MACRO

Suppose that in a closed economy GDP is $11 trillion, consumption is $7 trillion, taxes are $2 trillion, and the government runs a deficit of $1 trillion. What are private saving and national saving?

$2 trillion and $1 trillion

Which of the following would be an example of direct finance?

A saver buys a bond a corporation has just issued so it can purchase capital.

Which of the following would a macroeconomist consider as investment?

Alice builds a new restaurant.

Stock represents

All of the Above are correct.

Refer to table 29-2. If someone deposits $400 into the First Bank of Mason City,

All of the above are correct.

Which of the following is a store of value?

All of the above are correct.

Which of the following is correct?

All of the above are correct.

Which of the following is a function of money?

All of the above is correct.

Raphael is not working and is currently not looking for work. The BLS would count Raphael

neither unemployed nor in labor force.

Other things the same, bonds are likely to have higher interest rates if they have

no tax exemptions and long terms.

Economists would predict that, other things the same, the more generous unemployment compensation a country has,

the longer the duration of each spell of unemployment, and the higher the unemployment rate

Which of the following is included in M2 but not M1?

savings deposits

Which of the following is not included in M1?

savings deposits

Index funds

typically have a higher rate of return and lower costs than managed mutual funds.

29-4. Assume that all other banks hold only the required 5 percent of deposits as reserves. by how much would the economy's money supply increase?

$1,000

Refer to table 29-1. What is the M1 money supply?

$216 billion

The country of Nemedia does not trade with any other country. What is consumption and investment in Nemedia?

$31 billion and $4 billion

Refer to table 29-1. What is the M2 money supply?

$341 billion

You have some estimates of national accounts... Based on these numbers in the first case there should be a

$5 billion surplus, and in the second case a $10 billion deficit.

29-4. how much in excess reserves does the Bank of Tampa now hold?

$50

Suppose that the reserve ratio is 5 percent and that a bank has $1,000 in deposits. Its reserves are

$50

What is the adult female labor force in Meditor?

70 million

In a small closed economy investment is $20 billion and private saving is $22 billion. What is public saving and national saving?

-$2 billion and $20 billion

Dependable Appliances had a PE ratio of 25, earnings per share of $4, and retained earnings per share of $3. What was its dividend yield?

1%

By how much does the money supply change?

1,000 million Tazes

Suppose that in a closed economy, GDP is equal to 11,000, taxes are equal to 2,500 Consumption equals 7,500 and Government purchases equal 2,000. What are private saving and national saving?

1,000, 500, 1500

Refer to table 28-1. What is the U-1 measure of labor underutilization?

1.6 percent

Refer to table 29-4. Assume that the Bank of Tampa is holding the required. people hold only deposits and no currency. What is the money multiplier?

10

Refer to table 29-4. If the Bank of Tampa has loaned out all the money it wants given its deposits, then its reserve ratio is

10%

What is the adult female population in Meditor?

105 million

What is the adult male population in Meditor?

135 million

Suppose that in a closed economy, GDP is equal to 11,000, Taxes are equal to 1,500, Consumption equals 7,500 and Government purchases equal 2,000. What is national saving?

1500

What is the adult labor force in Meditor?

160 million

Suppose that in a closed economy GDP is 11,000, consumption is 7,500, and taxes are 2,000. What value of Government purchases would make national savings equal to 1000 and at that value would the government have a deficit or surplus?

2,500, deficit

Refer to table 29-2. The reserve ratio is

20 percent

By how much would the money supply change?

200 million Tazes

Refer to Labor Stats. What is the adult population in Meditor?

240 million.

In the small closed economy of San Lucretia, the currency is the denar. Statistics for last year... What were the consumption and investment in San Lucretia?

270 billion dinars, 50 billion denars

What were the number of people employed and the number of people in the labor force?

28.5 million, 30 million

Refer to Tazian Banking Statistics. What is the required reserve ratio and reserve ratio for Tazian Banks?

