Cor Sera

MODULE 1
Week 1
1.Question 1
A consumer buys either burgers or hot dogs and does not prefer one over the other. Given a market for burgers, an
increase in the price of hot dogs will cause the demand curve for burgers shifts to the left.
1 point
True
False
Cannot be determined
2. Question 2
Consider the market for oil. Suppose a war breaks out in a country that is a large supplier of oil, and the war shuts down
production of all oil in this country. Which of the following can we anticipate will occur?
1 point
There will be a decrease in the supply of oil.
There will be an increase in the supply of oil.
We cannot be certain if any of the other options are correct.
There will be a decrease in the demand for oil.
There will be an increase in the demand for oil.
3. Question 3
Universities frequently decide to set the price of attending sporting events to zero for their students. This is an example
of reducing scarcity for these activities.
1 point
True
False
4. Question 4
Imagine there is an innovation that allows milk cows to double their daily production of fluid milk. When we consider the
market for milk, which of the following can we anticipate?
1 point
There will be a shift to the right in the supply curve.
There will be a shift to the right in the supply curve AND the demand for milk will increase.
The demand for milk will increase.
The supply curve for milk will shift to the left on a graph with price on the vertical axis and quantity on the horizontal axis
AND the demand for milk will increase.
The supply curve for milk will shift to the left on a graph with price on the vertical axis and quantity on the horizontal axis.
5. Question 5
increase in the price of hot dogs will cause the supply curve for burgers to shift to the right.
1 point
True
False
6. Question 6
increase in the price of hot dogs will cause which of the following changes in equilibrium price and quantity of burgers?
1 point
Price decreases, quantity increases
Price decreases, quantity decreases

Price increases, quantity increases
Price increases, quantity decreases
Price remains the same, quantity decreases
Price increases, quantity remains the same
7. Question 7
Economists believe that scarcity exists for all things, including the air we breathe.
1 point
True
False
8. Question 8
Coffee and tea are close substitute goods. A ______ in the price of tea will tend to ______ the demand for _______.
1 point
rise, decrease, tea
fall, increase, tea
rise, increase, coffee
rise, decrease, coffee
rise, increase, tea
9. Question 9
All of the following factors are held constant when price changes on a demand curve except:
1 point
Quantity demanded
Tastes
Income
Population
None of these factors change when moving along a demand curve.
10. Question 10
Movement along a demand curve from left to right is known as an increase in demand.
1 point
True
False
Week 2
1. Question 1
The price of a product changes from $8 to $9, and as a result, the quantity of the product demanded falls from 20 to 15.
What do you know about the price elasticity of this good?
1 point
This is an example of an inelastic good.
This is an example of an elastic good.
None of the other options are correct.
For the prices and quantities given in the question, this product could be either elastic or inelastic.
2.Question 2
Which of the following is an effect/are effects of the imposition of a price ceiling? Select all that apply.
1 point
Equilibrium price is higher than that set by free-market equilibrium
Quantity demanded exceeds quantity supplied creating shortage

Equilibrium price is lower than that set by free-market equilibrium
Quantity supplied exceeds quantity demanded creating surplus
3.Question 3
The price of good X increases by 50%, and the consumption of good X decreases by 25%. What is the absolute value of
price elasticity of demand of X?
1 point
0.25
0.5
0.75
2.0
4. Question 4
Which of the following figures is an accurate depiction of an effective price floor P_1 set by the government?
1 point
5.Question 5
Imposition of an excise tax on a good has what effect on the supply curve of a good?
1 point
Supply curve does not move
Supply curve shifts to the left
Supply curve shifts to the right
6.Question 6
Assuming upward sloping supply curve and downward sloping demand curve, imposition of an excise tax has which of
the following effects on the equilibrium quantity of a good?
1 point
Depends on the amount of tax imposed
Quantity increases
Quantity decreases
Quantity remains the same
7.Question 7
A price floor is a government mandated minimum price in a market, and a price ceiling is a government mandated
maximum price in a market.
1 point
True
False
8. Question 8
Assuming upward sloping supply curve and downward sloping demand curve, imposition of an excise tax has which of
the following effects on the equilibrium price of a good?
1 point
Equilibrium price that producers retain falls
There is no effect on equilibrium price.
Equilibrium price for consumers falls
Equilibrium price for consumers is unchanged
Equilibrium price that producers retain rises
9.Question 9
The price of potatoes is $5 and the equilibrium quantity is 250. Now, the government imposes an excise tax of $1.50 on
potatoes. The quantity demanded at the new equilibrium is 200. The tax revenue for the government as a result of this
tax is $300.
1 point
True
False
10. Question 10
Which of the following factors crucially determines the magnitude of incidence of an excise tax on the consumers?
1 point
Number of buyers in the market
Free market equilibrium price
Slope of demand curve

Magnitude of excise tax
11.Question 11
Absolute value of elasticity along a linear demand curve decreases from left to right.
1 point
True
False
12. Question 12
The equilibrium price of laptops is $200. The government imposes an excise tax of $50 on the production of laptops.
Assuming demand is downward sloping and supply is upward sloping, which of the following statements is true?
1 point
The demand for laptops will decrease due to higher production costs of laptops.
Incidence of tax will be seen both on the consumers as well as the producers.
Producers will produce more laptops to make up for the fall in revenue shifting the supply curve downwards.
The new price consumers will have to pay for laptops is $250.
Week 3
1.Question 1
If the output levels at which short-run marginal and average cost curves reach a minimum are listed in order from largest
to smallest, then the order would be:
1 point
ATC, MC, AVC
MC, ATC, AVC
ATC, AVC, MC
MC, AVC, ATC

2.Question 2
Of all forms of business organizations, corporations are the only form which never face the long run.
1 point
True
False
3.Question 3
Short-run average variable cost is equal to:
1 point
Total variable cost divided by input
Average total cost minus average fixed cost
Marginal cost divided by output
4. Question 4
For our course, the symbol π represents economic profit. Accounting profit is denoted by the symbol πAccy. Which of the
following is true?
1 point
π is equal to πAccy plus opportunity costs.
π is equal to πAccy minus opportunity costs.
π is larger than πAccy.
π is larger than πAccy and π is equal to πAccy plus opportunity costs.
π and πAccy are identical in value.
5. Question 5
Which of the following short-run cost curves decreases continuously?
1 point
Average total cost

Average fixed cost
Marginal cost
Average variable cost
6.Question 6
Of the three forms of business organizations, sole proprietorship, partnership, and corporation, the corporation is the
most frequently observed type of firm.
1 point
True
False
7.Question 7
The law of diminishing product begins at the level of output where:
1 point
Average variable cost is at a minimum
Marginal cost is at a minimum
Average fixed cost is at a maximum
8.Question 8
Which one of the following short-run cost curves would not be affected by an increase in the wage paid to a firm's labor?
1 point
ATC
AFC
AVC
MC
9.Question 9
Goodproduct Corporation has a production function of Q = f(L,K), where K is capital and L is labor, the firm’s only inputs.
Which of the following are true? Select all that apply.
1 point
The period of time known as the long run for this firm is 365 days.
The firm has the ability to change both L and K in the long run.
If the firm can change L but not K, the firm is in the short run.
If the firm is unable to change either L or K, the firm is in the short run.
10.Question 10
Output as a function of inputs __________ at ___________ rate initially and then ___________ at ____________ rate.
1 point
Increases, a decreasing, decreases, an increasing
Decreases, a decreasing, increases, an increasing
Increases, a decreasing, increases, an increasing
Increases, an increasing, increases, a decreasing
11.Question 11
Variable cost as a function of output __________ at ___________ rate initially and then ___________ at ____________
rate.
1 point
Decreases, a decreasing, increases, an increasing
Increases, a decreasing, decreases, an increasing
Increases, a decreasing, increases, an increasing

Increases, an increasing, increases, a decreasing
12.Question 12
As we increase output, the vertical distance between AVC and ATC curves also increases.
1 point
True
False
13.Question 13
Which of the following is not a reason for the U-shape of ATC curve?
1 point
AFC declines continuously
Output as a function of input increases at an increasing rate and then increases at a decreasing rate
TC as a function of output rises at a decreasing rate and then increases at an increasing rate
Law of diminishing marginal product holds
14.Question 14
In some industries, the emergence of new technological advances have eliminated the Law of Diminishing Marginal
Product.
1 point
True
False
15.Question 15
If a firm organized as a corporation is making long run decisions, which of the following is true?
1 point
ATC = AVC and AFC is downward sloping.
ATC > AVC and FC are some constant amount.

