ECON 312 FINALS 2015

      [removed] there is never enough of anything.
      [removed] individuals have to make choices from among alternatives.
      [removed] production has to be planned by government.
      [removed] things which are plentiful have relatively high prices.

      [removed] as such, it is not productive.
      [removed] money is not a free gift of nature.
      [removed] money is made by man.
      [removed] idle money balances do not earn interest income.

      [removed] attainable and the economy is efficient.
      [removed] attainable, but the economy is inefficient.
      [removed] unattainable, but the economy is inefficient.
      [removed] unattainable and the economy is efficient.

      [removed] self-interest guides and commands individuals to pursue actions that lead them toward achieving their goals.
      [removed] the head of each family decides what to do with the family's resources.
      [removed] the government makes production and allocation decisions.
      [removed] market traders command what outputs are produced and how they are allocated.

      [removed] supply.
      [removed] wealth.
      [removed] price.
      [removed] income.

      [removed] When supply increases and demand increases
      [removed] When supply decreases and demand decreases
      [removed] When supply decreases and demand increases
      [removed] When supply increases and demand decreases

      [removed] 1.0.
      [removed] greater than 1.
      [removed] 0.5.
      [removed] zero.

      [removed] A 1 percent decrease in the price causes a 0.2 percent decrease in quantity supplied
      [removed] A 2 percent decrease in price causes a 1 percent decrease in quantity supplied
      [removed] A 1 percent decrease in price causes a 2 percent decrease in quantity supplied
      [removed] A 2 percent decrease in price causes a 2 percent decrease in quantity supplied

      [removed] until marginal cost begins to rise.
      [removed] until total revenue equals total cost.
      [removed] until marginal cost equals average variable cost.
      [removed] as long as marginal revenue is greater than marginal cost.

      [removed] exhibit the same price elasticity of demand for a given product than consumers who do not clip and redeem coupons.
      [removed] exhibit more price elasticity of demand for a given product than consumers who do not clip and redeem coupons.
      [removed] exhibit less price elasticity of demand for a given product than consumers who do not clip and redeem coupons.
      [removed] cause total revenue to decrease for firms that issue coupons for their products.

      [removed] reduce the elasticity of demand for the product.
      [removed] enlarge the market share for each producer.
      [removed] minimize the costs of production.
      [removed] maximize joint profits.

      [removed] firms earn zero profits in the long run.
      [removed] the long run always refers to a time period of one year or longer.
      [removed] in the short run, some inputs are fixed.
      [removed] in the long run, all inputs are fixed.

      [removed] Peak, recession, expansion, trough
      [removed] Trough, recovery, expansion, peak
      [removed] Expansion, recession, trough, peak
      [removed] Peak, recession, trough, expansion

      [removed] do not have jobs.
      [removed] are not employed but are seeking work.
      [removed] are not working.
      [removed] are not in the workforce.

      [removed] only final goods and services should be counted.
      [removed] intermediate goods and services should be counted.
      [removed] both final and intermediate goods and services should be counted.
      [removed] primary, intermediate, and final goods and services should be counted.

      [removed] nominal GDP is based on constant prices.
      [removed] real GDP is based on current prices.
      [removed] real GDP is adjusted for changes in the price level.
      [removed] nominal GDP is adjusted for changes in the price level.

      [removed] fiscal policy.
      [removed] incomes policy.
      [removed] monetary policy.
      [removed] employment policy.

      [removed] Increases in taxes and government spending
      [removed] Decrease in taxes and increase in government spending
      [removed] Increase in taxes and no change in government spending
      [removed] Decreases in taxes and government spending

      [removed] Interest rates
      [removed] Exchange rates
      [removed] Inflation rate
      [removed] Progressive income tax

      [removed] crowding-out lag.
      [removed] recognition lag.
      [removed] operational lag.
      [removed] administrative lag.

      [removed] increase aggregate demand and aggregate supply.
      [removed] decrease aggregate demand and aggregate supply.
      [removed] increase aggregate supply.
      [removed] increase aggregate demand.

      [removed] becomes flatter at output levels above the full-employment output.
      [removed] becomes vertical at output levels above the full-employment output.
      [removed] is upward-sloping with a constant slope.
      [removed] is horizontal.

      [removed] An increase in the prices of imported products
      [removed] An increase in productivity
      [removed] A decrease in business subsidies
      [removed] A decrease in personal taxes

      [removed] price level falls.
      [removed] price level rises.
      [removed] the rate of inflation falls.
      [removed] the rate of inflation rises.

      [removed] income is greater than saving.
      [removed] income is less than consumption.
      [removed] saving is greater than consumption.
      [removed] saving is greater than the interest rate.

      [removed] M1
      [removed] M2
      [removed] Neither M1 nor M2
      [removed] M1 and M2

      [removed] is legal tender, is generally acceptable in exchange for goods or services, and is backed by the gold and silver of the federal government.
      [removed] is generally acceptable in exchange for goods or services, is backed by the gold and silver of the federal government, and facilitates trade.
      [removed] is relatively scarce, is legal tender, and is generally acceptable in exchange for goods and services.
      [removed] facilitates trade, is legal tender, and permits the use of credit cards and near-monies.

      [removed] Seven
      [removed] Nine
      [removed] 12
      [removed] 14

      [removed] Setting reserve requirements
      [removed] Controlling the money supply
      [removed] Lending money to banks and thrifts
      [removed] Acting as fiscal agent for the U.S. government

      [removed] the Fed.
      [removed] the U.S. Treasury.
      [removed] other banks.
      [removed] large corporations.

      [removed] establishment of the Federal Reserve System in 1913.
      [removed] speculation during World War I.
      [removed] stock market crash of 1987.
      [removed] bank panics of 1930-1933.

      [removed] federal funds market.
      [removed] open market operations.
      [removed] money market transactions.
      [removed] term auction facility.

      [removed] selling government bonds in the open market.
      [removed] buying government bonds in the open market.
      [removed] operating the term auction facility.
      [removed] reducing the discount rate.

      [removed] Japan
      [removed] Iran
      [removed] Peru
      [removed] China

      [removed] a product with fewer inputs than the other nation.
      [removed] a product at lower average cost than the other nation.
      [removed] a product at a lower domestic opportunity cost than the other nation.
      [removed] more of a product than the other nation.

      [removed] quota.
      [removed] tariff.
      [removed] export restriction.
      [removed] price ceiling.

      [removed] domestic government administers the former, whereas the foreign government administers the latter.
      [removed] foreign government administers the former, whereas the domestic government administers the latter.
      [removed] one is a tax, whereas the other is a quantity limit.
      [removed] one raises the price of the imported product involved, whereas the other one does not.

      [removed] domestic producers of the product.
      [removed] domestic consumers of the product.
      [removed] workers engaged in trade, like transportation workers.
      [removed] foreign producers of the product.

      [removed] 35
      [removed] 72
      [removed] 153
      [removed] 210

      [removed] increase the foreign demand for foreign currencies.
      [removed] increase the domestic demand for foreign currencies.
      [removed] decrease the foreign supply of foreign currencies.
      [removed] increase the domestic supply of foreign currencies.

      [removed] trade in services.
      [removed] net international transfers.
      [removed] financial accounts.
      [removed] capital accounts.

      [removed] inflow of payments for goods and services.
      [removed] outflow of goods and services.
      [removed] inflow of goods and services.
      [removed] excess of exports over imports.

      [removed] price at which purchases and sales of foreign goods take place.
      [removed] movement of goods and services from one nation to another.
      [removed] price of one nation's currency in terms of another nation's currency.
      [removed] difference between exports and imports in a particular nation.

      [removed] depreciated.
      [removed] appreciated.
      [removed] inflated.
      [removed] deflated.

      [removed] fixed exchange rates.
      [removed] freely floating exchange rates.
      [removed] a managed gold standard.
      [removed] managed floating exchange rates.

Question 6. 6. (TCO 8) a) Define the four basic types of trade barriers.  b) Who gains and who loses from a protective tariff?  Explain. (Points : 40)