Homework #5, Due Tuesday, Nov 14.
|
|
- Agnes Andrews
- 7 years ago
- Views:
Transcription
1 Homework #5, Due Tuesday, Nov 14. 1) Monetary policy has several tools and the one used more frequently is A) open market operations. B) changing the discount rate. C) changing required reserve ratios. D) changing borrowing at commercial banks. 2) Fed increased the discount rate from 6.25 percent to 6.5 percent on August 17, This increase means that A) the Fed has used open market operations. B) the Fed has conducted fiscal policy. C) the Fed is trying to change the amount of money in circulation. D) the required reserve ratio will increase as well. 3) Which of the following increases the quantity of money? A) an individual s cash withdrawal from a bank. B) an individual s purchase of a bond from the Fed. C) a decrease in the required reserve ratio. D) an increase in the required reserve ratio. 4) You deposit $4,000 in currency in your checking account. The bank holds 20 percent of all deposits as reserves. As a direct result of your deposit, your bank will create A) $200 of new money. B) $800 of new money. C) $1,600 of new money. D) $3,200 of new money. 5) You withdraw $2,000 from your account. Your bank has a desired reserve ratio of 20 percent. This transaction, by itself, will directly reduce A) the quantity of money by $1,600. B) deposits by $1,600. C) the quantity of money by $2,000. D) deposits by $2,000. 6) The opportunity cost of holding money is the A) interest rate. B) price of goods and services. C) level of wage and rental income. D) ease with which an asset can become money. 7) If bond prices fall, A) interest rates rise. B) interest rates fall. C) bank reserves grow. D) households increase cash holdings.
2 8) Which of the following actions raise the interest rate? A) A decrease in the demand for money. B) An increase in bond prices. C) An increase in the quantity of money. D) An increase in the demand for money. 9) If the Fed carries out an open market operation and buys U.S. government securities, the interest rate A) falls and the quantity of money increases. B) rises and the quantity of money increases. C) falls and the quantity of money decreases. D) rises and the quantity of money decreases. 10) In the quantity theory of money, the velocity of circulation is assumed to A) be not influenced by the quantity of money. B) rise during recessions. C) fall during recessions. D) be unrelated to the equation of exchange. 11) The quantity theory of money predicts how changes in A) the price level affect nominal GDP. B) the price level affect real GDP. C) the quantity of money affect the price level. D) real GDP affect the nominal GDP. 12) Which of the following causes a leftward shift in the demand for money curve? A) increased use of credit cards. B) increased use of automatic teller machines. C) increase in interest rates. D) Both answers A and B are correct. 13) Which of the following decreases the demand for money? A) An increase in the price level. B) An increase in M1. C) A decrease in real GDP. D) A decrease in the cost of printing money. 14) Suppose that the price of a bond last week was $950 but this week its price is $975. Between last week and this week interest rates A) have fallen. B) have stayed about the same if inflation is roughly the same. C) have risen. D) are unaffected by bond prices.
3 15) Suppose the money market has an equilibrium interest rate of 10 percent. If the actual interest was 8 percent, the quantity of money demanded would be greater than the quantity of money supplied. Which of the following would bring the money market back to equilibrium? A) People buy bonds, the price of bonds rises and the interest rate rises. B) People buy bonds, the price of bonds falls and the interest rate rises. C) People sell bonds, the price of bonds rises and the interest rate rises. D) People sell bonds, the price of bonds falls and the interest rate rises. 16) Suppose the money market is in equilibrium and then the economy experiences a recession so that real GDP decreases. The quantity of money does not change. What effect will the recession have on equilibrium interest rates? A) interest rates rise B) interest rates fall C) interest rates do not change D) there is not enough information to tell what happens to interest rates Answer: B 17) If the Fed wants to raise interest rates it will A) buy bonds in order to increase the quantity of money. B) sell bonds in order to decrease the quantity of money. C) buy bonds in order to decrease the quantity of money. D) sell bonds in order to increase the quantity of money. Answer: B 18) If the aggregate demand curve shifts rightward following an increase in the quantity of money, what can be concluded if the short-run aggregate supply curve is rather steep? A) There will be a significant increase in real GDP with little impact on the price level. B) There will be a significant increase in both real GDP and the price level. C) There will be little increase in real GDP but a significant increase in the price level. D) There is significant unemployment and slack in the economy. 19) If nominal GDP = $10 trillion and the quantity of money is $2 trillion, what is velocity? A) 16 B) 8 C) 5 D) 2 20) The U.S. historical evidence A) supports the quantity theory of money in the long run. B) does not support the quantity theory of money. C) demonstrates that there is no correlation between the money growth rate and inflation. D) shows that a higher inflation rate causes an increase in the money growth rate.