ATC > AVC > AFC
ATC > AVC and AFC may be greater than or less than AVC.
Week 4
Question 1
A firm will shutdown in the short run if its revenues fail to cover its:
Opportunity costs
Sunk costs
Economic costs
Fixed costs
Marginal costs
Variable costs
2. Question 2
In this module, the firm had no control over the exogenously given price, P0, the market paid for its output. This
means the profit maximizing output for the firm is independent of this price the firm has no control over.
1 point
True
False
3. Question 3
The area under the MC curve is not a good measure of total cost. Which of the following reasons offers the best
explanation of why that is true?
1 point
The area under the MC curve only gives the variable cost.
Total cost is given by the area under the ATC curve and not the MC curve.
Total cost is given by the area above the MC curve and below the price at which MR = MC.
Total cost is given by the sum of MC and fixed cost curves.
4. Question 4
A graph showing marginal revenue and marginal cost will allow you to discover the firm’s profit maximizing output
as well as a graphical representation of this level of profit.
1 point
True
False
5. Question 5
Suppose firm X is facing an exogenously given price, P0, and has found its profit maximizing output point Q0.
Further, suppose that at this output, profits are zero. An increase in fixed cost with no other changes to cost curves
will result in which of the following?
1 point
The firm will reduce its profit maximizing output level for the firm in the short run to a level Q 1, where 0 < Q1 < Q0.
The firm will continue to produce Q0 in the short run.
The firm will shutdown and produce Q = 0 in the short run.
The firm will exit the industry in the short run.
6. Question 6
Which of the following is optimal for a firm in the long run if that firm is facing negative profits?
1 point
Shutdown
Decrease production
Downscale production
Exit the market
7. Question 7
If a firm is facing an exogenously given price, P0, and has found its profit maximizing output point, an increase in
fixed cost will not change this profit maximizing output level for the firm in the short run.
1 point
True
False
8. Question 8
Which of the following describe(s) a firm’s profits? Select all that apply.
1 point
Total revenue minus total cost
(Price times quantity) – (Quantity times ATC), where all variables are at the profit maximizing quantity
Quantity times the difference between price and the average total cost
9. Question 9
If a firm is facing an exogenously given price, P0, and has found its profit maximizing output point, an increase in
fixed cost will cause the firm to increase its output to help cover these higher fixed costs.
1 point
True
False
10. Question 10
If a firm is facing an exogenously given price, P0, and industry conditions change such that the new market price is
P1 > P0, which of the following is true?
1 point
The total revenue curve will become steeper, with an increase in slope on the graph, with dollars on the
vertical axis and firm quantity on the horizontal axis.
There will be no change to the total revenue curve of this individual firm.
The total revenue curve will reach its maximum at a new, higher output than under the old price, P0, and total
revenue would decline for further increases in output.
The total revenue curve will shift up vertically on the graph, with dollars on the vertical axis and firm quantity on
the horizontal axis.
11. Question 11
A firm facing an exogenously given market price, P0, will find its short run profit maximizing output is always
where:
1 point
Average total cost is just tangent to marginal revenue
Marginal cost is minimized
Marginal cost is equal to marginal revenue at a level greater than average variable cost
Marginal revenue exceeds average total cost
Marginal cost is equal to marginal revenue at a level greater than average variable cost AND average total cost is
just tangent to marginal revenue
12. Question 12
If a firm is maximizing profit at Q0, a change in fixed cost, either up or down, will have no impact on short run
profit maximizing output.
1 point
True
False
MODULE 2
Week 1
1. Question 1
Partnerships, unlike sole proprietorships, enjoy limited liability similar to corporations.
1 point
True
False
2.Question 2
Suppose a perfectly competitive firm is producing a quantity along the upward sloping portion of its marginal cost curve
at a point where marginal cost is greater than price, and it is earning positive economic profit. This firm should:
1 point
Increase price to further enhance its profits.
Continue to produce at this profitable level.
Increase price to further enhance its profits AND decrease the quantity produced because doing so will increase profit.
Decrease the quantity produced because doing so will increase profit.
Increase the quantity produced because profits are still positive.
3.Question 3
When do new firms tend to enter a competitive industry?
1 point
When new entrants can earn positive profits

When new entrants can earn positive profits AND when the largest firms in the industry are leaving the industry
When the largest firms in the industry are leaving the industry
When the industry is in long run equilibrium
When the small firms are leaving the industry
4.Question 4
In the long run, a perfectly competitive firm will always earn zero profits.
1 point
True
False
It depends
5.Question 5
Which of the following is a feature of a perfectly competitive market?
1 point
Large number of influential buyers and sellers
Perfect information
Differentiated products
Firms set the prices
6.Question 6
Which of the following is NOT a feature of a perfectly competitive market?
1 point
Homogenous products
Unrestricted entry and exit

Perfect information
Large number of relatively small buyers
None of the other options. They are all features of a perfectly competitive market.
7.Question 7
Which of the following quantities represents the marginal revenue curve for a firm in a perfectly competitive market?
1 point
Marginal cost
Variable cost
Fixed cost
Price
8.Question 8
Which of the conditions must hold true to produce at profit maximizing quantity in a perfectly competitive market?
1 point
TR = AVC
MR = MC
MC = AVC
MR = ATC
9.Question 9
Select all that apply. If a profit maximizing perfectly competitive firm in the short run is making positive output, we can be
certain that:
1 point
MR = MC
MC = ATC
P > AVC
10.Question 10
A firm in a perfectly competitive industry reports a profit of $10,000 in the previous financial year.
True or false? We can say for certain that the industry is not perfectly competitive as profits must be zero in such an
industry.
1 point
True
False
11.Question 11
Which of the following conditions must hold true for long run equilibrium?
1 point
Firms must make positive economic profits.
There should not be access to free entry and exit from the market.
Marginal cost must equal AVC.
Demand must equal supply.
12.Question 12
Arrange the following changes in the correct order of occurrence when demand for a product increases in a perfectly
competitive industry currently in long run equilibrium.
1. Existing firms earn positive profits.

2. Demand curve shifts to the right.
3. Supply curve shifts to the right.
4. New firms decide to enter the market.
1 point
1, 2, 4, 3
2, 3, 1, 4
2, 1, 4, 3
2, 1, 3, 4
13.Question 13
Negative economic profits faced by individual firms will cause which of the following changes in a perfectly competitive
industry in the long run?
1 point
Firms will exit the market.
ATC for each individual firm will rise.
Demand for the product will increase.
Prices will fall in the long run.
14.Question 14
Which of the following answers best represents the market supply curve in a perfectly competitive industry?
1 point
The price of the product
The product of marginal cost curves of all firms in the industry
The marginal cost curve of an individual firm
The sum of marginal cost curves at or above AVC of all firms in the industry
WEEK 2
1.Question 1
An increase in the market equilibrium price has which of the following effects, everything else being constant?
1 point
Decreases the area above the supply curve below market equilibrium price
Decreases consumer surplus
Increases the area under demand curve above market equilibrium price
Increases consumer surplus
2.Question 2
The consumer surplus derived by an individual from a product differs for different consumers due to difference in
marginal willingness to pay across consumers.
1 point
True
False
3.Question 3
The difference between the amount a consumer is willing to pay for a product and the cost of producing it is known as
consumer surplus.
1 point
True
False
4.Question 4
Total surplus is computed as the difference of cost to production minus the utility derived by buyers.
1 point
True
False
5.Question 5
Which of the following areas measures producer surplus?
1 point
BOTH the area above the supply curve below the market price AND the area bounded by demand and supply curves - y
axis and Q
Area above the supply curve below the market price
Area under the supply curve, above the X-axis
Area bounded by demand and supply curves - y axis and Q
Area under the demand curve, above market price
6.Question 6
Total surplus is maximized at the equilibrium in a perfectly competitive industry.
1 point
True
False
7.Question 7
Total surplus in a market always increases upon increasing the quantity produced.
1 point
True
False
8.Question 8
There are three identical cars in the market priced at $2000 each. Tom is willing to purchase the car for $2500, Bill for
$2000, and Harry for $1500. How many cars will be sold in the market and what will be the consumer surplus?
1 point
One car will be sold and consumer surplus will be $2500.
One car will be sold and consumer surplus will be $500.
Two cars will be sold and consumer surplus will be $4500.

