Econ 202 Final Exam. Table 3-1 Labor Hours Needed to Make 1 Pound of: Meat Potatoes Farmer 8 2 Rancher 4 5
|
|
- Shannon Crawford
- 7 years ago
- Views:
Transcription
1 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 is higher. c. right, so that at any inflation rate unemployment is lower. d. left, so that at any inflation rate unemployment is lower. 2. Over time people have come to rely more on market-produced goods and less on goods that they produce for themselves. For example, people eat at restaurants more and prepare their own meals at home less. Because of the way we measure GDP, this change will tend to a. make GDP fall over time. b. not make any change in GDP over time. c. make GDP rise over time. d. change GDP, but in an uncertain direction. 3. A decrease in government spending initially and primarily shifts a. aggregate demand right. b. aggregate demand left. c. aggregate supply right. d. neither aggregate demand nor aggregate supply. 4. According to liquidity preference theory, equilibrium in the money market is achieved by adjustments in a. the price level. b. the interest rate. c. the exchange rate. d. real wealth. Table 3-1 Labor Hours Needed to Make 1 Pound of: Meat Potatoes Farmer 8 2 Rancher Refer to Table 3-1. The Rancher has a comparative advantage in a. neither good, and the Farmer has a comparative advantage in both goods. b. both goods, and the Farmer has a comparative advantage in neither good. c. meat, and the Farmer has a comparative advantage in potatoes. d. potatoes, and the Farmer has a comparative advantage in meat. 6. If GDP rises, a. income and production must both rise. b. income and production must both fall. c. income must rise, but production may rise or fall. d. production must rise, but income may rise or fall. 7. The aggregate supply curve is upward sloping (and not vertical) in a. the short and long run. b. neither the short nor long run. c. the long run, but not the short run. d. the short run, but not the long run.
2 8. Which of the following tends to reduce the size of a shift in aggregate demand resulting from a tax change? a. the multiplier effect b. the crowding-out effect c. the accelerator effect d. None of the above is correct. 9. An adverse supply shock will cause the short-run Phillips curve to shift a. right and raise unemployment. b. right and lower unemployment. c. left and raise unemployment. d. left and lower unemployment. 10. An increase in the U.S. interest rate a. induces firms to invest more. b. induces households to increase consumption. c. shifts money demand to the right. d. leads to the appreciation of the U.S. exchange rate. 11. If your salary increased by 6 percent and prices increased by 2 percent, your real wage rose by a. 4 percent. b. 4.8 percent. c. 5.8 percent. d. 8 percent. 12. If demand for hamburger decreases due to mad cow disease, we would expect equilibrium price of hamburger a. to increase and equilibrium quantity to decrease. b. to decrease and equilibrium quantity to increase. c. and equilibrium quantity to both increase. d. and equilibrium quantity to both decrease. 13. Assume that the MPC is Assuming that only the multiplier effect matters, a decrease in government purchases of $10 billion will shift the aggregate demand curve a. left by $13.5 billion. b. left by $40 billion. c. right by $75 billion. d. right by $40 billion. 14. If the multiplier is 5, the MPC is a b c d If the exchange rate changes from 150 yen per dollar to 100 yen per dollar, the dollar has a. appreciated and so buys more Japanese goods. b. appreciated and so buys fewer Japanese goods. c. depreciated and so buys more Japanese goods. d. depreciated and so buys fewer Japanese goods. 16. In computing GDP, investment is spending on a. stocks, bonds, and other financial assets. b. real estate and financial assets. c. new capital equipment, inventories, and structures, including new housing. d. capital equipment, inventories, and structures, excluding household purchases of new housing.
