1 Multiple Choice  50 Points


 Bertram Gilbert
 1 years ago
 Views:
Transcription
1 Econ 201 Final Winter 2008 SOLUTIONS 1 Multiple Choice  50 Points (In this section each question is worth 1 point) 1. Suppose a waiter deposits his cash tips into his savings account. As a result of only this transaction: (a) M2 increases. (b) M1 decreases. (c) M2 decreases. (d) M3 increases. 2. Mark Twain said: (a) It is easy to write 30 pages in 2 days (b) It is easy to write 2 pages in 30 days (c) It is easy to write 2 pages in 2 days (d) It is easy to write 30 pages in 30 days (e) (a) and (b) (f) (c) and (d) 3. On 11/04/04, a euro was worth $1.287, and on 03/07/08, a euro was worth $ Using natural logarithms to calculate the total percent change between these two dates (not annualized), which is true? (a) The dollar appreciated by 19.3% (b) The dollar appreciated by 17.6% (c) The dollar depreciated by 17.6% (d) The dollar depreciated by 19.3% 4. Suppose the economy is in equilibrium and the central bank sells bonds. What happens to the equilibrium quantity of money and interest rates in the short term? (a) Quantity will go up, interest rates will go up. (b) Quantity will go up, interest rates will go down. (c) Quantity will go down, interest rates will go up. (d) Quantity will go down, interest rates will go down. 5. The survey that produces the monthly data on the unemployment rate is based on (a) A survey of employers (b) A survey of employees (c) A survey of households (d) A survey of individuals (e) (b) and (d) (f) (a) and (c) 6. Suppose that Crimson Bank has excess reserves of $800 and the reserve ratio is 20%. If Niels deposits $1,000 of cash into his checking account at Crimson Bank, and then Crimson Bank lends $600 to Mary, what is the most that Crimson Bank can lend to Professor Gordon? (a) $200 (b) $800 (c) $1000 (d) $2400
2 Pg Consider the market for loanable funds. Other things being equal, an increase in taxes on savings and investment income will: (a) shift demand to the right and increase the interest rate. (b) shift demand to the left and decrease the interest rate. (c) shift supply to the right and decrease the interest rate. (d) shift supply to the left and increase the interest rate. 8. American jobs are lost to: (a) China in manufacturing (b) China in information technology services (c) India in manufacturing (d) India in information technology services (e) (b) and (c) (f) (a) and (d) 9. Which of the following will not cause the AD curve to shift to the left? (a) Higher income tax rate (b) Lower stock of physical capital (c) Openmarket purchase (d) Lower government spending (e) (b) and (c) 10. An example of a double coincidence of wants is: (a) a car mechanic who wants a TV finding an owner of an electronics store who wants a car repaired. (b) a car dealer who wants a TV finding an electronics store owner who wants money. (c) an electronics store owner who wants car repairs finding a car mechanic who wants money. (d) all of the above are examples. 11. What is the main reason that the government does not bail out the households who face foreclosure on their mortgages? (a) Fear of higher inflation (b) Fear of lower output (c) Moral hazard (d) Bankruptcy of the mortgage banking industry 12. Advocates of free trade claim that (a) Import competitors are winners and consumers are losers (b) Consumers are losers and import competitors are losers (c) Consumers are losers and export producers are winners (d) Consumers are winners and export producers are winners 13. If a bank has deposits of $100,000, loans of $200,000, cash on hand of $10,000, and $15,000 on deposit at the Federal Reserve, then its reserve ratio is: (a) 5% (b) 10% (c) 12.5% (d) 25% 14. If the nominal quantity of money is $4 trillion, real output is $10 trillion, and the price level is 2, then the velocity of money is: (a) 1 (b) 2 (c) 4 (d) 5
3 15. To the money supply, the Fed could. (a) decrease; lower the discount rate (b) increase; raise the federal funds rate (c) decrease; conduct openmarket purchases (d) increase; lower the required reserve ratio Pg Japan s lost decade and today s U.S. mortgage meltdown have one thing in common, which is: (a) Falling housing prices. (b) Aggressive use of stimulative monetary and fiscal policy. (c) Insolvent banks. (d) Use of cash for most transactions. 17. An increase in the price level (a) increases the nominal demand for money. (b) decreases the nominal demand for money. (c) does not affect the nominal demand for money. (d) shifts the nominal demand for money to the left. 18. The money demand curve is because a lower interest rate. (a) upwardsloping; increases the opportunity cost of holding money. (b) downwardsloping; increases the opportunity cost of holding money. (c) upwardsloping; decreases the opportunity cost of holding money. (d) downwardsloping; decreases the opportunity cost of holding money 19. If the economy is suffering from a recessionary gap, the Fed should conduct monetary policy by the money supply. (a) expansionary; decreasing (b) expansionary; increasing (c) contractionary; decreasing (d) contractionary; increasing 20. In the readings for Chapter 19, there is a debate in Business Week about the desirability of letting the dollar depreciate. Which of the following is not an argument in favor of letting the dollar depreciate? (a) It will make U.S. exports more competitive. (b) It will make U.S. imports more expensive. (c) It will defuse protectionist pressure. (d) It will attract more investment for the U.S. stock market. 21. Deflation depresses aggregate demand because of (a) The wealth effect (b) The expectations effect (c) The income effect (d) The consumption effect
4 22. Suppose the AD, LRAS, and SRAS curves in the economy are Pg. 4 Aggregate Price Level LRAS SRAS Y AD Real GDP If real GDP in the economy is at Y and the central bank wants to change real GDP in the shortrun to be equal to potential GDP it should: (a) Buy bonds on the open market. (b) Sell bonds on the open market. (c) Do nothing. (d) Tell the government to print more money. 23. Economists argue that money is neutral: (a) in both the short and long run. (b) in the short run only. (c) in the long run but does have an impact on the price level. (d) in the long run but has no impact on the price level. 24. When an economy moves from autarky to free international trade, in the export sector (a) consumer and producer surplus both rise and the economy as a whole gains. (b) consumer surplus rises, producer surplus falls, and the economy as a whole gains. (c) consumer surplus falls, producer surplus rises, and the economy as a whole gains. (d) the decrease in either consumer surplus or producer surplus is sufficiently large to cause net losses for the economy. 25. Initially, the nominal exchange rate is 0.7 euros per $, and the price index for both the U.S. and the euro area are each 100. Over the following 10 years, the annual U.S. inflation rate is 3.5% per year, and that of the euro area is 2.5% per year. What must the nominal exchange rate be after 10 years to maintain the initial real exchange rate? (a) 0.5 euros per $ (b) 0.62 euros per $ (c) 0.7 euros per $ (d) 0.77 euros per $ 26. The three main monetary policy tools are: (a) interest rates, taxes, government purchases, and transfers. (b) currency, nearmoneys, and reserve ratio. (c) deposit insurance, discount rate, and money multiplier. (d) reserve requirements, the discount rate, and openmarket purchases.