4%, 5%

The manager of the bank where you work tells you that your bank has $5 million in excess reserves. Given this information you find that the reserve requirements must be

40/300

What is the adult male unemployment rate in Meditor?

5.56%

Refer Tazian. What is the value of existing loans made by Tazian Banks?

6,900 million Tazes

What is the U-3 measure of labor underutilization?

6.2 percent

What is the adult unemployment rate in Meditor?

6.25%

What is the U-4 measure of labor underutilization?

6.9 percent

What is the adult labor-force participation rate in Meditor?

66.67%

What is the adult male labor-force participation rate in Meditor?

66.67%

What is the adult female unemployment rate in Meditor?

7.14%

What is the U-5 measure of labor underutilization?

7.95 percent

Assuming that the banks still want to hold the same percentage of excess reserves what is the value of the money supply after the change in the reserve requirement ratio?

9,375 million Tazes

Suppose the economy is closed and consumption is 6,500 taxes are 1,500 and government purchases are 2,000. If national savings are 1,000 and the economy is closed then, what is GDP?

9,500

What is the U-6?

9.0 percent

Suppose in the small country of Sociopolis there are 6 million people. What is the unemployment rate?

9.5%

What is the adult male labor force in Meditor?

90 million

Assuming everyone in the question below is the adult population, which of the following is NOT correct?

Anna is a full-time student not looking for a job. The BLS counts her as unemployed and in the labor force.

Because of multiple tools....

FALSE

In the months of November and December...

FALSE

Unemployment due to job search is best classified as structural unemployment

FALSE

Money market mutual funds are included in

M2 but not M1

Meredith is looking for work as a computer programmer. Someone waiting in line with her tells her its been that way a long time.

Meredith is frictionally unemployed, and Julie is structurally unemployed

Which of the following executes open-market operations?

New York Federal Reserve Bank

Which of the following is correct?

None of the above is correct

Which of the following is correct?

None of the above is correct.

Frictional unemployment is different from unemployment arising from minimum-wage laws, unions, and efficiency wages....

TRUE

Consider T-G and Y-T-C

The first of these is public saving, the second one is private saving.

Investment rises and interest rates fall. Which of the following could explain these changes?

The government reduced the tax rate on savings.

Arnnie is the owner of a firm that produces bottled water in Washington state. There are many other such firms in the area. Annie decides that if he pays his workers a wage higher than the going market wage, his profits will increase. Which of the following is a likely explanation for his decision?

The higher the wage, the less often his workers choose to leave his firm.

Which of the following is correct?

There is no consensus among economists about whether unions are good or bad for the economy.

Which of the following people purchased the correct asset to meet their objective?

Tim wanted a high return, even if it meant taking some risk, so he purchased stock issued by Specific Electric instead of bonds issued by Specific Electric.

Which of the following isn't included in either M1 or M2?

US Treasury bills

Which of the following equations most simply represents GDP in a closed economy?

Y = C + I + G

Which of the following equations will always represent GDP in an open economy?

Y = C + I + G + NX

Which of the following is a cause of frictional unemployment?

a worker leaving a job to find one with better benefits

The natural rate of unemployment is the

amount of unemployment that the economy normally experiences.

Debit cards

are used as a method of payment

Refer to table 29-2. If 1,000 is deposited into the First Bank of Mason City, and the bank takes no other actions, it's

assets will increase by $1,000

Which of the following creates unemployment by keeping wages above the equilibrium level?

both efficiency wages and unions

The natural unemployment rate includes

both frictional and structural unemployment

When the Federal Reserve conducts open-market operations to increase the money supply, it

buys government bonds from the public

Assuming that the bonds below have the same term and principal and that the state or local government which issues the municipal bond has a good credit rating, which list has bonds ordered from the one that pays the most interest to the one that pays the least interest?

corporate bond, U.S. government bond, municipal bond

Unemployment insurance

creates frictional unemployment and unions create structural unemployment.

