Econ 102 previous midterm

.pdf

School

University of British Columbia *

*We aren’t endorsed by this school

Course

102

Subject

Economics

Date

Apr 3, 2024

Type

pdf

Pages

5

Uploaded by ElderNightingalePerson924

Report
Answer all the multiple choice questions: Question 1 If a one year maturity bond has its price changed to $102 and has a yield rate of 10.50% then the coupon value is approximately: A. 3 dollar B. 12 dollar C. 6 dollar D. 4.5 dollar E. 8 dollar F. none of the above Question 2 When one person saves more, that person's wealth is increased, meaning that they can consume more in the future. But when everyone saves more, everyone's income falls, meaning that everyone consumes less as a consequence. Which of the following explains this seeming contradiction? A. The economy is always self regulating. B. Saving is not a good idea. C. The combined effect of individual decisions can have results that are very different from what any one individual intended. D. The outcome is always the sum of individual action and intention. Question 3 What is the main goal of policymakers in regard to the business cycle? A. increase the magnitude of both recessions and economic booms since the net result is higher economic growth. B. limit the volatility of the business cycle by reducing the size of both recessions and economic booms. C. maximize growth by fighting recessions and promoting economic booms. D. mitigate recessions while allowing economic booms to run their course. E. allow recessions to self-correct while actively preventing economic booms from growing into bubbles. Question 4 John Maynard Keynes argued that a prolonged economic slump could arise when there is a macroeconomic equilibrium in which: A. Technological regress lowers productivity, driving output below potential; and since technological change is slow, years are needed for productivity and output to recover.
B. consumers and firms spend too little to maintain output at potential, and there are no incentives for these agents to change their spending patterns. C. The central bank sets interest rates so high that overall spending is insufficient to maintain output at potential, and political considerations prevent the central bank from lowering interest rates. D. A supply shock lowers output below potential and raises inflation, a situation hard for policymakers to address, since raising output means further raising inflation, and lowering inflation means further lowering output. Question 5 Suppose that nominal GDP is $1,200 in 2018 and $1,260 in 2019, If the overall price level increased by between 2018 and 2019, we could say that real gap A. 5%; increased B. more than 6%; increased C. less than 4.5%; increased D. less than 5%; decreased E. less than 0%; decreased Question 6 In the Republic of Sildavia, a market basket of goods and services cost $155 in 2017, $167.4 in 2018, $175.77 in 2019. Based on this information, and assuming 2017 is the base year, the inflation rate: A. in the year 2019 was 5.00% B. in the year 2018 was 2.00% C. in the year 2019 was 8.00% D. in the year 2018 was 3.00% E. none of the above. Question 8 Which of the choices is most likely related to structural unemployment A. Recession B. The age distribution of the country C. An increase in the number of new college graduates looking for work D. None of the above Question 9 Choose the true statement from below: A. One reason why the unemployment rate increased in the 1970s was because the number of older workers increased in the labor force in Canada. B. Because inexperienced workers tend to stay in a job longer than experienced ones, they have lower frictional employment.
C. One reason the natural rate of unemployment rose during the 1970s was a large rise in the number of new workers in Canada. D. The labor force as a whole in Canada is less experienced today than it was in the 1970s. Question 10 Which of the factors will decrease the rate of frictional unemployment? A. increased short term unemployment benefit B. improvements in technology that make skills which were once valued by employers obsolete C. an increase in the number of jobs available due to an increase in GDP D. the advent of the Internet, which makes finding available jobs easier Question 11 In Spectacula, wild-caught oysters are being replaced with farmed oysters, which have fewer negative effects and many more significant benefits. However, the production efficiency of farmed oysters has driven down the price of oysters so significantly that wild-caught oysters can no longer compete. After six months, everybody has switched to the cheaper and better farmed oysters. Assume that Spectacula consumes the same quantity of oysters now as they did six months ago. Please select the choice that best describes the short-run effects of this industrial change on Spectacula's GDP and its standard of living. A. GDP and standard of living both increase. B. GDP decreases and standard of living increases. C. GDP and standard of living both decrease. D. GDP increases and standard of living decreases. E. There is not enough information to answer the question. Question 12 Choose the incorrect statement from below. A. With a tradition of a job for life for most citizens, Japan prior to the 90s was able to keep the frictional unemployment low in the economy. B. In Japan from 1960 to 1995, the unemployment rate rarely exceeded 3% only once. However, since the crash of its stock market in 1989, slow economic growth caused the unemployment to grow higher than before. C. With a tradition of a job for life for most citizens, Japan prior to 90s was able to keep the natural rate of unemployment low. D. Japan, since the post-crash era since the 90s has experienced a higher level of unemployment. The factor driving this higher unemployment has been the job for life system, as it caused a higher level of natural unemployment.
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help