5 Pg. 5 For the next three problems, consider the following chart showing supply and demand for calculators. Price of calculators $300 Domestic supply A $150 $120 P W = $100 $50 B C G K H F L I J Domestic demand Quantity of calculators 27. The world price, P W, equals $100. When the economy moves from autarky to free trade, consumer surplus rises by area and producer surplus falls by. (a) B + K + L; B (b) B + C + K + L; B + C + K + L (c) B + C+ H + I + K + L; B + C + H + I (d) B + C + G + H + I + J + K + L; B + C 28. The world price, P W, equals $100. The government imposes a quota restricting imports to 25 calculators. If the import licenses are granted to foreigners, the net loss due to the import quota is equal to areas: (a) K + L (b) G + J (c) G + H + I + J (d) G + H + I + J + K + L 29. The world price, P W, equals $100. The government imposes an import tariff of $20 per calculator. Compared with the free trade situation, the tariff leads to a deadweight loss equal to areas: (a) K + L (b) G + J (c) G + H + I + J (d) There is no deadweight loss, since the tariff revenue the government receives offsets any losses. 30. The CPI in September, 2007, was 208.3, and it was in December, The annualized growth rate between September and December was: (a) 1.38% (b) 2.44% (c) 3.84% (d) 5.53%
6 Pg In the absence of international capital flows, the equilibrium interest rate in the U.S. market for loanable funds is 3%, while in Germany it is 7%. International borrowing and lending between the United States and Germany may result in a common interest rate of and. (a) 4%; capital inflows to the United States matching the capital outflows from Germany (b) 3%; massive capital inflows from Germany into the United States (c) 5%; capital outflows from the United States matching the capital inflows into Germany (d) 7%; massive capital inflows from the United States into Germany 32. All else being equal, which of the following could cause exchange rates to change from 1e=$1.50 to 1e=$1.25? (a) interest rates are higher in Europe. (b) interest rates are higher in the United States. (c) interest rates in the United States and Europe are equal. (d) inflation is higher in Europe. 33. A NobelPrize winner suggested the following combination: (a) Developed countries should lower tariffs and lessdeveloped countries should raise tariffs (b) Developed countries should raise tariffs and lessdeveloped countries should reduce tariffs (c) Developed countries should lower tariffs and lessdeveloped countries should reduce tariffs (d) Developed countries should raise tariffs and lessdeveloped countries should raise tariffs 34. Which of the following is true of the 2006 international balance of payments of the U.S.? (a) Current account surplus; private financial inflows > official financial inflows (b) Current account surplus; official financial inflows > private financial inflows (c) Current account deficit; private financial inflows > official financial inflows (d) Current account deficit; official financial inflows > private financial inflows 35. Suppose exchange rates between the U.S. and Europe changed from 1e=$1.50 to 1e=$1.25. This would cause Americans to purchase goods and services from Europe. (a) the same amount of (b) fewer (c) more (d) none of the above 36. Expansionary monetary policy in the United States causes U.S. interest rates to and the dollar to. (a) increase; appreciate (b) increase; depreciate (c) decrease; appreciate (d) decrease; depreciate 37. The U.S. rates lower on indices of wellbeing than on real per capita GDP because (a) The U.S. ranks lower on life expectancy (b) The U.S. ranks lower on health care expenditures as a share of GDP (c) The U.S. ranks lower in science and math test scores (d) The U.S. ranks lower on energy spending as a share of GDP
7 38. A reason for the low U.S. household saving rate is (a) Americans do not care about saving for their children (b) Americans respond to rising imports by spending now (c) Americans respond to capital gains on housing (d) High American investment crowds out saving Pg Suppose the reserve requirement is 20%, and you deposit a $1,000 check received as a gift for acing this exam in your checking account. The bank does NOT want to hold excess reserves. By how much does the monetary base change? (a) $0 (b) $800 (c) $1000 (d) $4000 (e) $ The order of magnitude increase in prices between 1929 and 2007 was by a factor of (a) 2 (b) 5 (c) 10 (d) 20 (e) A myth about the Great Depression is that (a) The New Deal ended the Great Depression (b) The New Deal raised the price level (c) The New Deal raised the wage level (d) The New Deal raised interest rates 42. Consider the following table which shows the maximum amounts of machinery and petroleum that the United States and Mexico can produce if they only produce one good. Both nations face constant costs of production. Countries Machinery (units) Petroleum (units) United States Mexico , and Mexico has a com The United States has a comparative advantage in parative advantage in. (a) both goods; neither good (b) neither good; both goods (c) machinery; petroleum (d) petroleum; machinery 43. The table shows the maximum amounts of autos and clothing that the United States and Canada can produce if they only produce one good. Both nations face constant costs of production. Countries Autos (units) Clothing (units) United States Canada Given the opportunity costs of production: (a) there is no basis for trade. (b) Canada should specialize in clothing. (c) the United States should specialize in autos. (d) the United States should specialize in both goods, and Canada should not produce either good.
