Econ 202 Section 4 Final Exam
|
|
- Anthony Hubbard
- 7 years ago
- Views:
Transcription
1 Douglas, Fall 2009 December 15, 2009 A: Special Code 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 of wine from Escudia and Escudia buys $100 of wool from Oceania. Supposing this is the only trade that these countries do. What are the net exports of Oceania and Escudia in that order? a. $140 and $140 b. $60 and -$60 c. $100 and $40 d. None of the above is correct. 2. When opening a bakery you need to buy ovens, mixers, and similar items which are tools for your workers to use. Economists call these expenditures a. capital investment. b. investment in human capital. c. personal saving. d. business consumption expenditures. 3. The long-run aggregate supply curve is vertical because a change in aggregate demand leads to a long-run change a. in output, but not the price level. b. in neither the price level nor output. c. in the price level and output. d. in the price level, but not output. 4. Last year, US nominal GDP was about a. $14 trillion, of which about 70% was consumption. b. $14 trillion; Real GDP was about $28 trillion in 1983 (base year) dollars. c. $1.4 trillion, of which about 70% was consumption. d. $14 trillion, of which about 50% was consumption. 5. According to the classical dichotomy and money neutrality, when the money supply doubles which of the following doubles? a. the price level and nominal GDP b. the price level and real GDP c. only real GDP d. velocity of money 6. If the price level increased from 220 to 242 over a year s time, what was the inflation rate? a. 22 percent b. 10 percent c. 110 percent d. None of the above is correct. 7. Fran buys $1,000,000 in bonds issued by Ford Motor Company. In turn, Ford uses the funds to buy new machinery for one of its factories. a. Fran is investing; Ford is saving. b. Fran and Ford are both saving. c. Fran is saving; Ford is investing. d. Fran and Ford are both investing. 1
2 8. Suppose you purchased a house for $210,000 house in late 2007 using $10,000 of your own financial capital (money), and $200,000 of borrowed money. You sold the house a year later for $180,000 and paid off your loan with 5% interest. You received a return on your own capital of a %. Your loss is determined by real factors, not your method of financing. b. -300%. If you had taken on more leverage, you would have lost more. c. -400%. Without leverage, you would have taken only a 14.3% loss. d %, which is the 14.3% loss on the house plus 5% interest. 9. If the exchange rate changes from 135 Kazakh tenge per dollar to 150 Kazakh tenge per dollar, the dollar has a. appreciated. Other things the same, it now takes fewer dollars to buy Kazakhstani goods. b. depreciated. Other things the same, it now takes fewer dollars to buy Kazakhstani goods. c. appreciated. Other things the same, it now takes more dollars to buy Kazakhstani goods. d. depreciated. Other things the same, it now takes more dollars to buy Kazakhstani goods. Figure Refer to Figure An increase in the money supply would move the economy from C to a. B in the short run and the long run. b. D in the short run and C in the long run. c. D in the short run and the long run. d. B in the short run and A in the long run. 11. Aggregate demand shifts right if a. taxes fall and shifts left if stock prices rise. b. taxes fall and shifts left if stock prices fall. c. taxes rise and shifts left if stock prices rise. d. taxes rise and shifts left if stock prices fall. 12. If the required reserve ratio is 10 percent, and a bank receives a new deposit of $1000 in cash, then initially the bank has a a. $1000 increase in reserves and no increase in required reserves. b. $1000 increase in reserves and no increase in excess reserves. c. $100 increase in excess reserves and $900 increase in required reserves. d. $900 increase in excess reserves and $100 increase in required reserves. 13. A depreciation of the U.S. real exchange rate induces U.S. consumers to buy a. fewer domestic goods and fewer foreign goods. b. more domestic goods and more foreign goods. c. fewer domestic goods and more foreign goods. d. more domestic goods and fewer foreign goods. 2
3 14. The source of hyperinflations is primarily a. lower output growth. b. continuing increases in money demand. c. increases in money-supply growth. d. continuing declines in velocity. 15. Which of the following by itself is consistent with the directions that the price level and real GDP changed at the onset of the Great Depression? a. aggregate supply shifted left b. aggregate demand shifted left c. aggregate supply shifted right d. aggregate demand shifted right 16. Suppose there were a large decline in net exports, caused by a sudden fall in foreign income. If the Fed wanted to prevent this from causing an increase in U.S. unemployment, it could a. sell bonds to lower interest rates. b. buy bonds to raise interest rates. c. buy bonds to lower interest rates. d. do nothing, since foreign income has no effect on the U.S. economy. 