Started on Friday, 4 February 2022, 5:24 PM

State Finished
Completed on Friday, 4 February 2022, 5:52 PM
Time taken 27 mins 42 secs
Grade 15.00 out of 15.00 (100%)

Question 1
If future price changes were perfectly anticipated by both borrowers and lenders, what would happen to the real interest
Complete rate in the future if the price level changed?
Mark 0.50 out
of 0.50 Select one:
a. it would increase
b. it would decrease by the amount of the price increase
c. it would decrease
d. it would not change

Question 2 Which of the following is not true about Gross Domestic Product?
Complete
Mark 0.50 out Select one:
of 0.50
a. It includes transfer payments.
b. Intermediate goods and services are excluded to prevent double counting.
c. It includes only final goods and services.
d. It reflects production in a particular year.
Question 3 If toy stores overestimate the demand for a toy in 2004 and, as a result, have an unexpectedly large number of them on
Complete hand at the end of the year, the value of the increased inventory of those toys will be counted as
Mark 0.50 out
of 0.50 Select one:
a. investment in 2004
b. consumption in 2005
c. consumption in 2004
d. investment in 2005

Question 4 Fiscal policy

Complete
Mark 0.50 out Select one:


of 0.50
a. uses the Union government's powers over the money supply and interest rates to affect employment, the price
level, and GDP
b. can affect employment and prices, but not the level of GDP
c. uses the Union government's powers of spending and taxation to affect employment, the price level, and GDP
d. can affect employment and the level of GDP, but not the price level

Question 5 Monopolistic competition is different from perfect competition because monopolistic competitors produce
Complete
Mark 0.50 out Select one:
of 0.50
a. unique products
b. differentiated products
c. a homogeneous product
d. a homogeneous but unique product
Question 6 In which market structure(s) might firms produce an undifferentiated product?
Complete
Mark 0.50 out Select one:
of 0.50
a. perfect competition and homogenous oligopoly
b. monopolistic competition only
c. perfect competition only
d. monopoly only

Question 7 Discretionary fiscal policy is policy that

Complete
Mark 0.50 out Select one:
of 0.50
a. is developed in secret by the Government
b. is an intentional change in taxation or government spending
c. applies to some states but not others

d. applies to some industries but not others

Question 8 In both monopolistic competition and non-price-discriminating monopoly,

Complete
Mark 0.50 out Select one:
of 0.50
a. marginal revenue is equal to average revenue
b. the marginal revenue curve lies above the average revenue curve
c. the marginal revenue curve lies above the demand curve
d. the marginal revenue curve lies below the demand curve
Question 9 In deciding how much money to hold, you should compare the
Complete
Mark 0.50 out Select one:
of 0.50
a. disadvantage of liquidity with the advantage of earning more interest
b. advantage of liquidity with the disadvantage of losing interest
c. advantage of storing wealth with the advantage of having a medium of exchange
d. disadvantage of storing wealth with the advantage of having a medium of exchange

Question 10 Gross Domestic Product equals the

Complete
Mark 0.50 out Select one:
of 0.50
a. total output of all goods and services produced by resources located in a country
b. value added to the economy by intermediate goods and services minus original cost
c. market value of all final goods and services produced by resources located in a country.

d. market value of all goods and services produced by resources located in a country

Question 11 Suppose that storage costs increase, so that firms decide to hold less output in inventory, other things constant. Which of
Complete the following is true?
Mark 0.50 out
of 0.50 Select one:
a. investment will increase
b. consumption spending will decrease
c. consumption spending will increase
d. investment will decrease
Question 12 It is harder to explain the behavior of firms in oligopoly than in other market structures because in oligopoly
Complete
Mark 0.50 out Select one:
of 0.50
a. firms base their decisions on what their rivals do
b. only differentiated products are produced
c. the firms act independently of each other
d. only homogeneous products are produced

Question 13 In periods of high inflation,

Complete
Mark 0.50 out Select one:
of 0.50
a. low nominal interest rates are likely to result
b. the purchasing power of money is increasing
c. the purchasing power of money is decreasing

d. nobody wants to work and earn income

Question 14 Monopolistically competitive firms ignore the effect of their decisions upon other firms in the industry because
Complete
Mark 0.50 out Select one:
of 0.50
a. each firm is small relative to the market
b. each firm is large relative to the market
c. there are few sellers in the market
d. there is only one seller in the market
Question 15 What is the opportunity cost of holding money rather than some other financial asset?
Complete
Mark 0.50 out Select one:
of 0.50
a. the forgone utility
b. the forgone interest income
c. time
d. the forgone leisure