Two cars will be sold and consumer surplus will be $500.
Three cars will be sold and consumer surplus will be $0.
Three cars will be sold and consumer surplus will be $4000.
9.Question 9
Monopolists are price takers.
1 point
True
False
10.Question 10
MR is always less than price in a monopoly.
1 point
True
False
11.Question 11
Which of the following is one of the purposes of antitrust laws?
1 point
Create public ownership of natural monopolies
All of the other options are correct.
Reduce costs and raise efficiency by increasing merger activities
Directly regulate the prices in a monopoly
Prevent unreasonable monopolies
12.Question 12
Breaking up of natural monopolies into smaller firms has which of the following consequences?
1 point
Not enough information is provided to answer this question.
Cost of production will rise
Cost of production will fall
Cost of production will remain the same
13.Question 13
The following question refers to the accompanying market diagram. PC and QC are the equilibrium price and quantity if
the industry is competitively, and PM and QM are the equilibrium price and quantity if the industry is monopolized. MC is
the sum of industry Marginal Costs.
Refer to Market Diagram. Suppose this industry was initially competitive. If the outcome switched to the monopoly
equilibrium, how much would Consumer Surplus fall?
1 point
Area C + D + E
Area A + B
Area E + H
Area D + E + G + H
14.Question 14
The following question refers to the accompanying market diagram. PC and QC are the equilibrium price and quantity if
the industry is competitively, and PM and QM are the equilibrium price and quantity if the industry is monopolized. MC is
the sum of industry Marginal Costs.
Suppose this industry was initially competitively at PC and QC. If it became monopolized, how much deadweight loss
would be created?
1 point
Area G + H
Area E + H
Area D + E + G + H
Area B + D + E + G + H
15.Question 15
Suppose a monopolist faces a downward sloping linear demand and the monopolist has a regular U-Shaped Marginal
Cost curve.
True or false? The profit maximizing monopolist will never produce in the inelastic range of the demand curve.
1 point
True
False
WEEK 4
1.Question 1
Winner’s curse is more likely to happen at an auction when the value of the good is common knowledge.
1 point
True
False
2.Question 2
The tendency for the highest-risk individuals to buy health insurance is known as ______________, and the tendency of
the insured to take more risks with their health is known as________________.
1 point
Adverse selection and moral hazard, respectively
The winner's curse and moral hazard, respectively
Moral hazard and adverse selection, respectively
The winner's curse and adverse selection, respectively
Adverse selection and natural selection, respectively
3.Question 3
An insurance company suffers a loss of $1000 per accident. Half the population is of high risk type with probability of
accident being one, and other half is low risk type with probability of accident being zero.
What is the expected loss per customer?
1 point
$100
$500
$750
$1000
4.Question 4
An insurance company suffers a loss of $1000 per accident. Half the population is of high risk type with probability of
accident being one, and other half is low risk type with probability of accident being zero. High risk type are willing to buy
insurance for $1200, and low risk type are willing to buy for $400.
What percentage of the population will buy insurance?
1 point
0%
50%
75%
100%
5.Question 5
MC_{P}MCP is the sum of industry marginal costs of production. The equilibrium quantity in the absence of any
government intervention is Q_{E}QE, and the optimal quantity according to the benevolent dictator is Q_{O}QO.
At the outcome Q_{E}QE, the size of deadweight loss to society will equal:
1 point
Area C + G
Area C + D + E + G + H
Area E
Area D+ H
Area C + D + G + H
6.Question 6
As per the accompanying figure, we can say that the society is:
1 point
In equilibrium
Underproducing
Efficient
Overproducing
7.Question 7
As per the accompanying figure, we observe which of the following?
1 point
Negative externality
Positive externality
8.Question 8
The initial price and quantity are P_{0}P0 and Q_{0}Q0, respectively, and the price ceiling is imposed at the price
P_{1}P1. Assume that none of the potential deadweight loss can be avoided and price cannot be raised above
P_{1}P1.
The producers get price P_{1}P1 only, and producer surplus is equal to:
1 point
Area H
Area D + E + F + G + H
Area D + E + H
Area A + H
Area D + H
9.Question 9
The initial price and quantity are P_{0}P0 and Q_{0}Q0, respectively, and the price ceiling is imposed at the price
P_{1}P1. Assume that none of the potential deadweight loss can be avoided and price cannot be raised above
P_{1}P1.
Which area represents the deadweight loss from the price ceiling?
1 point
Area F + G
Area C + E
Area A + B + C
Area C + E + F + G
10.Question 10
Which of the following rises due to a positive externality in the market?
1 point
Marginal benefit
Opportunity cost
Average cost
Marginal cost
11.Question 11
The benevolent dictator subsidizes production due to negative externalities in a market.
1 point
True
False
12.Question 12
Buyers are willing to purchase original paintings for $1000, and indistinguishable first-copies for $200. Sellers are willing
to sell original paintings for $900 and first-copies for $150. Buyers believe that 50% of the paintings in the market are
first copies.
Buyers cannot distinguish between original paintings and first-copies, but sellers know with absolute certainty whether
the art that they own is an original or a first copy.
Which of the following type of paintings will be traded in the market?
1 point
Only original paintings
Only first-copies
Both originals and first-copies
13.Question 13
first copies.
What is the average price buyers are willing to pay for a painting?
1 point
$200
$500
$600
$1000
14.Question 14
first copies.
For what price range will a market exist for both original and first-copy paintings?
1 point
$150-$600
$200-$1000
$150-$900
$900-$1000
15.Question 15
first copies.
Only first-copies are sold in the market because of which of the following reasons?
1 point
Winner's Curse
Moral Hazard
Principal-Agent Problem
Adverse Selection
MODULE 3
WEEK 1
1.Question 1
In 2015, the average nominal wage rate in country A went up by 1% and the rate of inflation was -2%. The real wage
rate growth in 2015 in the country must have been approximately __________.
1 point
-3%
-1%
0%
1%
3%
2.Question 2
Over the past three decades, the real GDP of the United States has increased at an average the rate of 3% per year.
The average growth rate of population in the country has been 1% per year. What has been the average growth rate of
real per capita GDP in the US during the past three decades?
1 point
0%
1%
2%
3%
4%
3.Question 3
Among the adult population in country C, 50% participate in the labor market and 45% are employed. What is the
unemployment rate in country C?
1 point
5%
10%
20%
50%
4.Question 4
In country D, the total adult population and the number of adults with jobs have remained constant since last year, while
the labor-force participation rate has declined. In this situation, the unemployment rate this year _________.
1 point
must have risen
must have declined
must have remained unchanged
may have risen or declined, depending on other developments in the economy
5.Question 5
Consider an economy that produces only two goods, soft drinks and hamburgers. The following price and quantity
statistics are available about this economy:
Year Hamburgers Soft Drinks
2015 Price = $2.00; Quantity = 2000 Price = $0.50; Quantity = 2000
Taking 2015 as the base year, find the growth rate of the constant-price GDP in 2016. Round to the nearest whole
percent and enter just the number with no symbols.
1 point
2
6.Question 6
Consider the same economy as in Question 5. The following price and quantity statistics are available about this
economy:
Year Hamburgers Soft Drinks
Taking 2015 as the base year, find the rate of inflation based on GDP deflator in 2016. Round to the nearest whole
percent and enter just the number with no symbols.
1 point
10
7.Question 7
In country M, households have been going to restaurants for half of their meals and for the rest they have been enjoying
their own cooking at home. This year, habits have changed and households are having only one quarter of their meals in
restaurants. Assume that the total expenditure on all other goods and services remains unchanged from last year.
As a result of this change, the GDP of country M __________.
1 point
goes up this year
goes down this year
does not change this year

may go up or down this year
8.Question 8
The purchase of __________.
1 point
a used house does enter GDP
new material for improving a used house does not enter GDP
both a used house and the new material for improving a used house enter GDP
a used house does not enter GDP, but the purchase of new material for improving a used house does
9.Question 9
An Indian company buys a new machine made in Britain by a Japanese company. No additional resources are used in
India for the investment. The machine is made entirely with British labor and British-made parts. Assume that other
activities in India, Britain, and Japan are unaffected by this purchase.
As a result, __________.
1 point
The GDPs of all three countries increase
Britain's GDP increases, but Indian and Japanese GDPs remains unaffected
India’s GDP increases, but Japanese and British GDPs are unaffected
Japan’s GDP increase, but British and Indian GDPs are unaffected
10.Question 10
Consumer price index is a measure of the price level for the goods and services __________.
1 point
imported or produced in a country and consumed by households inside and outside the country
produced in a country and consumed by households inside and outside the country
imported or produced in a country and consumed by households in that country
produced and consumed in a country
WEEK 2
1.Question 1
In macroeconomic analysis, why does one have to distinguish between consumption and investment expenditures?
1 point
Consumption expenditure has many sub-components, but investment does not.
Investment expenditure is included in GDP, but consumption expenditure is not.
Consumption expenditure is included in GDP, but investment expenditure is not.
Consumption and investment expenditures are determined by different factors.
2.Question 2
Suppose that the aggregate income in a country is $100 billion, aggregate private consumption is $60 billion, and total
tax payment is $20 billion.
How much does the private sector save in this economy? (Answer in billions of dollars.)
1 point
20
3.Question 3
In the United States, government expenditure on goods and services as a share of GDP declined between the mid-
1960s and late-1990s while the budget deficit was growing.
This outcome implies that __________.
1 point
taxes net of government transfers must have declined
taxes must have declined while government transfers remained unchanged
the trade and current account balances must have declined
taxes and government transfers must have both declined