3 17. In the long run, the inflation rate depends primarily on a. the ability of unions to raise wages. b. government spending. c. the money supply growth rate. d. the monopoly power of firms. Figure Refer to Figure If the economy starts at c and the money supply growth rate increases, in the long run the economy a. stays at c. b. moves to b. c. moves to e. d. None of the above is correct. 19. Refer to Figure Curve 1 is the a. long-run aggregate supply curve. b. short-run aggregate supply curve. c. long-run Phillips curve. d. short-run Phillips curve. 20. Refer to Figure If the economy starts at c and the money supply growth rate increases, in the short run the economy a. moves to b. b. moves to d. c. moves to e. d. moves to a. 21. Suppose a stock market boom makes people feel wealthier. The increase in wealth would a. increase consumption, which shifts the aggregate demand curve right. b. increase consumption, which shifts the aggregate demand curve left. c. decrease consumption, which shifts the aggregate demand curve right. d. decrease consumption, which shifts the aggregate demand curve left. 22. When the interest rate decreases, the opportunity cost of holding money a. increases, so the quantity of money demanded increases. b. increases, so the quantity of money demanded decreases. c. decreases, so the quantity of money demanded increases. d. decreases, so the quantity of money demanded decreases.
4 23. During expansions, automatic stabilizers make government expenditures a. and taxes fall. b. and taxes rise. c. rise, and taxes fall. d. fall and taxes rise. 24. If the interest rate is below the Fed's target, the Fed would a. buy bonds to increase the money supply. b. buy bonds to decrease the money supply. c. sell bonds to increase the money supply. d. sell bonds to decrease the money supply. 25. If the economy unexpectedly went from inflation to deflation, a. debtors and creditors would both have reduced real wealth. b. debtors and creditors would both have increased real wealth. c. debtors would gain at the expense of creditors. d. creditors would gain at the expense of debtors. 26. Which of the following would cause stagflation (as in the 1970 s)? a. aggregate demand shifts right b. aggregate demand shifts left c. aggregate supply shifts right d. aggregate supply shifts left 27. The price of a bond should equal the sum of the present values of its future payments. What should be the price of a bond that pays $50 in one year and $1,050 in two years, if the interest rate is 5%? a. $1, b. $1, c. $1, d. $ Which of the following equations will always represent GDP in an open economy? a. S = I - G b. I = Y - C + G c. Y = C + I + G d. Y = C + I + G + NX Table 11-2 year price of pork price of corn 2003 $20 $ $20 $ Refer to Table Suppose that the basket of goods in the CPI consisted of 3 units of pork and 2 units of corn. What is the consumer price index for 2004 if the base year is 2003? a. 100 b. 105 c. 115 d Net capital outflow = net exports implies that a. the supply of dollars equals the demand for dollars in the foreign-currency exchange market. b. national saving equals domestic investment. c. the volume of exports equals the volume of imports. d. All of the above are correct.
5 31. When the Fed buys government bonds, the reserves of the banking system a. increase, so the money supply increases. b. increase, so the money supply decreases. c. decrease, so the money supply increases. d. decrease, so the money supply decreases. 32. In the last few years household savings have declined. This means that a. supply of loanable funds shifted right. b. supply of loanable funds shifted left. c. demand for loanable funds shifted right. d. demand for loanable funds shifted left. 33. A monetary injection by the Fed a. increases interest rates and increases aggregate demand. b. increases interest rates and decreases aggregate demand. c. decreases interest rates and decreases aggregate demand. d. decreases interest rates and increases aggregate demand. Figure Refer to Figure Which of the following would cause the aggregate demand curve to shift from AD 1 to AD 2? a. an increase in government purchases b. a decrease in stock prices c. consumers and firms become more optimistic about the future. d. an increase in the price level 35. Other things being constant, when a business issues more stock, the a. supply of the stock is greater and thus the price will fall. b. supply of the stock is less and thus the price will rise. c. demand for the stock is greater and thus the price will rise. d. demand for the stock is less and thus the price will fall. 36. The effect of an increase in the aggregate price level is represented by a a. shift to the right of the aggregate demand curve. b. shift to the left of the aggregate demand curve. c. movement to the left along a given aggregate demand curve. d. movement to the right along a given aggregate demand curve.
