Introduction to Economics 2 Final 1. Deneme Sınavı
Toplam 20 Soru1.Soru
What is another name for production stability?
Expenditure
|
Inflation
|
Stagflation
|
One-time price increase |
Output stability |
Stability in production (output stability) is the reduction of periodic fluctuations in GDP and maintaining economic growth rate close to the long-term average.
2.Soru
In which choice the terms of definitions are correctly matched?
I. inflation caused by aggregate demand increases
II. inflation that occurs as a result of increase in output costs
I. Stagflation, II. Cost-push inflation |
I. Cost-push inflation, II. Stagflation |
I. Demand-pull inflation, II. Cost-push inflation |
I. Cost-push inflation, II. Demand-pull inflation |
I. Demand-pull inflation, II. Stagflation |
Correct answer is C.
3.Soru
Which of the following models relates economic growth to the nation’s savings rate?
The Solow Growth Model
|
The Harrod-Domar model
|
Endogenous Growth Model
|
Standard Equilibrium Growth Model |
Proximate Growth Model |
The Harrod-Domar model relates economic growth to the nation’s savings rate and hence to the capital stock.
4.Soru
Which of the following is the effect of an expansionary monetary policy on prices and production?
P↑ and Y↑
|
P↑ and Y↓
|
P↓ and Y↑
|
P↓ and Y↓ |
P↓ and Y does not change |
Expansionary monetary policy (increasing money supply) shifts the aggregate demand curve to the right, and therefore, price level and output increase.
5.Soru
Which one of the following is not true about economic growth?
It is the percentage increase in the gross domestic product of nation from a period to another period of time.
|
The time period is taken as quarterly, semi-annually and annually in the calculations of the changes in economic activity.
|
It is the percentage change in GDP of a country from a year to another year.
|
The economic growth can be positive only. |
If the change in GDP from a year to another year is positive, there is an economic expansion. |
Economic growth is simply defined as the percentage increase in the value of economic activity from a period to another period of time. Generally, the time period is taken as quarterly, semi-annually and annually in the calculations of the changes in economic activity. For the measurement of the value of the economic activity, generally the gross domestic product (GDP) of the country is used as a proxy. The GDP is defined as the market value of all final goods and services produced within a country in a given period of time, say, in a year. So, if we want to define the economic growth of a country annually, we say that the economic growth is the percentage change in GDP of a country from a year to another year. The economic growth can be positive or negative. If the change in GDP from a year to another year is positive, we say that the economic growth is positive or there is an economic expansion.
6.Soru
The period when there is no international trade is called _______.
production possibilities frontier
|
specialization
|
autarky
|
consumption possibilities frontier |
commodities |
Autarky is the absence of international trade.
7.Soru
Which of the following options gives the measurement of aggregate demand?
Average cost |
Marginal cost |
Real GDP |
Real inflation |
Nominal interest rate |
Aggregate demand is the total amount of goods and services demanded at various price levels by all sectors in an economy (households, firms, government, and external world). The total amount of these goods and services is measured by real income or real GDP.
8.Soru
What is “fiat money”?
The object which has no value as a good
|
The object which has no value as a good but has a value in purchasing goods and services
|
The object which has a value in purchasing goods and services
|
The object which has a value as a good |
The object which has a value as a medium of exchange |
Fiat money is the object which has no value as a good but has a value in purchasing goods and services.
9.Soru
_____ is the change in output produced that results in one unit increase (change) in the capital stock.
Real GDP
|
Nominal GDP
|
Production function
|
The marginal product of labor |
The marginal product of capital |
The marginal product of capital is the change in output produced that results in one unit increase (change) in the capital stock.
10.Soru
Which one of the following is not one of the factors affecting increase in aggregate supply?
Decrease in input prices
|
Low wage level
|
Economic growth
|
Favorable weather conditions |
Increase in fees |
Increase in input fees is one of the factors effecting decrease in aggregate supply.
11.Soru
What is the factor that causes the decrease of the production amount when the general level of prices increases in the economy?