17. Which of the following combinations implies a nominal interest rate of 7 percent? a. a real interest rate of 6 percent and an inflation rate of 1 percent b. a real interest rate of 4 percent and an inflation rate of 11 percent c. a real interest rate of 5.5 percent and an inflation rate of 3 percent d. a real interest rate of 2.5 percent and an inflation rate of 2 percent 18. According to liquidity preference theory, if the quantity of money supplied is greater than the quantity demanded, then the interest rate will a. increase and the quantity of money demanded will increase. b. increase and the quantity of money demanded will decrease. c. decrease and the quantity of money demanded will decrease. d. decrease and the quantity of money demanded will increase. 19. The sticky-wage theory of the short-run aggregate supply curve says that when the price level is higher than expected, a. production is less profitable and employment rises. b. production is more profitable and employment falls. c. production is more profitable and employment rises. d. production is less profitable and employment falls. 20. In the long run, changes in the money supply affect a. prices. b. real output. c. unemployment rates. d. All of the above. 21. The aggregate quantity of goods and service demanded rises as the aggregate price level falls because a. real wealth rises, interest rates fall, and the dollar depreciates. b. real wealth falls, interest rates fall, and the dollar depreciates. c. real wealth rises, interest rates rise, and the dollar appreciates. d. real wealth falls, interest rates rise, and the dollar appreciates. 22. Which of the following shifts both short-run and long-run aggregate supply left? a. a decrease in the actual price level b. a decrease in the capital stock c. a decrease in the money supply d. a decrease in the expected price level 3
4 23. During recessions, automatic stabilizers tend to make the government's budget a. move toward deficit. b. move toward surplus. c. move toward balance. d. not necessarily move the budget in any particular direction. 24. What would happen to the equilibrium price and quantity sold of leather gloves if the price of nylon gloves (a substitute) falls, at the same time that the cost of leather used to make gloves falls? a. Price will rise and quantity may either rise or fall. b. Price will fall and quantity may either rise or fall. c. Quantity will rise and price may either rise or fall. d. Quantity will fall and price may either rise or fall. 25. The U.S.natural rate of unemployment is about 5.5% and the current unemployment rate (U3) is about a. 10%, meaning that cyclical unemployment is at about 4.5%. b. 16.5%, meaning that cyclical unemployment is at about 3%. c. 21.5%, meaning that cyclical unemployment is at about 16%. d. 10%, meaning that cyclical unemployment is at about 15.5%. 26. When a business sells bonds, it is using the methods of a. equity finance to lend. b. debt finance to lend. c. debt finance to borrow. d. equity finance to borrow. 27. In 1945 a rule of thumb was that a young man must make $40 per week before he could afford to marry and start a family. The CPI was about 20 in 1944 and about 100 in To apply the same rule of thumb in 1983 the young man should make a. $400 per week. b. $100 per week c. $200 per week d. $8 per week. 28. A decrease in the expected price level shifts short-run aggregate supply (AS) to the a. left, but an increase in the current price level does not shift short-run AS. b. left, and an increase in the current price level shifts short-run AS to the left. c. right, and an increase in the current price level shifts short-run AS to the right. d. right, but an increase in the current price level does not shift short-run AS. 29. If the Federal Reserve decided to lower interest rates, it could a. sell bonds to raise the money supply. b. buy bonds to raise the money supply. c. sell bonds to lower the money supply. d. buy bonds to lower the money supply. 30. According to James Hamilton, the chief danger to the U.S. economy posed by the big changes in the Fed s balance sheet since September 2008 are a. the Fed may someday have to pay interest on excess reserves. b. hyperinflation due to the higher taxes required to pay interest on recent Treasury borrowings. c. increased inflation and increased taxpayer liability for interest payments if the Fed s new assets don t pay off. d. more government control over large banks. 4
5 31. An economic contraction caused by a shift in aggregate demand causes prices to a. rise in the short run, and fall back to their original level in the long run. b. rise in the short run, and rise even more in the long run. c. fall in the short run, and fall even more in the long run. d. fall in the short run, and rise above their original level in the long run. 32. If purchasing-power parity holds, a dollar will buy a. one unit of each foreign currency. b. foreign currency equal to the U.S. price level divided by the foreign country s price level. c. enough foreign currency to buy as many goods in the foreign country as a dollar will buy in the United States. d. None of the above is implied by purchasing-power parity. 33. Larry, a U.S. citizen, opens and operates a bookstore in Spain. This action is an example of both a. U.S. foreign direct investment and U.S. domestic investment. b. U.S. foreign portfolio investment and U.S. domestic investment. c. investment for Larry and U.S. foreign direct investment. d. investment for Larry and U.S. foreign portfolio investment. 