6 37. Which of the following equations is correct? a. S = I + C b. S = I - NX c. S = I + NCO d. S = NX - NCO. 38. If the government raises government expenditures, in the short run, prices a. rise and unemployment falls. b. fall and unemployment rises. c. and unemployment rise. d. and unemployment fall. 39. If the reserve ratio is 10 percent, banks do not hold excess reserves, and people do not hold currency, then when the Fed purchases $20 million of government bonds, bank reserves a. increase by $20 million and the money supply eventually increases by $200 million. b. decrease by $20 million and the money supply eventually increases by $200 million. c. increase by $20 million and the money supply eventually decreases by $200 million. d. decrease by $20 million and the money supply eventually decreases by $200 million. 40. Suppose that the incomes of buyers in a particular market for a normal good decline and there is also a reduction in input prices. What would we expect to occur in this market? a. Equilibrium price would increase, but the impact on quantity would be ambiguous. b. Equilibrium price would decrease, but the impact on quantity would be ambiguous. c. Both equilibrium price and equilibrium quantity would increase. d. Equilibrium quantity would increase, but the impact on price would be ambiguous. 41. Cyclical unemployment is closely associated with a. long-term economic growth. b. short-run ups and downs of the economy. c. fluctuations in the natural rate of unemployment. d. seasonal fluctuations in spending. 42. An increase in the minimum wage would a. increase both the quantity demanded and the quantity supplied of labor. b. decrease both the quantity demanded and the quantity supplied of labor. c. increase the quantity of labor demanded while decreasing the quantity supplied. d. decrease the quantity of labor demanded while increasing the quantity supplied. 43. According to Friedman and Phelps, the unemployment rate is below the natural rate when actual inflation a. is greater than expected inflation. b. is less than expected inflation. c. equals expected inflation. d. is low. 44. When taxes decrease, consumption a. increases, so aggregate demand shifts right. b. increases, so aggregate supply shifts right. c. decreases, so aggregate demand shifts left. d. decreases, so aggregate supply shifts left. 45. The supply of loanable funds slopes a. upward because an increase in the interest rate induces people to save more. b. downward because an increase in the interest rate induces people to save less. c. downward because an increase in the interest rate induces people to invest less. d. upward because an increase in the interest rate induces people to invest more.
7 46. A firm in India sells jackets to a U.S. department store chain. By itself, this sale a. increases U.S. and Indian net exports. b. decreases U.S. and Indian net exports. c. increases U.S. net exports and decreases Indian net exports. d. decreases U.S. net exports and increases Indian net exports. 47. As the reserve ratio increases, the money multiplier a. increases. b. does not change. c. decreases. d. could do any of the above. Figure Refer to Figure When the money supply curve shifts from MS 1 to MS 2, a. the demand for goods and services decreases. b. the economy's ability to produce goods and services increases. c. the equilibrium price level increases. d. the equilibrium value of money increases. 49. According to classical economic theory, changes in the money supply affect a. nominal variables and real variables. b. nominal variables, but not real variables. c. real variables, but not nominal variables. d. neither nominal nor real variables. 50. If purchasing-power parity holds, then the value of the a. real exchange rate is equal to one. b. nominal exchange rate is equal to one. c. real exchange rate is equal to the nominal exchange rate. d. real exchange rate is equal to the difference in inflation rates between the two countries. 51. An increase in the price level induces people to hold a. less money, so they lend less, and the interest rate rises. b. less money, so they lend more, and the interest rate falls. c. more money, so they lend more, and the interest rate falls. d. more money, so they lend less, and the interest rate rises. 52. Which of the following definitions is correct? a. Labor force = number of employed. b. Labor force = population - number of unemployed. c. Unemployment Rate = (number of unemployed [number of employed + number of unemployed]) 100. d. Unemployment Rate = (number of unemployed adult population) 100.