8 Pg Suppose actual output is below potential output. In the long run: (a) nominal wages will decrease, and the shortrun supply curve will shift to the right. (b) nominal wages will increase, and the shortrun supply curve will shift to the left. (c) the aggregate demand curve will shift to the right. (d) the longrun aggregate supply curve will shift to the right. 45. Suppose MP C = 0.6 and t = Holding all else constant, if capital inflows goes up by 100, how much does equilibrium Y change? (a) Y goes up by about 182 (b) Y goes down by about 182 (c) Y goes up by about 333 (d) Y goes down by about The circle to the left of George Washington s picture on the $1 bill represents: (a) The Presidential Seal (b) The importance of the number 13 in the design of the bill (c) The regional Federal reserve bank that issued the bill (d) The roman numeral for 1776 at the base of the pyramid 47. In the twentieth century, the years with the largest inflationary gap were: (a) (b) (c) (d) Suppose that annual inflation is 2% and the annual growth rate of real GDP is 3%. What is the annual growth rate of nominal GDP? (a) 1% (b) 2% (c) 3% (d) 4% (e) 5% (f) 6% 49. The course packet delivers a condemnation of Alan Greenspan s reign at the Federal Reserve between 1987 and Which of these comes closest to the condemnation? (a) Keeping interest rates too low in (b) Keeping interest rates too low in (c) Keeping interest rates too low in (d) Keeping interest rates too low in An aggregate production function typically exhibits returns to scale with respect to capital per worker. (a) Increasing (b) Decreasing (c) Constant (d) Zero
9 2 Short Answer  70 points Pg. 9 PLEASE NOTE: In order to receive full credit, in calculating growth rates you must use the logarithmic or exponential formulas from the classroom handout. 1. (14 pts.) Consider the economy of the country Microvilleshire. Its shortrun aggregate supply and aggregate demand equations are described as follows: SRAS: CPI = Y AD: CPI = 60 4Y (a) Suppose Microvilleshire is in longrun equilibrium. (2 pts.) What is output in the longrun? SOLUTION: We are told Microvilleshire is in longrun equilibrium, so we can just find the shortrun equilibrium, and we know that s the same as the longrun one Y = 60 4Y Y = 4 (2 pts.) What is CPI in the longrun? SOLUTION: CPI = = 44 (3 pts.) Draw a graph of aggregate supply and aggregate demand that illustrates AD, SRAS, and LRAS. SOLUTION: The graph should have CPI on the yaxis and Y on the xaxis, and it should include SRAS, which has intercept 20 and slope 6, AD, which has intercept 60 and slope 4, as well as LRAS, which is vertical. All three lines should cross at Y = 4 and CPI = 44. (b) Now suppose that Microvilleshire s main trade partner, Macrovilleshire, changes their trade policy in a way that decreases their demand for Microvilleshire products. This shifts AD such that for every level of output, the CPI is decreased by 30. (1 pt.) Does this result in a inflationary gap, a recessionary gap, or no output gap of any sort? SOLUTION: AD falls Y falls recessionary gap. (2 pts.) If you think there is an inflationary or recessionary gap, what is the magnitude? If you think there is no output gap, explain why. SOLUTION: The new AD curve is CPI = 30 4Y. Setting SRAS=AD, we get 30 4Y = Y Y = 1. So, the recessionary gap is 4 1 = 3. (1 pt.) Change your graph above in (a) to include the new AD and the inflationary or recessionary gap you found. SOLUTION: There should be a forth line added to the graph: the new AD curve, which has intercept 30 and slope 4. It should cross the old SRAS line at Y = 1 and CPI = 26. (c) (3 pts.) What is the new longrun equilibrium output and longrun equilibrium CPI? SOLUTION: Longrun output is still Y = 4. The new longrun prices will be CPI = = 14.
10 Pg (14 pts.) Consider a closed economy with three types of goods: consumption goods, investment goods, and governmentpurchased goods. In 2000, data on these goods is given by: 2000 Average Price Quantity Consumption goods: $ Investment goods: $ Government goods: $ After 2000, the Federal Reserve decreases the money supply, and the government engages in expansionary fiscal policy. This leads to the following data for 2001: 2001 Average Price Quantity Consumption goods: $ Investment goods: $ Government goods: $ (a) (2 pts.) What is nominal GDP in 2000 and 2001? SOLUTION: GDP in 2000 = = GDP in 2001 = = (b) (1 pt.) Using base year 2000, what is real GDP in 2001? SOLUTION: Real GDP in 2001 using 2000 as base year = = (1 pt.) Using base year 2001, what is real GDP in 2000? SOLUTION: Real GDP in 2000 using 2001 as base year = = (c) (6 pts.) Using the GDP deflator as your price index, what is the chainweighted inflation rate between 2000 and 2001? SOLUTION: Using 2000 as base year, GDP deflator in 2000 = = 100 Using 2000 as base year, GDP deflator in 2001 = = Using 2000 as base year, inflation = ln ( ) = %. Using 2001 as base year, GDP deflator in 2000 = = Using 2001 as base year, GDP deflator in 2001 = = 100. Using 2001 as base year, inflation = ln ( ) = %. So, chainweighted inflation = = %. (d) (1 pt.) Write the equation that relates the velocity of money (call it V ) to the money supply and nominal GDP. SOLUTION: M V = P Y V = P Y M = nominal GDP money supply (3 pts.) Suppose that in 2000, the money supply was $224,000. Assume that the velocity of money is the same in 2000 and Use the values of nominal GDP you found in part (a) for 2000 and 2001 to calculate the money supply in SOLUTION: V = nominal GDP money supply = = 5. Since V is the same in 2001, we have M 5 = nominal GDP M = =