34. If Congress were to change the tax laws so that investors no longer got tax breaks for purchasing new houses, the likely result in the loanable funds market would be a. higher interest rates and greater investment. b. lower interest rate and less investment. c. higher interest rates and less investment. d. lower interest rates and greater investment. 35. In an article assigned in class, Martin Wolf complains about China s exchange rate protectionism. What might Wolf mean by exchange rate protectionism? a. China is deliberately trying to keep the real exchange rate of the dollar low. b. By accumulating reserves of U.S. bonds, China keeps the nominal exchange rate of the dollar artificially low, which increases Chinese exports to the U.S. c. The Chinese government prevents the release of any information about the exchange rate of its currency, thus protecting its own industries. d. By accumulating reserves of U.S. dollars, China keeps the nominal exchange rate of the dollar artificially high, which increases Chinese exports to the U.S. 36. What will happen to the equilibrium price and quantity of cigarettes if the price of chewing tobacco (a substitute) rises sharply at the same time that the price of filters used to make cigarettes falls? a. Quantity will rise and price may either rise or fall. b. Price will fall and the quantity may either rise or fall. c. Price will rise and quantity may either rise or fall. d. Quantity will fall and price may either rise or fall. 37. A country has a trade deficit. Its a. net capital outflow must be positive and domestic saving is smaller than investment. b. net capital outflow must be negative and domestic saving is smaller than investment. c. net capital outflow must be negative and domestic saving is larger than investment. d. net capital outflow must be positive, and domestic saving is larger than investment. 38. People choose to hold a smaller quantity of money if a. the interest rate rises, which causes the opportunity cost of holding money to fall. b. the interest rate falls, which causes the opportunity cost of holding money to fall. c. the interest rate falls, which causes the opportunity cost of holding money to rise. d. the interest rate rises, which causes the opportunity cost of holding money to rise. 5
6 39. The present value of a payment to be made in the future increases as a. the interest rate falls and the time until the payment is made decreases. b. the interest rate rises and the time until the payment is made decreases. c. the interest rate rises and the time until the payment is made increases. d. the interest rate falls and the time until the payment is made increases. 40. To decrease the money supply, the Fed can a. buy government bonds or increase the discount rate. b. buy government bonds or decrease the discount rate. c. sell government bonds or increase the discount rate. d. sell government bonds or decrease the discount rate. 41. Suppose that the economy is at long-run equilibrium. If there is a sharp decline in the stock market combined with a significant increase in immigration of skilled workers, then in the short run a. the price level will fall, and real GDP might rise, fall, or stay the same. b. real GDP will fall and the price level might rise, fall, or stay the same. c. real GDP will rise and the price level might rise, fall, or stay the same. d. the price level will rise, and real GDP might rise, fall, or stay the same. 42. An assistant manager at a restaurant gets a $100 a month raise. He figures that with his new monthly salary he cannot buy as many goods and services as he could buy last year. a. His real and nominal salary have risen. b. His real and nominal salary have fallen. c. His real salary has fallen and his nominal salary has risen. d. His real salary has risen and his nominal salary has fallen. 43. If people had been expecting prices to rise but in fact prices fell, then who would benefit? a. people holding a lot of currency but not lenders b. lenders and people holding a lot of currency c. neither lenders nor people holding a lot of currency d. lenders but not people holding a lot of currency Table 28-1 Labor Data for Wrexington Year Adult population Number of employed Number of unemployed Refer to Table The labor force of Wrexington in 2004 was a b c d
7 Figure 4-7. Supply and Demand for Neckties. 45. Suppose the necktie market is currently in equilibrium as shown in Figure 4-7. What could cause the equilibrium price of neckties to rise to $35 and the equilibrium quantity to rise to 600? a. an increase in the price of silk used to make neckties. b. a drop in the price of suits (a complement). c. a fall in consumer income (neckties are a normal good). d. an improvement in the technology used to produce neckties. Figure Refer to Figure If the current interest rate is 2 percent, a. there is an excess supply of money. b. people will try to borrow more money, which drives interest rates up. c. as the money market moves to equilibrium, people will buy more goods. d. All of the above are correct. 47. If a dollar buys more potatoes in the U.S. than in France, then a. the real exchange rate is less than 1; a profit might be made by buying potatoes in France and selling them in the U.S. b. the real exchange rate is greater than 1; a profit might be made by buying potatoes in the U.S. and selling them in France. c. the real exchange rate is less than 1; a profit might be made by buying potatoes in the U.S. and selling them in France. d. the real exchange rate is greater than 1; a profit might be made by buying potatoes in France. and selling them in the U.S. 7