4.Question 4
This year, country J has a private saving of $150 billion and investment of $180 billion. If the government's budget deficit
is $20 billion, what would be the trade deficit? (Answer in billions of dollars.)
1 point
50
5.Question 5
During recessions, it is natural for an economy to consume less and invest more.
1 point
True
False
6.Question 6
This year, country K has a budget deficit of $30 billion, taxes are $70 billion, and government expenditures are $80
billion. How much did the government spend in providing transfers?
1 point
$0 billion
$20 billion
$40 billion
More information is needed
7.Question 7
This year in Country L, GDP is $500 billion, private consumption is $300 billion, government expenditure is $100 billion,
and trade surplus is $20 billion. How much is total (public and private) domestic savings?
1 point
$150 billion
$100 billion
$80 billion
$120 billion
8.Question 8
Which of the following is a correct representation of the relationship between Trade Surplus (NX) and other
macroeconomic variables [GDP (Y), Private Consumption (C), Government Consumption (G), Investment (I), Domestic
Savings (S), Private Savings (Sp), and Government Savings (Sg)]?
1 point
NX = Y – S
NX = S – I
NX = Sp + Sg
NX = Y – (C – G – I)
9.Question 9
Which of the following could have contributed to high trade deficit in the United States?
1 point
Decline in private sector investment
Increase in government saving
Increase in budget deficit
Increase in private sector savings
10.Question 10
Which of the following is a correct representation of Investment (I) in terms of other macroeconomic variables [GDP (Y),
Private Consumption (C), Government Consumption (G), Trade Surplus (NX), and Domestic Savings (S)]? Select all that
apply.
1 point
I = Y – C – G – NX
I = S + NX
I = S – NX
I = Domestic Saving + Foreign Saving
WEEK 3
1.Question 1
The price of one Indian rupee (INR) in terms of Australian dollar (AUD) is 0.02. If the price of a basket of goods is INR
50,000 in India and AUD 2000 in Australia, then the real exchange rate of the rupee vis-à-vis the Australian dollar
(treating the rupee as home currency) is __________.
1 point
0.2
0.5
1.0
2.0
2.Question 2
How does a depreciation of the dollar against the yen affect the net exports of the US?
1 point
Net exports of the US to Japan and the rest of the world will rise.
Net exports of the US to Japan and the rest of the world will decline.
Net exports of the US to Japan will rise, but net exports of the US to the rest of the world will remain unchanged.
Net exports of the US to Japan will decline, but net exports of the US to the rest of the world will rise.
3.Question 3
You are in charge of managing $10 million for one year. You are allowed to invest only in the US or German government
bonds, both of which are considered risk free. The money is needed exactly one year from now in dollars, and you are
not allowed to take any risks with it. The interest rates on the dollar and the German bonds are, respectively, i = 0.02
and i = 0.05. The spot exchange rate is e = 0.90€/$ and the forward rate is e = 0.945€/$.
What is the highest return you can expect on the $10 million? (Answer the number of dollars with no dollar sign or
separators.) Assume that any contract you make must be backed by the assets that you already have.
1 point
200000
4.Question 4
If covered interest parity holds, foreign interest rates are constant, and the rate of interest on dollar deposits rises, the
excess value of the dollar in the forward market, (ef - e)/e __________.
1 point
must rise
may rise or may decline
must decline
moves in the opposite direction of the expected appreciation of the dollar in the spot market
remains constant
5.Question 5
Suppose that the interest rate on dollar accounts is equal to 2% (i$ = 0.02), the interest rate on Polish zloty accounts is
equal to 4.5% (izł = 0.045), and the expected exchange rate between the dollar and the zloty one year from now is ee = 4
zł/$. Assume that the (uncovered) interest parity holds.
Find the spot exchange rate, e. (Answer in zł/$ and round to the nearest tenth.)
1 point
3.90
6.Question 6
Suppose that the interest rate on dollar accounts is equal to 2% (i$ = 0.02), the interest rate on Polish zloty accounts is
equal to 4.5% (izł = 0.045), and the expected exchange rate between the dollar and the zloty one year from now is ee = 4
zł/$. Assume that the (uncovered) interest parity holds.
What would the spot rate, e, be if the expected exchange rate remains the same and the interest rate on Polish assets
declines to izł = 0.02? (Answer in zł/$.)
1 point
4
7.Question 7
Assuming that the covered and uncovered interest parities both hold at a given time and that ef and ee represent forward
and expected exchange rates, we will have ___________.
1 point
ef > e e
ef < e e
ef = e e
ef and ee cannot be compared.
8.Question 8
ef and e represent forward and spot exchange rates, and i and i* represent the interest rates on domestic currency and
interest rate on foreign currency, respectively.
Which of the following equations can represent the Covered Interest Parity? Check all that apply.
1 point
(1+i)/(1+i*) = e/ef
(1+i*)ef = (1+i)e
(1+i)ef = (1+i*)e
(ef -e)/e = (i*-i)/(1+i)
9.Question 9
Suppose Botswana decides to peg its currency, pula, to the US dollar at the of rate 0.1$/pula and allows capital to free
flow in and out of the country so that the interest parity condition holds. If everyone views the peg as credible and comes
to expect the exchange rate to remain constant in the coming years, then the one-year, risk-free interest rate in
Botswana will
1 point
be higher or lower than the one-year, risk-free interest rate in the US.
be equal to the one-year, risk-free interest rate in the US.
be lower than the one-year, risk-free interest rate in the US.
be higher than the one-year, risk-free interest rate in the US.
10.Question 10
Suppose (1+i)ef < (1+i*)e where ef and e represent forward (a year from now) and spot exchange rates and i and i*
represent the interest rates on domestic currency and the interest rate on foreign currency, respectively.
If the forward rate for six months from now is equal to e + (ef – e)/2, which of the following will guarantee higher returns a
year from now?
1 point
Keeping Home currency in interest bearing form now and converting to Foreign currency a year later
Converting to Foreign currency now and keeping the foreign currency in interest bearing form for a year
Keeping Home currency in interest bearing form for six months and then converting it to foreign currency and keeping
foreign currency bonds for the rest of year
All three of the above will give the same returns
WEEK 4
1.Question 1
Central banks have perfect control over the money supply in their economies.
1 point
True
False
2.Question 2
The nominal interest rate is a better measure of the opportunity cost of holding money than the real interest rate
because in addition to the real interest rate it includes the loss of money’s value due to inflation.
1 point
True
False
3.Question 3
How does an increase in the money supply affect the LM curve?
1 point
The LM curve becomes steeper.
The change in the LM curve cannot be predicted.
The shift in the LM curve depends on the foreign money supply.

The LM curve remains unaffected.
The LM curve becomes flatter.
4.Question 4
After the unification of the East and West German economies in 1990, the East German mark (EDM) was replaced by
the West German mark (DM). A contested issue in the debates over the terms of unification was the rate at which the
EDM and DM were to be exchanged for each other. Some argued that DM 1 must be set equal to EDM 2, while others
favored a one-to-one relationship. In the end, the government of Germany decided to apply the DM 1=EDM 1 exchange
rate for the first 3000 Eastern marks that each former East German citizen wanted to convert and maintain an exchange
rate of DM 1=EDM 2 for any additional amounts of EDM offered for exchange. Suppose the German government had
decided to apply the 1:1 rate to all East German marks.
Assuming that all other policies as well as production levels would have remained the same, compared to what actually
happened to the dollar-DM exchange rate, the dollar value of the DM __________.
1 point
would have been the same
would have been higher
could have been higher or lower in unpredictable ways
would have been lower
5.Question 5
If the central bank of Turkey temporarily increases the money supply of the country, given other parameters, what will
happen to the equilibrium interest rate in Turkey? How will this policy affect the exchange rate of Turkish lira vis-à-vis the
euro?
1 point
The equilibrium interest rate will rise, and the exchange rate of Turkish lira will appreciate.
The equilibrium interest rate will rise, and the exchange rate of Turkish lira will remain unchanged.
The equilibrium interest rate will decline, and the exchange rate of Turkish lira will appreciate.
The equilibrium interest rate will decline, and the exchange rate of Turkish lira will depreciate.
6.Question 6
Assuming that the real interest rate and the real GDP growth are given in the long run, an increase in the rate of growth
of money supply over many years _________.
1 point
leads to a lower nominal interest rate
leads to a higher nominal interest rate
has no effect on the nominal interest rate
has an ambiguous effect on the nominal interest rate
7.Question 7
Assuming that the price level and the real GDP are given in the short run, a temporary increase in money supply
_________.
1 point
leads to a lower nominal interest rate
leads to a higher nominal interest rate
has no effect on the nominal interest rate
has an ambiguous effect on the nominal interest rate
8.Question 8
It is observed that the money supply in the US increases. Which of the following might have caused this movement?
1 point
Fed must have increased the discount rate.
Fed must have bought government bonds.
Fed must have set a higher minimum reserve requirement.
Fed must have sold government bonds.
9.Question 9
Which of the following explains why the demand for money is proportional to PY where P is the price level and Y is the
GDP? Check all that apply.
1 point
Money is a store of value.
Money is a medium of exchange.
Holding money has an opportunity cost.
Demand for money rises with the volume of transactions.
10.Question 10
Given the money demand curve, an increase in money supply will cause which of the following changes?
1 point
May increase or decrease the interest rate depending on the exchange rate
No change in the interest rate
Increase the interest rate
Lower bond prices
Decrease the interest rate
MODULE 4
WEEK 1
1.Question 1
When do net exports rise?
1 point
When current aggregate income declines
When the real exchange rate declines

When foreign income rises
All of the above
None of the above
2.Question 2
In the short run, when prices are sticky and the goods market is in equilibrium, income rises as the interest rate declines
because:
1 point
Investment expenditure rises
Imports decline
Exports rise
All of the above
None of the above
3.Question 3
Suppose P, P*, Y, Y*, \piπ, R, T, and G are exogenously given and the interest parity condition holds. Then aggregate
“preferred” expenditure, D, rises when:
1 point
The domestic aggregate price level rises.
The foreign aggregate price level rises.
The nominal interest rate rises.
Net taxes collected by the government rises.
All of the above
4.Question 4
In general, as aggregate income of an economy rises:
1 point
Consumption demand rises by less than the income increase.
Consumption demand rises by more than the income increase.
Consumption demand rises by the same amount as the income increase.
Net exports rise by more than the income increase.
Net exports rise by the same amount as the income increase.
5.Question 5
Which of the following factors does not shift the aggregate "preferred" expenditure (D) curve of an economy?
1 point
Government expenditure
The aggregate real income of the rest of the world
The aggregate real income of the economy
The aggregate price level
6.Question 6
Which of the following factors shifts the IS curve?
1 point
Government expenditure
Real income of the rest of the world
The aggregate price level
All of the above
None of the above

7.Question 7
Latin America is a major export market for the US. If, as a result of a slump in commodity prices, the real incomes in
Latin American countries decline, what would be the impact on the IS curve of the US economy?
1 point
The IS curve would not be affected.
The IS curve would shift to the right.
The IS curve would shift to the left.
The impact on the IS curve cannot be determined.
8.Question 8
This year, country B held presidential elections and the government of the incumbent president temporarily increased
public expenditure to win greater political support. Assuming that Ms, P, P*, Y*, and T were exogenously given, what kind
of impact must this policy have had on the IS curve in country B?
1 point
The IS curve should not have been affected.
The IS curve must have shifted to the right.
The IS curve must have shifted to the left.
The impact on the IS curve cannot be determined.
9.Question 9
This year, country T held politically sensitive parliamentary elections and the government of the incumbent ruling party
temporarily increased public expenditure to enhance its popularity. The government financed the additional expenditure
by selling more bonds. Assuming that Ms, P, P*, Y*, and T were exogenously given, what kind of impact must this policy
have had on the LM curve in country T?
1 point
The LM curve should not have been affected.
The LM curve must have shifted to downward.
The LM curve must have shifted to upward.

