Econ Test 2 Scott

If in the economy, business saving equals $50 billion, household saving equals $10 billion, and government saving equals −$60 billion, what is the value of national saving? $60 billion $−20 billion $0 billion $120 billion

$0 billion

There is $5,000,000 of currency in Econland, which are all held by banks as reserves. The public does not hold any currency. If the banks' desired reserve/deposit ratio is 0.4, then the money supply equals $7,000,000 $2,000,000 $5,000,000 $12,500,000

$12,500,000

Sydney purchases a newly issued, two-year government bond with a principal amount of $20,000 and a coupon rate of 7 percent paid annually. One year before the bonds matures (and after receiving the coupon payment for the first year), Sydney sells the bond in the bond market. What price (rounded to the nearest dollar) will Sydney receive for his bond if newly issued one-year government bonds are paying a 6 percent coupon rate? $21,400 $22,684 $21,200 $20,189

$20,189

If real GDP equals 3,500, nominal GDP equals 5,250, and the price level equals 1.5, then what is velocity if the money stock equals 2,100? 1.66 2.33 2.5 3

2.5

Based on the figure, if a union contract requires that workers be paid $25 per hour, there will be ______ unemployed workers. 9 12 21 31

21

When an American buys stock in a French company, from the perspective of France this is a(n) import. export. capital outflow. capital inflow.

capital inflow.

In an open economy, if domestic citizens decide to save more, then the domestic real interest rate will ______ and the level of capital investment in the country will _____, holding other factors constant. increase; increase increase; decrease decrease; decrease decrease; increase

decrease; increase

Holding constant risk and the real returns available abroad, lower domestic real interest rates ______ capital inflows, ______ capital outflows, and ______ net capital inflows. increase; increase; increase increase; increase; decrease increase; decrease; increase decrease; increase; decrease

decrease; increase; decrease

Holding other factors constant, if a change in tax laws discourages people from saving more for retirement, then the real interest rate will ______ and the equilibrium quantity of saving and investment will _____. increase; increase increase; decrease decrease; decrease decrease; increase

increase; decrease

Holding other factors constant, if new technology becomes available that allows machines to produce manufactured goods more quickly and with fewer defects, then the real interest rate will ______ and the equilibrium quantity of national saving and investment will ____. increase; increase increase; decrease increase; not change decrease; increase

increase; increase

Holding other factors constant, if oil prices rise relative to the prices of other products, then the real wages of oil workers will ______ and employment of oil workers will _____. increase; increase increase; decrease decrease; not change decrease; increase

increase; increase

Labor unions contribute to structural unemployment by keeping wages above the market-clearing level. keeping wages below the market-clearing level. allowing unemployed workers to search longer or less intensively for jobs. forcing unemployed workers to take the first job offered to them.

keeping wages above the market-clearing level.

Sang's current income is $100 more per month than his current consumption needs. He decides to use the $100 to reduce his credit card debt. As a result, his liabilities will decrease, and his wealth will increase. liabilities and his wealth will decrease. assets will decrease, and his wealth will increase. assets and his wealth will increase.

liabilities will decrease, and his wealth will increase.

The money supply will increase by a multiple of the increase in bank reserves created by the central bank unless there is fractional reserve banking. there is 100 percent reserve banking. the public holds no currency. banks' desired reserve/deposit ratio is 0.20.

there is 100 percent reserve banking.