8 48. Which of the following will reduce the price level and real output in the short run? a. technical progress b. an increase in the money supply c. an increase in oil prices d. a decrease in the money supply 49. Suppose that the value of a bond is the sum of the present values of all of its future payments. A certain bond pays $50 in one year, $50 in two years, and $1050 in three years. Using an interest rate of 5%, what is the value of the bond? a. $1150 b. $ c. $ d. $ If W denotes the value of an hour s work measured in terms of money and P is the CPI, then a. 1/P can be interpreted as the consumer inflation rate. b. classical economic theory would say that W is not affected by the supply of money. c. W/P represents the value of an hour s work measured in terms of consumer goods and services. d. All of the above are correct. 8
9 ID: A Econ 202 Section 4 Final Exam Answer Section MULTIPLE CHOICE 1. B 2. A 3. D 4. A 5. A 6. B 7. C 8. C 9. A 10. D 11. B 12. D 13. D 14. C 15. B 16. C 17. A 18. D 19. C 20. A 21. A 22. B 23. A 24. B 25. A 26. C 27. C 28. D 29. B 30. C 31. C 32. C 33. C 34. B 35. D 36. A 37. B 38. D 39. A 40. C 41. A 42. C 43. B 1
10 ID: A 44. C 45. B 46. B 47. C 48. D 49. D 50. C 2
11 Douglas, Fall 2009 December 15, 2009 B: Special Code PLEDGE: I have neither given nor received unauthorized help on this exam. SIGNED: PRINT NAME: Econ 202 Section 4 Final Exam 1. When opening a bakery you need to buy ovens, mixers, and similar items which are tools for your workers to use. Economists call these expenditures a. investment in human capital. b. personal saving. c. capital investment. d. business consumption expenditures. 2. Fran buys $1,000,000 in bonds issued by Ford Motor Company. In turn, Ford uses the funds to buy new machinery for one of its factories. a. Fran is saving; Ford is investing. b. Fran and Ford are both saving. c. Fran is investing; Ford is saving. d. Fran and Ford are both investing. 3. If purchasing-power parity holds, a dollar will buy a. one unit of each foreign currency. b. enough foreign currency to buy as many goods in the foreign country as a dollar will buy in the United States. c. foreign currency equal to the U.S. price level divided by the foreign country s price level. d. None of the above is implied by purchasing-power parity. 4. According to the classical dichotomy and money neutrality, when the money supply doubles which of the following doubles? a. the price level and real GDP b. velocity of money c. only real GDP d. the price level and nominal GDP 5. The U.S.natural rate of unemployment is about 5.5% and the current unemployment rate (U3) is about a. 21.5%, meaning that cyclical unemployment is at about 16%. b. 10%, meaning that cyclical unemployment is at about 15.5%. c. 10%, meaning that cyclical unemployment is at about 4.5%. d. 16.5%, meaning that cyclical unemployment is at about 3%. 6. People choose to hold a smaller quantity of money if a. the interest rate rises, which causes the opportunity cost of holding money to fall. b. the interest rate rises, which causes the opportunity cost of holding money to rise. c. the interest rate falls, which causes the opportunity cost of holding money to rise. d. the interest rate falls, which causes the opportunity cost of holding money to fall. 7. Suppose there were a large decline in net exports, caused by a sudden fall in foreign income. If the Fed wanted to prevent this from causing an increase in U.S. unemployment, it could a. sell bonds to lower interest rates. b. buy bonds to lower interest rates. c. buy bonds to raise interest rates. d. do nothing, since foreign income has no effect on the U.S. economy. 1
Econ 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 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 informationEcon 202 Final Exam. Table 3-1 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 short-run Phillips curve shifts a. right, so that at any inflation rate unemployment is higher. b. left, so that at any inflation rate unemployment
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 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 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 informationRefer to Figure 17-1
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 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 102-103) 2. a. When the Fed buys bonds, the dollars that it pays to the public for the bonds increase
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 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 informationExam 1 Review. 3. A severe recession is called a(n): A) depression. B) deflation. C) exogenous event. D) market-clearing 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 informationD) surplus; negative. 9. The law of one price is enforced by: A) governments. B) producers. C) consumers. D) arbitrageurs.