8 53. The misperceptions theory of the short-run aggregate supply curve says that if the price level increases more than people expect, firms believe that the relative price of what they produce has a. decreased, so they increase production. b. decreased, so they decrease production. c. increased, so they increase production. d. increased, so they decrease production. 54. The money supply in Freedonia is $100 billion. Nominal GDP is $800 billion and real GDP is $200 billion. What are the price level and velocity in Freedonia? a. Velocity is 2 and the price level is 1. b. Velocity is 4 and the price level is 8. c. Velocity is 8 and the price level is 4. d. There is insufficient information to answer the question. 55. According to the AD/AS model, in the long run an increase in the money supply leads to a. increases in both the price level and real GDP. b. an increase in real GDP but does not change the price level. c. an increase in the price level but does not change real GDP. d. does not change either the price level or real GDP.
9 According to an article in the NY Times yesterday: [Alan ]Greenspan cautioned that the country should not be lulled into a false sense of security about the federal deficit just because at the moment interest rates on long-term Treasury securities remain [fairly constant]. 1) Draw diagrams below showing equilbrium in the markets for Foreign Exchange and Loanable Funds. Be sure to label all axes and curves that you draw, and show the initial equilbrium exchange rate e 0, interest rate r 0, savings LF 0, and dollars exchanged for foreign currency FX 0. 2) If the government increases its deficit, which curve shifts? Which direction? This shift (ceteris paribus) should cause interest rates to (rise or fall), the dollar to appreciate or depreciate), and the trade deficit to (rise or fall) 3) Show the shift on your graphs below. Label the new equilibrium values e 1, r 1, LF 1, and FX 1. 4) In fact, we have not seen the interest rate change mentioned above, which gives rise to the false sense of security that Greenspan mentioned. A (rightward, leftward) shift of the curve would explain the lack of movement in interest rates. On your graphs below, show this shift and label the new equilibrium values e 2, r 2, LF 2, and FX 2. 5) In recent years the Saudis, Chinese, and Indians have purchased increasing amounts of US Treasury bonds and currency. If foreigners decide not to purchase US bonds and dollars anymore, and current US budget deficit trends continue, the macromodels discussed in class would predict that US interest rates will (increase, decrease,?), the dollar will (depreciate, appreciate,?), US net exports will (increase, decrease,?), US Investment will (increase, decrease,?), US long term real growth rates will (increase, decrease,?), and your opportunity to become wealthy will (increase, decrease,?). If you like, you may (optionally) explain your answer below and on the back of the page, to make sure I understand your reasoning.
10 Multiple Choice Answers 1. ANS: A 2. ANS: C 3. ANS: B 4. ANS: B 5. ANS: C 6. ANS: A 7. ANS: D 8. ANS: B 9. ANS: A 10. ANS: D 11. ANS: A 12. ANS: D 13. ANS: B 14. ANS: D 15. ANS: D 16. ANS: C 17. ANS: C 18. ANS: C 19. ANS: C 20. ANS: B 21. ANS: A 22. ANS: C 23. ANS: D 24. ANS: D 25. ANS: D 26. ANS: D 27. ANS: C 28. ANS: D 29. ANS: D 30. ANS: A 31. ANS: A 32. ANS: B 33. ANS: D 34. ANS: B 35. ANS: A 36. ANS: C 37. ANS: C 38. ANS: A 39. ANS: A 40. ANS: B 41. ANS: B 42. ANS: D 43. ANS: A 44. ANS: A 45. ANS: A 46. ANS: D 47. ANS: C 48. ANS: C 49. ANS: B
11 50. ANS: A 51. ANS: D 52. ANS: C 53. ANS: C 54. ANS: C 55. ANS: C
Econ 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 informationAggregate Demand and Aggregate Supply Ing. Mansoor Maitah Ph.D. et Ph.D.
Aggregate Demand and Aggregate Supply Ing. Mansoor Maitah Ph.D. et Ph.D. Aggregate Demand and Aggregate Supply Economic fluctuations, also called business cycles, are movements of GDP away from potential
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 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 information1. a. Interest-bearing checking accounts make holding money more attractive. This increases the demand for money.
