econ exam

In 1933, president FDR created a program called “Civilian Conversation Corps” (CCC). Which allowed young men (ages 18-25) enlisted in various work programs such as improving national parks as work. This further allow more people with money to spend after the government increase expenditure on wages for the people in the program.

Identify the government action in the example in the left.. What type of fiscal policy was best applied?

• Contractionary Fiscal Policy

• Discretionary Fiscal Policy

• Expansionary Fiscal Policy

• Automatic Fiscal Policy

Answer explanation

While it appears it maybe discretionary fiscal policy, this was a program approve by congress but states the president committed to this program therefore the correct answer is expansionary fiscal policy as the young men earn money then spend it on goods and services. Automatic is not possible as this was started by the government. Contractionary is not present as the fiscal policy here demonstrates work of the government increasing spending not decreasing spending.

NAFTA (North American Free Trade Agrreement). Since this policy was enacted by Bill Clinton. This allowed companies more freedom within North America. Example: Jobs in Mexico making American products. Which of the following terms best fit this action?

• Protectionism

• Absolute Advantage

• Imports

• Net Exports

• Comparative Advantage

The Ford Motarcycle company is loosing revenue this year due to a decrease in motorcycle sales. On the flip side the Japanese Toyota Motorcycle company is gaining revenue this year due to an increase in motorcycle sales. In order to help the Ford Motorcycle company, the US placed a limit amount of Japanese Toyota motorcycles available to be bought (up to 4,000). Which then result an increase due to higher demand lower supply of American buyers. Which led to a boom of Ford Motorcycles increasing. What form of action was this?

• Tariff

• Import Quotas

• Protectionism

• Depreciation

In 1965, many farm workers went on strike known as the “Delano Grape Strike and Boycott” for increase wages. What scarcity of resource did this caused?

Choose what best fits.

• Natural Resources

• Physical Capital

• Human Capital

• Entrepreneurship

Answer explanation

While this strike leads to less physical capital, ultimately it’s the lack of labor unavailable.

True or False: Money is a resource.

• True

• False

True or False: Money is a resource

• True

• False

You buy oreos every day for a snack then suddenly you feel less want of the snack and stop buying. What type of demand is this?

• Substitution Effect

• Income Effect

• Law of Diminishing Marginal Utility

• Complementary Good

• None of these answers are correct.

Answer explanation

The correct answer is "Law of Diminishing Marginal Utility" the reason why is due buying the same unit can lead to less of satisfaction. It is not income effect as while, oreo isn't inherently a need it is a want, this isnt a situation of one's income depleting into buying less goods this is a situation of one tired of buying the same good therefore a decrease in demand, as also their want of the oreo has been satisfied therefore less of a want for oreos.

You go to the store and choose to buy a second pair of jeans despite it being less satisfactory of utility. When stores choose to do buy one get one half off/or free, what is it based on?

• The law of demand

• The law of supply

Answer explanation

Ultimately the law of demand as this is to entice consumers to consume more then originally intended as if the price is right you would buy it. While the law of supply could somewhat work if the store has too many pairs of jeans, it does not apply as well to the law of demand.

Gatorade cost $2.75 per drink vs Powerade is $2.50 per drink. What kind of change in demand would this cause?

• Substitution Effect

• Income Effect

• Law of Diminishing Marginal Utility

• Complementary Good

• Something else in my head that I cannot say

If the government conducts a type of protectionism policy that places tariffs to Canada, China, and Mexico. What in the following answers best applies to the impact of tariffs?

• Tariffs decrease prices on imports and benefit consumers.
• Tariffs raise prices on imports, protect domestic industries, and can lead to trade retaliation.
• Tariffs have no effect on domestic industries or trade relations.
• Tariffs only apply to exports and do not impact imports.