ISS-ECON10 I8S-ECONI03-Final Exam Multiple Choice Ideratify the choice that best

Question

ISS-ECON10 I8S-ECONI03-Final Exam Multiple Choice Ideratify the choice that best completes the statement or answers the question 1. Suppose widespread digitalization leads to a spurt in worker productivity. In the long rum, output will and the price level will a. increase; decrease d. e. remain unchanged; remain unchanged increase; increase increase; remain unchanged c. decrease; decrease 2. A resegnition lag happens because a. in most nations, one or more governing bodies must approve government spending or new tax policies. b. it takes time for the complete effects of monetary and fiscal policy to materialize. it is difficult to determine when the economy is turning up or down. c. d. it takes time to recognize the true long-run growth rate in the economy. e. it is difficult to recognize what the unemployment rate is. 3. Suppose consumption spending in an economy is $16 billion, planned investment spending is S4 billion, unplanned investment spending is $2 billion, government purchases are $6 billion, and net export spending is SI billion. What is aggregate expenditure? a. $22 billion b. $25 billion c. S27 billion d. $29 billion e. $26 billion 4. If the price of a typical market basket of goods increased from about $200 in 1998 to $500 in early 2018, then it a. rose by 5-fold from 1998 until early 2018. b. rose at a 25 percent rate per year from 1998 until early 2018. c. rose by 2.5-fold from 1998 until early 2018. d. must not have contained the same goods in both periods. e. rose at a 25 percent rate from 1998 until early 2018. to use his credit card to purchase a new TV. As a consequence, this purchase would lead to a. a decrease in MI and a decrease in M2. b. c. d. no changes to MI or M2. an increase in M1 and an increase in M2. a decrease in M1 and an increase in M2. an increase in MI and a decrease in M2. e. Page

Explanation / Answer

1. Option A

Explanation: Higher productivity will lead to higher output. Also, higher productivity means lower production cost per unit. This will result in a fall in price.

2. Option C

Explanation: Recognition lag takes place when there a time gap between when an actual economic event happens and when economic authorities such as the central bank recognize the event. It takes some time to determine whether the economy is going up or down.

3. Option C

Explanation: Aggregate expenditure = consumption spending + planned investment + government purchase + net exports = $16 billion + $4 billion + $6 billion + $1 billion = $27 billion. Aggregate expenditure does not include unplanned investment.

4. Option C

Explanation: $500/$200 = 2.5 folds increase.

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.