ECON 202 FINAL
A central bank can help stop a bank panic by: a.) raising the required reserve ratio b.) calling in consumer loans. c.) acting as a lender of last resort. d.) decreasing income taxes
c
A major source of inefficiency in barter economies is that they require: A. a standard of deferred payment to make trade possible. B. a double coincidence of wants in exchange C. more Liquid stores of value than monetary economies D. all of the above are correct
b
A major source of inefficiency in barter economies is that they require: a.) a standard of deferred payment to make trade possible. b.) a double coincidence of wants in exchange c.) more liquid stores of value than do monetary economies. d.) All of the above are correct.
b
Assume tuition and fees at North Carolina State University cost $4,259 in 2004 and $7,787 in 2012. If the price index was 184 in 2004 and 226 in 2012, then we could say: a.) tuition has increased more slowly than inflation. b.) tuition has increased more rapidly than inflation c.) tuition has increased at about the same rate as inflation. d.) nominal tuition has decreased
b
Automatic stabilizers refer to: a.) the money supply and interest rates that automatically increase or decrease along with the business cycle. b.) government spending and taxes that automatically increase or decrease along with the business cycle. c.) changes in the money supply and interest rates that are intended to achieve macroeconomic policy objectives. d.) changes in federal taxes and purchases that are intended to achieve macroeconomic policy objectives
b
By making exchange ________, money allows for ________ and higher ________. A) harder; specialization; costs B) easier; specialization; productivity C) harder; generalization; productivity D) easier; specialization; costs
b
Due to ____________, government outlays have risen quickly since 2000. a.) less tax revenue b.) an aging population c.) increased government borrowing d.) economic expansion
b
Fiat money is generally issued by: A) private banks. B) central banks. C) brokerage firms. D) major multinational corporations.
b
GDP is best defined as the total market value of all: a.) goods and services produced within a country within a given time b.) final goods and services produced within a country within a given time c.) services produced within a country within a given time d.) goods produced within a country within a given time
b
GDP is not a perfect measure of well-being because: A) the value of leisure is included in GDP. B) GDP is not adjusted for pollution. C) GDP is adjusted for changes in crime rates. D) GDP is adjusted for increases in drug addiction
b
A bank is legally required to hold a fraction of its ________ as ________. a.) deposits; required reserves b.) deposits; excess reserves c.) loans; excess reserves d.) loans; required reserves
a
All of the following are assumptions made by the dynamic model of aggregate demand andaggregate supply EXCEPT: a.) aggregate demand and potential real GDP decrease continuously. b.) the aggregate demand curve shifts to the right during most periods. c.) potential real GDP increases continuously. d.) the short-run aggregate supply curve shifts to the right except during periods whenworkers and firms expect higher wages.
a
An example of an intermediate good would be: a.) sheet metal purchased by Ford Motor Company b.) an airplane purchased by the government c.) a new stove purchased by a restaurant d.) Social Security payments made by the government
a
An increase in government purchases will increase aggregate demand because: a.) government expenditures are a component of aggregate demand. b.) consumption expenditures are a component of aggregate demand. c.) the decline in the price level will increase demand. d.) the decline in the interest rate will increase demand.
a
An increase in public saving has what impact on the market for loanable funds? A) The supply of loanable funds increases. B) The demand for loanable funds increases. C) The supply of loanable funds decreases. D) The demand for loanable funds decreases.
a
By the 2000s, an important market change occurred when investment banks became significant participants in the secondary market for: A. mortgages. B. Treasury securities. C. corporate bonds. D. currency.
a
By the 2000s, an important market change occurred when investment banks became significant participants in the secondary market for: a.) mortgages. b.) Treasury securities. c.) corporate bonds. d.) currency
a
Consumption spending refers to ________ spending on goods and services. A) household B) business C) government D) foreign
a
During the expansion phase of the business cycle: A) production increases. B) employment decreases. C) income decreases. D) unemployment increases.
