macro chapter review test
the money price of a pack of microwave popcorn is $.44, the relative price of a pack of microwave popcorn in terms of burritos is 1.25 packs of burritos per pack if popcorn. The money price of a pack of burritos is
$.35
aggregate income in an economy in 2014 is $460. Savings is 30 and imports are 35 aggregate expenditure in the economy in 2014 is
$460
when the fed buys securities from a bank, a sequence of events begins
1. banks have excess reserves 2. banks lend excess reserves 3. the quantity of money increases 4. new money is used to make payments 5. some of the new money remains on deposit 6. some of the new money is currency drain 7. desired reserves increase because deposits have increased 8. excess reserves decrease
correct statements
1. we measure the marginal benefit from a good or service by the most that people are willing to pay for an additional unit of it. 2. to describe preferences, economists use the concept of marginal benefit.
If the quantity of money increases by 2 percent a year, in the long run the change in the price level is ____percent a year.
2
which are positive and normative?
3 and 4 are positive, 1 and 2 are normative
what is true about the neoclassical growth theory
3. The rate of technology change influenced the economic growth rate but economic growth does not influence the pace of technological change 4. as income increases Bothe the birth and death rate decrease
valued at the market exchange rate, GDP per person in the US in 2013 is_______ times that in china., valued at purchasing power parity prices, real gap per person in the US in 2013 is _____ times that of china
7.9; 5.4
ann's marginal cost of producing an additional unit of cookies is
8 units of bread
______ has a comparative advantage in milkshakes and _____ has an absolute advantage in both goods
Belinda, Elizabeth
when production is efficient
Mario can produce more pasta only by producing less pizza
choose the incorrect statement
a bias in the CPI gives workers with wage contracts linked to the CPI lass real income than the firms intended
when real GDP decreases,
a decrease in the demand for money occurs
choose the incorrect statement
a government budget surplus competes with investment for funds
all of the following are examples of investment except
a person depositing $100 a week to her savings account
choose what is incorrect
a rational choice will turn out to be the best choice after the event
resource use if efficient when
a situation cannot be improved upon
in the market for bread, the supply of bread will increase if any of the following occur except
an increase in the price of a loaf of bread
If OPEC is correct, the price change could have occurred as a result of demand changing because of ______ in the expected price of oil and supply changing because of ______ in the expected price of oil.
an increase; an increase
biscotti bought by delta airlines and served to passengers is an example of _____ good. second hand blue jeans is an example of _____ goods
an intermediate; nighter a final nor intermediate
The reference base period for the CPI is 1982-1984. In AprilApril 2014, the CPI was 237.1 This number tells us that the ______ of the prices paid by urban consumers for a fixed basket of consumer goods and services was ______ .
average; 137.1 percent higher in April 2011 than the average of 1982-1984
suppose that the us and Cuba decide to open up trade. if each country specializes in the good in which it has a comparative advantage, _________ will gain from that trade because...
both countries; consumption possibilities in both Cuba and the US will lie outside their PPFs
Microsofts marginal cost of the 100th copy of Microsoft window 8 is
calculated as the slope of PPF at the point where the 100th copy of windows 8 is produced
as a result of financial innovation, _____ have become ________.
checking deposits at thrift institutions; an increasing percentage of M1
choose the incorrect statement
coins, which are issued by the treasury are an asset of the Fed and a component of the monetary base
choose the correct statement
commercial banks are financial institutions that accept deposits, provide payment services, and make loans to firms and households
if as the price of beef increases, the quantity of leather that firms plan to sell increases, then beef and leather are
complements in production
low fat milk and cream are
complements in production fro a dairy
the news clip illustrates a change in the supply of flights when it reports that American Airlines is
cutting the number of flights with no mention of the change in airfare
a government budget deficit occurs, which _____. the real interest rate______.
decreases the supply of loanable funds; falls
which of the following are included in the income approach to calculating GDP?
depreciation; compensation of employees; indirect taxes less subsidies (other factor incomes maybe)
the ratio of reserves to deposits that a bank plans to hold is its _____. if a bank had $10 million actual reserves and $8 million in desired reserves, then it has______.
desired reserve ration; excess reserves
liquid assets
do NOT have a higher interest rate than securities
an economy that uses new technology
does not eliminate scarcity
if the growth rates of 2009 are maintained in future years, real gap per person in eastiana will
double by 2019
if the growth rates of 2012 are maintained in future years, real gap per person in Atlantis will
double by 2046
Choose the correct statements
economists use natural experiments, statistical investigations, and economic experiments. an economic model is a description of some aspect of the economic world that includes only those features that are needed for the purpose at hand
the supply of loanable funds is influenced by all of the following except
expected profit
real flows are the flow of
factor production from households to firms and the flow of goods and services from firms to households
a decrease in the demand fro rice brings a ______ in the price of rice and ______ in the quantity of rice supplied
fall; a decrease
the liabilities of the fed are_______, and these liabilities along with ______ make up the monetary base
federal reserve notes held by households and business and reserves of depository institutions; coins issued by the treasury
whether for motor company gets a larger profit or its workers get higher wages is a ________ question
for whom
the law of supply states that other things remaining the same, the higher the price of a good, the ______; and the lower the price, the _____
greater is the quantity supplied; smaller is the quantity supplied
the opportunity of producing a cake is ____ at point a than at point B the opportunity cost of producing a loaf of bread is ____ at point b than at point a
greater; greater
potential gap per person
grows at a steady pace but nat a constant pace
if tom also has an absolute advantage in growing blueberries and cherries, he will
have a comparative advantage in one activity but not both
choose the incorrect statement
in 2012 about 700 commercial banks operated in the US
suppose the fed buys $50 million of government securities from the bank of America. The fed's Toal assets ______ and its total liabilities_______. The bank of americas total assets ______ and its total liabilities ________
increase by 50 million; increase by 50 million do not change; do not change
a decrease in the voice of leather jackets, complement in production of beef, will______ the equilibrium price of beef and ______ the equilibrium quantity of beef
increase; decrease
The price of oil hit a record high above $135 a barrel in May 2008 long dash— more than twice what it cost the year before ... OPEC has so far blamed price rises on speculators and says there is no shortage of oil. The price of oil rises if the demand for oil_____ and the supply of oil _____ a shortage in the market for oil implies that
increases: decreases the price of oil is being prevented from influencing buying and selling plans
an increase in the population ____ potential gap and ____ potential gap per hour of labor
increases; decreases
an increase in real GDP _______ the demand for money ad financial innovation__________.