1. An open economy is one in which: A) the level of output is fixed. B) government spending exceeds revenues. C) the national interest rate equals the world interest rate. D) there is trade in goods and
More informationDouglas, Spring 2008 February 21, 2008 PLEDGE: I have neither given nor received unauthorized help on this exam.
, Spring 2008 February 21, 2008 PLEDGE: I have neither given nor received unauthorized help on this exam. SIGNED: PRINT NAME: Econ 202 Midterm 1 1. What will happen to the equilibrium price of hamburgers
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 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 crowding-out effect c.
More informationEconomics 212 Principles of Macroeconomics Study Guide. David L. Kelly
Economics 212 Principles of Macroeconomics Study Guide David L. Kelly Department of Economics University of Miami Box 248126 Coral Gables, FL 33134 dkelly@miami.edu First Version: Spring, 2006 Current
More informationBUSINESS ECONOMICS CEC2 532-751 & 761
BUSINESS ECONOMICS CEC2 532-751 & 761 PRACTICE MACROECONOMICS MULTIPLE CHOICE QUESTIONS Warning: These questions have been posted to give you an opportunity to practice with the multiple choice format
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 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 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 informationCHAPTER 7: AGGREGATE DEMAND AND AGGREGATE SUPPLY
CHAPTER 7: AGGREGATE DEMAND AND AGGREGATE SUPPLY Learning goals of this chapter: What forces bring persistent and rapid expansion of real GDP? What causes inflation? Why do we have business cycles? How
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 informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
ECON 4110: Sample Exam Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Economists define risk as A) the difference between the return on common
More informationI. Introduction to Aggregate Demand/Aggregate Supply Model
University of California-Davis Economics 1B-Intro to Macro Handout 8 TA: Jason Lee Email: jawlee@ucdavis.edu I. Introduction to Aggregate Demand/Aggregate Supply Model In this chapter we develop a model
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 information1 Multiple Choice - 50 Points
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
More informationEcon 102 Aggregate Supply and Demand
Econ 102 ggregate Supply and Demand 1. s on previous homework assignments, turn in a news article together with your summary and explanation of why it is relevant to this week s topic, ggregate Supply
More information7 AGGREGATE SUPPLY AND AGGREGATE DEMAND* Chapter. Key Concepts
Chapter 7 AGGREGATE SUPPLY AND AGGREGATE DEMAND* Key Concepts Aggregate Supply The aggregate production function shows that the quantity of real GDP (Y ) supplied depends on the quantity of labor (L ),
More informationPre-Test Chapter 11 ed17
Pre-Test Chapter 11 ed17 Multiple Choice Questions 1. Built-in stability means that: A. an annually balanced budget will offset the procyclical tendencies created by state and local finance and thereby
More informationMacroeconomics, Fall 2007 Exam 3, TTh classes, various versions
Name: _ Days/Times Class Meets: Today s Date: Macroeconomics, Fall 2007 Exam 3, TTh classes, various versions Read these Instructions carefully! You must follow them exactly! I) On your Scantron card you
More informationMONEY, 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 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 informationLong run v.s. short run. Introduction. Aggregate Demand and Aggregate Supply. In this chapter, look for the answers to these questions:
33 Aggregate Demand and Aggregate Supply R I N C I L E S O F ECONOMICS FOURTH EDITION N. GREGOR MANKIW Long run v.s. short run Long run growth: what determines long-run output (and the related employment
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 informationProblem Set for Chapter 20(Multiple choices)
Problem Set for hapter 20(Multiple choices) 1. According to the theory of liquidity preference, a. if the interest rate is below the equilibrium level, then the quantity of money people want to hold is
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 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 informationPolitics, Surpluses, Deficits, and Debt
Defining Surpluses and Debt Politics, Surpluses,, and Debt Chapter 11 A surplus is an excess of revenues over payments. A deficit is a shortfall of revenues relative to payments. 2 Introduction After having