a
Economists refer to the series of induced increases in consumption spending that result from an initial increase in autonomous expenditures as the ________ effect. a.) multiplier b.) expenditure c.) consumption d.) aggregate demand
a
Expansionary monetary policy to prevent real GDP from falling below potential real GDP would cause the inflation rate to be ________ and real GDP to be ________. A) higher; higher B) higher; lower C) lower; higher D) lower; lower
a
If aggregate expenditure is above the 45% line the economy is: a.) expanding b.) contracting c.) imploding d.) no change
a
If firms are more pessimistic and believe that future profits will fall and remain weak for the next few years, then: A) investment spending will fall. B) investment spending will rise. C) investment spending will remain unaffected. D) investment spending will rise and then fall
a
If the Fed buys Treasury bills, this will shift the a.) money supply curve to the right. b.) money supply curve to the left. c.) money demand curve to the right. d.) money demand curve to the left
a
If the Fed buys Treasury bills, this will shift the: A) money supply curve to the right. B) money supply curve to the left. C) money demand curve to the right. D) money demand curve to the left.
a
If the tax multiplier is 1.5 and a $200 billion tax increase is implemented, what is the change in GDP, holding everything else constant? (Assume the price level stays constant.) a.) a $300 billion decrease in GDP b.) a $300 billion increase in GDP c.) a $30 billion increase in GDP d.) a $133.33 billion decrease in GDP
a
If, during a deposit expansion, not all money gets redeposited into the banking system and some leaks out as currency, then the real world multiplier is: A) smaller than 1/RR. B) larger than 1/RR. C) equal to 1/RR. D) not related to 1/RR.
a
Labor productivity will increase if the ________ increases and ________. A) quantity of capital per hour worked; technology improves B) quantity of labor per unit of capital; technology improves C) quantity of capital per hour worked; immigration increases while capital is fixed D) quantity of labor per unit of capital; immigration increases while capital is fixed
a
Macroeconomic equilibrium occurs when: A) aggregate expenditure = GDP. B) aggregate expenditure = C+ I + G + net transfers. C) aggregate income = planned inventories. D) aggregate expenditure = planned inventories.
a
Monetary policy could be pro-cyclical if the Federal Reserve: A. is late recognizing that a recession has begun and conducts expansionary monetary policy. B. is quick to recognize that a recession has begun and conducts expansionary monetary policy. C. is late recognizing that a recession has begun and does not conduct expansionary monetary policy. D. is quick to recognize that a recession has begun and does not conduct expansionary monetary policy.
a
Monetary policy could be procyclical if the Federal Reserve: a.) is late recognizing that a recession has begun and conducts expansionary monetary policy. b.) is quick to recognize that a recession has begun and conducts expansionary monetary policy. c.) is late recognizing that a recession has begun and does not conduct expansionary monetary policy. d.) is quick to recognize that a recession has begun and does not conduct expansionary monetary policy.
a
Money is: a.) an asset that people are willing to accept in exchange for goods and services. b.) a liability that people are willing to accept in exchange for goods and services. c.) the income one earns over a period of time. d.) one's assets net of one's liabilities at any point in time.
a
Ownership shares in a firm are known as: a.) Stocks b.) Bonds c.) Mortgages d.) Treasuries
a
Short-run macroeconomic equilibrium occurs when: A) aggregate demand and short-run aggregate supply intersect. B) the equilibrium lies on the long-run aggregate supply curve. C) structural and frictional unemployment equal zero. D) A and B
a
Technology growth is generally more important than capital per person growth because: a.) there are diminishing returns to capital b.) capital is hard to measure c.) people dislike using capital d.) technology is scary
a
The Industrial Revolution: A) marked the beginning of significant economic growth in the world. B) started in France around the year 1750. C) produced goods exclusively using human or animal power. D) had no impact on standards of living in the world.
a
The bonds sold by the U.S. government to pay for the national debt are called: a.) treasury securities b.) stocks c.) mortgage-backed securities d.) shares
a
The level of real GDP in the long run is called a.) potential GDP b.) frictional GDP c.) Short-run GDP d.) relative GDP
a
The low point in the business cycle is the a.) Trough b.) Recession c.) Peak d.) Expansion
a
The size of the underground economy would tend to decrease if the government of a country A) decreased government regulations on businesses. B) increased business taxes. C) made over-the-counter drugs illegal. D) increased income tax rates.
