Practice Test - Final Exam

If a nation's real GDP is growing by 5 percent per year, its real GDP will double in approximately

14

Answer the question using the accompanying opportunity-cost ratios for two products, fish (F) and chicken (C), in countries Singsong and Harmony. Assume that production occurs under conditions of constant costs and that these are the only two nations in the world.Singsong: 1C ≡ 5FHarmony: 6C ≡ 3F In Harmony the domestic opportunity cost of each fish

2 chickens (6/3=2)

the level; of aggregate expenditures in a mixed open economy consists of

Ca + Ig + Xn + G

The domestic opportunity cost of producing 100 pairs of shoes in Germany is 40 bottles of wine. In France, the domestic opportunity cost of producing 100 pairs of shoes is 50 bottles of wine. In this case,

Germany has the comparative advantage in shoes.

If the equilibrium level of GDP in a private open economy is $1,000 billion and consumption is $700 billion at that level of GDP, then

Ig + Xn must equal $300 billion

Which of the following would most likely shift the aggregate demand curve to the right?

an increase in stock prices that increases consumer wealth

Which one of the following would increase per-unit production cost and therefore shift the aggregate supply curve to the left?

an increase in the price of imported resources

As disposable income increases, consumption...

and saving both increase

which of the following is a land intensive good

beef

The immediate-short-run aggregate supply curve represents circumstances where

both input and output prices are fixed

reoccurring increases and decreases in an economy's real GDP over periods of years are called

business cycles

Which of the following is an example of a capital-intensive good?

computers

Which of the following is a tool of monetary policy?

creating new money to pay for bond purchases

Economic growth is best defined as an increase in

either real GDP or real GDP per capita.

Suppose the domestic price (no-international-trade price) of cotton is $0.87 per pound in the United States while the world price is $0.98 per pound. Assuming no transportation costs, the United States will

export cotton

Prices for airline tickets change hourly. This would suggest that airline ticket prices are

extremely flexible.

Assume that Kyle is temporarily unemployed because he has voluntarily quit his job with company A and to begin a better job in two weeks with company B. Kyle will be considered

frictionally unemployment and structurally

If the MPS in an economy is 0.25, government could shift the aggregate demand curve rightward by $60 billion by

increasing government spending by 15 billionin

If the MPC in an economy is 0.80, government could shift the aggregate demand curve leftward by $48 billion by

increasing taxes by $12 billion.

Alex works in his own home as a homemaker and full-time caretaker of his children. Officially, he is

not in the labor force

demand pull inflation

occurs when total spending exceeds the economy's ability to provide output at the existing price level.

Which of the following would most likely shift the aggregate demand curve to the right?

people expect their future real incomes will rise

If a nation's real GDP increases from $100 billion to $120 billion and its population jumps from 200 million to 240 million, its real GDP per capita will

remain constant

Graphically, demand-pull inflation is shown as a

rightward shift of the AD curve along an upsloping AS curve.

The accompanying tables give production possibilities data for Gamma and Sigma. All data are in tons.Gamma's production possibilities A B C D E Tea 120 90 60 30 0 Pots 0 30 60 90 120 Sigma's production possibilities A B C D E Tea 40 30 20 10 0 Pots 0 30 60 90 120 On the basis of this information, within its borders,

sigma can exchange 1 tea for 3 tea pots

Macroeconomics approaches the study of economics from the viewpoint of

the entire economy

The MPC for an economy is

the slope of the consumption schedule or line.

which of the following is an example of economic investment?

Ethan buys a $5000 worth of bitcoin

examples of products with output prices that are typically fixed in the immediate short-run include

Both gas and appliances