Macro Final

Susan reported that 3 weeks ago she applied for jobs at a bank and at a mortgage lending company. She currently is waiting to hear back from both businesses. Susan is considered to be ________.

Unemployed

The value (in dollars) of Bitcoin fluctuated dramatically in 2017. For people trying to quote the prices of goods and services, this has diminished its function as a

Unit of Account

The Okun's Law states that when the real GDP growth is decreasing, unemployment goes __

Up

Which one of the following is closest to be considered as a normative question?

What is the optimal level of inequality?

In this economy, there are households, banks, firms, and government. If the government's revenue is $20M and it spends $40M, the government has _______ at _________. (refer to image 16)

budget deficit; $20M

In this economy, there are households, banks, firms, and government. If the government's revenue is $60M and it spends $50M, the government has _______ at _________. (refer to image 16)

budget surplus; $10M

According to the balance of payments, suppose that at the beginning, the US and France both start every account from zero. If France can export more wine to the US at $100M, France can balance this act by _________.

buying bonds from the US banks by $100M

Which scenario can most likely occur after a shortage of goods that can bring the market back to equilibrium?

consumers choose to bid up the price

According to the U3 and U6 data, unemployment rates are ____________.

countercyclical

Nominal GDP measures the value of all goods and services

current dollars

If labor productivity has risen faster than real wage in Mauritius in the past two decades, we can conclude that their labor share of income has ________.

decreased

According to the balance of payments, suppose that at the beginning, the US and France both start every account from zero. If France can export more wine to the US at $100M, the US's current account ______.

decreases by $100M

If Poland in 2016 had trade deficit at $3 billion and the private savings was in deficit at $2 billion, we know that the government budget was in ________ at $____ billion.

deficit; 1

In 2014, when the Spanish economy's total taxes were $2 billion and national government spending was $3 billion, the Spanish government budget was in ________ by $________billion.

deficit; 1

If Canada in 2018 had current account deficit at $2 trillion and the private net savings was in surplus at $1 trillion, we know that the government budget was in____________ at $_______ trillion.

deficit; 3

Gross Domestic Product equals $1.2 trillion. If consumption equals $690 billion, investment equals $200 billion, and government spending equals $260 billion, then:

exports exceed imports by $50 billion.

Deposits and withdrawal are examples of ________.

flows

In 2016, the German GDP was $8 trillion. If consumption and investment spending were the same as last year (see the previous question) and trade surplus decreased by $1 trillion from the previous year, we can imply that ____________in 2016.

government spending increased by $1 trillion

Consumption is the purchase of goods and services by:

households

Which one is NOT a main issue in microeconomics?

inflation

The annualized growth rate should not be applied when the economy ____________ because you may see the overstated negative growth level.

is hit by the economic recession.

From the two questions above, we can conclude that South Korea has been the net ________ to the world.

lender

According to the scatterplot below, we can predict that if the annual population growth is at 0.04%, the life expectancy should be _______ 60 years. (refer to image 7)

lower than

If the GDP deflator is greater than 100, then

nominal GDP is greater than real GDP

Katherine has been thinking about looking for work in the past four weeks, but there was no specific effort she has made. Katherine is counted as _________.

not in the labor force

Inflation is an increase in

overall price level

What is an example of negative externality?

pollution

According to the textbook, which one is NOT considered as an economic institution?

prices

According to the CPI and GDP Deflator data, we know that inflation is _________

procyclical

Which scenario can most likely occur after a surplus of goods that can bring the market back to equilibrium?

producers start to decrease the price

Which one is the example of a stock variable?

savings

In the above figure, if the price is $4 then there is a (refer to image 13)

shortage of 200

According to the scatterplot below, we can predict that the shorter of fathers, the _______ of sons. (refer to image 6)

shorter

In the above figure, if the price is $8 then there is a (refer to image 12)

surplus of 200

If South Korea in 2019 had trade surplus at $10 billion and the government budget was in deficit at $3 billion, we know that the net private savings were in _______ at $_____billion.

surplus; 13

If South Korea in 2016 had trade surplus at $5 billion and the government budget was in surplus at $1 billion, we know that the net private savings were in _______ at $_____billion.

surplus; 4

The flow of funds accounts are collected and maintained by _______.

the Federal Reserve system

Investment (I) includes:

the amount spent on new factories and machinery.

