Essay about Final Exam

3247 Words Nov 28th, 2012 13 Pages
Palomar College
Final Exam: Principles of Macroeconomics 101

1. Noelle quits her $80,000-a-year job to stay home. What is the opportunity cost of her decision? a. zero, since she will no longer be earning a salary b. depends on the “going-rate” for stay-at-home spouses c. at least $80,000 d. the value she attributes to the joy of not working e. $80,000

2. Scarcity: a. stems from the incompatibility between limited resources and unlimited wants b. can be overcome by discovering new resources c. can be eliminated by rationing products d. is a bigger problem in market economies than in socialist economies e. is not experienced by the very wealthy

3.
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The Real GDP for this year is: a. $1,000 b. $2,000 c. $4,000 d. $10,000

Here is some made-up data: Use it to answer questions 10-12. Actual Real GDP $14 trillion Potential Real GDP $15 trillion Unemployment Rate 6% Budget Deficit $1 trillion (7% of GDP) National Debt $11 trillion (80% of GDP) Growth of CPI -0.1% Net Exports -$1 trillion

10. Based on the data above, the current state of this economy is: a. inflationary gap b. recessionary gap c. long-run equilibrium d. short-run equilibrium

11. Based on the data, the appropriate open market operations for the Chair of the Federal Reserve System to take would be: a. lower the reserve requirement b. raise the reserve requirement c. sell U.S. Govt. bonds d. buy U.S. Govt. bonds e. do nothing

12. Based on the data, the appropriate two fiscal policies for the President and the Congress to take would be: a. do nothing b. lower taxes and increase govt. spending c. raise taxes and reduce govt. spending d. lower interest rates and increase govt. spending e. lower interest rates and reduce govt. spending

13. Assume that

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