Social Science: Economics
Final Exam
Course Introduction
This course offers an introduction to the fundamental principles of economics as a core discipline within the social sciences. Students will explore key economic concepts such as scarcity, supply and demand, market structures, and the role of government in economic systems. Through the study of microeconomics and macroeconomics, learners will gain insights into how individuals, businesses, and societies allocate resources, make decisions, and respond to incentives. The course also highlights the impact of economic policies on societal well-being, addresses contemporary economic issues, and introduces quantitative and qualitative methods used by economists to interpret data and predict trends.
Recommended Textbook Principles of Macroeconomics 5th Edition by Robert Frank
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15 Chapters
1841 Verified Questions
1841 Flashcards
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Chapter 1: Thinking Like an Economist
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134 Verified Questions
134 Flashcards
Source URL: https://quizplus.com/quiz/58108
Sample Questions
Q1) Normative economics is concerned with how people _____ make decisions while positive economics is concerned with how people _____ make decisions.
A) in the real world; in models
B) should; do
C) in power; in ordinary life
D) in ordinary life; in power
Answer: B
Q2) The marginal benefit of an activity is the:
A) same as the total benefits of the activity.
B) total benefit divided by the level of the activity.
C) extra benefit associated with an extra unit of the activity.
D) total benefit associated with an extra unit of the activity.
Answer: C
Q3) The principle of scarcity applies to:
A) the poor exclusively.
B) all consumers.
C) all firms.
D) everyone-consumers, firms, governments, and nations.
Answer: D
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Page 3
Chapter 2: Comparative Advantage
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) The benefits to specialization are enhanced when two trading partners have:
A) absolute advantages in producing the same goods.
B) similar consumption preferences.
C) very similar opportunity costs.
D) large comparative advantages in different goods.
Answer: D
Q2) The principle of comparative advantage states that specialization increases productivity, but the principle of increasing opportunity costs states that, when you increase production of a single good, you must use increasingly costly resources. These two principles:
A) are evidence that economic theory is internally inconsistent.
B) are an example of the difference between abstract models and the real world.
C) cannot be true at the same time.
D) together account for the outward bow shape of production possibility curves.
Answer: D
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4
Chapter 3: Supply and Demand
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120 Verified Questions
120 Flashcards
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Sample Questions
Q1) Supply curves are generally _______ sloping because _______________.
A) downward; more consumers will buy the good if the price falls.
B) upward; of the principle of increasing opportunity costs.
C) downward; it is less expensive to mass-produce goods.
D) upward; of inflation.
Answer: B
Q2) As the price of a good rises:
A) firms earn larger profits.
B) more firms can cover their opportunity costs of producing the good.
C) firms find they can raise price by even more.
D) government regulation becomes more justified.
Answer: B
Q3) Suppose that the equilibrium price of apples falls and the equilibrium quantity increases. Which of the following best fits the observed data?
A) An increase in demand with supply constant.
B) A decrease in supply with demand constant.
C) An increase in demand coupled with an increase in supply.
D) An increase in supply with demand constant.
Answer: D
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Page 5
Chapter 4: Macroeconomics: the Birds-Eye View of the Economy
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150 Verified Questions
150 Flashcards
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Sample Questions
Q1) Intermediate goods and services are ______ production and ______ counted in GDP.
A) the end products of; are
B) the end products of; are not
C) used up in the process of; are
D) used up in the process of; are not
Q2) A measure of GDP in which quantities produced are valued at current-year prices is called:
A) real GDP.
B) nominal GDP.
C) base GDP.
D) physical GDP.
Q3) If business inventories equal $40 billion at the beginning of the year and $55 billion at the end of the year, then, assuming no other changes, GDP must have:
A) decreased by $15 billion.
B) increased by $15 billion.
C) increased by $40 billion.
D) increased by $55 billion.