A demand curve shows ...

the quantities that buyers are willing to purchase at different prices.

A supply curve represents...

the quantities that sellers are willing to sell at various prices.

A market is said to be in equilibrium when ...

the quantity demanded equals the quantity supplied.

A shortage occurs when .....

the quantity demanded exceeds the quantity supplied.

A surplus occurs when ...

the quantity supplied exceeds the quantity demanded.

Diane lost her job and immediately started looking for another job. As a result the

unemployment rate increases

Discouraged workers are people ...

who want employment but have given up looking for a job.

What is the linear function standard form of this example? (refer to image 5)

y=9x

Which economic policy will NOT stimulate macroeconomic (income) growth?

Increase interest rates

Which economic policy will stimulate macroeconomic (income) growth?

Increased government spending

According to the traditional (mainstream) view of money, a central bank can reduce the amount of money supply by ________.

Increasing the reserve requirement ratio

The table below shows the relationship between hours worked and the wage received. What is the rate of change of the wage (in dollars per hour) when working from 1 to 2 hours? (refer to image 9)

$9 dollars per hour

Between 2015 and 2016, if your nominal wages decreased by 2% and deflation was 1%, this implies that your real wages changed by _____%.

-1

From the picture below, what is the slope of this linear function? (refer to image 11)

-1

If the US nominal GDP growth was 5% and inflation was 6%, the real GDP growth equals __________%

-1

If the US real GDP growth is 2% and the nominal GDP growth is 1%, inflation is ________%.

-1

The value for net exports in billions of dollars is (Refer to image 17)

-150

From the picture below, what is the Y-axis intercept of this linear function? (refer to image 10)

-2

If the real GDP growth last year was 2% and population increased 4%, the real GDP per capita changed by __%

-2

If the real GDP per capita growth last year was 1% and the real GDP decreased 1%, we can know that population changed by __%

-2

A linear function is given as 4X + 3Y = -9. Please rearrange it into a standard form. What is a Y-axis intercept?

-3

Between 2016-2017, the US economy experienced 2% employment growth and -1% real GDP growth. It implies that labor productivity growth was __________%.

-3

A linear function is given as 4X + 3Y = -9. Please rearrange it into a standard form. What is the slope of this linear function?

-4/3

Suppose there is a linear function. A line runs through two points: (1, 0) and (0, -5). When writing down a standard form of a linear function, what is the Y-axis intercept of this function?

-5

In 2015, Argentina's GDP was $600 billion. In 2016, Argentina's GDP was $550 billion. What was the GDP growth rate between 2015-2016?

-8.33%

advantage of GDP?

-GDP helps policymakers to design the good policy package. -GDP helps us to understand better what happened during the 1930s Great Depression. -GDP allows us to compare the health of economy between countries.

shortcoming of GDP?

-GDP includes some 'bad' economic activities such as deforestation. -GDP cannot capture a change in a quality of the product. -GDP recognizes the underground economy.

According to the balance of payments, suppose that at the beginning, the US and France both start every account from zero. If France can export more wine to the US at $100M, the US can balance this act by _________.

-decreasing imports from France by $100M -increasing exports to France by $100M

In Vietnam, if wage share equals to 0.65, we know that the profit share equals ________.

.35

In 2012, M2 is around _________of US GDP.

.5

In 2017, Mexico's labor productivity growth was 2%. If employment growth was -2%, we know that their real GDP growth must equal to ________%.

0

What is the Y-intercept of this function? (refer to image 4)

0

From Table 6.1 in the textbook, which country has the weakest link between economic growth and job creation?

Italy

Which economist has a biggest influence on the beginning of macroeconomics study?

John Maynard Keynes

Which one of the following forms of money is not included in M1?

Savings Accounts

According to the alternative view of money, money is created at the ________ and it's highly correlated with _________.

Sphere of production; debt

Which one of the following forms of money is not included in M2?

Stock Shares

cause of falling labor income share?

