SOPHIA ECON102 Final Milestone Latest 2022 May

ECON102 Macroeconomics

Final Milestone

1An increase in which of the following will cause a rightward shift of AD?

•             Imports

•             Exports

•             Peg

•             International Trade and Aggregate Demand

 

2Select the statement below that is FALSE regarding corporate social responsibility.

•             Philanthropy by a business always benefits the shareholders of the company.

•             Corporate governance includes oversight of all production and financial operations.

•             Sustainability involves holding the supply chain accountable.

•             Producing in ways that are sustainable would be an example of corporate social responsibility.

 

3Which of the following could cause a shift in the demand curve?

•             A change in quantity

•             A change in production capacity

•             A major shift in supply

•             A change in income

 

4Using the image shown here, which of the following flows from the government to firms?  

•             Imports

•             Wages, interest and transfer payments

•             Taxes

•             Purchases of goods and services

 

5GDP would be a poor indication of how well a country is doing economically for which of the scenarios below?

•             For a country that is producing significantly in other nations, so there is repatriation of profits outside its borders.•               

For a country that has offshore production that is offset by onshore production by foreign nationals

•             For a country that has an equal amount of onshore and offshore production

•             For a country that has little or no offshore production

 

6Which of the following is not a goal of monetary policy?

•             Promote maximum stable employment

•             Promote the increase of printed paper currency

•             Prevent destruction of the currency's value

•             Prevent deflation of the currency

 

 

7Select the statement below that is true of long run aggregate supply curves.

•             There is a positive relationship between price level and RGDP.

•             There is a variable quantity of RGDP.

•             There is no relationship between price level and RGDP.

•             Changes in price level affect output.

 

8The record of all monetary transactions that flow across a country's borders is known as which of the following?

•             Capital account

•             Current account

•             National income accounting

•             Balance of payment

 

9Select the statement below that is an example of monetary policy only.

•             It is how the federal government influences the business cycle.

•             A tool of this policy is government spending.

•             It can promote growth when economy is slowing.

•             It influences interest rates and borrowing in the economy.

 

10Which of the following is one of the benefits of women being employed in occupations that pay a living wage?

•             Higher resource availability to children

•             A higher level of income inequality

•             A higher amount of home responsibilities

•             A higher birth rate

 

11As the price level falls, people feel as if they have more money, so they spend more, which influences which of the following, in economic terms?

•             Exchange rate effect

•             Aggregate demand

•             Interest rate effect

•             Aggregate supply

 

12Which of the following is an example of expansionary fiscal policy?

•             Reducing taxes

•             Decreasing the reserve requirement

•             If tax revenues exceed government expenditures

•             Increasing interest rates

 

13Which of the following is NOT a step in the process of lending federal funds?

•             At the end of the day, deposits and withdrawals influence the reserve level.

•             The FOMC sets a target for the federal funds rate.

•             The Fed gives short term loans to banks to help them meet reserve requirements.

•             Banks with excess reserves loan money for one night to banks who cannot meet the reserve.

 

14U.S. dollars (USD) are the base currency and Bahraini dinar (BHD) are the price currency.

If one U.S. dollar can purchase 0.56 Bahraini dinar, what is the exchange rate?

•             0.44

•             1.12

•             3.51

•             1.79

 

15Select the TRUE statement below regarding banking during the 19th century.

•             Currency traders did not make a lot of money.

•             There was not much need for a central banking system.

•             Judging the value of currency from an unknown bank was not difficult.

•             Trade across long distances was difficult.

 

16Select the income elasticity that corresponds to a normal good.

•             Income elasticity is zero.

•             Income elasticity is negative and less than -1.

•             Income elasticity is positive and less than 1.

•             Income elasticity is -1.

17Which of the following is true about a market at equilibrium price?

•             At the prevailing price, there is no market basis for the price to change.

•             The market does not clear.

•             Demand is low because the price is so high.

•             There tend to be shortages because the price is so low.

 

18When an economy is producing to the left of the LRAS, __________.

•             contractionary monetary policies can be put in place

•             resources are over-utilized

•             expansionary fiscal policies can be put in place

•             the LRAS curve will shift to the left to meet the current price level and GDP

 

19Which statement below is true about aggregate demand?

•             It slopes upward due to the interest rate effect.

•             It represents the amount the economy can produce at different price levels.

•             In the long run, it is indicated by a vertical line.

•             It slopes downward due to wealth efffect.

 

20When will the deadweight loss be created?

• When the market is clearing

•When a binding price constraint is implemented

•When consumer and producer surplus are maximized

•When surplus is shifted from consumer to producer

 

21The terms M0, M1, M2 classify money according to which of the following?

•             Adherence to the gold standard

•             Level of liquidity

•             Reserve requirement

•             Unit of account

22Which of the following is NOT part of the expenditure approach to calculating GDP?

•             Exports

•             Imports

•             Labor income

•             Business investments

 

23What is the benefit of having a sole authority print currency?

•             The value of the currency becomes more certain.

•             It protects a country's economy because it creates a natural barrier to trade.

•             There could be multiple dollars in multiple checking accounts for every one dollar in reserve.

•             Bank runs are much less likely.

 

24Which statement below regarding monetary and fiscal policy is FALSE?

•             The situation where unemployment is high and inflation is high is stagflation.

•             The inverse relationship between inflation and unemployment is known as the Phillips Curve.

•             If AD increases too much, prices will increase and AD will return to equilibrium.

•             Expansionary policy causes AD to shift to the left.

 

25Of the following true statements, which statement might be a reason that budget deficits make interest rates go up?

•             Tax revenue collected to make interest payments on the debt is given to Americans who can then use it to make purchases.

•             Large budget deficits reduce the strength of the domestic currency.

• The increased demand for loanable funds in the private market will drive interest rates up.

•             They represent the difference between tax revenue and government expenditures.