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Chapter 5: Measuring Economic Activity: Gdp and Unemployment
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146 Verified Questions
146 Flashcards
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Sample Questions
Q1) A college graduate in 1972 found a job paying $7,200. The CPI was 0.418 in 1972. A college graduate in 2005 found a job paying $28,000. The CPI was 1.68 in 2005. The 1972 graduate's job paid ______ in nominal terms and ______ in real terms than the 2005 graduate's job.
A) more; less
B) more; more C) less; more D) less, less
Q2) Suppose the value of the CPI is 1.100 in year one, 1.160 in year two, and 1.270 in year three. Assume also that the price of computers increases by 3% between year one and year two, and by another 3% between year two and year three. The price level is increasing, the inflation rate is _______, and the relative price of computers is
A) increasing; increasing B) constant; increasing C) constant; decreasing D) increasing; decreasing
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Chapter 6: Measuring the Price Level and Inflation
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134 Verified Questions
134 Flashcards
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Sample Questions
Q1) An increase in unemployment insurance benefits will:
A) increase the demand for labor.
B) decrease the demand for labor.
C) increase job search efforts of unemployed workers.
D) decrease job search efforts of unemployed workers.
Q2) If the Luddites had succeeded in ______ the introduction of labor-saving machinery, economic growth in Great Britain may have been ______.
A) blocking; slower
B) blocking; more rapid
C) promoting; slower
D) promoting; more rapid
Q3) A person 16 years or older who does not work, but is actively looking for work, is officially classified as:
A) employed.
B) unemployed.
C) chronically unemployed.
D) out of the labor force.
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Chapter 7: Economic Growth, Productivity, and Living Standards
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142 Verified Questions
142 Flashcards
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Sample Questions
Q1) If average labor productivity increases, real GDP per person: A) increases.
B) decreases.
C) remains constant.
D) may increase or decrease depending on the change in the share of population employed.
Q2) If real GDP per person was equal to $2,000 in 1900 and grew at a 1 percent annual rate, what would be the value of real GDP per person 100 years later?
A) $2,210
B) $4,000
C) $5,410
D) $20,000
Q3) If real GDP per person in a country equals $40,000 and 60 percent of the population is employed, then average labor productivity equals:
A) $24,000.
B) $40,000.
C) $60,000.
D) $66,667.
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Chapter 8: Workers, Wages, and Unemployment
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134 Verified Questions
134 Flashcards
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Sample Questions
Q1) Ted and Alice want to make sure that their children will inherit lots of money when they die, so that their children do not have to struggle the way that they themselves did.
Saving more in response to this is a ______ reason for saving.
A) life-cycle
B) bequest
C) private
D) precautionary
Q2) When the government runs a budget deficit, it makes up the difference by:
A) issuing bonds.
B) paying down outstanding debt.
C) increasing transfer payments.
D) increasing public saving.
Q3) Empirical evidence indicates that higher real interest rates lead to ______ in savings.
A) modest increases
B) substantial increases
C) no change in
D) modest decreases
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Chapter 9: Saving and Capital Formation
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126 Verified Questions
126 Flashcards
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Sample Questions
Q1) A financial intermediary that sells shares in itself to the public, and then uses the funds to buy a wide variety of financial assets is called a: A) commercial bank. B) credit union.
C) stock exchange.
D) mutual fund.
Q2) The introduction of credit cards and debit cards has ______ velocity. A) increased B) decreased C) had no impact on D) eliminated
Q3) The market value of a particular bond at any given point in time is called the bond's: A) coupon rate. B) principal. C) term.
D) price.
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Chapter 10: Money, Prices, and the Federal Reserve
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118 Verified Questions
118 Flashcards
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Sample Questions
Q1) In a recession, the cyclical rate of unemployment:
A) is rising.
B) is constant.
C) is falling.
D) equals the natural rate of unemployment.
Q2) In the long run, total spending only influences:
A) actual output.
B) potential output.
C) productive capacity.
D) inflation.
Q3) "Smart" vending machines, which adjust prices automatically according to changes in demand factors (like time of day or outside temperature), are examples of:
A) meeting demand at preset prices.
B) skill-biased technological change.
C) flexible price setting.
D) capital equipment that is less expensive than standard equipment.
