Question

QUESTION 35

1. Ceteris paribus, a rise in the number of unskilled and relatively poor immigrants tends to

   		have no effect on income inequality.
   		reduce income inequality.
   		increase income inequality.
   		initially reduce income inequality, but then increase it because immigrants steal jobs from citizens.

2 points   

QUESTION 36

1. Which one of the following is not an accurate description of the activities in which labor unions engage?

   		Control competition among workers for jobs.
   		Encourage consumers to purchase union-made products exclusively.
   		Enforce seniority criteria when employers are contemplating layoffs.
   		Help workers compete against corporate employers.

2 points   

QUESTION 37

1. Consider the following simplified sequences of four exchanges in a production process for a bookcase. A logger sells a tree to a sawmill owner. The sawmill mills it and sells the boards to a woodworker. The woodworker makes a bookcase out of the boards, and sells it to a retailer. The retailer then sells you the bookcase. Do supply and demand dynamics play out that result in the price at which each of those transactions takes place?

   		No; subjective value only comes into play for the final good.
   		No; the objective costs of each of each step of the process are simply passed along to the next producer until theyâ re fully accounted for in the sale of the final good.
   		Yes; all costs are subjective, so each stage of the production process involves haggling and negotiation between buyers and sellers.
   		Yes; the sellers have all of the bargaining power at each stage of the production process, which is how all supply and demand dynamics play out in all markets.

2 points   

QUESTION 38

1. The 2011 Tuscaloosa-Birmingham tornado caused $2.4 billion-worth of damage. Suppose it produced exactly that amount of new expenditures on new construction and health care services for the victims in its aftermath. How would those new expenditures be counted in GDP figures?

   		They would be subtracted from the gross domestic product account.
   		They would be added to the gross domestic product account.
   		They would be added to the gross domestic product account and subtracted from the national income account.
   		They would impact GDP in none of the above ways.

2 points   

QUESTION 39

1. The systemic costs and burdens that inflation imposes upon a society are almost entirely the result of

   		government price controls.
   		inability to predict its rate and timing.
   		the fact that no one can ultimately gain from higher prices because everyone is a consumer.
   		the lag between the rise of prices and the subsequent rise of wages.

2 points   

QUESTION 40

1. When determining value added, national income accounting systematically ignores

   		accounting profits.
   		accounting losses.
   		the expected market value of unsold inventory.
   		economic profits.

2 points   

QUESTION 41

1. The defining characteristic of money is to

   		provide a store of value
   		serve as a unit of account
   		enable people to measure their own personal net worth
   		serve as a commonly accepted medium of exchange

2 points   

QUESTION 42

1. Money exists to solve what central economic problem?

   		High transaction costs associated with barter
   		You want what I have, but I don't want what you have
   		Lack of double coincidence/mutual reciprocity of wants
   		All of the above

2 points   

QUESTION 43

1. Goldsmiths issued paper receipts for customer deposits of metallic coins. These receipts were probably one of the earliest forms of

   		Federal Reserve notes.
   		seigniorage.
   		paper money.
   		traveler's checks.

Answer 1

Question 35.Everything remain unchanged and If there is a rise in the number of unskilled and relatively poor immigrants than it tends to increase the income inequality in the economy. This is because when the unskilled and poor immigrants enters the economy the proportion of poor people increases but the work and incomes for them is almost same. So the income will be distributed to more number of people at lower level but for higher income groups there is no change in incomes. So it increases inequality.

Question 36. Labour unions are the organisations comprising of labours only who come together for the protection of their rights and for the upliftment of themselves. So they control competition among workers for job so that the wage rate do not fall, helps in enforcement of seniority criteria for workers and help workers compete against corporate employers. But they dont encourage consumers to buy union made goods exclusively, this is because they have no benefit in it.

Question 37. Yes the supply and demand dynamics play out that results in the price at which each of these transactions take place. This is very common that the demand and supply dynamics comes into play in all types of purchase and sell of goods and services in the markets. There are demands and supply for every commodity in the market and these are the only factors which determine the price in a competitive market. So it can be said that all costs are subjective, so each stage of the production process involves haggling and negotiation between buyers and sellers and the prices are decided after these bargaining and negotiations.