More informationEcon 336 - Spring 2007 Homework 5
Econ 336 - Spring 2007 Homework 5 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The real exchange rate, q, is defined as A) E times P B)
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 informationFinance, Saving, and Investment
23 Finance, Saving, and Investment Learning Objectives The flows of funds through financial markets and the financial institutions Borrowing and lending decisions in financial markets Effects of government
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/peter-ireland/ec132.html Copyright (c) 2013 by Peter Ireland. Redistribution
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Chatper 34 International Finance - Test Bank MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The currency used to buy imported goods is A) the
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 information2 0 0 0 E D I T I O N CLEP O F F I C I A L S T U D Y G U I D E. The College Board. College Level Examination Program
2 0 0 0 E D I T I O N CLEP O F F I C I A L S T U D Y G U I D E College Level Examination Program The College Board Principles of Macroeconomics Description of the Examination The Subject Examination in
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 25-1 First National Bank First National Bank has $80 million in
More informationWith lectures 1-8 behind us, we now have the tools to support the discussion and implementation of economic policy.
The Digital Economist Lecture 9 -- Economic Policy With lectures 1-8 behind us, we now have the tools to support the discussion and implementation of economic policy. There is still great debate about
More informationTHREE KEY FACTS ABOUT ECONOMIC FLUCTUATIONS
15 In this chapter, look for the answers to these questions: What are economic fluctuations? What are their characteristics? How does the model of demand and explain economic fluctuations? Why does the
More informationECON 3312 Macroeconomics Exam 3 Fall 2014. Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
ECON 3312 Macroeconomics Exam 3 Fall 2014 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Everything else held constant, an increase in net
More informationUniversity of Lethbridge Department of Economics ECON 1012 Introduction to Macroeconomics Instructor: Michael G. Lanyi
University of Lethbridge Department of Economics ECON 1012 Introduction to Macroeconomics Instructor: Michael G. Lanyi CH 25 Exch Rate & BofP 1) Foreign currency is A) the market for foreign exchange.
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 informationChapter 4 Consumption, Saving, and Investment
Chapter 4 Consumption, Saving, and Investment Multiple Choice Questions 1. Desired national saving equals (a) Y C d G. (b) C d + I d + G. (c) I d + G. (d) Y I d G. 2. With no inflation and a nominal interest
More informationChapter 2 The Measurement and Structure of the National Economy
Chapter 2 The Measurement and Structure of the National Economy Multiple Choice Questions 1. The three approaches to measuring economic activity are the (a) cost, income, and expenditure approaches. (b)
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 informationFISCAL POLICY* Chapter. Key Concepts
Chapter 11 FISCAL POLICY* Key Concepts The Federal Budget The federal budget is an annual statement of the government s expenditures and tax revenues. Using the federal budget to achieve macroeconomic
More informationANSWERS TO END-OF-CHAPTER PROBLEMS WITHOUT ASTERISKS
Part III Answers to End-of-Chapter Problems 97 CHAPTER 1 ANSWERS TO END-OF-CHAPTER PROBLEMS WITHOUT ASTERISKS Why Study Money, Banking, and Financial Markets? 7. The basic activity of banks is to accept
More informationChapter 07 Interest Rates and Present Value
Chapter 07 Interest Rates and Present Value Multiple Choice Questions 1. The percentage of a balance that a borrower must pay a lender is called the a. Inflation rate b. Usury rate C. Interest rate d.
More informationThe Return of Saving
Martin Feldstein the u.s. savings rate and the global economy The savings rate of American households has been declining for more than a decade and recently turned negative. This decrease has dramatically
More informationQUIZ IV Version 1. March 24, 2004. 4:35 p.m. 5:40 p.m. BA 2-210
NAME: Student ID: College of Business Administration Department of Economics Principles of Macroeconomics O. Mikhail ECO 2013-0008 Spring 2004 QUIZ IV Version 1 This closed book QUIZ is worth 100 points.
