ECO 550 Mid term 2

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Mid Term 2:

Question 1

Which of the following barometric indicators would be the most helpful for forecasting future sales for an industry?

Selected Answer:

leading economic indicators.

Correct Answer:

leading economic indicators.

· Question 2

4 out of 4 points

The use of quarterly data to develop the forecasting model Yt = a +bYt−1 is an example of which forecasting technique?

Selected Answer:

Time-series forecasting

Correct Answer:

Time-series forecasting

· Question 3

4 out of 4 points

An example of a time series data set is one for which the:

Selected Answer:

data would be collected for a given firm for several consecutive periods (e.g., months).

Correct Answer:

data would be collected for a given firm for several consecutive periods (e.g., months).

· Question 4

4 out of 4 points

The forecasting technique which attempts to forecast short-run changes and makes use of economic indicators known as leading, coincident or lagging indicators is known as:

· Question 5

4 out of 4 points

The type of economic indicator that can best be used for business forecasting is the:

· Question 6

4 out of 4 points

The variation in an economic time-series which is caused by major expansions or contractions usually of greater than a year in duration is known as:

· Question 7

4 out of 4 points

If Ben Bernanke, Chair of the Federal Reserve Board, begins to tighten monetary policy by raising US interest rates next year, what is the likely impact on the value of the dollar?

· Question 8

4 out of 4 points

In a recession, the trade balance often improves because

· Question 9

4 out of 4 points

An increase in the exchange rate of the U.S. dollar relative to a trading partner can result from

· Question 10

4 out of 4 points

The optimal currency area involves a trade-off of reducing transaction costs but the inability to use changes in exchange rates to help ailing regions. If the US, Canada, and Mexico had one single currency (the Peso-Dollar) we would tend to see all of the following EXCEPT:

· Question 11

4 out of 4 points

Trading partners should specialize in producing goods in accordance with comparative advantage, then trade and diversify in consumption because

· Question 12

4 out of 4 points

Companies that reduce their margins on export products in the face of appreciation of their home currency may be motivated by a desire to

· Question 13

4 out of 4 points

The purchasing power parity hypothesis implies that an increase in inflation in one country relative to another will over a long period of time

· Question 14

4 out of 4 points

Marginal revenue product is defined as the amount that an additional unit of the variable input adds to __.

· Question 15

4 out of 4 points

Which of the following is never negative?

· Question 16

4 out of 4 points

The marginal rate of technical substitution may be defined as all of the following except:

· Question 17

4 out of 4 points

The combinations of inputs costing a constant C dollars is called:

· Question 18

4 out of 4 points

If the marginal product of labor is 100 and the price of labor is 10, while the marginal product of capital is 200 and the price of capital is $30, then what should the firm?

· Question 19

4 out of 4 points

In a production process, an excessive amount of the variable input relative to the fixed input is being used to produce the desired output. This statement is true for:

· Question 20

4 out of 4 points

Economies of scale exist whenever long-run average costs:

· Question 21

4 out of 4 points

According to the theory of cost, specialization in the use of variable resources in the short-run results initially in:

· Question 22

4 out of 4 points

__ are defined as costs which are incurred regardless of the alternative action chosen in a decision-making problem.

· Question 23

4 out of 4 points

What method of inventory valuation should be used for economic decision-making problems?

· Question 24

4 out of 4 points

For a short-run cost function which of the following statements is (are) not true?

· Question 25

4 out of 4 points

Economies of Scope refers to situations where per unit costs are: