ECO 372 Final Exam


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ECO 372 Final Exam

2015 Update

1) The largest source of household income in the U.S. is obtained from



2) The market where business sell goods and services to households and the government is called the



3) Real gross domestic product is best defined as



4) Underemployment includes people



5) The Bureau of Economic Analysis is responsible for which of the following?



6) The Federal Reserve provides which of the following data?


7) Consider if the government instituted a 10 percent income tax surcharge. In terms of the AS/AD model, this change should have



8) If the depreciation of a country’s currency increases its aggregate expenditures by 20, the AD curve will


9) Aggregate demand management policies are designed most directly to



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?



11) According to Keynes, market economies



12) The laissez-faire policy prescription to eliminate unemployment was to



13) In the AS/AD model, an expansionary monetary policy has the greatest effect on the price level when it



14) The Federal funds rate


15) What tool of monetary policy will the Federal Reserve use to increase the federal funds rate from 1% to 1.25%?



16) If the Federal Reserve increases the required reserves, financial institutions will likely lend out



17) Suppose the money multiplier in the U.S. is 3. Suppose further that if the Federal Reserve changes the discount rate by 1 percentage point, banks change their reserves by 300. To increase the money supply by 2700 the Federal Reserve should



18) If the Federal Reserve reduced its reserve requirement from 6.5 percent to 5 percent. This policy would most likely



19) A country can have a trade deficit as long as it can



20) A weaker dollar



21) In the short run, a trade deficit allows more consumption, but in the long run, a trade deficit is a problem because


22) Considering an economy with a current trade deficit and considering only the direct effect on income, an expansionary monetary policy tends to



23) The balance of trade measures the



24) When a country runs a trade deficit, it does so by:



25) Expansionary fiscal policy tends to



26) In considering the net effect of expansionary fiscal policy on the trade deficit, the



27) If U.S. interest rates fall relative to Japanese interest rates and Japanese inflation falls relative to U.S. inflation, then the


28) Expansionary monetary policy tends to


29) The U.S. has limits on Chinese textile imports. Such limits are an example of



30) Duties imposed by the U.S. government on imported Chinese frozen and canned shrimp are an example of




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