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Survey of Macroeconomics, MBA 641 Fall 2006, Quiz 4 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The central bank for the United States
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 information12.1 Introduction. 12.2 The MP Curve: Monetary Policy and the Interest Rates 1/24/2013. Monetary Policy and the Phillips Curve
Chapter 12 Monetary Policy and the Phillips Curve By Charles I. Jones Media Slides Created By Dave Brown Penn State University The short-run model summary: Through the MP curve the nominal interest rate
More informationThe Aggregate Demand- Aggregate Supply (AD-AS) Model
The AD-AS Model The Aggregate Demand- Aggregate Supply (AD-AS) Model Chapter 9 The AD-AS Model addresses two deficiencies of the AE Model: No explicit modeling of aggregate supply. Fixed price level. 2
More informationASSIGNMENT 1 ST SEMESTER : MACROECONOMICS (MAC) ECONOMICS 1 (ECO101) STUDY UNITS COVERED : STUDY UNITS 1 AND 2. DUE DATE : 3:00 p.m.
Page 1 of 13 ASSIGNMENT 1 ST SEMESTER : MACROECONOMICS (MAC) ECONOMICS 1 (ECO101) STUDY UNITS COVERED : STUDY UNITS 1 AND 2 DUE DATE : 3:00 p.m. 19 MARCH 2013 TOTAL MARKS : 100 INSTRUCTIONS TO CANDIDATES
More informationMonetary Policy Bank of Canada
Bank of Canada The objective of monetary policy may be gleaned from to preamble to the Bank of Canada Act of 1935 which says, regulate credit and currency in the best interests of the economic life of
More informationMacroeconomics Instructor Miller Fiscal Policy Practice Problems
Macroeconomics Instructor Miller Fiscal Policy Practice Problems 1. Fiscal policy refers to changes in A) state and local taxes and purchases that are intended to achieve macroeconomic policy objectives.
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 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 informationMEASURING GDP AND ECONOMIC GROWTH*
Chapter 5 MEASURING GDP AND ECONOMIC GROWTH* Gross Domestic Product Topic: GDP 1) Gross domestic product is the total produced within a country in a given time period. A) market value of all final and
More informationreal r = nominal r inflation rate (25)
3 The price of Loanable Funds Definition 19 INTEREST RATE:(r) Charge per dollar per period that borrowers pay or lenders receive. What affects the interest rate: inflation. risk. taxes. The real interest
More informationPractice Problems on Current Account
Practice Problems on Current Account 1- List de categories of credit items and debit items that appear in a country s current account. What is the current account balance? What is the relationship between
More informationThe Fiscal Policy and The Monetary Policy. Ing. Mansoor Maitah Ph.D.
The Fiscal Policy and The Monetary Policy Ing. Mansoor Maitah Ph.D. Government in the Economy The Government and Fiscal Policy Fiscal Policy changes in taxes and spending that affect the level of GDP to
More information_FALSE 1. Firms react to unplanned inventory investment by increasing output.
Macro Exam 2 Self Test -- ANSWERS Dr. McGahagan WARNING -- Be sure to take the self-test before peeking at the answers. Chapter 8 -- Aggregate Expenditure and Equilibrium Output _FALSE 1. Firms react to
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 informationEcon 202 Section 2 Midterm 1
Douglas, Fall 2009 September 29, 2009 A: Special Code 0000 21 PLEDGE: I have neither given nor received unauthorized help on this exam. SIGNED: PRINT NAME: Econ 202 Section 2 Midterm 1 1. What will happen
More informationApril 4th, 2014. Flow C was 9 trillion dollars, Flow G was 2 trillion dollars, Flow I was 3 trillion dollars, Flow (X-M) was -0.7 trillion dollars.
Problem Session I April 4th, 2014 Reference: Parkin, Introduction to economics, 2011 1. The rm that printed your Introduction to economics textbook bought the paper from XYZ Paper Mills. Was this purchase
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 market-clearing rate 2 Compared with a recession, real GDP during a
More informationAnswers: 1. B 2. C 3. A 4. A 5 D 6. C 7. D 8. C 9. D 10. A * Adapted from the Study Guide
Economics 101 Quiz #1 Fall 2002 1. Assume that there are two goods, A and B. In 1996, Americans produced 20 units of A at a price of $10 and 40 units of B at a price of $50. In 2002, Americans produced
More information4. The minimum amount of owners' equity in a bank mandated by regulators is called a requirement. A) reserve B) margin C) liquidity D) capital
Chapter 4 - Sample Questions 1. Quantitative easing is most closely akin to: A) discount lending. B) open-market operations. C) fractional-reserve banking. D) capital requirements. 2. Money market mutual
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 informationIII. INTERNATIONAL TRADE
III. INTERNATIONAL TRADE A. Gains from Trade -- a history of thought approach 1. The idea of mercantilism (15-175) argued that a country s well-being is directly tied to the accumulation of gold and silver.
More informationChapter 11. International Economics II: International Finance
Chapter 11 International Economics II: International Finance The other major branch of international economics is international monetary economics, also known as international finance. Issues in international
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 informationChapter 12: Gross Domestic Product and Growth Section 1
Chapter 12: Gross Domestic Product and Growth Section 1 Key Terms national income accounting: a system economists use to collect and organize macroeconomic statistics on production, income, investment,
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 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 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 informationCHAPTER 5: MEASURING GDP AND ECONOMIC GROWTH
CHAPTER 5: MEASURING GDP AND ECONOMIC GROWTH Learning Goals for this Chapter: To know what we mean by GDP and to use the circular flow model to explain why GDP equals aggregate expenditure and aggregate
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 informationProfessor Christina Romer. LECTURE 17 MACROECONOMIC VARIABLES AND ISSUES March 17, 2016
Economics 2 Spring 2016 Professor Christina Romer Professor David Romer LECTURE 17 MACROECONOMIC VARIABLES AND ISSUES March 17, 2016 I. MACROECONOMICS VERSUS MICROECONOMICS II. REAL GDP A. Definition B.
More informationECON 4423: INTERNATIONAL FINANCE
University of Colorado at Boulder Department of Economics ECON 4423: INTERNATIONAL FINANCE Final Examination Fall 2005 Name: Answer Key Student ID: Instructions: This test is 1 1/2 hours in length. You
More informationBADM 527, Fall 2013. Midterm Exam 2. Multiple Choice: 3 points each. Answer the questions on the separate bubble sheet. NAME
BADM 527, Fall 2013 Name: Midterm Exam 2 November 7, 2013 Multiple Choice: 3 points each. Answer the questions on the separate bubble sheet. NAME 1. According to classical theory, national income (Real
More informationUse the following to answer question 9: Exhibit: Keynesian Cross
1. Leading economic indicators are: A) the most popular economic statistics. B) data that are used to construct the consumer price index and the unemployment rate. C) variables that tend to fluctuate in
More informationObjectives for Chapter 18: Fiscal Policy (This is a technical chapter and may require two class periods.)
1 Objectives for Chapter 18: Fiscal Policy (This is a technical chapter and may require two class periods.) At the end of Chapter 18, you will be able to answer the following: 1. How is the government
More informationThe Circular Flow of Income and Expenditure
The Circular Flow of Income and Expenditure Imports HOUSEHOLDS Savings Taxation Govt Exp OTHER ECONOMIES GOVERNMENT FINANCIAL INSTITUTIONS Factor Incomes Taxation Govt Exp Consumer Exp Exports FIRMS Capital
More informationCH 10 - REVIEW QUESTIONS
CH 10 - REVIEW QUESTIONS 1. The short-run aggregate supply curve is horizontal at: A) a level of output determined by aggregate demand. B) the natural level of output. C) the level of output at which the
More informationFISCAL POLICY* Chapter. Key Concepts
Chapter 15 FISCAL POLICY* Key Concepts The Federal Budget The federal budget is an annual statement of the government s expenditures and tax revenues. Using the federal budget to achieve macroeconomic
More informationExchange Rates: Application of Supply and Demand
Exchange Rates: Application of Supply and Demand ECO 120: Global Macroeconomics 1 1.1 Goals Goals ˆ Specific goals: Learn how interpret exchange rates. Learn how to use supply and demand to interpret exchange
More informationINTRODUCTION AGGREGATE DEMAND MACRO EQUILIBRIUM MACRO EQUILIBRIUM THE DESIRED ADJUSTMENT THE DESIRED ADJUSTMENT
Chapter 9 AGGREGATE DEMAND INTRODUCTION The Great Depression was a springboard for the Keynesian approach to economic policy. Keynes asked: What are the components of aggregate demand? What determines
More information