The impact on the LM curve cannot be determined.
10.Question 10
This year, country E held politically sensitive parliamentary elections and the government of the incumbent ruling party
temporarily increased public expenditure to enhance its popularity. The government financed the additional expenditure
by getting the country’s central bank to print money to finance the additional expenditure. Assuming that P, P*, Y*, and T
were exogenously given, what kind of impact must this policy have had on the real income and interest rate in country
E?
1 point
Both real income and interest rate must have declined.
Real income must have declined and interest rate must have risen.
Real income must have risen and interest rate must have declined.
Both real income and interest rate must have risen.
Real income must have risen, but the impact on interest rate would depend on other factors.
WEEK 2
1.Question 1
Suppose the price level in the US is 150 while the corresponding price level in the UK is 100. If the nominal exchange
rate is e=2/3£/$, what is the real exchange rate between the US dollar and the British pound (that is, how many baskets
of British goods can be purchased with one corresponding basket of US goods)?
1 point
3/2
2/3
3
2.Question 2
During 1960-1990, the cost of a representative basket of goods produced in Japan steadily rose compared to a similar
basket of goods produced in the US, when both baskets were evaluated in the same currency using the spot market
exchange rate. Which one of the following factors contributed to that long-term real exchange rate appreciation?
1 point
Faster productivity growth of tradable sector in Japan compared to that in the US
Faster productivity growth of tradable sector in the US compared to that in Japan
Faster productivity growth of non-tradable sector in Japan compared to that in the US
Faster growth of government expenditure in the US compared to that in Japan
3.Question 3
During 1980-2008, the Chinese government followed a successful policy of increasing the productivity of the country's
tradable sectors much faster than was the case in the rest of the world. If this policy had continued over the 2009-2016
period and if the productivity in China's non-tradable sector had grown at the same rate as that in the rest of the world,
what would have been the impact on the real exchange rate of the Chinese currency, the yuan, vis-à-vis the US dollar?
1 point
The real exchange rate of the yuan would have remained unchanged vis-à-vis the US dollar.
The real exchange rate of the yuan would have appreciated vis-à-vis the US dollar.
The real exchange rate of the yuan would have depreciated vis-à-vis the US dollar.
The real exchange rate of the yuan may have appreciated, depreciated, or remained unchanged vis-à-vis the US dollar;
the impact cannot be predicted.
The real exchange rate of the yuan would have first depreciated and then appreciated vis-à-vis the US dollar.
4.Question 4
Suppose the government of the United States introduces a permanent tax reduction without cutting expenditure over the
next several years. The plan will go into effect next year. Assuming that tradables' prices in foreign currency are given,
what will be the impact of this policy on the real exchange rate of the dollar vis-à-vis other currencies a few years from
now?
1 point
The real exchange rate of the US dollar will depreciate.

The real exchange rate of the US dollar will appreciate.
The real exchange rate of the US dollar will remain unchanged.
The real exchange rate of the US dollar will first depreciate and then appreciate.
The real exchange rate of the US dollar may appreciate, depreciate, or remain unchanged.
5.Question 5
Which of the following reasons may account for the failure of the law of one price?
1 point
Trade restrictions
Transportation costs
Imperfect competition
All of the above
None of the above
6.Question 6
The PPP hypothesis implies that the real exchange rate must be equal to which of the following? Select all that apply.
1 point
eP/P*, where P is the aggregate price level in home country, P* in foreign country
P*/P, where P is the aggregate price level in home country, P* in foreign country
eP*/P, where P is the aggregate price level in home country, P* in foreign country
7.Question 7
The prices of the inputs used for the production of airplanes in United States will be included in which of the two price
indices?
1 point
Entirely in the tradables’ price index, PT
Entirely in the non-tradables’ price index, PN
Partly in PT and partly in PN
None of the above
8.Question 8
The real exchange rate of an economy _________ when the relative price of non-tradables to tradables _________.
1 point
Rises; rises
Remains unchanged; rises
Rises; declines
Declines; rises
9.Question 9
In the long run, the relative price of non-tradables to tradables is determined by the rate of growth of money supply.
1 point
True
False
10.Question 10
Suppose the productivity of the non-tradables sector in the Pakistan economy permanently reduces due to a natural
calamity while the tradable sector remains unaffected. If all economic policies and other exogenous events in all
countries remain unchanged, in the long-run, the real exchange rate of Pakistani Rupee vis-à-vis the US dollar:
1 point
Remains unchanged
Appreciates
Depreciates
May appreciate, depreciate, or remain unchanged; the impact cannot be predicted
WEEK 3
1.Question 1
The Fed increased the supply of US dollars at an average rate of 6 percent per year over the 1980-2005 period. Based
on the theory of production capacity, if the Fed had instead increased the money supply at the rate of 7 percent per year
during that period, given other policies: (Select all that apply.)
1 point
The average inflation rate during 1980-2005 would have been one percentage point higher than it actually was in
that period.
The economy would have enjoyed a much higher level of output in the mid-2000s.
The price level in 2005 would have been about 28 percent higher than what it actually reached in that year.
The output of the economy in the mid-2000s would not have been very different from the levels it actually reached.
2.Question 2
At the time of its independence in 1947, India was a very poor country with a very small stock of physical capital.
Between 1947 and 1980, the government of India believed that the best way to improve the standard of living in that
country was to increase investment and create more jobs with the existing technology. Importing advanced technology
and encouraging cost-saving innovations were seen as unnecessary because the government believed that such
developments would reduce the need for labor and contribute to unemployment. Other things equal, the consequence of
this policy for the long-run growth of the economy must have been:
1 point
Economic stagnation throughout the 1947-1980 period
Steady economic growth throughout the 1947-1980 period
Slowing economic growth throughout the 1947-1980 period
Accelerating economic growth throughout the 1947-1980 period
3.Question 3
Country J’s economy has been stagnant for some time. The government has now decided to stimulate the economy and
achieve long-term growth by spending more and by running large budget deficits. Such a policy:
1 point
Can indeed bring about long-term growth
Can bring about growth in the short run, but not in the long run
Cannot bring about short-term or long-term growth under any circumstances
May not bring about growth in the short run, but lays the foundation for long-term growth
4.Question 4
Venezuela’s economy was operating at production capacity until political turmoil reduced the production capacity of the
country. To deal with the drop in GDP and to return the aggregate output to its pre-crisis level, the government of
Venezuela has decided to increase its expenditure and stimulate demand, but it has found it hard to sell bonds and fund
its expenditures. To solve this problem, the government has forced the central bank to print money and buy the bonds
directly from the government. In this situation, the equilibrium income in Venezuela determined by the crossing of IS and
LM curves:
1 point
Must be above production capacity
Must be below production capacity
Must be equal to production capacity
Could be above or below production capacity
5.Question 5
In the above question, what is likely to happen to the rate of inflation if the political turmoil continues and the government
of Venezuela tries to keep the output level steady by continued fiscal and monetary expansion?
1 point
The rate of inflation will accelerate.
The rate of inflation will rise in the short run, but decline in the long run.
The rate of inflation will rise for a short while, but become steady afterwards.
The change in inflation rate is indeterminate in this situation.
6.Question 6
In 1997, East Asian economies faced a major financial crisis, which reduced their incomes and their demands for US
exports. Suppose the Fed believed that the negative impact of the crisis on the US economy would be sizable and would
take a few years. Assume that before the crisis, the US economy was on its long-run equilibrium path. In that case, if the
Fed wanted to stabilize the level of income and inflation in the US for the duration of the adverse demand shock, what
should it have done?
1 point
The Fed should have reduced money supply.
Nothing. The economy would have quickly adjusted to the shock and returned to stability by itself.
The Fed should have increased money supply.
The Fed should have waited for a couple of years to assess the situation better before acting.
7.Question 7
Your company wants to expand its production and needs to know the impact of a surge in East Asian incomes this year
on the US economy. You know that East Asian economies have been growing at an average rate of 5 percent per year,
and the US economy has been growing at 3 percent per year along its long-run equilibrium path. You hire a consultant
who tells you that everyone believes that: (1) the faster pace of East Asian countries this year is a one-time jump in
income level and those economies will return to their 5 percent growth rate after this year; (2) the (risk-free) interest
rates in East Asia will remain constant; and (3) the economic policies in the US will not change as a result of the
temporary increase in Asia’s growth rate. If you believe these claims, you should conclude that by the end of this year,
the developments in East Asia will tend to:
1 point
Leave GDP growth and the production capacity of the US economy unchanged
Temporarily raise GDP growth and the production capacity of the US economy
Temporarily lower GDP growth and the production capacity of the US economy
Temporarily raise GDP growth of the US economy, but leave the production capacity unchanged
Temporarily lower GDP growth of the US economy, but leave the production capacity unchanged
8.Question 8
In the above question (Question 7), given the assumptions about the current and future conditions, you can also
conclude that over the next couple of years, the events in East Asia will tend to:
1 point
Raise the inflation rate and the real exchange rate of the US economy
Lower the inflation rate and the real exchange rate of the US economy
Raise the inflation rate, but lower the real exchange rate of the US economy
Lower the inflation rate, but raise the real exchange rate of the US economy
Lower the inflation rate, but leave the real exchange rate of the US economy
9.Question 9
Complete the following sentence.
“Accumulating capital without technological progress cannot generate long-term growth because as capital stock grows,
its depreciation _____________, while total production rises at _____________ rate and _____________ portion of the
savings that it generates has to be used for replacing depreciated capital, rather than being available for production
capacity expansion.”
1 point
Rises proportionately; a diminishing; an increasing
Diminishes; a proportional; an increasing
Rises proportionately; an increasing; a diminishing
Increases; a proportional; a diminishing
10.Question 10
Which of the following are among the six major dimensions of governance as laid down by The Worldwide Governance
Indicators? Select all that apply.
1 point
Government Effectiveness
Rule of Law
Individualism
Secularism
Voice and Accountability
WEEK 4
1.Question 1
Under optimal monetary policy, the central bank adjusts its policy based on anticipated rather than current inflation and
output gaps because:
1 point
It takes time for the central bank to implement its policy decisions.
Monetary policy has a long outside lag.
It wants to avoid time-inconsistency problems.
Forecast errors are often rather large.
2.Question 2
Under optimal fiscal policy, changes in public debt at each time should strongly depend on:
1 point
The existing levels of debt
The average size of government
The average tax rate
All of the above
None of the above
3.Question 3
When government expenditure is used for stabilization purposes, it makes the changes in public debt:
1 point
More countercyclical
Less countercyclical
More procyclical
Less procyclical
Acyclical
4.Question 4
In oil exporting countries, where government budgets are significantly financed by oil revenues, the governments can
often borrow easily during oil price booms and become credit rationed when oil prices drop very low. If the government
does not have large savings, this phenomenon is likely to make its fiscal policy:
1 point
Countercyclical
Acyclical
Procyclical
5.Question 5
Which one of the following is a reason why actual fiscal policies in many countries deviate from the patterns deemed
optimal?
1 point
Fiscal policy may be used to buy political support of interest groups.
Fiscal policy may suffer from the “tragedy of the commons."
Both of the above
None of the above
6.Question 6
From the point of view of macroeconomic policymaking, separation of powers:
1 point
Is always desirable because it reduces embezzlement
Is undesirable because it always leads to a deadlock
Is always desirable because it increases flexibility
Faces a tradeoff because it may reduce flexibility
7.Question 7
Which one of the following is an example of a rule-based monetary policy?
1 point
Fiscal golden rule
Currency board with a fixed exchange rate
Determination of public debt by a non-political national debt board
Balanced budget laws
8.Question 8
Under optimal fiscal policy, changes in public debt should be dependent on the existing levels of public debt and
government size.
1 point
True
False
9.Question 9
Which of the following statements is true about monetary and fiscal policies in developing countries?
1 point
Monetary policy is often procyclical while fiscal policy is often countercyclical.
Monetary policy is often countercyclical while fiscal policy is often procyclical.