Superstar firms declining labor protection The adoption of more machines in factories

Which of the following is an example of a final good or service?

a computer purchased by Federal Express to track shipments

Between 2016 and 2017, if your real wages decreased by 2% and inflation was 3%, this implies that your nominal wages changed by _____%.

1

In Canada during 2013-2014, the researchers found that the real GDP per capita growth was 3%, the population growth was 1%, the nominal GDP growth was 5%, and the nominal wage growth was 3%. What was the inflation rate in Canada during 2013-2014?

1%

Suppose that the Okun's Law for Mexico between 1960-2019. We find the equation that GDP growth = -1.5(change in u) + 3 Change in u = -0.67(GDP growth - 3) If the government wants to decrease unemployment rate by 2%, how much of GDP growth that the Mexican government needs to find ways to achieve?

6%

We found that the values of Italian GDP components (in billion of dollars) are the following. What should be the value of Imports? (refer to image 19)

7

The GDP deflator in year 2 is 110 and the GDP deflator in year 3 is 118. The rate of inflation between years 2 and 3 is

7.27%

If the labor force is 320,000 and the total population 16 years of age or older is 400,000, the labor-force participation rate is

80%

Tom's salary this year increases by 5%. However, we found that inflation this year is 6%. Therefore, Tom's real salary __________ by ______%.

Decrease by 1

Which economic policy will NOT help the labor market, workers, or employment in the economy?

Decrease export production

For economists, money is .....

a medium of exchange a store of value a unit of account

According to the traditional (mainstream) view of money, ____________.

Deposits create loans

Sam has been applying for jobs in the past few weeks. Last week she drove for Uber for two hours and received $35. Sam is considered as ________.

Employed

Refer to Table below. Labor Force Participation rate: 75% Total population 16 years or older: 200 million Unemployment rate: 10% The labor force:

Equals 150 million people

Which one is the example of a flow variable?

GDP

Which one is NOT an example of unexpected shocks on macroeconomy?

Tax decrease

Commercial banks make profit by setting interest rates for loans ____ interest rates for deposits.

Higher than

Trade deficit means

Imports higher than exports

The commercial banks are directly monitored by __________.

The federal reserve system

According to the traditional (mainstream) view of money, banks can lend less when _________.

The reserve ratio is large (i.e. to be considered official by federal bank you have to have large reserve)

According to the traditional (mainstream) view of money, banks can lend more when _________.

The reserve ratio is small

How is the value-added approach to measuring GDP calculated?

The sum of the cost of raw materials and how much market value is added at each stage of production

Okun's Law posits a relationship between which two variables?

The unemployment rate and real GDP

Which one of the following is NOT included in the M2 measure of money?

The value of credit card balances

According to the traditional (mainstream) view of money, money is created ____________.

To grease the wheels of commerce

In 2015, Argentina's GDP was $600 billion. If its population size was 40 million. Argentina's GDP per capita equals to $__________.

15000

If the US real GDP growth is 1% and inflation is 4%, the nominal GDP growth is ________%.

5

If the accounting identity has 6 variables, we can know the value of the unknown variable if we know the values of ___________ variables.

5

If the real GDP per capita growth was 3% and total population growth was 2%, we can imply that the real GDP growth was _______%.

5

Suppose there is a linear function. A line runs through two points: (1, 0) and (0, -5). When writing down a standard form of a linear function, what is the slope of this function?

5

The table below shows the relationship between hours worked and the wage received. What is the percentage change of hours when the time increases from 2 hours to 3 hours? (refer to image 8)

50%

Looking at the balance sheet of Stephanie, her assets equal $15000 and her liability equals $10000. This implies that her net worth equals $_________.

5000

Two years ago the state of Vermont GDP was $3 billion and the state employed 60,000 people, Vermont's labor productivity equals $___________.

50000

According to the Fisher equation, when I borrow from Well Fargo in which I pay 7% annual interest rate, the real interest rate is _______% when inflation this year is 1%.

6%

The correct formula to calculate GDP based on its spending components is:

Consumption + Investment + Government Spending + Exports - Imports

The Okun's Law implies that the unemployment rate is _____________.

Countercyclical

A company produced 5 dishwasher machines in 2010. The company sold 6 in 2010 (by selling 1 dishwasher machine from their inventory from last year.) The market value of the dishwasher machines in 2010 was $100 per unit. What is the value of this company's output that will be included in the 2010 GDP?