11 Pg (17 pts.) Consider an economy in equilibrium with the following initial structure: Equilibrium GDP = Y = 10, 000 MP C = 3 4 Income tax rate = t = 1 9 Reserve ratio = rr = 0.10 The desired currency to deposit ratio is 15%, so c = 0.15 Interest rate = i = 0.04 (= 4%) Money demand is characterized by M D = i (in millions of dollars, where i is written as a decimal. For example, if i = 0.07, then M D = = 480). Assume consumption takes the standard form C = A + MP C (Y T ), and taxes take the form T = T a + t Y. A, T a, t, G, X, Im, and MP C do not change when the interest rate changes. However, investment does change based on the interest rate. Specifically, I = i. (Again, i is written as a decimal. For example, if i = 0.07, then I = = 650.) (a) Given that the economy is in equilibrium: (2 pts.) What is the money supply? (Hint: consider the market for money and the equilibrium condition that relates M D to M S ) SOLUTION: M S = M D = = 510 (2 pts.) What is the monetary base? SOLUTION: B = M S 1+c = = c+rr 0.25 (b) (2 pts.) Now suppose that the central bank sells 5 million dollars worth of bonds on the open market. What is the change in money supply? SOLUTION: M S = 1+c 1.15 c+rr B = 0.25 ( 5) = 23 (c) (2 pts.) What is the new interest rate? SOLUTION: M S = M D = i i = (d) (4 pts.) What is the new equilibrium Y that results from the open market operation described in parts (b) and (c)? (Hint: first, find how I changes.) SOLUTION: I = ( ) ( ) = 115 Y = I 1 MP C (1 t) = = 345 Y = 9655 (e) (5 pts.) Going back to the initial equilibrium (i.e., before the open market operations in (b) happened), suppose that net exports decreases by 100 and G increases by 20. The central bank wants to keep output unchanged (i.e., wants to keep Y = 10, 000). How many million dollars of bonds should they buy or sell? SOLUTION: We want the change in I to offset the change in NX and G. If the Fed does nothing, we will have AAE = = 80. So, we want I = 80 to offset the changes. This means we want a new level of investment of I = ( )+80 = 880. If I = 880, we need an interest rate of 880 = i i = In order to have i = 0.024, we need M S = = 526. Thus, we need a change in M S of M S = = 16. This means we needs a change in B of B = M S 1+c c+rr of bonds. = = Thus, the Fed needs to buy million dollars worth
12 4. (25 pts.) Suppose an economy has the following data: Pg. 12 Year Y Y D C I G X Im T NS The consumption function and the tax function are the same in every year. Additionally, imports are a function of disposable income. In particular, the import function is Im = a + b Y D where a and b are some numbers. This function also stays the same every year. (a) (2 pts.) What is Y (GDP or output) and Y D (disposable income) in 2004 and 2005? SOLUTION: Y = C + I + G + X Im. In 2004, Y = = In 2005, Y = = Y D = Y T. In 2004, Y D = = In 2005, Y D = = (b) (2 pts.) What are national savings in 2004 and 2005? SOLUTION: NS = P S + GS = Y T C + T G = Y C G. In 2004, NS = = 250. In 2005, NS = = 350. (c) (Hint: for the three sections in part (c), use the data for 2004 and 2005.) (3 pts.) What is the consumption function? (Hint: your answer should be of the form C = A + MP C Y D.) SOLUTION: The two equations to solve are: 700 = A + MP C 1000 and 800 = A + MP C These give MP C = 0.5 and A = 200. Thus, the consumption function is C = Y D. (3 pts.) What is the tax function? (Hint: your answer should be of the form T = T a + t Y.) SOLUTION: The two equations to solve are: 100 = T a + t 1100 and 150 = T a + t These give t = 0.20 and T a = 120. Thus, the tax function is T = Y. (3 pts.) What is the import function? (Hint: as above, your answer should be of the form Im = a + b Y D.) SOLUTION: The two equations to solve are: 150 = a+b 1000 and 170 = a+b These give b = 0.10 and a = 50. Thus, the import function is Im = Y D. (d) (Hint: you should be using the three functions you found in part (c), along with the data from the table for 2006, to help solve for Y.) SOLUTION: Y = C + I + G + X Im Y = A + MP C (Y (T a + t Y )) + I + A MP C Ta+I+G+X a+b Ta G + X (a + b (Y (T a + t Y ))) Y = 1 MP C (1 t)+b (1 t) (2 pts.) What is the multiplier for 2006? 1 SOLUTION: From above, the multiplier is 1 MP C (1 t)+b (1 t) = (2 pts.) What is AAE for 2006? SOLUTION: From above, AAE= A MP C T a + I + G + X a + b T a = ( 120) ( 120) = (1 0.2)+0.10(1 0.2) =
13 (1 pt.) What is equilibrium GDP for 2006? SOLUTION: Y = = Pg. 13 (e) (2 pts.) What is the trade balance in equilibrium in 2006? SOLUTION: Trade balance= X Im = 300 ( ( ( ))) = (f) (3 pts.) Now suppose that the government changes the tax policy by decreasing T a by 80. By how much does equilibrium GDP change? (Hint: use the formula you found for Y in part (d).) SOLUTION: Y = AAE 1 MP C (1 t)+b(1 t) = MP C Ta+b Ta 1 MP C (1 t)+b(1 t) = 0.5( 80)+0.1( 80) 1 0.5(1 0.2)+0.10(1 0.2) = (g) Return to part (d) (i.e., ignore the change in part (f)). Suppose between 2006 and 2007, MP C changes to 0.70, and t changes to 0 (no income tax). (1 pt.) What is the new multiplier in 2007? SOLUTION: Multiplier = 1 1 MP C (1 t)+b(1 t) = (1 0)+0.10(1 0) = 2.5 (1 pt.) Assume AAE is the same in 2007 as it was in 2006 (from part (d)). What is equilibrium GDP in 2007? SOLUTION: Y = = 2370 NOTE: AAE does change. It s new value is AAE = A MP C T a +I +G+X a+b T a = ( 120) ( 120) = 972 Y = = 2430
MONEY, INTEREST, REAL GDP, AND THE PRICE LEVEL*
Chapter 11 MONEY, INTEREST, REAL GDP, AND THE PRICE LEVEL* The Demand for Topic: Influences on Holding 1) The quantity of money that people choose to hold depends on which of the following? I. The price
More informationWhat three main functions do they have? Reducing transaction costs, reducing financial risk, providing liquidity
Unit 4 Test Review KEY Savings, Investment and the Financial System 1. What is a financial intermediary? Explain how each of the following fulfills that role: Financial Intermediary: Transforms funds into
More informationEcon 202 Section 2 Final Exam
Douglas, Fall 2009 December 17, 2009 A: Special Code 0000 PLEDGE: I have neither given nor received unauthorized help on this exam. SIGNED: PRINT NAME: Econ 202 Section 2 Final Exam 1. The present value
More informationEconomics 101 Multiple Choice Questions for Final Examination Miller
Economics 101 Multiple Choice Questions for Final Examination Miller PLEASE DO NOT WRITE ON THIS EXAMINATION FORM. 1. Which of the following statements is correct? a. Real GDP is the total market value
More informationPRACTICE Unit 6 AP Economics
PRACTICE Unit 6 AP Economics Multiple Choice Identify the choice that best completes the statement or answers the question. 1. The term liquid asset means: A. that the asset is used in a barter exchange.
More informationECON Intermediate Macroeconomics (Professor Gordon) First Midterm Examination: Fall 2013 Answer sheet
ECON 311  Intermediate Macroeconomics (Professor Gordon) First Midterm Examination: Fall 2013 Answer sheet YOUR NAME: Student ID: Circle the TA session you attend: Chris  10AM Chris  1PM Andreas  10AM
More informationPrinciples of Macroeconomics Prof. Yamin Ahmad ECON 202 Fall 2004
Principles of Macroeconomics Prof. Yamin Ahmad ECON 202 Fall 2004 Sample Final Exam Name Id # Part B Instructions: Please answer in the space provided and circle your answer on the question paper as well.
