ECO403 Midterm MCQs

ECO403 MCQs Lecture 1-16

Q1. Which of the following is included in M2?

Commercial paper Stocks U.S. Treasury bonds

Savings accounts

Q2. The rate of inflation measures which of the following?

The rate of increase in the overall level of prices pg 4

The rate of increase in the price of a particular good The rate of increase in nominal GDP

3. The cost of changing prices is known as the:

Menu cost of inflation pg 35

4. n a macroeconomic model without foreign trade or government spending, aggregate demand is the sum of:

Personal saving and private investment. Personal saving and personal consumption. Personal consumption and personal income. Personal consumption and private investment.

5. Question # 13 of 15 (Start time: 08:05:13 PM) Total Marks: 1

Real GDP (Gross Domestic Product) is measured:

In the prices of a base year. In current dollars. At a constant output level but at current prices. As the difference between the current year’s GDP and last year’s GDP.

6. Real interest rates are the:

Nominal interest rates plus the inflation rate. Interest rates quoted in the market. Interest rates quoted in the market minus the inflation rate. Interest rates quoted in the market plus the expected inflation rate.

7. The number of people unemployed equals:

The number of people employed minus the labor force. The labor force plus the number of people employed. The number of people employed divided by the labor force. The labor force minus the number of people employed.

8. Economists define the labor force to

include Select correct option:

Only people who are working full-time. People who are not working but are actively looking for a job and people who are working. People who are working.

9. To arrive at GDP, the Bureau of Economic Analysis (BEA) counts:

The value of total sales. The value of final sales. The value of intermediate goods and final goods. Total value added plus the value of sales at the retail level.

10. example of an expansionary monetary policy

is: Select correct option:

An increase in the required reserve ratio. An increase in the discount rate. A reduction in the taxes banks pay on their profits. The central bank buying government securities in the open market.

11. Which of the following best defines Net national product

elect correct option:

GDP less depreciation GNP plus income generated from foreign firms in the domestic country

GNP less depreciation

GNP less income generated from foreign firms in the domestic country

12. change in the price level is merely a change in the units of measurement.” This is the:

Classical view of inflation

Keynesian view of inflation Ricardian view of inflation Neo classical view of inflation

13. The cost of next best alternative forgone is best described by the:

Principle of diminishing returns. Marginal principle. Principle of opportunity cost. Reality principle.

Q14. Which of the following events will lead to an increase in the demand for money?

An increase in the level of aggregate output

A decrease in the price level An increase in the interest rate An increase in the supply of money

Q15. Which of the following expressions is the unemployment rate?

Labor Force/Population

Unemployed / Employed + Unemployed

Employed + Unemployed Labor Force + Not in Labor Force

Q16. Which of the following statements best describes the definition of scarcity?

There are no buyers willing to purchase what sellers have produced There is more than enough money to satisfy consumers' wants

Resources are limited in quantity and can be used in different ways

There are not enough goods to satisfy all of the buyers' demand