UOP ECO 561 Final Exam Guide (New, 2017)

of barriers to entry
5 All else equal, a large decline in the real interest rate will shift the:
investment demand curve rightward
investment demand curve leftward
investment schedule upward
investment schedule downward
6 In order for mutually beneficial trade to occur between two otherwise isolated
nations:
each nation must be able to produce at least one good relatively cheaper than the
other
each nation must face constant costs in the production of the good it exports
one nation's production must be labor-intensive while the other nation's production
is capital-intensive
each nation must be able to produce at least one good absolutely cheaper than the
other
7 If the Federal Reserve System buys government securities from commercial banks
and the public:
the money supply will contract
commercial bank reserves will decline
it will be easier to obtain loans at commercial banks
commercial bank reserves will be unaffected
8 Normal profit is:
the average profitability of an industry over the preceding 10 years
determined by subtracting explicit costs from total revenue
the return to the entrepreneur when economic profits are zero
determined by subtracting implicit costs from total revenue
9 The term "recession" describes a situation where:
an economy's ability to produce is destroyed
output and living standards decline
inflation rates exceed normal levels
Government takes a less active role in economic matters
10 If an unintended increase in business inventories occurs at some level of GDP,
then GDP:
is too low for equilibrium
entails a rate of aggregate expenditures in excess of the rate of aggregate production
is too high for equilibrium