Reference no: EM133200042
Assignment:
1. A high rise apartment building has a spectacular view of the city until an office building is built next to it, which destroys the view. This
a. causes an external cost to the apartment building.
b. causes an external cost to the office building.
c. does not cause any externality because the office building has property rights.
d. causes an external benefit to the apartment building
2. The tax accessor's office now says the owners of the apartment building should pay more property tax because the apartments are more valuable. This reasoning is flawed because losing the view causes the __________ curve for the apartments to shift to the ___________.
a. supply // right
b. supply // left
c. demand // left
d. demand // right
3. Keynes' solution to the Depression was
a. encourage business to spend more.
b. increase transfer payments but nothing else
c. increase government spending and taxes by the same amount.
d. increase government spending and to finance it via borrowing (deficit spending).
4. The G (Government) component of GDP includes transfer payments.
a. true
b. false
5. The distinction of nominal vs. real GDP is necessary to
a. adjust GDP for the actual quality of life.
b. account for inflation.
c. distinguish exports from imports.
d. determine if the economy is in a recession.
e. both a) and b) are correct.
6. A often used indicator of a recession is two consecutive quarterly falls in ______. The official determination is made, however, by _________.
a. either nominal or real GDP // the Federal Reserve Bank
b. real GDP // NBER (National Bureau of Economic Research)
c. nominal GDP // BLS (Bureau of Labor Statistics)
d. real GDP // BEA (Bureau of Economic Analysis)
e. real GDP // a consensus of economic commentators of the major news channels
7. Deflation is the converse of inflation. In deflation the CPI would be declining and the real value of money would increase. Therefore deflation
a. would benefit everyone.
b. makes debtors better off and creditors worse off.
c. make creditors better off and debtors worse off.
d. help corporate profits at the expense of wage earners.
8. Buying a U.S. treasury bond is lending money to the government. In the last month the nominal interest rate has declined by about 1.5 percentage points from 2.5 to 1.0 percent. It's still a better buy then before as long as the inflation rate
a. Is steady
b. falls by more than 1.5 percentage points
c. rises moderately.
d. falls at any rate greater than 0.
For the next three questions, consider that 97 people in a community already have a job and in addition
* Joe has no job but is looking.
* Mary has a part-time job but can barely pay her bills. She wants a full-time job.
* Jim has given up looking for work and lives off his spouse's income.
9. The labor force participation rate is
a. 1/3
b. 2/3
c. 97/99
d 99/100
10. The unemployment rate is
a. 1/3
b. 2/3
c. 1/99
d. 1/100
11. Who could be called hidden unemployed?
a. Joe, Mary, Jim
b. Mary & Jim
c. Joe only
d. Jim only
12. A major problem with health care insurance in general according to John Stossel is that it encourages consumers to ________ health care because _________ is paying the bill.
a. over consume // the federal government
b. under consume // a monopoly or oligopoly seller
c. over consume // a third-party
d. under consume // the federal government
13. The Canadian health care system most likely does a better job with the _________ problem than the U.S. system
a. efficiency
b. equity
14. Grace Marie Turner's concern with government provided health insurance is that it takes away
a. equity
b. oligopoly and economies of scale.
c. freedom.
d. both a) and c) are correct.
15. The Canadian system does not include
a. dental care.
b. eye care.
c. both of these.
d. neither of these since the system provides everything free.
16, In one video a doctor is interviewed who has a clinic with much lower prices than other providers. It is nonetheless profitable because it
a. provides a lower quality of care.
b. is affiliated with a publically supported hospital.
c. uses only paraprofessionals on its staff instead of licensed doctors.
d. does not take insurance, which saves considerable administrative expense.