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Chapter 11: Financial Markets and International Capital Flows
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133 Verified Questions
133 Flashcards
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Sample Questions
Q1) If the marginal propensity to consume equals 0.75, then a $100 increase in after-tax disposable income leads to a ______ increase in consumption.
A) $13.33
B) $25
C) $75
D) $133
Q2) In the short-run Keynesian model, if the mpc equals 0.8, then to decrease planned aggregate spending by $30 billion at any output level, government spending must be decreased by ______ or net taxes must be increased by _____.
A) $30 billion; $30 billion
B) more than $30 billion; more than $30 billion
C) less than $30 billion; less than $30 billion
D) $30 billion; more than $30 billion
Q3) One drawback in using fiscal policy as a stabilization tool is that fiscal policy:
A) affects potential output as well as planned aggregate expenditure.
B) effects are frequently offset by automatic stabilizers.
C) is too flexible to use to close output gaps.
D) is not useful for dealing with prolonged episodes of recession.
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Chapter 12: Short-Term Economics Fluctuations: An Introduction
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) A higher real interest rate ______ saving and ______ consumption spending. A) increases; increases
B) increases; decreases C) does not change; does not change D) decreases; increases
Q2) Innovations in the United States, such as credit cards, debit cards, and ATMs have: A) increased the demand for money.
B) decreased the demand for money.
C) had no impact on the supply or demand for money.
D) increased the supply of money.
Q3) If the Fed wishes to reduce nominal interest rates, it must engage in an open market ______ of bonds that ______ the money supply.
A) sale; increases
B) sale; decreases
C) purchase; decreases D) purchase; increases
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14
Chapter 13: Spending and Output in the Short Run
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90 Verified Questions
90 Flashcards
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Sample Questions
Q1) The Great Recession was the result of:
A) two negative demand shocks.
B) a negative demand shock and a negative inflation shock.
C) two positive inflation shocks.
D) a negative demand shock and a positive inflation shock.
Q2) Technological improvements:
A) decrease aggregate demand.
B) increase aggregate demand.
C) decrease aggregate supply.
D) increase aggregate supply.
Q3) Starting from potential output, if consumer confidence increases and consumers decide to spend more, then this will generate a(n) _____ gap and inflation will _____.
A) recessionary; increase
B) recessionary; decrease
C) expansionary; decrease
D) expansionary; increase
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Chapter 14: Stabilizing the Economy: the Role of the Fed
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75 Verified Questions
75 Flashcards
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Sample Questions
Q1) Policymakers' use of stabilization policy to eliminate output gaps is more appropriate when an economy self corrects very ______ and when the output gap is very ____.
A) rapidly; large
B) rapidly; small
C) slowly; small
D) slowly; large
Q2) Someone who is committed to maintaining low inflation even at the short-run cost of reduced output and employment is called a(n):
A) anchored central banker.
B) reactionary central banker.
C) inflation dove.
D) inflation hawk.
Q3) Central banks that practice flexible inflation targeting are ____ than central banks that practice strict inflation targeting.
A) more likely to adjust policy in response to output gaps
B) less likely to adjust policy in response to output gaps
C) more concerned with inside lags in macroeconomic policy
D) less concerned with inside lags macroeconomic policy
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16
Chapter 15: Aggregate Demand, Aggregate Supply, and Inflation
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130 Verified Questions
130 Flashcards
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Sample Questions
Q1) At each value of the domestic interest rate, decreases in the riskiness of domestic assets ______ capital inflows, ______ capital outflows, and ______ net capital inflows.
A) increase; increase; increase
B) increase; increase; decrease
C) increase; decrease; increase
D) decrease; decrease; decrease
Q2) The theory that nominal exchange rates are determined so that the law of one price holds is called:
A) the fixed-exchange-rate rule.
B) the equilibrium principle.
C) the law of supply and demand.
D) purchasing power parity.
Q3) The gold standard is an example of a ______ exchange rate system.
A) fixed
B) flexible
C) nominal
D) dollarized
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