Survey of Economics
Mock Exam
Course Introduction
Survey of Economics provides an introduction to the fundamental principles and concepts of both microeconomics and macroeconomics. The course explores topics such as supply and demand, market structures, consumer behavior, production, taxation, government intervention, national income, unemployment, inflation, and monetary and fiscal policies. Designed for students in a variety of majors, this course emphasizes real-world applications and critical thinking about economic issues, preparing learners to make informed decisions as both consumers and citizens.
Recommended Textbook
Principles of Macroeconomics A Streamlined Approach 3rd Edition by Robert H. Frank
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13 Chapters
2266 Verified Questions
2266 Flashcards
Source URL: https://quizplus.com/study-set/2479
Page 2
Chapter 1: Thinking Like an Economist
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135 Verified Questions
135 Flashcards
Source URL: https://quizplus.com/quiz/49257
Sample Questions
Q1) Your classmates from the University of Chicago are planning to go to Miami for spring break, and you are undecided about whether you should go with them. The round-trip airfares are $600, but you have a frequent-flyer coupon worth $500 that you could use to pay part of the airfare. All other costs for the vacation are exactly $900. The most you would be willing to pay for the trip is $1400. Your only alternative use for your frequent-flyer coupon is for your trip to Atlanta two weeks after the break to attend your sister's graduation, which your parents are forcing you to attend. The Chicago-Atlanta round-trip airfares are $450. If the Chicago-Atlanta round-trip air fare were $350, should you use the coupon to go to Miami?
A) No, your economic surplus would be $50.
B) No, your economic surplus would be $100.
C) Yes, your economic surplus would be $50.
D) Yes, your economic surplus would be $400.
Answer: C
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Chapter 2: Supply and Demand
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173 Verified Questions
173 Flashcards
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Sample Questions
Q1) The buyer's reservation price for a particular good or service is the:
A) smallest price the buyer would be willing to pay for it.
B) same as the market price.
C) largest price the buyer would be willing to pay for it.
D) price the buyer must pay to ensure he or she gets it.
Answer: C
Q2) Suppose that Tom bought a bike from Helen for $195. If Helen's reservation price was $185, and Tom's reservation price was $215, the total economic surplus from this transaction was:
A) $30
B) $185
C) $195
D) $215
Answer: A
Q3) A good example of central planning at work in the U.S. is:
A) car manufacturers establishing suggested retail prices.
B) McDonald's fries being the same everywhere.
C) unions working with businesses to establish wages.
D) New York City's rent control program.
Answer: D
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Chapter 3: International Trade and Trade Policy
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184 Verified Questions
184 Flashcards
Source URL: https://quizplus.com/quiz/49259
Sample Questions
Q1) If Les can produce two pairs of pants per hour while Eva can produce one pair per hour, then it must be true that:
A) Les has a comparative advantage in producing pants.
B) Les has an absolute advantage in producing pants.
C) Eva has a comparative advantage in producing pants.
D) Les has both comparative and absolute advantage in producing pants.
Answer: B
Q2) The demand for cars in a certain country is given by: D = 20,000 - P, where P is the price of a car. Supply by domestic car producers is: S = 5,000 + 0.5P. If this economy opens to trade while the world price of a car is $6,000, and the government imposes a quota allowing 3000 cars to be imported, then the winners are ________.
A) domestic consumers
B) domestic consumers and import permit holders
C) domestic producers and the government
D) domestic producers and import permit holders
Answer: D
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Chapter 4: Macroeconomics: the Birds-Eye View of the Economy
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155 Verified Questions
155 Flashcards
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Sample Questions
Q1) The unemployment rate in the United States at the peak of the Great Depression was _____ percent.
A) 5
B) 10
C) 20
D) 25
Q2) A particularly severe recession is called a(n):
A) super recession.
B) lull.
C) growth recession.
D) depression.
Q3) After increasing at more than 2 percent per year between 1950 and 1973, the growth rate of average labor productivity _____ between 1973 and 1995, and ____ between 1996 to 2007.
A) slowed; decreased even more
B) speeded up; accelerated even more
C) slowed; picked up
D) speeded up; slowed
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Chapter 5: Measuring Economic Activity: GDP, Unemployment,
and Inflation
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272 Verified Questions
272 Flashcards
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Sample Questions
Q1) Which of the following is NOT a capital good?
A) Batteries purchased by a car manufacturer to install in new cars
B) Machines purchased by a car manufacturer to measure metal thicknesses
C) A new house purchased by a family
D) A new apartment building purchased by a corporation
Q2) If the price of motel rooms increases by 10% while the prices of other goods and services increase by 5% on average, the relative price of motel rooms has:
A) increased.
B) decreased by 5%.
C) decreased by 10%.
D) remained constant.
Q3) The sum of the value added by all firms equals total:
A) profits.
B) spending on capital goods.
C) investment spending.
D) value of final goods and services.
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Chapter 6: Economic Growth, Productivity, and Living Standards
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162 Verified Questions
162 Flashcards
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Sample Questions
Q1) Managers contribute to increased average labor productivity in each of the following ways except by:
A) developing new products.
B) obtaining financing.
C) assigning workers to jobs.
D) dealing with suppliers.
Q2) Defenders of limits on economic growth are concerned that continued economic growth will eventually:
A) raise interest rates.
B) reduce the rate of technological progress.
C) exhaust natural resources.
D) make plant and equipment obsolete.
Q3) In Macroland, 500,000 of the 1 million people in the country are employed. Average labor productivity in Macroland is $20,000 per worker. Real GDP per person in Macroland totals:
A) $1,000.
B) $10,000.
C) $15,000.