Macroeconomics ECON 2204 Prof. Murphy Problem Set 4 Answers Chapter 10 #1, 2, and 3 (on pages 308-309) 1. a. Interest-bearing checking accounts make holding money more attractive. This increases the demand
More informationS.Y.B.COM. (SEM-III) ECONOMICS
Fill in the Blanks. Module 1 S.Y.B.COM. (SEM-III) ECONOMICS 1. The continuous flow of money and goods and services between firms and households is called the Circular Flow. 2. Saving constitute a leakage
More informationPre-Test Chapter 10 ed17
Pre-Test Chapter 10 ed17 Multiple Choice Questions 1. Refer to the above diagrams. Assuming a constant price level, an increase in aggregate expenditures from AE 1 to AE 2 would: A. move the economy from
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 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 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 informationProblem Set #4: Aggregate Supply and Aggregate Demand Econ 100B: Intermediate Macroeconomics
roblem Set #4: Aggregate Supply and Aggregate Demand Econ 100B: Intermediate Macroeconomics 1) Explain the differences between demand-pull inflation and cost-push inflation. Demand-pull inflation results
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 informationAnswer: C Learning Objective: Money supply Level of Learning: Knowledge Type: Word Problem Source: Unique
1.The aggregate demand curve shows the relationship between inflation and: A) the nominal interest rate. D) the exchange rate. B) the real interest rate. E) short-run equilibrium output. C) the unemployment
More informationThe Short-Run Macro Model. The Short-Run Macro Model. The Short-Run Macro Model
The Short-Run Macro Model In the short run, spending depends on income, and income depends on spending. The Short-Run Macro Model Short-Run Macro Model A macroeconomic model that explains how changes in
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 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 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 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 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 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 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 informationExtra Problems #3. ECON 410.502 Macroeconomic Theory Spring 2010 Instructor: Guangyi Ma. Notice:
ECON 410.502 Macroeconomic Theory Spring 2010 Instructor: Guangyi Ma Extra Problems #3 Notice: (1) There are 25 multiple-choice problems covering Chapter 6, 9, 10, 11. These problems are not homework and
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 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 informationNATIONAL INCOME AND PRODUCT ACCOUNTING MEASURING THE MACROECONOMY
NATIONAL INCOME AND PRODUCT ACCOUNTING MEASURING THE MACROECONOMY 1. NIPA: GNP and GDP 2. Saving and Wealth 3. Prices and Inflation 4. Unemployment 5. Problems with Measuring the Macroeconomy There are
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 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 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 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 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 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 information13 EXPENDITURE MULTIPLIERS: THE KEYNESIAN MODEL* Chapter. Key Concepts
Chapter 3 EXPENDITURE MULTIPLIERS: THE KEYNESIAN MODEL* Key Concepts Fixed Prices and Expenditure Plans In the very short run, firms do not change their prices and they sell the amount that is demanded.
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 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 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 informationChapter 12 Unemployment and Inflation
Chapter 12 Unemployment and Inflation Multiple Choice Questions 1. The origin of the idea of a trade-off between inflation and unemployment was a 1958 article by (a) A.W. Phillips. (b) Edmund Phelps. (c)
More informationIn this chapter we learn the potential causes of fluctuations in national income. We focus on demand shocks other than supply shocks.
Chapter 11: Applying IS-LM Model In this chapter we learn the potential causes of fluctuations in national income. We focus on demand shocks other than supply shocks. We also learn how the IS-LM model
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 informationAnswers to Text Questions and Problems. Chapter 22. Answers to Review Questions
Answers to Text Questions and Problems Chapter 22 Answers to Review Questions 3. In general, producers of durable goods are affected most by recessions while producers of nondurables (like food) and services
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 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 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 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 informationStudy Questions 8 (Keynesian Model) MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Study Questions 8 (Keynesian Model) MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) In the Keynesian model of aggregate expenditure, real GDP is
More informationANSWERS TO END-OF-CHAPTER QUESTIONS
ANSWERS TO END-OF-CHAPTER QUESTIONS 9-1 Explain what relationships are shown by (a) the consumption schedule, (b) the saving schedule, (c) the investment-demand curve, and (d) the investment schedule.
