ECO401 Quiz # 5

ECO401 – Economics

Online Quiz # 5

February 15, 2010

Total questions: 15

Question # 1 of 15 ( Start time: 09:37:50 PM )      Total Marks: 1

Economic activity moves from a trough into a period of _______until it reaches a _____ and then into a period of _______.

Select correct option:

            Expansion; trough; recession.

            Recession; trough; expansion.

            Expansion; peak; recession.

            Recession; peak; expansion.

Question # 2 of 15 ( Start time: 09:39:03 PM )      Total Marks: 1

If a Japanese radio priced at 2,000 yen can be purchased for $10, the exchange rate is:

Select correct option:

            200 yen per dollar.

            20 yen per dollar.

            20 dollars per yen.

            None of the given options.

Question # 3 of 15 ( Start time: 09:39:58 PM )      Total Marks: 1

A tax on the accounting profits of corporations is known as:

Select correct option:

            Sales tax.

            Excise tax.

            Corporate income tax.

            Personal income tax.

Question # 4 of 15 ( Start time: 09:41:10 PM )      Total Marks: 1

Which of the following statements describes increasing returns to scale:

Select correct option:

            Doubling the inputs used leads to double the output.

            Increasing the inputs by 50% leads to a 25% increase in output.

            Increasing inputs by 1/4 leads to an increase in output of 1/3.

            None of the given options.

Question # 5 of 15 ( Start time: 09:41:54 PM )      Total Marks: 1

An individual with a constant marginal utility of income will be:

Select correct option:

            Risk averse.

            Risk neutral.

            Risk loving.

            Insufficient information for a decision.

Question # 6 of 15 ( Start time: 09:43:09 PM )      Total Marks: 1

A group of modern economists who believe that markets clear very rapidly and that expanding the money supply will always increase prices rather than employment are the:

Select correct option:

            Keynesians

            Monetarists

            New Classical school

            Post-Keynesians

Question # 7 of 15 ( Start time: 09:44:29 PM )      Total Marks: 1

Real GDP:

Select correct option:

            Is nominal GDP adjusted for changes in the price level.

            Is also called nominal GDP.

            Measures GDP minus depreciation of capital.

            Will always change when prices change.

Question # 8 of 15 ( Start time: 09:44:58 PM )      Total Marks: 1

In the equation MV = PQ, according to the crude quantity theory of money:

Select correct option:

            M has no effect on the price level.

            V is the number of times each dollar is spent per year.

            Q is the real price level.

            P rises as V falls, other things constant.

Question # 9 of 15 ( Start time: 09:46:23 PM )      Total Marks: 1

Which one of the following is most likely to lead to an increase in aggregate demand? An increase in:

Select correct option:

            Government tax revenues

            Household savings

            Business capital investment

            Demand for imports

Question # 10 of 15 ( Start time: 09:46:53 PM )    Total Marks: 1

When the demand curve is downward sloping, marginal revenue is:

Select correct option:

            Equal to price.

            Equal to average cost.

            Less than price.

            More than price.

Question # 11 of 15 ( Start time: 09:47:59 PM )    Total Marks: 1

Which of the following is not an assumption of ordinal utility analysis?

Select correct option:

            Consumers are consistent in their preference.

            Consumers can measure the total utility received from any given basket of good.

            Consumers are non-satiated with respect to the goods they confront.

            All are necessary.

Question # 12 of 15 ( Start time: 09:49:22 PM )    Total Marks: 1

To make the equation of exchange into the quantity theory of money:

Select correct option:

            V and Q are assumed to be constant.

            The money supply is assumed to be produced by the banking system and not exclusively in currency.

            The quantity of money is assumed to determine the amount of Real GDP.

            M and P are considered constant.

Question # 13 of 15 ( Start time: 09:50:44 PM )    Total Marks: 1

The marginal rate of substitution is equal to the:

Select correct option:

            Magnitude of the slope of the indifference curve

            Relative price

            Marginal cost of each good

            Slope of the budget line

Question # 14 of 15 ( Start time: 09:51:07 PM )    Total Marks: 1

The investment demand curve shows the relationship between the levels of:

Select correct option:

            Investment and consumption.

            Consumption and interest rate.

            Investment and interest rate.

            Investment and saving.

Question # 15 of 15 ( Start time: 09:51:46 PM )    Total Marks: 1

According to economy is always at full employment level. Economy would automatically find the new equilibrium in the short run.

Select correct option:

            True

            False

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