Essay on Eco 372 Final Exam

1500 Words Dec 2nd, 2015 6 Pages

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ECO 372 Final Exam,
1) The largest source of household income in the U.S. is obtained from
A. stock dividends
B. wages and salaries
C. interest earnings
D. rental income
2) The market where business sell goods and services to households and the government is called the
A. goods market
B. factor market
C. capital market
D. money market
3) Real gross domestic product is best defined as
A. the market value of intermediate goods and services produced in an economy, including exports
B. all goods and services produced in an economy,
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shift right by more than 20
B. shift right by less than 20
C. shift right by exactly 20
D. not shift at all
9) Aggregate demand management policies are designed most directly to
A. minimize unemployment
B. minimize inflation
C. control the aggregate level of spending in the economy
D. prevent budget deficits or surpluses
10) Suppose that consumer spending is expected to decrease in the near future. If output is at potential output, which of the following policies is most appropriate according to the AS/AD model?
A. An increase in government spending
B. An increase in taxes
C. A reduction in government spending
D. No change in taxes or government spending
11) According to Keynes, market economies
A. never experience significant declines in aggregate demand
B. quickly recover after they experience a significant decline in aggregate demand
C. may recover slowly after they experience a significant decline in aggregate demand
D. are constantly experiencing significant declines in aggregate demand
12) The laissez-faire policy prescription to eliminate unemployment was to
A. eliminate labor unions and government policies that hold real wages too high
B. strengthen unions and government regulations protecting unions and workers
C. increase real wages so that people are encouraged to work
D. have government guarantee jobs for everyone
13) In the AS/AD model, an expansionary monetary

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