More informationRefer to Figure 171
Chapter 17 1. Inflation can be measured by the a. change in the consumer price index. b. percentage change in the consumer price index. c. percentage change in the price of a specific commodity. d. change
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Suvey of Macroeconomics, MBA 641 Fall 2006, Final Exam Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Modern macroeconomics emerged from
More informationAGGREGATE DEMAND AND AGGREGATE SUPPLY The Influence of Monetary and Fiscal Policy on Aggregate Demand
AGGREGATE DEMAND AND AGGREGATE SUPPLY The Influence of Monetary and Fiscal Policy on Aggregate Demand Suppose that the economy is undergoing a recession because of a fall in aggregate demand. a. Using
More informationEcon 202 Section 4 Final Exam
Douglas, Fall 2009 December 15, 2009 A: Special Code 00004 PLEDGE: I have neither given nor received unauthorized help on this exam. SIGNED: PRINT NAME: Econ 202 Section 4 Final Exam 1. Oceania buys $40
More information2.5 Monetary policy: Interest rates
2.5 Monetary policy: Interest rates Learning Outcomes Describe the role of central banks as regulators of commercial banks and bankers to governments. Explain that central banks are usually made responsible
More informationChapter 32 A Macroeconomic Theory of the Open Economy
Chapter 32 A Macroeconomic Theory of the Open Economy TRUE/FALSE 1. Over the past two decades, the United States has persistently exported more goods and services than it has imported. ANS: F DIF: 1 REF:
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Econ 111 Summer 2007 Final Exam Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The classical dichotomy allows us to explore economic growth
More information7 AGGREGATE SUPPLY AND AGGREGATE DEMAND* Chapter. Aggregate Supply
Chapter 7 AGGREGATE SUPPLY AND AGGREGATE DEMAND* Aggregate Supply Topic: Aggregate Supply/Aggregate Demand Model 1) The aggregate supply/aggregate demand model is used to help understand all of the following
More information4. If the investment demand function is I = c drand the quantity of real money demanded is ey fr,
1. If money demand does not depend on income, then the curve is. A) IS; vertical B) IS; horizontal C) LM; vertical D) LM; horizontal 2. If consumption is given by C = 200 + 0.75(Y T) and investment is
More informationEcon 202 Final Exam. Table 31 Labor Hours Needed to Make 1 Pound of: Meat Potatoes Farmer 8 2 Rancher 4 5
Econ 202 Final Exam 1. If inflation expectations rise, the shortrun Phillips curve shifts a. right, so that at any inflation rate unemployment is higher. b. left, so that at any inflation rate unemployment
More informationPractice Problems Mods 25, 28, 29
Practice Problems Mods 25, 28, 29 Multiple Choice Identify the choice that best completes the statement or answers the question. Scenario 251 First National Bank First National Bank has $80 million in
More informationECON 201: Introduction to Macroeconomics Final Exam December 13, 2012 NAME:
ECON 201: Introduction to Macroeconomics Final Exam December 13, 2012 NAME: Circle your TA s name: Amy Thiago Samir Circle your section time: 9 a.m. 3 p.m. INSTRUCTIONS: 1) The exam lasts 2 hours. 2) The
More information2009 CHAPTER 11 Self Study Questions
CHAPTER 11 Self Study Questions 1) The aggregate supply/aggregate demand model is used to help understand all of the following except A) inflation. B) business cycle fluctuations. C) the aggregate value
More informationThe Aggregate Demand Aggregate Supply (ADAS) Model
The ADAS Model The Aggregate Demand Aggregate Supply (ADAS) Model Chapter 9 The ADAS Model addresses two deficiencies of the AE Model: No explicit modeling of aggregate supply. Fixed price level. 2
More informationEC2105, Professor Laury EXAM 2, FORM A (3/13/02)
EC2105, Professor Laury EXAM 2, FORM A (3/13/02) Print Your Name: ID Number: Multiple Choice (32 questions, 2.5 points each; 80 points total). Clearly indicate (by circling) the ONE BEST response to each
More informationEconomics 152 Solution to Sample Midterm 2
Economics 152 Solution to Sample Midterm 2 N. Das PART 1 (84 POINTS): Answer the following 28 multiple choice questions on the scan sheet. Each question is worth 3 points. 1. If Congress passes legislation
More informationEcon 202 H01 Final Exam Spring 2005
Econ202Final Spring 2005 1 Econ 202 H01 Final Exam Spring 2005 1. Which of the following tends to reduce the size of a shift in aggregate demand? a. the multiplier effect b. the crowdingout effect c.
More informationName: Days/Times Class Meets: Today s Date:
Name: _ Days/Times Class Meets: Today s Date: Macroeconomics, Spring 2009, Exam 3, several versions Read these Instructions carefully! You must follow them exactly! I) Answer on your Scantron card, using
More information4 Macroeconomics LESSON 6
4 Macroeconomics LESSON 6 Interest Rates and Monetary Policy in the Short Run and the Long Run Introduction and Description This lesson explores the relationship between the nominal interest rate and the
More information1) Explain why each of the following statements is true. Discuss the impact of monetary and fiscal policy in each of these special cases:
1) Explain why each of the following statements is true. Discuss the impact of monetary and fiscal policy in each of these special cases: a) If investment does not depend on the interest rate, the IS curve
More informationThe level of price and inflation Real GDP: the values of goods and services measured using a constant set of prices
Chapter 2: Key Macroeconomics Variables ECON2 (Spring 20) 2 & 4.3.20 (Tutorial ) National income accounting Gross domestic product (GDP): The market value of all final goods and services produced within
More informationPracticed Questions. Chapter 20
Practiced Questions Chapter 20 1. The model of aggregate demand and aggregate supply a. is different from the model of supply and demand for a particular market, in that we cannot focus on the substitution
More informationECON 1010 Principles of Macroeconomics Final Exam
ECON 1010 Principles of Macroeconomics Final Exam 1. Expansionary monetary policy: Section A: Multiple Choice Questions. (120 points; 3 pts each) a. increases the money supply, interest rates, consumption,
More informationTHE OPEN AGGREGATE DEMAND AGGREGATE SUPPLY MODEL.
THE OPEN AGGREGATE DEMAND AGGREGATE SUPPLY MODEL. Introduction. This model represents the workings of the economy as the interaction between two curves:  The AD curve, showing the relationship between
More information3. a. If all money is held as currency, then the money supply is equal to the monetary base. The money supply will be $1,000.
Macroeconomics ECON 2204 Prof. Murphy Problem Set 2 Answers Chapter 4 #2, 3, 4, 5, 6, 7, and 9 (on pages 102103) 2. a. When the Fed buys bonds, the dollars that it pays to the public for the bonds increase
More informationECONS PASCO {ECON 152}
ECONS PASCO {ECON 152} 1. Macroeconomics deals with a. the activities of individual units b. the behaviour of the electronics industry c. economic aggregates d. the behaviour of firms 2. The study of inflation
More informationAnswers. Event: a tax cut 1. affects C, AD curve 2. shifts AD right 3. SR eq m at point B. P and Y higher, unemp lower 4.
