ECO 101 Exam 2 Study guide

1.           The least likely of the following events to be classified as an external macroeconomic shock would be: (a) the Stock Market Crash of 1929. (b) the terrorist attack of September 11, 2001. (c) nuclear storms on the surface of the sun that altered weather on Earth. (d) the black plague that killed millions of Europeans in the 14th century. (e) severe hurricanes that decimated the southeastern United States.

2.           This rightward shift of the Aggregate Supply curve could not have been caused by: (a) increases in the labor force. (b) an increased preference for work. (c) reductions in the government spending and the availability of welfare payments. (d) increases in the cost of imported oil.

3.           If improved labor productivity shifted the Aggregate Supply curve rightward, a likely result would be that: (a) prices would fall faster than wages, if wages fell at all. (b) the rate of unemployment would be increasing. (c) a demand-pull inflationary cycle has started. (d) real per capita income would be falling. (e) political incumbents would be more likely to lose in the next election.
Powered by