Money demand
|
Money supply
|
Interest rate
|
Equilibrium price level |
Stagnation |
The factor that causes the decrease of the production amount when the general level of prices increases in the economy is the interest rate. The interest rate influences the planned aggregate expenditures, thus causing the production level to be determined. For this reason, the real sector and the monetary sector are in equilibrium at every point on the aggregate demand curve.
12.Soru
Which of the following is the main reason for the continuing inflation of an economy?
Decrease in interest rate
|
Increase in money supply
|
Variability in the capacity utilization rate
|
Variability in unemployment rate |
Decrease in the openness of the economy |
The increase in the money supply plays an important role in the emergence of demand-pull inflation as well as the consistent inflation. For example, let’s assume that an expansionary fiscal policy has been followed by an increase in government expenditure while money supply is constant. The fact that the money supply remains constant in the face of the increase in government expenditures suggests that the central bank does not accommodate to the expansionary fiscal policy. The increase in government expenditures will cause the aggregate demand curve to shift to the right and the prices will increase.
13.Soru
Which of the following options is used to obtain the aggregate demand curve?
Marginal cost level- average cost level |
Total cost-production level |
Average cost level- production level |
General price level- marginal cost level |
General price level-production level |
Aggregate demand curve is the curve that shows the relationship between general price level and production level.
14.Soru
Which of the following is the reason for aggregate demand to shift?
Changes in the international trade terms |
Changes in the money supply |
Changes in the marginal cost |
Changes in the export |
Changes in the total cost |
In obtaining the aggregate demand curve, we have assumed that the variables of the economic policy that the government use are fixed. Changes resulting from government expenditure (G), taxation (T) and money supply (MS) due to monetary and fiscal policy decisions cause the aggregate demand curve to shift.
15.Soru
Which of the following is not true about the aggregate demand curve shifting to the right?
Aggregate demand increases
|
Government expenditure increases
|
Money supply increases
|
Taxes decrease |
Public spending decreases |
The aggregate demand curve shifts to the right to indicate that aggregate demand increases when government expenditure increases, money supply increases, and taxes decrease. The shift of the aggregate demand curve to the left is a matter of decreasing public spending and money supply, increasing taxes.
16.Soru
Which of the following is not the components of a country’s financial system?
Interests
|
Savers
|
Investors
|
Central bank |
Banks |
There are four basic actors in a country’s financial system: Central bank, financial intermediaries (banks etc.), savers and investors. Among them, the most important one is the central bank with its functions.
17.Soru
Which of the following is an example of commodity money?
Gold
|
Tobacco
|
Clothes
|
Whale teeth |
Bread |
Commodity money is the object which has a value when used as goods and which can also be used as medium of exchange. The best example of commodity money is gold. Gold has been used as means of payment to purchase goods and services for centuries; gold also has a value in other usage areas as a good. For instance, gold is being used as jewelry or ornaments for centuries, as well as a means of payment.
18.Soru
“_____ is the situation in which the general price level in the economy either changes very slowly or does not change at all.”
Production stability
|
Price stability
|
Inflation
|
Stagflation |
Investment deficit |
The definiton fits the term “price stability”.
19.Soru
Of the functions of Money, which one of the following is not about “medium of exchange”?
Being a measurement unit in quantifying the value of goods and services
|
Simplifying and accelerating exchange process of goods and services
|
Ensuring to keep purchasing power on hand
|
Contributing to ensure and increase the efficiency in economy |
Being closely related with the prices of goods and services in the country |
Serving as a Medium of Exchange: The first function of money is to be a medium of exchange. Economic units exchange goods and services on hand with money, and use this money to buy goods and services they want. Money, as a medium of exchange, is a kind of tool simplifying and accelerating exchange process of goods and services.
20.Soru
What is is the boundary between those combinations of commodities and services that can be produced and those that cannot?
Production possibilities frontier
|
Consumption possibilities frontier
|
Terms of trade
|
Theory of absolute advantage |
Heckscher-Ohlin theory |
Production possibilities frontier (PPF) is the boundary between those combinations of commodities and services that can be produced and those that cannot.
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