Both monetary and fiscal policies are often countercyclical.
Both monetary and fiscal policies are often procyclical.
10.Question 10
The presence of automatic stabilizers like income taxes in the policy framework can help reduce discretion while
maintaining some policy responsiveness to economic fluctuations.
1 point
True
False
MODULE 5
WEEK 1
1.Question 1
Nominal variables are:
1 point
Numerical and can be multiplied and divided
Categorical and can be ordered
Categorical without implying order
Numerical and can be added and subtracted
1.Question 1
Ordinal variables are:
1 point
Categorical and can be ordered
Numerical and can be multiplied and divided

Categorical without implying order
Numerical and can be added and subtracted
2.Question 2
Which of the following is a categorical variable?
1 point
Customers’ waiting time
Bank account balance
Whether a person has a college degree
Number of people employed by the company
Daily sales in a store
3.Question 3
A qualitative variable is:
1 point
A numeric variable
A categorical variable
Sometimes measured on a continuous scale
4.Question 4
A set of all elements we wish to study is called a _______.
1 point
Sample
Population
Frame
Census
3.Question 3
A person's telephone area code is an example of a(n) _____________ variable.
1 point
Ordinal
Ratio
Interval
Nominative
4.Question 4
A subset of all elements we wish to study is called a _______.
1 point
Sample
Population
Census
Frame
5.Question 5
A typical medical record will contain the following variables on each patient: gender, age, height, weight, blood pressure,
temperature, heart rate, and smoker (yes/no). Which of the following are ordinal qualitative variables?
1 point
Gender
Blood pressure
Temperature
Smoker
None of the above
6.Question 6
The relative frequency is the frequency of a class divided by the total number of measurements.
1 point
True
False
7.Question 7
When we wish to summarize the proportion (or fraction) of items in a class we use the frequency distribution for each
class.
1 point
True
False
8.Question 8
A frequency table includes row and column percentages.
1 point
True
False
9.Question 9
A table that summarizes the distribution of a categorical variable is a:
1 point
Histogram
Frequency table
Summary table
Cumulative table
9.Question 9
The number of measurements falling within a class interval is called the:
1 point
Frequency
Cumulative sum
Relative frequency
Height
10.Question 10
The following is a relative frequency table for the top five smartphone brands for the US market in 2015.
Smartphone Subscribers Relative Frequency
Apple 0.435
Samsung 0.287
LG 0.082
Motorola 0.049
HTC 0.035
What is the proportion of the market for the other brands of smartphones?
1 point
0.108
0.112
0.236
None of the above
10.Question 10
Based on Census data, the five-year estimate for number of vehicles per household between 2006 and 2010 is:
Vehicles Available United States Dallas, TX New York City, NY Jackson, WY
None 10,113,266 1,664,376 44,504 123
1 38,014,177 959,320 200,880 1,177
2 43,264,978 331,693 150,823 1,268
3 or more 22,843,575 91,860 53,390 574
What is the relative frequency of “none” for all Americans?
1 point
3.01%
8.85%
10.88%
33.55%
None of the above
11.Question 11
Based on Census data, the five-year estimate for number of vehicles per household between 2006 and 2010 is:
None 10,113,266 1,664,376 44,504 123

1 38,014,177 959,320 200,880 1,177
2 43,264,978 331,693 150,823 1,268
3 or more 22,843,575 91,860 53,390 574
What is the relative frequency of “2” for New York City among the residents of the city?
1 point
3.01%
8.85%
10.88%
33.55%
None of the above
12.Question 12
The following graph plots the birth rates per 1000 women aged 15-19 in specific groups for 1991, 2005, 2007, and 2010.
Figure 3: The graph is a histogram that shows the birth rates per 1000 women aged 15-19 in specific racial groups for
1991, 2005, 2007, and 2010. The horizontal x-axis shows 6 different racial groups including All races, Non-Hispanic
white, Non-Hispanic black, Hispanic, American Indian or Alaska Native, and Asian or Pacific Islander. The vertical y-axis
shows the rates per 1,000 women aged 15-19 in specified group ranging from zero to 140 in increments of 20. The data
is summarized in the following table.
American
Non- Non- Asian or
All Indian or
Race/Year Hispanic Hispanic Hispanic Pacific
Races Alaska
white black Islander
Native
1991 61.8 43.4 118.2 104.6 84.1 27.3
2005 39.7 26.0 59.4 76.5 46.0 15.4
2007 41.5 27.2 62.0 75.3 49.4 14.8
2010 34.4 23.5 51.5 55.7 38.7 10.9
Question: 10.9 out of the 34.4 births per 1000 women in 2010 were among Asian or Pacific Islander group of women.
1 point
True
False
Non- Non- Asian or