17. Which of the following can be considered a provider of medical care?
a. a hospital
b. an insurance company
c. consumer
d. both a) and b) are correct
18. Consider the possibility that it is difficult to start a new hospital in a geographic area. Economies of scale are so important. If true, which definition of perfect competition would be violated?
a. ease of entry
b. homogenous products
c. price searching behavior
d. perfect knowledge
19. Consider that there are many different specialties of doctors and hospitals and quality varies among doctors and hospitals. If true, which definition of perfect competition would be violated?
a. ease of entry
b. homogenous products
c. price searching behavior
d. perfect knowledge
20. Consider that it may be impossible to do price comparison shopping among doctors and hospitals. If true, which definition of perfect competition would be violated?
a. ease of entry
b. homogenous products
c. price searching behavior
d. perfect knowledge
21. GDP has limitations as a quality of life (welfare) indicator because
a. it never considers real vs. nominal spending.
b. it also counts spending which is for the sole purpose of undoing the damage (external costs) of other production.
c. it includes transfer payments.
Use the following information for the next three questions: the U.S. can produce 4 tons of potatoes per day or 2 tons of wheat per day. Ireland can produce 3 tons of potatoes per day or one ton of wheat.
22. If the U.S. produces one ton of wheat, its opportunity cost is ______ ton(s) of potatoes. For Ireland it is ________ ton(s) of potatoes.
a. two // three
b. one-half // one-third
c. one // one
d. four // three
23. The U.S. has an absolute advantage in producing
a. potatoes.
b. wheat.
c. both.
d. neither.
24. The U.S. has a comparative advantage on producing
a. potatoes.
b. wheat.
c. both.
d. neither.
25. It is possible to have a comparative advantage without having any absolute advantages.
a. true
b. false
26. The theory of comparative advantage can explain trade between individuals as well as trade between countries.
a. true
b. false
27. Which of the policy combinations given below would consistently work in the direction of increasing the rate of growth of the money supply?
a. Raise the discount rate, lower the reserve requirement and engage in open market sales.
b. Lower the discount rate, lower the reserve requirement and engage in open market purchases.
c. Lower the discount rate, raise the reserve requirement and engage in open market sales.
d. Raise the discount rate, raise the reserve requirement and engage in open market sales.
e. Raise the discount rate, raise the reserve requirement and engage in open market purchases.
28. Why is it important to distinguish between the discount rate and the federal funds rate?
a. One is a short-term, and the other is a long-term rate.
b. One is a tool of monetary policy, and the other is a target of monetary policy.
c. One is a tool of fiscal policy, and the other is a tool of monetary policy.
d. All of the above.
29. The President is proposing a cut in the payroll tax (social security & Medicare taxes) in order to stimulate the economy. This can be considered
a. anti-inflationary fiscal policy
b. anti-inflationary monetary policy
c. anti-recessionary fiscal policy
d. anti-recessionary monetary policy
30. An automatic stabilizer
a. increases fluctuations in economic activity.
b. decreases fluctuations in economic activity.
c. take a long time to take effect since each time they're used they require Presidential and Congressional approval.
d. can be considered both a fiscal and monetary policy.
Match the following: (Answers can be found in D2L Posting from 50 Economics Ideas You Need to Know)
31. Milton Friedman (monetarism)
32. Supply-side Economics
33. Both monetarism and supply-side economics
Choices: (One is not used.)
a. Emphasis on the incentive effect of lower taxes
b. Emphasis on the money supply rather than the Keynesian emphasis on fiscal policy
c. Less emphasis on laissez-faire than Keynes.
d. More emphasis on laissez-faire than Keynes
Questions on Patrono & Mathews, (Answer questions based on the text discussion.)
34. The dual confidence of wants is a problem in barter. For this reason money is an improvement over barter with respect to the
a. store of value function.
b. medium of exchange function.
c. both of these.
35. Long-run changes in GDP is best associated with
a. economic growth.
b. business cycles.
