Macro Economics Final

Look at the table National Income Accounts. The value of national savings is:

$1.6 trillion

29. Use figure 3. If the interest rate is 8% businesses will want to borrow

$2 trillion

Investment spending in macroeconomics. How much the national savings is equal to

$2.1

An American soldier uses her income to purchase a $100 MP3 player made in China by a Chinese firm and $200 for fruit and vegetables from a local farmers market. As a result, U.S. GDP increases by

$200 due to an increase Consumption Spending

Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. Nominal GDP in 2013 was:

$400

Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. If 2013 is the base year, real GDP in 2014 was:

$420

Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. Nominal GDP in 2014 was:

$445

If a country has a population for a 1,000 people, an area of 100 square miles, and a GDP of $5, then its GDP per capita is

$5,000

Look at the table. If the reserve ration is 25% deposits are of $20,000

$80,000

If reserve ratio is 10 percent, the money multiplier is

10

The rate is 70% population 150 million Suppose the labor force participation rate is 70%. The labor force is equal to Total Pop 200 Million Pop 16 and Older 150 Million Employed 97 Million

105 million

43. If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its unemployment rate is:

30 million/ 150 million = 10%

Use figure 1 ... Saving are going to be

4 percent

Assume that the marginal propensity to consume is 0.8 and potential output is $800 billion. The government spending multiplier is

5

If GDP doubles in 12 years, it's average annual growth rate is approximately:

6%

The rule of 70 states that the variable's approximate doubling time equals:

70 divided by the growth rate

Imagine that someone offers you $100 today or $200 in 10 years. You will prefer to take the $100 today if the interest rate is

8%

Lemonade and cookies graph I the price of lemonade is $1 per cup, the total quantity of lemonade supplied will be:

90 cups

Investment spending in macroeconomics refers to

Adding to physical capital

Financial market provides a mean for

All correct

GDP is defined as

All of the above

When conducting an open market purchase the fed. ___

Buys government bonds, and in so doing increases the money supply

Use graph If the economy is at equilibrium the government should use ___ in order to return to equilibrium (Figure: Short-Run Equilibrium) If the economy is at equilibrium at Y1 and P1, the government should use ____ fiscal policy to shift the aggregate demand curve the ____

Contractionary, left

A reduction in government transfer ___, therefore shifting the aggregate demand curve to the ___

Decrease disposable income and consumption, left

Suppose the economy is experiencing an inflationary gap. To move equilibrium aggregate output closer to the level of potential output, the best fiscal policy option is to

Decrease government purchases

Suppose the economy is experiencing a recessionary gap. To move equilibrium aggregate output closer to the level of potential output, the best fiscal policy option is to _____

Decrease taxes

Suppose a stock market crash makes people feel poorer. The decrease in wealth would cause people to desire___

Decreased consumption, which shifts the aggregate-demand curve left

Contractionary fiscal policy includes:

Decreasing government expenditures

Look at the table balance. If the reserve ration is 25% loans are

Deposit is 20 thousand / 25% = 80 thousand and the loan would be 60

The total income of households after taxes and government transfers is called:

Disposable income

GDP is equal to

Everything

Which of the following is a function of money?

Everything

Use graph If the economy is at the equilibrium at D1 the government should use what kind of policy. (Figure: Short- and Long-Run Equilibrium) If the economy is at equilibrium at E1, the government should use __________ fiscal policy to shift the aggregate demand curve to the ________

Expansionary, right

When the money supply increase. Interested rates __ and aggregate demand __

Fall, Shifts right

An increase in the interest rate causes investment to ___ and aggregate demand __

Fall, decreases

A recession can be fixed by ____ wages that shift the ___

Falling, SRAS curve rightward

The agency responsible for regulating the money supply in the U.S. is ___

Federal Reserve

Anna recently moved to Boston, as her husband, Joe, has a new job as an economics professor at Harvard. Anna is an experienced surgeon who is interviewing with several hospitals in Boston. Anna is:

Frictionally unemployed

Jackie, a Canadian citizen, works only in the United States. The value of the output she produces is

Included in US GDP, but it is not included in US GNP

If the central bank in some country lowered the reserve requirement, then the money multiplier for that country would

Increase

Using the same figure, if the economy is at the same point and we want to use contractionary fiscal policy. What is appropriate fiscal policy that will return to (Figure: Short-Run Equilibrium) If the economy is at equilibrium at Y1 and P1, the appropriate policy to return the economy to potential output would be a(n):

Increase in taxes

Which of the following is an expansionary fiscal policy?

Increase in unemployment benefits

Which of the following is not a tool for the Fed in increasing money policy?

Increase the government budget deficit

Assume you are doing expansionary. What is the best policy to do using the fiscal policy?

Increase transfer payments

Suppose the marginal propensity to consume is 0.8 and the government cuts taxes by $40 billion. Real GDP will ___ by ___

Increase, $160 billion

23. Assume that the marginal propensity to consume is 0.8 and the potential output is $800 billion. If the actual GDP is $700 billion, ___ government spending by ___ would bring the economy to potential output.

Increase, $20 billion

Peanut butte graph Look at the table Peanut Butter and Jelly Economy. From 2010 to 2011 real GDP ___ by ___

Increased; 12.5%

Stagflation is a combination of ____ unemployment and ___ inflation.

Increasing, increasing

Potential output

Is the level of output that the economy would produce if all prices, including nominal wages, were fully flexible

One of the shortcomings of fiscal policy is that

It has less time lags and sometimes it may end up destabilizing the economy as a result of these lag

Suppose that 8 million people in the US were seeking for jobs and unable to find job. And .. What will happen the official unemployment this month when nothing changes

It will fall because 2 million people are not in workforce anymore

A bank makes a loan for one year. The nominal annual interest rate is 7.5%. The real rate is 4%. Over the course of the year, overall prices increase by 4%. This rate of inflation hurt the _____ because the actual rate of inflation was _____ than the anticipated rate

Lender, higher

Suppose that Jim just got a $20,000 loan from credit union bank to buy a new car. The loan is a ___ for Jim and a ___ for the credit union

Liability, financial asset

To be classified as unemployed a person must

Not be working and actively looking for a job in the last four weeks

Investment spending is spending on:

Productive physical capital

The fed can increase money supply by conducting open market _____.

Purchases or lowering the discount rate

If there is an expansion, nominal wages ___, and the __ curve shifts __ until the economy reaches long-run equilibrium

Rise, SRAS, left

In the long run, as the economy returns to equilibrium, an increase in aggregate demand will trigger a change in the SRAS and that will cause the price level to ___ and potential output ___

Rise, remain stable

Which of the following is a government transfer?

Social security payments to retired auto workers

National savings is the sum of private saving and

The budget balance

Discouraged workers are

The ones that have given up on looking for a job

A worker classified as frictionally unemployed is one who is:

Unemployed and looking for a job that demands his or her skills

Which of the following best illustrates the medium of exchange function of money?

You pay for your oil change using currency

A key statistic to measure economic growth is

real GDP per capita

The current service of the fed is ___

yelp