All American Indian
Race/Year Hispanic Hispanic Hispanic Pacific
Races or Alaska Native
white black Islander
1991 61.8 43.4 118.2 104.6 84.1 27.3
2005 39.7 26.0 59.4 76.5 46.0 15.4
2007 41.5 27.2 62.0 75.3 49.4 14.8
2010 34.4 23.5 51.5 55.7 38.7 10.9
Question: Non-Hispanic Black women had the highest birth rates per 1000 women aged 15-19 from 1991 to 2010 as
compared to all other categories.
1 point
True
False
13.Question 13
All of the following are used to describe qualitative data, except:
1 point
Bar charts
Pie charts
Histograms
None of the above
13.Question 13
A histogram that has a long tail to the right shows a distribution that is:
1 point
Centered
Skewed to the right
Normal
Skewed to the left
14.Question 14
The histogram below shows the average dollars spent on coffee per month.
Figure 1: The graph is a histogram that shows the average dollars spent on coffee per month. The horizontal x-axis
shows dollars spent on coffee with bins ranging from 5 to 55 in increments of 5. The vertical y-axis shows the height of
each bin, which represents frequency and ranges from 0 to 45 in increments of 5. The data is summarized in the table
below. All data are approximate.
$ Spent
1 1 2 2 3 3 4 4 5 5
on Coffee 5
0 5 0 5 0 5 0 5 0 5
(Bin)
Frequenc 2 2 2 3 4 2 3 2 3 3 3
y 0 4 6 0 0 7 7 6 2 6 0
Question: What do the numbers on the x-axis show?
1 point
The minimum dollars spent on coffee for each bin
The maximum dollars spent on coffee for each bin
The average dollars spent on coffee for each bin
None of the above
15.Question 15
The histogram below shows the average dollars spent on coffee per month.
Figure 1: The graph is a histogram that shows the average dollars spent on coffee per month. The horizontal x-axis
shows dollars spent on coffee with bins ranging from 5 to 55 in increments of 5. The vertical y-axis shows the height of
each bin, which represents frequency and ranges from 0 to 45 in increments of 5. The data is summarized in the table
below. All data are approximate.
$ Spent
on 1 1 2 2 3 3 4 4 5 5
5
Coffee 0 5 0 5 0 5 0 5 0 5
(Bin)
Frequen 2 2 2 3 4 2 3 2 3 3 3
cy 0 4 6 0 0 7 7 6 2 6 0
Question: What is most observed value for the dollars spent on coffee per month?
1 point
25
35
55
Question: What is the bin size?
1 point
25
16.Question 16
____________ are more useful while comparing actual values while ______________ are more useful when comparing
the relative sizes of various categories.
1 point
Frequency distributions; scatter plots
Pie charts; frequency distributions
Bar graphs; pie charts
Histograms; bar graphs
16.Question 16
Pie charts are not as useful as bar graphs as they do not take into account all possible categories.
1 point
True
False
17.Question 17
Based on the pie chart shown here, which of the following was the prime source of renewable electrical energy in the US
in 2009?
Figure 2: The graph is a pie chart that shows the sources of U.S. electricity. The data is shown in the following table.
Other
Natura Nuclea Hydr Renewable Petroleu
Source Coal Source
l Gas r o s m
s
Percen
48.5
t of 21.6% 19.6% 5.9% 3.0% 1.1% 0.3%
%
Total
The “renewables” section of the previous pie chart is broken down by a second pie chart. The data for this pie chart is
listed in the table below.
Source Wind Wood Fuels “Renewable” Biomass Geothermal Solar

Percent of Total 1.3% 0.9% 0.4% 0.4% 0.0%
1 point
Nuclear
Coal
Wind
Natural gas
18.Question 18
Based on the scatter plot below:
Figure 4: The graph is a scatter plot that does not have a title shown. The horizontal x-axis shows the total number of
classes missed ranging from 0 to 20 in increments of 5. The vertical y-axis shows exam score ranging from 0 to 100 in
increments of 20. The graph shows a general trend where students who missed fewer classes scored higher on the
exam. The points are also more concentrated towards the left side of the graph, which represents students missing zero
classes, and get more spread out as you move towards the right side, which represents missing more classes.
1 point
There is no apparent relationship between number of classes missed and a student’s exam score.
As the number of classes missed increase so do the exam scores.
Exam scores drop as the number of classes missed go up.
There is a very weak relationship between the two variables.
19.Question 19
Which of the following is true about a scatter plot?
1 point
Only X variables can have multiple observations for a specific value.
Only Y variables can have multiple observations for a specific value.
Both X and Y variables can have multiple observations for specific values.
Neither X nor Y variables can have multiple observations for specific values.
19.Question 19
To look for association between numerical values we use a:
1 point
Pie chart
Bar graph
Scatter plot
Histogram
WEEK 2
1.Question 1
The revenues of BigBurgers (a fast food company) for the last 50 years are provided in the attached Excel sheet. Find
the mean annual revenues and median revenues considering the given data set.
BigBurgers Data Set.xlsx
Below is an accessible version of the data file for a screen reader user.
Mod2_Q1_BigBurgers-Data-Set.xlsx
1 point
657.2; 785.5
702.6; 740.6
771.1; 780.4
771.1; 785.5
2.Question 2
Melissa has collected data on her monthly grocery bills for the last three years (see attached Excel sheet) to understand
her grocery spending. What is her average monthly spending?
Melissa Groceries Data Set.xlsx
Mod2_Q2_Melissa-Groceries-Data-Set.xlsx
1 point
545.69
586.50
623.79
653.03
3.Question 3
What is Melissa's median for her monthly spending?
1 point
545.69
586.50
623.79
653.03
4.Question 4
What can you say about the distribution of Melissa's spending?
1 point
It is fairly symmetrical.
It is skewed to the right.
It is skewed to the left.
None of the above
5.Question 5
The annual value of exports of 200 countries in the world is provided in the attached data set. What is the difference
between the mean value of exports and the median value of exports?
Exports Data Set.xlsx
Mod2_Q5_Exports-Data-Set.xlsx
1 point
2.7
3.4
11.2
6.Question 6
Julian has collected sample data of the annual sales of bookstores in the Chicagoland area (see attached data set).
Help him calculate the standard deviation and variance of the sample data set.
Bookstore Data Set.xlsx
Mod2_Q6_Bookstore-Data-Set.xlsx
1 point
156.93; 24627.02
189.23; 35807.99
135.71; 18417.15
137.23; 18832.07
7.Question 7
The GMAT scores of 1000 applicants to an MBA program are provided in the attached data set. Calculate the range,
standard deviation, and variance of the applicant GMAT scores.
GMAT Scores Data Set.xlsx
Mod2_Q7_GMAT-Scores-Data-Set.xlsx
1 point
430; 98.29; 9660.92
380; 134.32; 18041.86
400; 117.23; 13742.87
400; 114.27; 13057.82
8.Question 8
Natalie wants to get into a highly ranked law school. The cutoff percentile score for this school in the LSAT is 92
percentile. Her score in the LSAT is 165. The mean and standard deviation for all the test takers are 150 and 13.2,
respectively. What is her percentile, and does she make the cut off for this school?
1 point
85.89; no
87.21; no
93.42; yes
96.65; no
9.Question 9
The monthly revenues of all new car dealers in the Miami area is arranged in a normal distribution. The Z-score of the
revenue of El Classico Cars is -0.94. Which percentile range does this company’s revenues fall in?
1 point
16 percentile to 50 percentile
10.Question 10
The frequency distribution of the number of gallons of gasoline sold from a retail outlet at Bloomington, IL over a 100 day
period is provided in the attached data set. Calculate the probability of the outlet selling less than 600 gallons per day.
Gasoline Gallons Sold Data Set.xlsx
Mod2_Q10_Gasoline-Gallons-Sold-Data-Set.xlsx
1 point
28%
34%
66%
72%
11.Question 11
The frequency distribution of the daily number of Apple iPads sold by a retailer through its website over a year is given in
the data set. Calculate the expected value of the number of iPads sold in a day and the standard deviation of that value.
iPads Sold Data Set.xlsx
Mod2_Q11_iPads-Sold-Data-Set.xlsx
1 point
229.73; 11.34
238.85; 4.57
245.35; 6.75
240.34; 5.92
12.Question 12
In a standard normal distribution, what is the percentile score of a data point with a Z-score of 1?
1 point
50.00
84.13
93.33
97.73
13.Question 13
The mean and standard deviation of the value of venture capital investments by Angel investors over a year is $209,856
and $33,985, respectively. Suppose Evelyn wants to start a business. What is the probability that she will receive more
than $280,000 for her business from an Angel investor?
Use the Z-value table below for this exercise.
normal table.pdfPDF File
(Note: If your browser prompts you to leave this page when clicking on this file, you may lose your work. Instead, right-
click on the file and choose "open in a new window" or "save link as," which will download the file.)
Below is an accessible version of the z score excel file for a screen reader user.
Mod2_Z score table.xlsx
1 point
1.95%
6.76%
93.24%
98.05%
14.Question 14
Mean hourly wage in the construction industry is $19.45 and standard deviation is $3.94. What is the probability that a
worker receives less than minimum wage, which is $14/hour?
1 point
4.75%
8.33%
91.67%
95.25%
15.Question 15
The average price of milk available in supermarkets in 2015 is $4.98/gallon. The standard deviation is $0.72. What is the
probability that you could buy milk within a range of $4.50 to $5.50 if you went to a similar supermarket?
1 point
26.63%
51.24%
75.90%
94.32%
WEEK 3
1.Question 1
When initiating a study, the first step we must follow is to define the ____________.
1 point
Independent variables
Variable of interest
2.Question 2
Data collected for a study over different time periods are called cross-sectional data.
1 point
True
False
3.Question 3
When we can’t control or it is simply unethical for us to control the independent variables in a study, then the study is
called an observational study.
1 point
True
False
4.Question 4
In a study to examine the relationship between hair fall and stress, a random sample of 160 men and 210 women aged
23-50 completed a questionnaire and underwent a short examination in a clinic. Number of years of work experience,
number of hours worked per week, and time spent at home were measured by a questionnaire. What kind of study is
this?
1 point
Experimental study
Observational study
5.Question 5
Suppose a corporate firm wishes to analyze last month's official travel expense bills for its employees. Then, because
the travel costs given by these bills are for different employees in the same month, the travel costs are time-series data.
1 point
True
False
6.Question 6
The best way to get a representative sample is to pick members of the population at random.
1 point
True
False
7.Question 7
Suppose you have a network of cellphone stores (total of 50) and you want to know if the customers are satisfied with
the quality of service provided at your stores. Which one of the following sampling techniques would you classify as
cluster sampling?
1 point
You select at random 700 customers from your database of past customers and survey them.
You choose 10 of the stores and contact all customers who have visited these stores and survey them.
Every customer receives a phone number to call with their bill and is encouraged to call with their comments.
You choose 40 customers at random from each of the stores and survey them.
8.Question 8
Simple random sampling, stratified sampling, and cluster sampling are all probability sampling techniques.
1 point
True
False
9.Question 9
When every member of the population has the same chance of being selected as the other members, the sampling
technique used is called cluster sampling.
1 point
True
False
10.Question 10
Exit polls predicted that Bernie Sanders would win the Democratic primary in Michigan. This conclusion may be false
because of which of the following reasons?
1 point
The conclusion is based on data collected from a sample.
Conclusions from exit polls can never be wrong.
Any statistical prediction conducted after the voting procedure is faulty.
The conclusion is based on data collected from a population.
11.Question 11
Students of the 2017 MBA class were surveyed to estimate the expected amount of cash a University of Illinois student
holds at a given time. The calculated average represents which of the following?
1 point
Sample statistic
Dataset
Variable
Population parameter
12.Question 12
Kevin wants to understand how different students in his college travel from home to college. He asks only the students in
the health and physical education department at his college to participate in his study. The phenomenon that this
method of study can cause is called:
1 point
Cluster sampling
Stratification
Simple random sampling
Bias
13.Question 13
Results obtained from larger sample sizes are more reliable.
1 point
True
False
14.Question 14
When a distribution is wider, it means it has a larger standard deviation, and therefore the mean is representative of a
typical observation.
1 point
True
False
15.Question 15
For the Central Limit Theorem, we expect about 95% of all sample means to lie within one standard error of the
population mean.
1 point
True
False
16.Question 16
Given a large sample size, the Central Limit Theorem allows us to use the properties of normal distribution whether or
not the actual population is normal or not.
1 point
True
False
17.Question 17
x-bar (x̄ ), i.e., “standard error,” of a distribution is calculated by taking the population standard deviation and dividing it
by the square root of 5 times n (where n is sample size).
Standard Error: (σ_{x̄ }) = s/\sqrt{5n}(σxˉ)=s/5n
1 point
True
False
18.Question 18
900 GMAT takers were randomly selected for a national survey. Among survey participants, the mean GMAT score was
680, and the standard deviation was 0.6. Calculate the standard error of the mean.
1 point
0.01
0.02
0.1
0.5
None of the above
19.Question 19
If the true population proportion for a sample size of 200 is found to be 0.2, then the standard error will be
____________. (Round to two decimal places.)
1 point
0.03
20.Question 20
Suppose we run an online shopping site and are conducting a study to know which of our ads bring us customers that
will actually end up buying. The data shows that 700 customers clicked on our advertisement link and 223 of those
ended up buying something. The sample proportion here is _____________. (Round to two decimal places.)
1 point
0.32
21.Question 21
Let us assume that for a study we take a sample of 50 customers and repeat this 10,000 times. Suppose we increase
the sample size to 5000 and repeat it 10,000 times. Then, the second histogram of the second sample size will be:
1 point
Wider than that of the first and resemble a bell shape
Narrower than that of the first and resemble a bell shape
22.Question 22
An advantage of using the Central Limit Theorem is that we can use just one sample of sufficient size to make
inferences about a population.
1 point
True
False
WEEK 4
1.Question 1
The confidence level of a confidence interval is 99% (Z_{a/2}Za/2 = 2.58). The margin of error is 0.212. The standard
deviation of the sample used is 3. The sample size is _______________. (Round your answer to the nearest whole
number).
1 point
1333
2.Question 2
The Z_{a/2}Za/2 for a 95% confidence level of a confidence interval is 1.96. What does the number 1.96 signify?
1 point
Margin of error
Number of standard errors from the mean
Length of the confidence interval

