SOPHIA ECON102 Unit 1 Challenge 2 Latest 2022 May

ECON102 Macroeconomics

Unit 1 Challenge 2

Movements along the supply curve are a result of changes in __________.

a.)input prices

b.)price

c.)regulations

d.)resource access

When a good is unit elastic, the absolute value of the elasticity is ___________.

a.)greater than 10

b.)less than one

c.)equal to one

d.)greater than one

In 2007, the government attempted to end inflation by enforcing a price freeze on basic commodities such as corn, sugar and eggs. This led to runs on grocery stores and other places that sold such items, since in some cases the prices were rolled back to almost 50% of what they had been. A shortage occurred because people rushed to stock up on these items as much as they could.

In this example, the freeze on prices is known as a government enforced __________, with businesses forbidden to charge more than the price set by the government. These government enforced price constraints are binding because they are lower than the __________.

a.)price floor; equilibrium price

b.)price ceiling; equilibrium price

c.)price floor; price ceiling

d.)price ceiling; price floor

When the government pays money to encourage production, this is known as a __________.

a.)revenue stream

b.)subsidy

c.)tax incidence

d.)transfer payment

The price for borrowing money is known as the __________.

a.)time deposit

b.)deposit rate

c.)interest rate

d.)exchange rate

Unemployment as a result of people's skills not matching those needed for jobs in a changing economy is known as __________ unemployment.

a.)structural

b.)frictional

c.)cyclical

d.)full

Which of the following is a reason why the aggregate demand curve slopes downward?

a.)Trade surplus

b.)Interest rate effect

c.)Solow growth curve

d.)Balance of payments

Which of the following is true regarding exchange rates?

a.)It is easy to predict what the exchange rate will be.

b.)All countries express the exchange rate in the same way.

c.)The exchange rate between two currencies never changes.

d.)It is subject to the stability in one country as compared to another.

Investment and financial activity is shown on a country's __________.

a.)current account

b.)trade surplus

c.)capital account

d.)trade deficit