36. Intensive growth is ______ important for the long-run than extensive growth. Intensive growth can also be described as ________.
a. more // using more natural resources such as land
b. less // using more natural resources such as land
c. more // increases in worker productivity
d. less /// increases in worker productivity
37. The production possibilities curve shows that ceteris paribus the counties that grow the most put more emphasis on __________. Economic growth is represented in the model by _______.
a. consumer goods // moving along the curve
b. consumer goods // shifting the curve to the right
c. capital goods // moving along the curve
d. capital goods // shifting the curve to the right
38. A gold standard is ______ likely to cause inflation than monetary policy as it is currently practiced by the ________.
a. more // Federal Reserve Bank
b. more // President and Congress
c. less// Federal Reserve Bank
d. less// President and Congress
39. Imagine because of inflation one must make several weekly trips back and forth between two banks. Bank A pays interest (necessary to avoid losing the real value of money from inflation) but does not allow one to write checks to facilitate transactions. Bank B allows for check writing but does not pay any interest.
This scenario is sometimes called the shoe leather costs of inflation and best relates to
a. transaction costs.
b. hyperinflation.
c. open market operations.
d. discount rate.
40. Which term is most inconsistent with the others?
a. utilitarian justice
b. Rawlsian justice
c. socialism
d. libertarian justice
41. Which type of tax would most likely increase income inequality?
a. progressive tax
b. the U.S. income tax system as it is currently designed
c. regressive tax
d. proportional tax
The following 8 questions are on the article "Economists: U.S. has reasons to up debt."
42. Consider the remark shaded in yellow "I think we can afford...." This is referring to
a. expansionary monetary policy
b. expansionary fiscal policy
c. contractionary fiscal policy.
d. contractionary monetary policy.
43. The chronic low interest rates (shaded in grey) refer to
a. expansionary monetary policy
b. expansionary fiscal policy
c. contractionary fiscal policy.
d. contractionary monetary policy.
44. The passage marked in blue refers to low real interest rates. Which of the following gives the lowest positive (not negative) real interest rate?
a. Inflation rate of 5 percent and nominal interest rate of 6 percent.
b. Inflation rate of 3 percent and nominal interest rate of 5 percent.
c. Inflation rate of 6 percent and nominal interest rate of 5 percent
d. Inflation rate of 4.5 percent and nominal interest rate of 5 percent.
45. The green passage refers to automatic stabilizers. Food stamps could be considered an example of ________, and automatic stabilizers is part of _______.
a. transfer payments // fiscal policy
b. the progressive income tax // fiscal policy
c. marginal tax rates // monetary policy
d. GDP but not personal income // fiscal policy
46. The proposal would mean more food stamps and less payroll (social security, Medicare) taxes when unemployment increases. When the unemployment rate decreased there would automatically be _______ food stamps and _______ payroll taxes. This would be in order to fight ____________.
a. more // less // recession
b. less // more // inflation
c. more // less // inflation
d. less // more // recession
47. The article is written in the spirit of
a. Keynesian economics.
b. classical economics.
c. microeconomics.
48. This article was published in January. Since then business spending and consumer spending has declined because of the coronavirus pandemic. This makes ________
a. the proposals more urgent now than before.
b. the proposals less urgent now than before
c. monetary policy more important than fiscal policy.
d. Keynesian economics unrealistic and implies classical economics and laissez-faire as the best way to go.
For the final 3 questions go to the following links:
48. The latest federal funds rate is
a. 0.0 - 0.25 percent
b. 0.1 percent
c. 3.7 percent
d. 1.8 percent
e. 63.4 percent
49. The unemployment rate for 2019 was
a. 0.0 - 0.25 percent
b. 0.1 percent
c. 3.7 percent
d. 1.8 percent
e. 63.4 percent
50. What was the inflation rate for 2019 (annual percent change in CPI from previous year based on average - average)
a. 0.0 - 0.25 percent
b. 0.1 percent
c. 3.7 percent
d. 1.8 percent
e. 63.4 percent
Attachment:- Resources.rar