None of the above
3.Question 3
An automobile company wants to determine the average amount of time it takes a machine to assemble a car. A sample
of 40 times yielded an average time of 23.92 minutes, with a sample standard deviation of 6.72 minutes. Assuming
normality of assembly times, provide a 98% confidence interval for the mean assembly time. Use Z_{a/2}Za/2 = 2.33
and round your answer to three decimal places.
1 point
[21.444, 26.396]
[22.178, 27.962]
[22.321, 27.987]
[23.529, 24.311]
4.Question 4
What is the minimum sample size required to provide a 95% confidence interval for a mean if we want to be no more
than 1.25 cm off? You may assume that the population is normal with standard deviation of 4 cm. (Z_{a/2}Za/2 = 1.96)
1 point
40
110
630
5.Question 5
A drug company is undertaking a survey study to assess the potential market share for their new drug. They desire to be
within 0.1 of the true proportion of the market share. Currently the survey has been sent to 100 physicians. If all 100
respond, would this survey provide the precision they require for a 95% confidence interval?
1 point
Yes.
No, their sample size is too small.

No, because the length of the confidence interval would be greater than 0.1.
There is not enough information to answer this question.
6.Question 6
You take a random sample (mean = x̅ ) from some population and form a 96% confidence interval for the population
mean, m. Which value (or notation presenting the value) is guaranteed to be in the confidence interval?
1 point
x̅
.96
7.Question 7
Decreasing the sample size while holding the confidence level the same will do what to the width of your confidence
interval?
1 point
Make it smaller
Make it bigger
Will not change the width
None of the above
8.Question 8
A random sample of graduate students were asked, "Would you come back to school to get a second degree if you were
given the opportunity?" Of the 150 people surveyed, 127 of them said that they would do so. Find a 95% confidence
interval for the proportion of graduate students who would come back to school (Z_{a/2}Za/2 = 1.96). Round your
answer to three decimal places.
1 point
0.847 ± 0.002
0.847 ± 0.029
0.847 ± 0.048
0.847 ± 0.058
9.Question 9
The 99% confidence interval for a population proportion is [0.24, 0.86]. What is the sample mean proportion.
(Z_{a/2}Za/2 = 2.58). Choose the closest answer.
1 point
0.31
0.36
0.55
0.86
10.Question 10
We have developed a 95% confidence interval for the population the proportion which is [32.2%, 35.8%]. What is the
margin of error?
1 point
1.8%
3.6%
5%
7.2%

Cor Sera

Uploaded by

Copyright:

Available Formats

Cor Sera

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Cor Sera

Uploaded by

Copyright:

Available Formats

MODULE 1

There will be a decrease in the supply of oil.

There will be an increase in the supply of oil.

We cannot be certain if any of the other options are correct.

There will be a decrease in the demand for oil.

There will be an increase in the demand for oil.

There will be a shift to the right in the supply curve.

The demand for milk will increase.

Price decreases, quantity increases

Price decreases, quantity decreases

Price increases, quantity decreases

Price remains the same, quantity decreases

Price increases, quantity remains the same

rise, decrease, tea

fall, increase, tea

rise, increase, coffee

rise, decrease, coffee

rise, increase, tea

None of these factors change when moving along a demand curve.

This is an example of an inelastic good.

This is an example of an elastic good.

None of the other options are correct.

Equilibrium price is higher than that set by free-market equilibrium

Quantity demanded exceeds quantity supplied creating shortage

Quantity supplied exceeds quantity demanded creating surplus

Supply curve does not move

Supply curve shifts to the left

Supply curve shifts to the right

Depends on the amount of tax imposed

Quantity remains the same

Equilibrium price that producers retain falls

There is no effect on equilibrium price.

Equilibrium price for consumers falls

Equilibrium price for consumers is unchanged

Equilibrium price that producers retain rises

Number of buyers in the market

Free market equilibrium price

Slope of demand curve

ATC, MC, AVC

MC, ATC, AVC

MC, AVC, ATC

Total variable cost divided by input

Average total cost minus average fixed cost

Marginal cost divided by output

π is equal to πAccy plus opportunity costs.

π is equal to πAccy minus opportunity costs.

π is larger than πAccy.

π is larger than πAccy and π is equal to πAccy plus opportunity costs.

π and πAccy are identical in value.

Average total cost

Average variable cost

Average variable cost is at a minimum

Marginal cost is at a minimum

None of the other options are correct.

Average fixed cost is at a maximum

Increases, a decreasing, decreases, an increasing

Decreases, a decreasing, increases, an increasing

Increases, a decreasing, increases, an increasing

Increases, an increasing, increases, a decreasing

Decreases, a decreasing, increases, an increasing