A C T I V E L E A R N I N G 2: Answers Event: a tax cut 1. affects C, AD curve 2. shifts AD right 3. SR eq m at point B. P and Y higher, unemp lower 4. Over time, P E rises, SRAS shifts left, until LR
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Study Questions 5 (Money) MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The functions of money are 1) A) medium of exchange, unit of account,
More informationEcon 202 Final Exam. Douglas, Spring 2010 May 6, 2010 PLEDGE: I have neither given nor received unauthorized help on this exam.
, Spring 2010 May 6, 2010 PLEDGE: I have neither given nor received unauthorized help on this exam. SIGNED: PRINT NAME: Econ 202 Final Exam Multiple Choice. 2 points each. 1. According to the longrun
More information13. If Y = AK 0.5 L 0.5 and A, K, and L are all 100, the marginal product of capital is: A) 50. B) 100. C) 200. D) 1,000.
Name: Date: 1. In the long run, the level of national income in an economy is determined by its: A) factors of production and production function. B) real and nominal interest rate. C) government budget
More informationEcon 202 Final Exam. Douglas, Spring 2006 PLEDGE: I have neither given nor received unauthorized help on this exam.
, Spring 2006 PLEDGE: I have neither given nor received unauthorized help on this exam. SIGNED: PRINT NAME: Econ 202 Final Exam 1. When the government spends more, the initial effect is that a. aggregate
More informationchapter: Aggregate Demand and Aggregate Supply Krugman/Wells 2009 Worth Publishers 1 of 58
chapter: 12 >> Aggregate Demand and Aggregate Supply Krugman/Wells 2009 Worth Publishers 1 of 58 WHAT YOU WILL LEARN IN THIS CHAPTER How the aggregate demand curve illustrates the relationship between
More informationAP Macroeconomics. Practice Exam. Advanced Placement Program
Advanced Placement Program AP Macroeconomics Practice Exam The questions contained in this AP Macroeconomics Practice Exam are written to the content specifications of AP Exams for this subject. Taking
More informationAggregate Supply and Aggregate Demand
Aggregate Supply and Aggregate Demand Econ 120: Global Macroeconomics 1 1.1 Goals Goals Specific Goals Be able to explain GDP fluctuations when the price level is also flexible. Explain how real GDP and
More informationChapter 13. Aggregate Demand and Aggregate Supply Analysis
Chapter 13. Aggregate Demand and Aggregate Supply Analysis Instructor: JINKOOK LEE Department of Economics / Texas A&M University ECON 203 502 Principles of Macroeconomics In the short run, real GDP and
More informationECON 1010 Principles of Macroeconomics Solutions to Exam #3. Section A: Multiple Choice Questions. (40 points; 2 pts each)
ECON 1010 Principles of Macroeconomics Solutions to Exam #3 Section A: Multiple Choice Questions. (40 points; 2 pts each) 1. Domestic savings and foreign savings are: a. sources of funds for investment
More informationChange Effect on nominal money demand Effect on real money demand Decrease in aggregate price level Shift nominal money demand to left Has no effect
AP Macroeconomics Unit 4 Review Session Money Market 1. Draw the money market, indicating the equilibrium interest rate and quantity. 2. Use the following table to answer this question. Change Effect on
More informationEcon 102 The Open Economy
Winter 2007 Econ 102 The Open Economy 1. Be sure to read your copy of the Wall Street Journal every weekday, looking especially for items related to the material in this course. Find an article in this
More informationECON 201: Introduction to Macroeconomics Professor Robert Gordon Final Exam: December 8, Circle your TA's name: Max Samir Vishal
ECON 201: Introduction to Macroeconomics Professor Robert Gordon Final Exam: December 8, 2014 NAME Circle your TA's name: Max Samir Vishal Circle your section time: 9:00 am 4:00 pm Directions: This test
More informationMONEY, INTEREST, REAL GDP, AND THE PRICE LEVEL*
Chapter 11 MONEY, INTEREST, REAL GDP, AND THE PRICE LEVEL* Key Concepts The Demand for Money Four factors influence the demand for money: The price level An increase in the price level increases the nominal
More informationChapter 4: Money and Inflation (LongRun Theory of Monetarism)
Chapter 4: Money and Inflation (LongRun Theory of Monetarism) The overall increase in prices is called inflation A price is the rate at which money is exchanged for a good or a service. In reality, the
More informationUsing an appropriately labeled money market graph, show the effects of an open market purchase of government securities by the FED on :
Using an appropriately labeled money market graph, show the effects of an open market purchase of government securities by the FED on : The money supply Interest rates Nominal Interest rates i1 i2 Sm1
More informationb. Given this information, describe the government budget balance for this economy.
Economics 102 Summer 2015 Answers to Homework #5 Due Wednesday, July 15, 2015 Directions: The homework will be collected in a box before the lecture. Please place your name on top of the homework (legibly).
More informationEcon 202 Section H01 Midterm 2
, Spring 2010 March 16, 2010 PLEDGE: I have neither given nor received unauthorized help on this exam. SIGNED: PRINT NAME: Econ 202 Section H01 Midterm 2 Multiple Choice. 2.5 points each. 1. What would
More informationChapter 12. Aggregate Expenditure and Output in the Short Run
Chapter 12. Aggregate Expenditure and Output in the Short Run Instructor: JINKOOK LEE Department of Economics / Texas A&M University ECON 203 502 Principles of Macroeconomics Aggregate Expenditure (AE)
More informationMiami Dade College ECO Principles of Macroeconomics Fall 2015 Practice Test #3
Miami Dade College ECO 2013.004 Principles of Macroeconomics Fall 2015 Practice Test #3 1. If disposable income is $3,000 and saving is $1,200, how much is the average propensity to consume? A) 0.4 B)
More informationMGE#12 The Balance of Payments
MGE#12 The Balance of Payments The Current Account, the Capital Account and the Balance of Payments Introduction to the Foreign Exchange Market Savings, Investment and the Current Account 1 From last session
More information2.If actual investment is greater than planned investment, inventories increase more than planned. TRUE.
Macro final exam study guide True/False questions  Solutions Case, Fair, Oster Chapter 8 Aggregate Expenditure and Equilibrium Output 1.Firms react to unplanned inventory investment by reducing output.
More informationA country s economy is in a shortrun equilibrium with an output level less than the fullemployment output level. Assume an upwardsloping aggregate
ADAS Practice A country s economy is in a shortrun equilibrium with an output level less than the fullemployment output level. Assume an upwardsloping aggregate supply curve. (a) Using a correctly labeled
More informationEconomic Systems. 1. MARKET ECONOMY in comparison to 2. PLANNED ECONOMY
Economic Systems The way a country s resources are owned and the way that country takes decisions as to what to produce, how much to produce and how to distribute what has been produced determine the type
More information(a) Using an MPC of.5, the impact of $100 spent the government will be as follows: 1 100 100 2 50 150 3 25 175 4 12.5 187.5 5 6.25 193.
S5 Solutions 24 points Chapter 2: Fiscal policy. If the marginal propensity to save is.5, how large is the multiplier? If the marginal propensity to save doubles to., what happens to the multiplier? With
More informationMacroeconomics Series 2: Money Demand, Money Supply and Quantity Theory of Money
Macroeconomics Series 2: Money Demand, Money Supply and Quantity Theory of Money by Dr. Charles Kwong School of Arts and Social Sciences The Open University of Hong Kong 1 Lecture Outline 2. Determination
More informationEconomics of Money, Banking, and Fin. Markets, 10e (Mishkin) Chapter 22 Aggregate Demand and Supply Analysis. 22.
Economics of Money, Banking, and Fin. Markets, 10e (Mishkin) Chapter 22 Aggregate Demand and Supply Analysis 22.1 Aggregate Demand 1) The aggregate demand curve is the total quantity of an economy's A)
More informationEcon 202 Honors Midterm 2
, Spring 2009 April 7, 2009 PLEDGE: I have neither given nor received unauthorized help on this exam. SIGNED: PRINT NAME: Econ 202 Honors Midterm 2 1. The price level falls if either a. money demand shifts
More informationMacroeconomics: Aggregate Demand & Aggregate Supply
RGDP HOSP 2207 (Economics) Learning Centre Macroeconomics: Aggregate Demand & Aggregate Supply The level of real GDP attained when an economy is at full capacity is called the full capacity GDP or potential
More informationPractice Final Exam Economics 503 Fundamentals of Economic Analysis 2:305:30PM
Name Student ID Practice Final Exam Economics 503 Fundamentals of Economic Analysis 2:305:30PM Write all of your answers on this white exam paper. Do not hand in the blue books. Multiple Choices (2 points
More informationa) Aggregate Demand (AD) and Aggregate Supply (AS) analysis
a) Aggregate Demand (AD) and Aggregate Supply (AS) analysis Determinants of AD: Aggregate demand is the total demand in the economy. It measures spending on goods and services by consumers, firms, the
More informationEcon 202 Final Exam. Douglas, Fall 2007 Version A Special Codes 00000. PLEDGE: I have neither given nor received unauthorized help on this exam.
, Fall 2007 Version A Special Codes 00000 PLEDGE: I have neither given nor received unauthorized help on this exam. SIGNED: PRINT NAME: Econ 202 Final Exam 1. On average over the past 50 years, the U.S.
More informationchanges in spending changes in income/output AE = Aggregate Expenditures = C + I + G + Xn = AD
small larger changes in spending changes in income/output AE = Aggregate Expenditures = C + I + G + Xn = AD The Multiplier Effect A small change in spending gives rise to a larger change in income/output
More informationCosumnes River College Principles of Macroeconomics Problem Set 11 Will Not Be Collected
Name: Solutions Cosumnes River College Principles of Macroeconomics Problem Set 11 Will Not Be Collected Fall 2015 Prof. Dowell Instructions: This problem set will not be collected. You should still work
More informationBusiness Conditions Analysis Prof. Yamin Ahmad ECON 736
Business Conditions Analysis Prof. Yamin Ahmad ECON 736 Sample Final Exam Name Id # Instructions: There are two parts to this midterm. Part A consists of multiple choice questions. Please mark the answers
More informationQUIZ IV Version 1. March 24, 2004. 4:35 p.m. 5:40 p.m. BA 2210
NAME: Student ID: College of Business Administration Department of Economics Principles of Macroeconomics O. Mikhail ECO 20130008 Spring 2004 QUIZ IV Version 1 This closed book QUIZ is worth 100 points.
More informationIntroduction to Macroeconomics 1012 Final Exam Spring 2013 Instructor: Elsie Sawatzky
Introduction to Macroeconomics 1012 Final Exam Spring 2013 Instructor: Elsie Sawatzky Name Time: 2 hours Marks: 80 Multiple choice questions 1 mark each and a choice of 2 out of 3 short answer question
More information3 Macroeconomics LESSON 8
3 Macroeconomics LESSON 8 Fiscal Policy Introduction and Description Fiscal policy is one of the two demand management policies available to policy makers. Government expenditures and the level and type
More informationEconomics 1012A Introduction to Macroeconomics Fall 2008 Dr. R. E. Mueller Second Midterm Examination October 17, 2008
Economics 1012A Introduction to Macroeconomics Fall 2008 Dr. R. E. Mueller Second Midterm Examination October 17, 2008 Answer all of the following questions by selecting the most appropriate answer on
More informationEcon 303: Intermediate Macroeconomics I Dr. Sauer Sample Questions for Exam #3
Econ 303: Intermediate Macroeconomics I Dr. Sauer Sample Questions for Exam #3 1. When firms experience unplanned inventory accumulation, they typically: A) build new plants. B) lay off workers and reduce
More informationMONTE VISTA CHRISTIAN SCHOOL SOSC 4452 AP Macroeconomics Course Syllabus
MONTE VISTA CHRISTIAN SCHOOL SOSC 4452 AP Macroeconomics Course Syllabus Course Description A college level course introducing the study of macroeconomics. The course will begin with an overview of basic
More informationAP Macroeconomics: Vocabulary. 1. Aggregate Spending (GDP): The sum of all spending from four sectors of the economy.
AP Macroeconomics: Vocabulary 1. Aggregate Spending (GDP): The sum of all spending from four sectors of the economy. GDP = C+I+G+Xn 2. Aggregate Income (AI) :The sum of all income earned by suppliers of
More informationI. MULTIPLE CHOICES. Choose the one alternative that best completes the statement to answer the question.