a
The term ___________ is a popular way to describethe recession-expansion pattern followed by the economy. a.) business cycle b.) inflation cycle c.) unemployment cycle d.) the kreb cycle
a
Which component of consumption spending is the greatest in America? A) services B) durable goods C) nondurable goods D) new housing
a
Which of the following is not one of the three sources of technological change? A) additional amounts of existing capital B) better machinery and equipment C) increases in human capital D) better means of organizing and managing production
a
Which of the following would contribute to a sustained high rate of economic growth in the long run in an economy? A) growth in capital per hour accompanied by technological change B) increases in labor force participation rates as workers who are out of the labor force pursue rising wages C) a shift of workers in the economy from the agricultural sector to the nonagricultural sector D) an influx of immigrant labor into an economy without any accompanying technological change
a
________ of unemployment during ________ make it easier for workers to ________ wages. A) High levels; a recession; accept lower B) Low levels; an expansion; accept lower C) Low levels; a recession; negotiate higher D) High levels; an expansion; negotiate higher
a
____________ is an example of human capital. a.) knowing calculus b.) a tractor c.) a factory d.) hiring more workers
a
An increase in the real interest rate does which of the following? A) reduces the demand for loanable funds B) reduces saving C) reduces consumption spending D) increases the demand for loanable funds
a and c
Gross domestic product in the economy is measured by the: A) total number of goods and services produced in the economy. B) dollar value of all final goods and services produced in the economy. C) total number of goods produced in the economy. D) total number of services produced in the economy.
b
If nominal income increases, then: a. real income increases. b. real income increases if the price index falls. c. real income increases if the percent increase in price index rises by more the percent change in nominal income. d. real income increases if you buy only the goods included in the consumer price index (CPI) and the majority of those goods get cheaper.
b
If planned aggregate expenditure is greater than total production: A) actual inventories will equal planned inventories. B) firms will experience an unplanned decrease in inventories. C) GDP will decrease. D) the economy is in equilibrium.
b
If the Fed raises its target for the federal fund rate, this indicates that: a.) the Fed is pursuing an expansionary monetary policy b.) the Fed is pursuing a contractionary monetary policy. c.) the Fed is attempting to combat deflation. d.) The Fed is concerned that the growth in aggregate demand is too slow to keep up with potential GDP.
b
If the Fed raises its target for the federal fund rate, this indicates that: A) the Fed is pursuing an expansionary monetary policy. B) the Fed is pursuing a contractionary monetary policy. C) the Fed is attempting to combat deflation. D) The Fed is concerned that the growth in aggregate demand is too slow to keep up with potential GDP.
b
If the Fed's policy is contractionary, it will: a.) use open market operations to buy Treasury bills b.) use open market operations to sell Treasury bills. c.) lower the discount rate. d.) lower the reserve requirement.
b
If the Federal Open Market Committee wants to decrease the money supply through open market operations it will: a.) buy U.S. Treasury Securities. b.) sell U.S. Treasury Securities c.) increase the discount rate. d.) decrease the discount rate.
b
If the MPC is .9 and autonomous expenditure is 100 how much will the change in Y be? a.) 750 b.) 1,000 c.) 1,000,000 d.) no change
b
If you have a savings account at a bank, you participate in the loanable funds market as: a.) a borrower b.) a lender c.) you don't participate d.) a debtor
b
In comparison to a government that runs a balanced budget, when the government runs a budget deficit: A) the equilibrium interest rate will fall. B) business investment will fall. C) household savings will fall. D) none of the above
b
Lowering the interest rate will: A) decrease spending on consumer durables. B) increase investment projects by firms. C) decrease spending on new homes. D) decrease the value of the dollar and lower net exports.
b
M1 includes: A) currency in circulation, checking account deposits in banks, and holdings of traveler's checks. B) currency in circulation, savings account balances, and checking account deposits in banks. C) currency in circulation, savings account balances, checking account deposits in banks, and holdings of traveler's checks. D) coins, savings account balances, traveler's checks.
b
Monetary policy refers to the actions the Federal Reserve takes to manage: A) the money supply and income tax rates to pursue its economic objectives. B) the money supply and interest rates to pursue its economic objectives. C) income tax rates and interest rates to pursue its economic objectives. D) government spending and income tax rates to pursue its economic objectives.
b
The Federal Reserve responded to the 2008 financial crisis in several ways. Which of the following is one of the ways the Fed responded? a.) The Fed banned investment banks from obtaining discount loans. b.) The Fed lent investment banks Treasury securities in exchange for mortgage-backed securities. c.) The Fed lowered the required reserve ratio on demand deposit accounts in order to increase the amount of bank reserves d.) The Fed helped Citibank to acquire General Motors and Chrysler.
