ECON 201 � Final Exam � Ansbach - Katterbach - Spring 2013, Session 1

Name: ECON 201 � Final Exam � Ansbach - Katterbach - Spring 2013, Session 1
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Final exam covering fundamental economic principles.

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ECON 201 – FINAL EXAM – ANSBACH - KATTERBACH - SPRING 2013, SESSION 1
Page 1 of 18
ECON 201 – Final Exam – Ansbach - Katterbach - Spring 2013, Session 1

ECON 201 – FINAL EXAM – ANSBACH - KATTERBACH - SPRING 2013, SESSION 1
Page 2 of 18
TRUE / FALSE
1. True False A side benefit of international trade is that it links national interests
and increases the opportunity costs of war.
2. True False When C + Ig = GDP in a private closed economy, S = Ig and there
are no unplanned changes in inventories.
3. True False The risk-free interest rate is the rate on long-term U.S. government
bonds.
4. True False Bond prices and interest rates are directly or positively related.
5. True False The public debt is the accumulation of all deficits and surpluses
that have occurred through time.
6. True False The M2 money supply may be larger or smaller than the M1 money
supply depending on the size of small-denominated time deposit
balances and Money Market Mutual Fund balances held by
individuals.
7. True False Excess reserves are the amount by which required reserves exceed
actual reserves.
8. True False The public debt is held as Treasury bills, Treasury notes, Treasury
bonds, and U.S. savings bonds.
9. True False The equilibrium price level and equilibrium level of real GDP
occur at the intersection of the aggregate demand curve and the
aggregate supply curve.

ECON 201 – FINAL EXAM – ANSBACH - KATTERBACH - SPRING 2013, SESSION 1
Page 3 of 18
10. True False Investment is highly stable; it increases over time at a very steady
rate.
MULTIPLE CHOICE
11. A recessionary expenditure gap is:
A. the amount by which the full-employment GDP exceeds the level of aggregate expenditures.
B. the amount by which equilibrium GDP falls short of the full-employment GDP.
C. the amount by which investment exceeds saving at the full-employment GDP.
D. the amount by which aggregate expenditures exceed the full-employment level of GDP.
12. The multiplier effect indicates that:
A. a decline in the interest rate will cause a proportionately larger increase in investment.
B. a change in spending will change aggregate income by a larger amount.
C. a change in spending will increase aggregate income by the same amount.
D. an increase in total income will generate a larger change in aggregate expenditures.
13. Which one of the following is true about the U.S. Federal Reserve System?
A. There are 12 regional Federal Reserve Banks.
B. The head of the U.S. Treasury also chairs the Federal Reserve Board.
C. There are 14 members of the Federal Reserve Board.
D. The Open Market Committee is smaller in size than the Federal Reserve Board.

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University

University of Washington

Subject

Economics

ECON 201 � Final Exam � Ansbach - Katterbach - Spring 2013, Session 1

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