500

Suppose the U.S. Bureau of Labor Statistics classifies 135 million people as employed and the unemployment rate is 10%. How many people are in the labor force in this example?

150 million

The value of government spending in billions of dollars is (refer to image 17)

1000

Suppose GDP per capita of Chile increased by 4% between 2012-2013 and the GDP per capita number equals to 12,000 in 2013. What is the GDP per capita in Chile in 2012?

11538.46

If nominal GDP in 2001 is $18 trillion and real GDP is $15 trillion, the GDP deflator in 2001 is

120

If your monthly salary in 2018 was $1800 and the CPI (base year is 2010) was 150, your real salary (in terms of 2010 dollars) equals to $__________.

1200

Refer to Table below. Labor Force Participation rate: 75% Total population 16 years or older: 200 million Unemployment rate: 10% The total number of people employed is:

135 million people

Personal consumption expenditures in billions of dollars are (Refer to image 17)

1400

Refer to Table below. Labor Force Participation rate: 75% Total population 16 years or older: 200 million Unemployment rate: 10% The total number of people unemployed is

15 million people

A company produced 8 dishwasher machines in 2010. The company sold 6 in 2010 and added 2 to its inventories. The market value of the dishwasher machines in 2010 was $200 per unit. What is the value of this company's output that will be included in the 2010 GDP?

1600

In 2012, M1 is already made up around _______% of M2.

17%

According to the Rule of 72, how many years does it take for a country to double its size if it grows at 4% per year?

18

Between 2010-2011, we found that real wage growth was 2% while nominal wage growth was 4%, we can imply that the inflation rate was ________%.

2

In 2014, when the Spanish economy's private saving was $4 billion and national gross investment was $2 billion, the Spanish economy's net private saving was $________billion.

2

In this economy where there are households, banks, and firms, when households' income equals to $6M and they spend $4 as consumption, households' savings equal to $____M. (refer to image 15)

2

In this economy where there are only households and firms, the total money spent on all production equals to $15M. If the business needs to split their income to employees, landlords, and their profit. Suppose that the business received profit $6M and rents paid to landlords equal to $7M, employees' wages equal to $_____M. (refer to image 14)

2

In Canada during 2013-2014, the researchers found that the real GDP per capita growth was 3%, the population growth was 1%, the nominal GDP growth was 5%, and the nominal wage growth was 3%. What was the real wage growth in Canada during 2013-2014?

2%

If the Chinese Nominal GDP in 1980 is $4 billion and the deflator (the base year is 2000) is 20. The real Chinese GDP equals to $___________ billion.

20

If nominal GDP in 2001 is $18 trillion and real GDP is $15 trillion. Suppose we use 2000 as the base year, what is the inflation rate between 2000 and 2001?

20%

Between 2000-2002, GDP per capita of Spain grew at 2% per year. If GDP per capita equals to $25,000 in 2000, GDP per capita in Spain equals to $................... in 2002.

26010

In 2015, the German GDP was $8 trillion, consumption spending was $2 trillion, final government spending was $1 trillion, investment was $3 trillion and imports were $1 trillion. The trade balance of Germany in 2015 was $_______ trillion _________.

2; surplus

If the accounting identity has 4 variables, we can know the value of the unknown variable if we know the values of ___________ variables.

3

In 2015, the German GDP was $8 trillion, consumption spending was $2 trillion, final government spending was $1 trillion, investment was $3 trillion and imports were $1 trillion. The value of German exports in 2015 was $_______trillion.

3

In this economy where there are only households and firms, the total money spent on all production equals to $10M. If the business needs to split their income to employees, landlords, and their profit. Suppose that wages paid to employees equal to $4M and rents paid to landlords equal to $3M, the business receives profit equals to $_____M. (Refer to image 14)

3

In 2018, if Singapore's employment growth was 3% and real GDP growth was 6%, we can imply that its labor productivity growth equals __________.

3%

Suppose that the Okun's Law for Mexico between 1960-2019. We find the equation that GDP growth = -1.5(change in u) + 3 Change in u = -0.67(GDP growth - 3) what is the GDP growth rate that can make the unemployment rate stable in Mexico?