4 21) Which of the following is true regarding the quantity theory of money? I. The theory predicts that in the long run the inflation rate equals the money growth rate minus the growth rate of potential GDP. II. The theory predicts that countries with high growth rates of money will have high inflation rates. III. The long-run U.S. relationship between money growth and inflation supports the theory. A) I and II. B) II and III. C) I and III. D) I, II and III. 22) According to the quantity theory of money, changes in the price level are usually the result of changes in the A) prime interest rate. B) real interest rate. C) quantity of money. D) velocity of circulation. 23) If the currency to deposit ratio is 0.25, and the required reserve ratio is 0.1. If a bank sold $100,000 to the Fed. Immediately, how much additional money that the bank can use as loans? A) $40,000 B) $60,000 C) $72,000 D) $67,000 24) Which of the following is NOT a short-run effect of an increase in the quantity of money? A) People try to buy more goods and services. B) Banks have excess reserves. C) Aggregate supply increases. D) Price level increases. 25) A decrease in the quantity of money A) increases interest rates, investment, and aggregate demand. B) raises the interest rate, decreases investment, and decreases aggregate demand. C) lowers the interest rate, increases investment, and increases aggregate demand. D) decreases the interest rate, investment, and aggregate demand. Answer: B Essay Questions: 1. (10 points) According to the book, the reserve ratio in the US r = 0.08, and the currency to deposits ratio c = Suppose Fed buys $100,000 of securities from banks; banks loan this amount to an investors. How much additional deposits that the bank would have? With this additional deposit, how much would have to be used as a reserve, and as a loan?
5 Solutions: In total, how much additional money created in the market? If the reserve ratio is now changed to.15. How much additional money that Fed creates by purchasing $100,000 bond from the bank? It is better to answer this question in steps. Step 0: $100,000 loan, in which $100,000/(1+c) = D 0 = $100,000/2.06 = $48,544. Step 1: The bank now has D 0 = $48,544 additional deposit. The bank is going to divide the money into two parts, reserve and loan. The amount of reserve from D 0 is: R 1 = r D 0 = 0.08*$48,544 = $3,884, the amount of loan is: L 1 = (1-r) D 0 = 0.92 * $48,544 = $44,660. Step 2: At the loan amount of L 1 = $44,660, part of loan will be in currency, and part of them will in deposit. The amount of deposit is given by: D 1 =L 1 /(1+c) = (1-r) D 0 / (1+c) Repeat this process. In general, D k = [(1-r)/(1+c)] k D 0 Therefore, the total amount of deposit in the bank is: D = D 0 + D 1 + D 2 + D 1 r 1 r 1 r = D L c + c + c D0 D0 ( 1+ c) = = 1 r c + r 1 1+ c $48,544( ) = = $87, L Total Reserve: R = r D = $7,018 Total loan amount is: (1- r) D + $100,000 = $180,703 Monetary base is given by: B = (r + c) D = D 0 (1+r) = $100,000 Total amount of money is created by: M = (1+c) D = 2.06 * $87,720 = $180,703 If r =.15, then: Total amount of deposit: $100,000/(c+r) = $100,000/( ) = $82,645 Total amount of money created: M = (1 + c) D = $170,249 Total mount of loan: (1 r) D + $100,000 = $170, (15 points) #10 on page 276
6 a. Failures of banks reduce amount of deposits, and hence reduce quantity of money. b. Reducing quantity of money would shift aggregate demand curve left. Total aggregate demand is lower. c. In the short run, if the supply curve is not completely vertical, then bank failures would reduce GDP, and the price level in general would be lower. d. Over the long run, the real GDP is going to come back to its potential output level. Lower price is expected.
MONEY, INTEREST, REAL GDP, AND THE PRICE LEVEL*
Chapter 11 MONEY, INTEREST, REAL GDP, AND THE PRICE LEVEL* The Demand for Topic: Influences on Holding 1) The quantity of money that people choose to hold depends on which of the following? I. The price
More 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 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 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 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 informationThe Money Market and the Interest Rate. 2003 South-Western/Thomson Learning
The Money Market and the Interest Rate 2003 South-Western/Thomson Learning Individuals Demand for Money An individual s quantity of money demanded is the amount of wealth that the individual chooses to
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 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 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 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 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 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 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 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 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 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 information(a) Using an MPC of.5, the impact of $100 spent the government will be as follows: 1 100 100 2 50 150 3 25 175 4 12.5 187.5 5 6.25 193.
S5 Solutions 24 points Chapter 2: Fiscal policy. If the marginal propensity to save is.5, how large is the multiplier? If the marginal propensity to save doubles to., what happens to the multiplier? With
More 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 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 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 1. Why Study Money, Banking, and Financial Markets?
Chapter 1 Why Study Money, Banking, and Financial Markets? Why Study Money, Banking, and Financial Markets To examine how financial markets such as bond, stock and foreign exchange markets work To examine
More informationECON 4110: Money, Banking and the Macroeconomy Midterm Exam 2
ECON 4110: Money, Banking and the Macroeconomy Midterm Exam 2 Name: SID: MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following
More informationHomework 5: The Monetary System and Inflation
Homework 5: The Monetary System and Inflation Solutions 1. Be sure to read your copy of the Wall Street Journal every weekday, looking especially for items related to the material in this course. Find
More informationPractice Problems on Money and Monetary Policy
Practice Problems on Money and Monetary Policy 1- Define money. How does the economist s use of this term differ from its everyday meaning? Money is the economist s term for assets that can be used in
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 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 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 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 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 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 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 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 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 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 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 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 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 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 24 Money Price Inflation 1) Money is A) currency plus coins. B) the same as gold.