Which list ranks assets from most to least liquid?

currency, stocks, fine art

Suppose that Krameriais considering policy changes that would affect the number... what would their values have been if policy had been in place?

current 4.8% and 70% with policy change 4.4% and 66.7%

Refer to table 29-6. If the reserve requirement is 10% than People's bank

currently needs to increase reserves by less than $2 million to meet the reserve requirement.

29-6. When it has met the reserve requirement, reserves have changed so that the money supply should have

decreased by more than $10 million

Other things the same if reserve requirements are decreased, the reserve ratio

decreases, the money supplier increases, and the money supply increases

Skyline Chili wants to finance the purchase of new equipment for its restaurants, but they have limited internal funds. Skyline will likely

demand loanable funds by selling bonds.

Profits paid out to stockholders are

dividends

Each Federal Reserve District Bank president is appointed by

each bank's board of directors

The sum of which of the following would necessarily be equal to the adult population in the US statistics on labor?

employed, unemployed, not in the labor force.

The labor force

equals the number of people employed plus the number of people unemployed

The natural rate of unemployment is the economist's notion of

full employment.

Refer to Figure 26-2. Which of the graphs shows the effects of an increase in the tax rate on interest income?

graph 1.

Refer to Figure 26-2. Which of the graphs in the figure above shows the effects of the government moving from a budget deficit to a budget surplus while also lowering tax rates on interest earnings?

graph 2

Fiat money

has no instrinsic value

Efficiency wages

increase structural unemployment by keeping wages above equilibrium.

When a bank loans out $1,000, the money supply

increases

Job search

is the process of matching workers with appropriate jobs.

When the Fed conducts open-market purchases,

it buys Treasury securities, which increases the money supply

According to the definitions of national saving and private saving, if Y, C, and G remained the same, an increase in taxes would

leave national saving unchanged and reduce private saving

Municipal bonds pay a relatively

low rate of interest because of their low-default risk and because the interest they pay is not subject to federal income tax.

The Federal Reserve does all except which of the following?

makes loans to individuals

Commodity money is

money with intrinsic value

Long-term bonds are generally

more risky than short-term bonds and so pay higher interest

Credit card limits are included in

neither M1 nor M2.

If Huedepool Beer runs into financial difficulty, the stockholders as

part owners of Huedepool are paid after the bondholders get paid.

Mary Sue is the newly appointed CEO of a company that manufactures the CD drives on an assembly line. According to efficiency wage theory, what should she do?

pay all workers more than the equilibrium wage rate.

The single most important piece of information about a stock is the

price.

In a closed economy, what does (Y-T-C) represent?

private saving

In a closed economy, what does (T-G) represent?

public saving

World Wide Delivery Service Corporation develops a way to speed up its deliveries and reduce its costs. We would expect that this would

raise the demand for existing shares of the stock, causing the price to rise.

On a bank's T-account,

reserves are assets, deposits are liabilities.

Profits NOT paid out to stockholders are

retained earnings

Consider two labor markets in which jobs are equally attractive in all respects. If a union organizes workers in one of the markets, then the wage rates will tend to

rise for the union jobs and fall for the nonunion jobs.

If the tax revenue of the federal government exceeds spending, then the government necessarily

runs a budget surplus

Lekeisha's income exceeds her expenditures. Lekeisha is a

saver who supplies money to the financial system.

Stock indexes are

the average group of stock prices.

A bank's liabilities include

the deposits of its customers, but not its reserves

Liquidity refers to

the ease with which an asset is converted to the medium of exchange

The sale of stocks

to raise money is called equity finance, while the sale of bonds to raise funds is called debt finance.

M1 equals currency + demand deposits +

travelers checks with other checkable deposits

Cyclical unemployment refers to

year-to-year fluctuations of unemployment around its natural rate