b
The Soviet Union consistently increased the amount of capital available to its workers, but found that increases in capital resulted in progressively smaller and smaller increases in GDP per worker. This phenomenon is referred to as: A) a rising standard of living. B) diminishing returns to capital. C) new growth theory. D) a shift of the per-worker production function.
b
The ________ the reserve ratio, the ________ the money multiplier. a.) smaller; smaller b.) smaller; larger c.) larger; larger d.) None of the above are correct.
b
The buyers (or borrowers) in financial markets are: a.) financial intermediaries b.) firms and governments in search of fundsto undertake their daily operations and make investments c.) savers looking for opportunities to earn areturn on their savings d.) not concerned with the interest rate in the market.
b
The demand for business investment has increased. What happens to the supply and demand graph? a.) The interest rate will fall. b.) The demand shifts outward and the interest rate will rise. c.) Nothing changes d.) The market will be out of equilibrium
b
The portion of ________ that a bank does not loan out or spend on securities is known as ________. A) loans; reserves B) deposits; reserves C) deposits; securities D) loans; securities
b
The process of bundling financial assets together and buying and selling these bundles in a secondary financial market is called: a.) open market operations b.) securitization c.) fractional reserve lending. d.) seigniorage.
b
Which of the following would cause the short-run aggregate supply curve to shift to the left? a.) an increase in the price level b.) an increase in inflation expectations c.) a technological advance d.) a decrease in interest rates
b
________ of unemployment during ________ make it easier for workers to ________ wages a.) High levels; a recession; negotiate higher b.) Low levels; an expansion; negotiate higher c.) Low levels; a recession; accept lower d.) High levels; an expansion; accept lower
b
A central bank can help stop a bank panic by: A. raising the required reserve ratio. B. calling in consumer loans. C. acting as a lender of last resort. D. Decreasing income taxes
c
All of the following are true statements about the multiplier except: A) the multiplier rises as the MPC rises. B) the smaller the MPS, the larger the multiplier. C) the multiplier is a value between zero and one. D) the multiplier effect occurs when autonomous expenditure changes.
c
An increase in the price level ________ real wealth, which causes consumption to ________. A) raises; increase B) raises; decrease C) lowers; decrease D) lowers; increase
c
Equilibrium in the loanable funds market means: a. the interest rate at which savings equals consumption. b. the interest rate at which investment equals consumption. c. the interest rate at which investment equals savings. d. the dollar price at which investment equals savings.
c
Higher personal income taxes: A) increase aggregate demand. B) increase disposable income. C) decrease aggregate demand. D) both B and C
c
If AE is below the 45% line the economy can be said to be _______ a.) amazing b.) amazing c.) in a recession d.) in equilibrium
c
If real GDP exceeded potential real GDP and inflation was increasing, which of the following would be an appropriate fiscal policy? a.) a decrease in the money supply and an increase in the interest rate b.) an increase in government spending c.) an increase in taxes d.) an increase in oil prices
c
In financial markets, savers looking for opportunities to earn a return on their savings would be the: a.) Banks b.) financial intermediaries c.) sellers d.) buyers
c
Inflation necessarily occurs when: a.) the price of gasoline rises. b.) a greater number of goods increase in price compared to the number of goods that undergo a price decrease c). the overall price level, such as the consumer price index (CPI), rises. d.) there is an decrease in the rate of change in the price level.
c
Labor productivity is caused by? a.) magic b.) diminishing returns c.) capital per hour worked and technological progress d.) nothing
c
Liquidity is defined as: A) the ease with which a given asset can be converted to a store of value. B) the ease with which a given asset can be converted to a unit of account. C) the ease with which a given asset can be converted to a medium of exchange. D) the ease with which a given asset can be converted to a standard of deferred payment.
c
Nominal GDP increases if: a. current prices increase, while current quantities decrease. b. current quantities increase, while current prices decrease. c. current prices or current quantities increase. d. real GDP increases
c
Potential GDP is defined as: A) the maximum of GDP that the economy can produce in the short run. B) the amount of GDP produced if there is no frictional unemployment. C) the level of GDP attained when all firms are producing at long run capacity. D) the amount of GDP produced if there is no structural unemployment.