3%

In this economy where there are only households and firms, if the total money spent on goods equals to $500, the total income equals to $_______. (refer to image 14)

500

If the number of people classified as unemployed is 20,000 and the number of people classified as employed is 620,000, what is the unemployment rate?

3.1%

Looking at the balance sheet of Jack, his liabilities equal $25000 and his net worth equals $5000. This implies that his assets equal $_________.

30000

The value for gross domestic product in billions of dollars is (refer to image 17)

3140

According to the Rule of 72, how many years does it take for a country to double its size if it grows at 2% per year?

36

Between 2016-2017, the US economy experienced 1% decrease in labor productivity and 3% increase in real GDP. It implies that employment growth was __________%.

4

The Italian economy in 2005 had the GDP components as the following. What should be the value of their imports (in billions of dollars) ?

4

We found that the values of Mexican GDP components (in billion) are the following. What should be the value of consumption in billion of dollars? (Refer to image 18)

4

In Canada during 2013-2014, the researchers found that the real GDP per capita growth was 3%, the population growth was 1%, the nominal GDP growth was 5%, and the nominal wage growth was 3%. What was the real GDP growth in Canada during 2013-2014?

4%

If the Chinese Nominal GDP in 2007 is $60 billion and the deflator (the base year is 2000) is 150. The real Chinese GDP equals to $__________ billion.

40

Suppose the the total income can be separated into the income for labor and the income for capital. In 2007, we know that the U.S. labor income share was 55%, it can imply that the U.S. capital income share was _%

45

The value for gross private domestic investment in billions of dollars is (Refer to image 17)

890

What are the rate of change of total cost (in $ per shirt) between the 1st & 2nd shirt? (refer to image 3)

9

How is a negative output gap related to the business cycle?

A negative output gap usually means the economy is in a recession

According to the alternative view of money, the decision to produce or invest for businesses highly depends on their expectations of __________.

Aggregate demand

Which one is the example of macro-uncertainty, according to the alternative view of money?

Average US GDP this year

When Jill received new mortgage of $100,000 from Bank of America to to buy a new apartment, according to the alternative view of money, new money is created by _______ through ________.

Bank of America ; new deposits (checking account)

According to the alternative view of money and the balance sheet analysis, when banks create new loans, it affects ____________'s balance sheet.

Banks and consumers

If labor productivity has risen at the same rate as real wage in England in the past two decades, we can conclude that their labor share of income has ________.

Been constant

From Table 6.1 in the textbook, which country has the weakest strongest link between economic growth and job creation?

Belgium

Which one is the example of micro-uncertainty, according to the alternative view of money?

Business Owner's past experience

Which one of the following is the most liquid type of asset?

Cash

According to the alternative theory of money, __________ is one of the main creators of economic crisis.

Commercial Bank

When Jack buys his new laptop paid by the antique silverware from his grandmother, the silverware he uses as money is considered as ____________.

Commodity Money

Which one of the following is not included in M2?

Large Certificate of deposits

When money is used for private or public debt settlements, we can say that money performs the role as a ______________.

Means of Payment

Bitcoin transactions often involve "middlemen" and transaction fees for people buying goods and services. This has diminished its function as a

Medium of exchange

The Federal Reserve directly controls the ________.

Monetary Policy

Which one of the following is closest to be considered as a positive statement?

Most economists believe the unemployment rate will increase next year.

The Bureau of Labor Statistics treat discouraged workers as ...

Not part of the labor force

Income of Mexican citizens earn in the U.S. counts in

U.S GDP

If the output gap of a certain year equals zero, it means that _______.

actual GDP = potential GDP

In this economy where there are households, banks, and firms, when households' income equals to $10M and they spend $12M as consumption, households need to _______. (refer to image 15)

borrow $2M from banks

In 2016, from the information in the previous question, Poland was a net ________ to the rest of the world.

borrower

Real GDP is gross domestic product measured

in the prices of a base year

According to the balance of payments, suppose that at the beginning, the US and France both start every account from zero. If France can export more wine to the US at $100M and then France does nothing, their reserve account will ________.

increase by $100M