SOPHIA ECON102 Unit 1 Milestone Latest 2022 May

ECON102 Macroeconomics

Unit 1 Milestone

1Which term below refers to investment and financial flows that have the ability to appreciate or depreciate currency?

Balance of payments

Capital account

Trade deficit

Current account

2Select the example below that is binding.

A price floor above equilibrium

A price floor at equilibrium

A price ceiling at equilibrium

A price ceiling above equilibrium

3Which of the following is a reason to learn about macroeconomics?

Macroeconomics focuses on decisions made at the individual level.

It allows us to understand the decisions that small business owners make.

Understanding the reasons behind economic policy decisions can make us better citizens.

It helps us to predict the prices of individual goods and wages in specific jobs.

4Which of the following terms is the sum of all final goods and services purchased in an economy?

Expenditure approach

GDP growth

Factor market

Resource cost/Income approach

5Which of the statements below is false?

The NBER provides data regarding when recessions start and end.

A recession is a significant decline in economic activity.

Sometimes GDP can shrink quite a bit.

A recession cannot usually be seen in GDP.

6Which of the following is true about exchange rates?

They often change as a result of changing economic conditions in one country compared to another.

A country's exchange rate will depend on how much supply and demand exist for its currency.

Exchange rates matter when making international purchases or traveling abroad.

All of the above are true regarding exchange rates.

7If one dollar can purchase 0.74 euros, what is the exchange rate when using U.S. dollars as the base currency?

0.65

0.85

1.25

1.35

8Government can change markets through all of the following except__________.

enacting regulations

changing the tax rate

awarding subsidies

awarding large business contracts

9The president gives his annual State of the Union speech on television and discusses the loss of manufacturing jobs to China and the need for the United States to create more jobs in order to make up for this.

This describes which of the following types of unemployment?

Frictional

Seasonal

Structural

Cyclical

10Which statement below is NOT true regarding government intervention in the economy?

If the economy is doing badly, the government should cut spending to improve it.

Unemployment insurance is an automatic economic stabilizer.

Progressive income tax is a form of automatic stabilizer.

Most suggest that government should promote macroeconomic stability.

11The consumer will bear more of the burden of a tax if demand is which of the following?

Unit elastic

Perfectly elastic

Elastic

Inelastic

12According to the circular flow diagram, which of the following do households purchase from businesses?

Final goods and services

Factors of production

Wages and interest

Taxes and subsidies

13Which statement below is true of BOTH aggregate supply and aggregate demand?

Price level and GDP are on the two axes of the graph.

The intersection of this with the SRAS curve shows the current level of RGDP.

It gives the perception that wealth has increased, resulting in an increase in consumption, C.

This represents the amount the economy can produce at different price levels.

14Select the statement that corresponds to a shift in the supply curve.

Occurs when the price for a certain good changes and influences the quantity supplied

The amount of goods and services that may be purchased at a certain moment in time at a specific income level

The amount of goods and services that are available at different prices at a certain moment in time

A movement that occurs due to factors such as firms having more or less access to resources

15Which of the following is NOT true about economics?

It addresses decision-making.

Economics can accurately predict what the national economy will do in six months to a year.

Other fields have influenced the ever evolving development of economics.

Economics is a social science.

16Which of the following policy types can promote growth when the economy is showing signs of slowing?

Fiscal policy

Both

Monetary policy

Neither

17If a new car cost $1,250 in 1950 and is $30,000 in 2013, prices have increased by a factor of which of the following?

12

24

48

20

18Which of the following are examples of unit elasticity?

An interior designer whose services have an income elasticity of 2.5

A house with an income elasticity of 1

A day laborer whose services have an income elasticity of -1.75

A real estate agent whose services have an income elasticity of 1.25

19Which of the following is the point in the business cycle that marks the lowest period of growth in GDP for a specific period?

Recession

Trough

Expansion

Peak