increases; might increase the demand for some types of deposits and decrease the demand for others
the bias in the CPI is a problem because
it distorts wage agreements linked to the CPI
the income earned by the people who sell the services of the factor of production__________ is called __________
land; rent
Stephen's opportunity cost of producing a ton of apples is ______ than Jack's, so jack _______ gain from specialization and trade with Stephen
lower than; can
an economy produced snowboards. If more than the efficient quantity of snowboards is produced
marginal cost exceeds marginal benefit
the inflation rate in 2014
might be higher, lower. or the same as in 2013
luxury car makers announce a fall in next years price of a luxury car and an increase in the ease in which credit can be obtained. You predict that the demand fro luxury cars today
might increase, decrease or remain the same
choose the incorrect statement
most economists believe that the Ricardo-barro effect holds in the loanable funds market
if the price of a taco rises, a _____ the demand curve occurs. if any factor that influences buying plans other than the price changes, then a ______ the demand curve occurs
movement up along; shift of
if the price of a taco rises, a _______ the supply curve occurs. If any factor that influences selling plans other than the price changes, then a ________ the supply curve occurs
movement up along; shift of
between 1960 and 2010, the gap between real gap per person in the US and Japan
narrowed
if we count marginally attached workers as unemployed
no change occurs in the employment to population ratio
choose the correct statement
nominal GDP is just a more precise name for GDP
assume that the preconditions fro labor productivity growth are in place. the pace of labor productivity growth is influenced by all of the following except
population growth
when the real interest rate falls, the _____ because the _____ is the opportunity coast of loanable funds
quantity of loanable funds demanded increases; real interest rate
convergence between real gap per person in the us and Japan was relatively _____ during the 1960s; convergence has recently been _____
rapid; decreasing
choose what is incorrect
real gap per person grows at a constant rate
the amount paid each month by an oil company for the right to drill on a farmer's land is called
rent
the marginal cost curve is upward sloping because
resources are not all equally productive in all activities
on average in the us, the inflation rate and the money growth rate minus the real gap growth rate
rise and fall together
when the interest rate rises, other things remaining the same, the opportunity cost of holding money _____ and _______
rises; the quantity of money demanded decreases
a _____ is a depository institution that accepts saving deposits and makes mostly home-purchase loans. a ______ is a depository institution owned by a social or economic group such as a firms employee that accepts savings deposits and makes mostly personal loans
savings bank; credit union
if the interest rate is 5 percent, people will _____ bonds. Bond prices will ______
sell, fall
an increase in labor productivity
shifts the demand for labor curve rightward and the production function upward
in increase in the population
shifts the supply of labor curve rightward and creates a movement along the production function
French fries and baked potatoes are
substitutes or substitutes in production
how can the change in us wealth differ from us saving
the change in wealth includes changes in the price of assets owned and saving exclude these items
taking an MP3 player to the gym becomes less popular. As a result
the demand for MP3s decreases
choose the incorrect answer
the demand for labor is the relationship between the quantity of labor demanded and the money wage rate
choose the statement about growth in labor productivity that is incorrect
the demand fro labor increases, the production function does not change, but a movement occurs along the production function
the demand of US dollars changes when there is a change in any of the following except
the foreign exchange rate
the fundamental precondition fro labor productivity growth is
the incentive system created by firms, markets, property rights, and money
when the price of an asset rises,...
the interest rate falls
when GDP per person in china in 2013 is valued at ______, gap per person in the us is ______ times that in china
the market exchange rate; 7.9
which of the following topics is studied in macro?
the national economy and the global economy
goods and services are
the objects that people value and produce to satisfy human wants
Consider the following statements about factors that influence the standard of living, and choose the statement that is incorrect.
the omission of household productions from God means that the growth rate of gap underestimates the growth rate of total production
along the supply curve,
the price changes but all other influences in producer's planned sales remains the same
choose the statement about an increase in the population that is incorrect
the production function shifts upward
choose the option that is an example go government expenditure
the purchase of office supplies for the office of the junior senator from New York
correct statement
the quality of labor depends on human capital
if the price of a yoga class falls, all other influenced on buying plans remaining the same, in the market for yoga classes
the quantity of yoga classes demanded increases
a relative price is
the ratio of one money price to another
which is incorrect
the return to full employment in an expansion phase of the business cycle is economic growth
the CPI places more weight on _______ than on______
transportation; medical care
choose the correct answer
we measure the change in production by comparing the value of real gap in two different years
an MP3 player is a normal good. If income is expected to increase next year, you predict that the demand for MP3 players _________ now
will increase
when you make economic choices that result in what, how, and for whom goods and services are produced
you are making choices that are in your self interest and the people who produce and deliver the goods and services that you decide to buy are also making choices in their self interest
______ is an example of US consumption expenditure
your purchase is a flight on American Airlines