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 informationAggregate Supply and Aggregate Demand
26 Aggregate Supply and Aggregate Demand Learning Objectives Explain what determines aggregate supply Explain what determines aggregate demand Explain what determines real GDP and the price level and how
More informationThe Federal Reserve System. The Structure of the Fed. The Fed s Goals and Targets. Economics 202 Principles Of Macroeconomics
Economics 202 Principles Of Macroeconomics Professor Yamin Ahmad The Federal Reserve System The Federal Reserve System, or the Fed, is the central bank of the United States. Supplemental Notes to Monetary
More informationAP Macroeconomics 2003 Scoring Guidelines Form B
AP Macroeconomics 2003 Scoring Guidelines Form B The materials included in these files are intended for use by AP teachers for course and exam preparation; permission for any other use must be sought from
More information14.02 Principles of Macroeconomics Problem Set 1 Fall 2005 ***Solution***
Part I. True/False/Uncertain Justify your answer with a short argument. 14.02 Principles of Macroeconomics Problem Set 1 Fall 2005 ***Solution*** Posted: Monday, September 12, 2005 Due: Wednesday, September
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 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 informationI d ( r; MPK f, τ) Y < C d +I d +G
1. Use the IS-LM model to determine the effects of each of the following on the general equilibrium values of the real wage, employment, output, the real interest rate, consumption, investment, and the
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 27 Expenditure Multipliers 1) Disposable income is A) aggregate income minus transfer
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 informationStudy Questions for Chapter 9 (Answer Sheet)
DEREE COLLEGE DEPARTMENT OF ECONOMICS EC 1101 PRINCIPLES OF ECONOMICS II FALL SEMESTER 2002 M-W-F 13:00-13:50 Dr. Andreas Kontoleon Office hours: Contact: a.kontoleon@ucl.ac.uk Wednesdays 15:00-17:00 Study
More informationBig Concepts. Balance of Payments Accounts. Financing International Trade. Economics 202 Principles Of Macroeconomics. Lecture 12
Economics 202 Principles Of Macroeconomics Professor Yamin Ahmad Big Concepts Balance of Payments Equilibrium The relationship between the current account, capital account and official settlements balance
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 informationECONOMIC GROWTH* Chapter. Key Concepts
Chapter 5 MEASURING GDP AND ECONOMIC GROWTH* Key Concepts Gross Domestic Product Gross domestic product, GDP, is the market value of all the final goods and services produced within in a country in a given
More informationPre-Test Chapter 15 ed17
Pre-Test Chapter 15 ed17 Multiple Choice Questions 1. The extended AD-AS model: A. distinguishes between short-run and long-run aggregate demand. B. explains inflation but not recession. C. includes G
More informationAP Macroeconomics 2011 Scoring Guidelines
AP Macroeconomics 2011 Scoring Guidelines The College Board The College Board is a not-for-profit membership association whose mission is to connect students to college success and opportunity. Founded
More informationEffects of Inflation Unanticipated Inflation in the Labor Market
Effects of Inflation Unanticipated Inflation in the Labor Market Unanticipated inflation has two main consequences in the labor market: Redistribution of income Departure from full employment Effects of
More informationChapter 9. The IS-LM/AD-AS Model: A General Framework for Macroeconomic Analysis. 2008 Pearson Addison-Wesley. All rights reserved
Chapter 9 The IS-LM/AD-AS Model: A General Framework for Macroeconomic Analysis Chapter Outline The FE Line: Equilibrium in the Labor Market The IS Curve: Equilibrium in the Goods Market The LM Curve:
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 information2. With an MPS of.4, the MPC will be: A) 1.0 minus.4. B).4 minus 1.0. C) the reciprocal of the MPS. D).4. Answer: A
1. If Carol's disposable income increases from $1,200 to $1,700 and her level of saving increases from minus $100 to a plus $100, her marginal propensity to: A) save is three-fifths. B) consume is one-half.
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 information