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 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 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 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 informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Exam Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The government agency that oversees the banking system and is responsible for the conduct
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 informationAGGREGATE DEMAND AND AGGREGATE SUPPLY The Influence of Monetary and Fiscal Policy on Aggregate Demand
AGGREGATE DEMAND AND AGGREGATE SUPPLY The Influence of Monetary and Fiscal Policy on Aggregate Demand Suppose that the economy is undergoing a recession because of a fall in aggregate demand. a. Using
More informationEcon 202 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 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 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 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 informationAP Macroeconomics 2012 Scoring Guidelines
AP Macroeconomics 2012 Scoring Guidelines The College Board The College Board is a mission-driven not-for-profit organization that connects students to college success and opportunity. Founded in 1900,
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 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 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 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 informationCase, Fair and Oster Macroeconomics Chapter 11 Problems Money Demand and the Equilibrium Interest Rate
Case, Fair and Oster Macroeconomics Chapter 11 Problems Money Demand and the Equilibrium Interest Rate Money demand equation. P Y Md = k * -------- where k = percent of nominal income held as money ( Cambridge
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 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 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 informationHomework (Chapter 11)
EC 2113 Principles of Macroeconomics Instructor: Erdenechimeg Eldev-Ochir Name:_ ID: Homework (Chapter 11) Multiple Choice Identify the letter of the choice that best completes the statement or answers
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 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 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 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 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 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 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 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 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 informationEconomic Systems. 1. MARKET ECONOMY in comparison to 2. PLANNED ECONOMY
Economic Systems The way a country s resources are owned and the way that country takes decisions as to what to produce, how much to produce and how to distribute what has been produced determine the type
More 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 informationChapter 6 Economic Growth
Chapter 6 Economic Growth 1 The Basics of Economic Growth 1) The best definition for economic growth is A) a sustained expansion of production possibilities measured as the increase in real GDP over a
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 11 Money and Monetary Policy Macroeconomics In Context (Goodwin, et al.)
Chapter 11 Money and Monetary Policy Macroeconomics In Context (Goodwin, et al.) Chapter Overview In this chapter, you will be introduced to a standard treatment of the banking system and monetary policy.
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 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 informationEcon 330 Exam 1 Name ID Section Number
Econ 330 Exam 1 Name ID Section Number MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) If during the past decade the average rate of monetary growth
More information1. Fill in the blanks for the following sentence: A rise in taxes on households will shift AD to the, this will push.
Homework 16 1. Fill in the blanks for the following sentence: A rise in taxes on households will shift AD to the, this will push. A. right; down B. left; down C. left; up D. right; up 2. During a recession,
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 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 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 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 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 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 information13. If Y = AK 0.5 L 0.5 and A, K, and L are all 100, the marginal product of capital is: A) 50. B) 100. C) 200. D) 1,000.
Name: Date: 1. In the long run, the level of national income in an economy is determined by its: A) factors of production and production function. B) real and nominal interest rate. C) government budget
More informationCHAPTER 5 Review... Page 1
CHAPTER 5 Review... 1. The rate of inflation is the: A) median level of prices. B) average level of prices. C) percentage change in the level of prices. D) measure of the overall level of prices. 2. If
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 17. Preview. Introduction. Fixed Exchange Rates and Foreign Exchange Intervention
Chapter 17 Fixed Exchange Rates and Foreign Exchange Intervention Slides prepared by Thomas Bishop Copyright 2009 Pearson Addison-Wesley. All rights reserved. Preview Balance sheets of central banks Intervention
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 information2.5 Monetary policy: Interest rates
2.5 Monetary policy: Interest rates Learning Outcomes Describe the role of central banks as regulators of commercial banks and bankers to governments. Explain that central banks are usually made responsible
More 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 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 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 informationSome Answers. a) If Y is 1000, M is 100, and the growth rate of nominal money is 1%, what must i and P be?
Some Answers 1) Suppose that real money demand is represented by the equation (M/P) d = 0.25*Y. Use the quantity equation to calculate the income velocity of money. V = 4. 2) Assume that the demand for
More informationChapter 11: Activity
Economics for Managers by Paul Farnham Chapter 11: Measuring Macroeconomic Activity 11.1 Measuring Gross Domestic Product (GDP) GDP: the market value of all currently yproduced final goods and services
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 informationChapter 7 The Asset Market, Money, and Prices
Chapter 7 The Asset Market, Money, and Prices Multiple Choice Questions 1. A disadvantage of the barter system is that (a) no trade occurs. (b) people must produce all their own food, clothing, and shelter.
More informationLecture 12-1. Interest Rates. 1. RBA Objectives and Instruments
Lecture 12-1 Interest Rates 1. RBA Objectives and Instruments The Reserve Bank of Australia has several objectives, including the stability of the currency, the maintenance of full employment. These two
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