D) $40,000.
Page 8
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Chapter 7: The Labor Market: Workers, Wages, and Unemployment
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143 Verified Questions
143 Flashcards
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Sample Questions
Q1) The costs of unemployment are lowest (and perhaps even negative) for ______ unemployment.
A) frictional
B) cyclical
C) structural
D) cyclical and structural
Q2) Worker mobility is the:
A) demand for labor in different industries and firms.
B) movement of workers between job, firms, and industries.
C) process of increasing the size of the working-age population.
D) way to end globalization.
Q3) Compared to the United States, over the last three decades unemployment in Western Europe has been ____ and the rate of job creation has been ______.
A) lower; slower
B) higher; faster
C) higher; slower
D) lower; faster
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Page 9
Chapter 8: Saving and Capital Formation
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174 Verified Questions
174 Flashcards
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Sample Questions
Q1) Public saving is:
A) increased when the government budget deficit rises.
B) identical to the government budget surplus.
C) less important to national saving than private saving.
D) more important to national saving than private saving.
Q2) If government purchases increases by $1 million while net taxes are unchanged, then:
A) public saving increases.
B) public saving decreases.
C) public saving does not change.
D) private saving increases.
Q3) The opportunity cost of capital investment is the:
A) value of the marginal product of capital.
B) value of the marginal product of labor.
C) real interest rate.
D) price of new capital goods.
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Chapter 9: Money, The Federal Reserve, and Global
Financial Markets
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184 Verified Questions
184 Flashcards
Source URL: https://quizplus.com/quiz/49265
Sample Questions
Q1) Commercial banks create new money:
A) when they increase their desired reserve/deposit ratio.
B) by issuing checks.
C) through multiple rounds of lending.
D) when they buy government bonds from the Federal Reserve.
Q2) If a bank's desired reserve/deposit ratio is 0.33 and it has deposit liabilities of $100 million and reserves of $50 million, it:
A) has too few reserves and will reduce its lending.
B) has too many reserves and will increase its lending.
C) has the correct amount of reserves and outstanding loans.
D) should increase the amount of its reserves.
Q3) If the United States has a $300 billion net capital inflow, then there must be a:
A) trade surplus of $300 billion.
B) trade deficit of $300 billion.
C) trade surplus of $600 billion.
D) net capital outflow of $300 billion.
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Chapter 10: Short-Term Economic Fluctuations and Fiscal Policy
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190 Verified Questions
190 Flashcards
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Sample Questions
Q1) Recessions in the United States typically are:
A) limited to a few industries.
B) limited to specific regions of the country.
C) widely felt outside the United States.
D) confined to the domestic economy.
Q2) Short-term economic fluctuations are ______ in length and severity and ______ to predict.
A) regular; difficult
B) regular; easy
C) irregular; easy
D) irregular; difficult
Q3) In the Keynesian model deviations of output from potential are caused by:
A) fluctuations in average labor productivity.
B) fluctuations in aggregate spending.
C) technological change.
D) changing asset prices.
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Chapter 11: Stabilizing the Economy: The
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163 Verified Questions
163 Flashcards
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Sample Questions
Q1) Which of the following would be expected to decrease the demand for money in the U.S.?
A) Grocery stores begin to accept credit cards in payment.
B) The economy enters a boom period.
C) Political instability increases dramatically in developing nations.
D) Households fear increasing computer glitches will severely limit their ability to use ATMs.
Q2) To close a recessionary gap, the Federal Reserve must ______ real interest rates by ______ the money supply.
A) increase; increasing B) increase; decreasing C) decrease; decreasing D) decrease; increasing
Q3) To close an expansionary gap, the Fed ______ interest rates which ______ aggregate spending and ______ short-run equilibrium output.
A) raises; increases; increases B) raises; decreases; increases C) raises; decreases; decreases D) reduces; increases; decreases
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Page 13
Chapter 12: Inflation and Aggregate Supply
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163 Verified Questions
163 Flashcards
Source URL: https://quizplus.com/quiz/49268
Sample Questions
Q1) A large decrease in oil prices is an example of:
A) a favorable inflation shock.
B) an adverse inflation shock
C) inflation inertia.
D) excessive aggregate spending.
Q2) For a given level of inflation, if bright prospects for the future of the economy cause businesses to increase their investment in new capital, then the _____ shifts _____.
A) aggregate demand curve; right
B) short-run aggregate supply line; downward
C) aggregate demand curve; left
D) short-run aggregate supply line; upward
Q3) According to the text, the Fed and other policy makers are concerned about:
A) inflation rates that are too high only.
B) inflation rates that are either too high or too low compared to its set target.
C) annual inflations rates that exceed 10%.
D) inflations rates that are too low only.
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Chapter 13: Exchange Rates and the Open Economy
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168 Verified Questions
168 Flashcards
Source URL: https://quizplus.com/quiz/49269
Sample Questions
Q1) Foreign currency assets held by a government for the purpose of purchasing domestic currency in the foreign exchange market are called:
A) purchasing-power-parity funds.
B) international reserves.
C) balance-of-payment currency.
D) fixed-exchange-rate deposits.
Q2) As U.S. real GDP rises, wealthier households may decide to buy ______ foreign goods and assets, which would cause a(n) ______ of the U.S. dollar.
A) more; appreciation
B) more; depreciation
C) fewer; appreciation
D) fewer; depreciation
Q3) A currency depreciation is a(n):
A) increase in the value of a currency relative to other currencies.
B) decrease in the value of a currency relative to other currencies.
C) reduction in the official value of a currency in a fixed-exchange-rate system.
D) increase in the official value of a currency in a fixed-exchange-rate system.
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