Question 16 Inflation is
Complete
Mark 0.50 out Select one:
of 0.50
a. a continuing rise in everyone's standard of living
b. a general and continuous rise in the money prices of goods and services
c. a rise in the real prices of all goods and services

d. a reduction in everyone's standard of living

Question 17 Which of the following would cause a downward movement along the money demand curve?
Complete
Mark 0.50 out Select one:
of 0.50
a. a decrease in the interest rate
b. a decrease in real GDP
c. an increase in real GDP
d. an increase in the interest rate
Question 18 Which of the following, other things constant, will shift the money demand curve to the left?
Complete
Mark 0.50 out Select one:
of 0.50
a. a decrease in real GDP
b. a decrease in the interest rate
c. an increase in real GDP
d. an increase in the interest rate

Question 19 Fiscal policy focuses on manipulating

Complete
Mark 0.50 out Select one:
of 0.50
a. aggregate supply to smooth out business fluctuations
b. aggregate demand to stimulate the economy and aggregate supply to contract it
c. both aggregate supply and aggregate demand to smooth out business fluctuations

d. aggregate demand to smooth out business fluctuations

Question 20 If MPC is 0.8, the simple tax multiplier is:

Complete
Mark 0.50 out Select one:
of 0.50
a. 3
b. -4
c. 5
d. 4
Question 21 If Ford raises the price of its automobiles, the demand curve for GM automobiles
Complete
Mark 0.50 out Select one:
of 0.50
a. shifts to the left
b. becomes more elastic
c. shifts to the right
d. is unaffected

Question 22 Which of the following would not be included in the calculation of GDP?
Complete
Mark 0.50 out Select one:
of 0.50
a. Joe pays a plumber $100 to fix a broken pipe.
b. Jim purchases a new automobile.
c. Laurie pays $15 for a haircut.

d. Sandy, who is on welfare, receives $100 in food stamps.

Question 23 Demand-pull inflation is associated with

Complete
Mark 0.50 out Select one:
of 0.50
a. decreasing aggregate demand and greater unemployment
b. increasing aggregate demand and lower unemployment
c. increasing aggregate demand and greater unemployment
d. decreasing aggregate demand and lower unemployment
Question 24 A firm could differentiate its product by all of the following means except one. Which is the exception?
Complete
Mark 0.50 out Select one:
of 0.50
a. making the product available at a number of different locations
b. using packaging or advertising to create a special subjective image of the product in the consumer's mind
c. increasing the number of services that accompany the product
d. emphasizing that the product provides the same benefits to consumers as the others on the market, even when it
is really physically different

Question 25 If a monopolistically competitive firm can earn a profit, it will adjust production until
Complete
Mark 0.50 out Select one:


of 0.50
a. MR > AVC
b. MR = ATC
c. MR = MC
d. MC > MR

Question 26 The view that union wage demands may be a source of inflation would be best associated with the
Complete
Mark 0.50 out Select one:
of 0.50
a. demand pull view of inflation
b. supply shock view of inflation
c. cost push view of inflation
d. demand push view of inflation
Question 27 Which of the following assumptions is usually made about government purchases?
Complete
Mark 0.50 out Select one:
of 0.50
a. They equal the level of net taxes in equilibrium.
b. They are autonomous.
c. They vary directly with the interest rate.
d. They vary directly with the level of income.

Question 28 Which of the following would lead to the most inflation?

Complete
Mark 0.50 out Select one:
of 0.50
a. Aggregate demand increases and aggregate supply decreases.
b. Both aggregate demand and aggregate supply decrease.
c. Both aggregate demand and aggregate supply increase.

d. Aggregate demand increases and aggregate supply increases.

Question 29 An oligopoly is characterized by

Complete
Mark 0.50 out Select one:
of 0.50
a. many firms and some barriers to entry
b. few firms, which have control over market price
c. a single firm and no barriers to entry
d. a large number of firms and no barriers to entry
Question 30 A movement upward and to the left along the money demand curve is caused by
Complete
Mark 0.50 out Select one:
of 0.50
a. a decrease in real GDP
b. a decrease in the interest rate
c. an increase in the interest rate
d. an increase in real GDP

PREVIOUS ACTIVITY
NEXT ACTIVITY
 Assignment - 1 Unit 1 