Econ 20B Additional Problem Set I. MULTIPLE CHOICES. Choose the one alternative that best completes the statement to answer the question. 1.According to the theory of liquidity preference, the money supply
More informationLECTURE NOTES ON MACROECONOMIC PRINCIPLES
LECTURE NOTES ON MACROECONOMIC PRINCIPLES Peter Ireland Department of Economics Boston College peter.ireland@bc.edu http://www2.bc.edu/peterireland/ec132.html Copyright (c) 2013 by Peter Ireland. Redistribution
More informationCritical Graphs Required for Success on the AP Macroeconomics Exam
Critical Graphs Required for Success on the AP Macroeconomics Exam A / AS Recessionary Gap A / AS Inflationary Gap LRAS SRAS LRAS SRAS plevel plevel A rgp A rgp Fed Funds Mkt  Expansionary Fed Funds
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Exam Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Based on our understanding of the Keynesian cross, we know with certainty that an equal
More informationThinkwell s Homeschool Economics Course Lesson Plan: 36 weeks
Thinkwell s Homeschool Economics Course Lesson Plan: 36 weeks Welcome to Thinkwell s Homeschool Economics! We re thrilled that you ve decided to make us part of your homeschool curriculum. This lesson
More informationUniversity of Lethbridge Department of Economics ECON 1012 Introduction to Microeconomics Instructor: Michael G. Lanyi. Chapter 29 Fiscal Policy
University of Lethbridge Department of Economics ECON 1012 Introduction to Microeconomics Instructor: Michael G. Lanyi Chapter 29 Fiscal Policy 1) If revenues exceed outlays, the government's budget balance
More information1. Firms react to unplanned inventory investment by increasing output.
Macro Exam 2 Self Test  T/F questions Dr. McGahagan Fill in your answer (T/F) in the blank in front of the question. If false, provide a brief explanation of why it is false, and state what is true.
More information1) Other things equal, a decrease in autonomous consumption shifts the curve to the. A) IS; right B) IS; left C) LM; left D) LM; right
Chapter 21 Monetary and Fiscal Policy in the ISLM Model 21.1 Factors That Cause the IS Curve to Shift 1) Other things equal, a decrease in autonomous consumption shifts the curve to the. A) IS; right B)
More informationEcon 202 Section 2 Midterm 2
Douglas, Fall 2009 November 3, 2009 A: Special Code 0000 PLEDGE: I have neither given nor received unauthorized help on this exam. SIGNED: PRINT NAME: Econ 202 Section 2 Midterm 2 1. The sale of stocks
More informationChapter 13 Money and Banking
Chapter 13 Money and Banking Multiple Choice Questions Choose the one alternative that best completes the statement or answers the question. 1. The most important function of money is (a) as a store of
More informationAssignment 4. To answer each question correctly, you have to choose the best answer from the given four choices.
IBS 601 Introduction to International Economics Instructor: Sharif F. Khan Department of Economics Ryerson University Winter 2006 Assignment 4 Part A MultipleChoice Questions To answer each question correctly,
More informationIntroduction. Learning Objectives. Chapter 17 Domestic and International Dimensions of Monetary Policy
Copyright 2011 by Pearson Education, Inc. Chapter 17 Domestic and International Dimensions of Monetary Policy All rights reserved. Introduction From the early 1970s through the late 1990s, the number of
More informationMoney and Banking Prof. Yamin Ahmad ECON 354 Spring 2007
Money and Banking Prof. Yamin Ahmad ECON 354 Spring 2007 Midterm Exam # 2 Name Id # Instructions: There are two parts to this midterm. Part A consists of multiple choice questions. Please mark the answers
More information1. Various shocks on a small open economy
Problem Set 3 Econ 122a: Fall 2013 Prof. Nordhaus and Staff Due: In class, Wednesday, September 25 Problem Set 3 Solutions Sebastian is responsible for this answer sheet. If you have any questions about
More information13 EXPENDITURE MULTIPLIERS: THE KEYNESIAN MODEL* Chapter. Fixed Prices and Expenditure Plans. D) the aggregate price level is fixed and that aggregate
Chapter 13 EXPENDITURE MULTIPLIERS: THE KEYNESIAN MODEL* Fixed Prices and Expenditure Plans Topic: Keynesian Model * 1) In the Keynesian model of aggregate expenditure, real GDP is determined by the A)
More informationchapter: Solution Fiscal Policy
Fiscal Policy chapter: 28 13 ECONOMICS MACROECONOMICS 1. The accompanying diagram shows the current macroeconomic situation for the economy of Albernia. You have been hired as an economic consultant to
More informationECON 4110: Money, Banking and the Macroeconomy Midterm Exam 2
ECON 4110: Money, Banking and the Macroeconomy Midterm Exam 2 Name: SID: MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following
More information7. Which of the following is not an important stock exchange in the United States? a. New York Stock Exchange
Econ 20B Additional Problem Set 4 I. MULTIPLE CHOICES. Choose the one alternative that best completes the statement to answer the question. 1. Institutions in the economy that help to match one person's
More informationAt the end of Chapter 10, you will be able to answer the following:
1 Objectives for Chapter 10 The Circular Flow Model At the end of Chapter 10, you will be able to answer the following: 1. Explain the basic circular flow model. 2. Define "consumption" and "saving" 3.
More informationEdmonds Community College Macroeconomic Principles ECON 202C  Winter 2011 Online Course Instructor: Andy Williams
Edmonds Community College Macroeconomic Principles ECON 202C  Winter 2011 Online Course Instructor: Andy Williams Textbooks: Economics: Principles, Problems and Policies, 18th Edition, by McConnell, Brue,
More informationCHAPTER6. The Open Economy. Modified for ECON 2204 by Bob Murphy
CHAPTER6 The Open Economy Modified for ECON 2204 by Bob Murphy 2016 Worth Publishers, all rights reserved IN THIS CHAPTER, YOU WILL LEARN: Accounting identities for the open economy The small open economy
More informationExam 1 Review. 3. A severe recession is called a(n): A) depression. B) deflation. C) exogenous event. D) marketclearing assumption.
Exam 1 Review 1. Macroeconomics does not try to answer the question of: A) why do some countries experience rapid growth. B) what is the rate of return on education. C) why do some countries have high
More informationSolution. Solution. Monetary Policy. macroeconomics. economics
KrugmanMacro_SM_Ch14.qxp 10/27/05 3:25 PM Page 165 Monetary Policy 1. Go to the FOMC page of the Federal Reserve Board s website (http://www. federalreserve.gov/fomc/) to find the statement issued after
More informationLecture 6: Economic Fluctuations. Rob Godby University of Wyoming
Lecture 6: Economic Fluctuations Rob Godby University of Wyoming ShortRun Economic Fluctuations Economic activity fluctuates from year to year. In some years, the production of goods and services rises.
More informationName: Date: 3. Variables that a model tries to explain are called: A. endogenous. B. exogenous. C. market clearing. D. fixed.
Name: Date: 1 A measure of how fast prices are rising is called the: A growth rate of real GDP B inflation rate C unemployment rate D marketclearing rate 2 Compared with a recession, real GDP during a
More information