c
Stagflation occurs when: A. inflation rises and GDP rises. B. inflation falls and GDP rises. C. inflation rises and GDP falls. D. inflation falls and GDP falls
c
Stagflation occurs when: a.) inflation rises and GDP rises. b.) inflation falls and GDP rises. c.) inflation rises and GDP falls d.) inflation falls and GDP falls
c
Suppose a bank has $100 million in checking account deposits with no excess reserves and the required reserve ratio is 10 percent. If the Federal Reserve reduces the required reserve ratio to 4 percent, then the bank can make a maximum loan of: A) $0. B) $4 million. C) $6 million. D) $10 million.
c
Suppose the economy is at full employment and firms become more pessimistic about the future profitability of new investment. Which of the following will happen in the short run? A) Output will rise. B) Prices will rise. C) Unemployment will rise. D) The aggregate demand curve will shift to the right.
c
The ________ curve is vertical. A) short-run aggregate supply B) short-run aggregate demand C) long-run aggregate supply D) long-run aggregate demand
c
The federal funds rate is: A) the interest rate the Fed charges commercial banks. B) the interest rate a bank charges its best customers. C) the interest rate banks charge each other for overnight loans. D) the interest rate on a Treasury Bill
c
The federal funds rate is: a.) the interest rate the Fed charges commercial banks. b.) the interest rate a bank charges its best customers. c.) the interest rate banks charge each other for overnight loans. d.) the interest rate on a Treasury Bill.
c
The level of aggregate supply in the long run is not affected by: A. changes in the number of workers B. changes in technology. C. changes in the price level. D. changes in the capital stock.
c
The level of aggregate supply in the long run is not affected by: a.) changes in the number of workers. b.) changes in technology. c.) changes in the price level. d.) changes in the capital stock.
c
The use of fiscal policy to stabilize the economy is limited because: a.) changes in government spending and tax rates have a small effect on aggregate demand. b.) changes in government spending and tax rates have a small effect on interest rates. c.) the legislative process can be slow, which means that it is difficult to make fiscal policy actions in a timely way. d.) the Internal Revenue Service (IRS) resists changes in tax rates because of all the changes they would have to make to the tax code.
c
What is human capital? A) a slang term for the underground labor market B) manufactured goods that are used to produce other goods C) accumulated knowledge and skills acquired by a worker D) the manager or owner of a business
c
When actual unemployment is less than its natural rate: a. the economy is producing below its long-run capabilities. b. the economy is producing within its long-run capabilities. c. resources are employed at levels that are not sustainable in the long run. d. resources are employed at levels that are sustainable in the long run.
c
When the price of a financial asset ________ its interest rate will ________. A) rises; rise B) falls; fall C) falls; rise D) rises; remain the same
c
Which of the following are goals of monetary policy? a.) maximizing the value of the dollar relative to other currencies, economic growth, and high employment b.) price stability, maximizing the value of the dollar relative to other currencies, and high employment c.) price stability, economic growth, and high employment d.) price stability, economic growth, and maximizing the value of the dollar relative to other currencies
c
Which of the following is not a major function of the Federal Reserve System? A) lender of last resort B) clearing checks between banks C) setting income tax rates D) controlling the money supply
c
Which of the following is not a tool the Fed uses to manage the money supply? a.) open market operations b.) setting the discount rate. c.) expanding and contracting deposit insurance d.) setting reserve requirements for deposits in the banking system
c
Which of the following is not an argument against inflation targeting? A) Inflation targeting reduces the flexibility of the Fed to pursue other policy goals. B) Inflation targeting assumes that the Fed can accurately forecast future inflation rates. C) Inflation targeting makes monetary policy ineffective because the targets are publicly announced. D) Inflation targeting holds the Fed accountable for an inflation goal, but may make it less likely the Fed will achieve other goals.
c
Which statement best represents the purpose for measuring annual inflation (or deflation)? a. The main purpose is to find out how much the price of gasoline has increased from year to year. b. The main purpose is to find out whether more goods have increased (or decreased) in price compared to the number of goods whose price has decreased (or increased). c. The main purpose is to find out whether the overall cost of living has changed. d. The main purpose is to find out whether the economy has produced more goods this year than last year.
c
Workers and firms both expect that prices will be 3% higher next year than they are this year. As a result: A) workers will be willing to take lower wages next year. B) the purchasing power of wages will rise if wages increase by 3%. C) the short-run aggregate supply curve will shift to the left as wages increase. D) aggregate demand will increase by 3%
c
Workers laid off as a result of a recession suffer: A) frictional unemployment. B) structural unemployment. C) cyclical unemployment. D) seasonal unemployment.
c
A decrease in the price level will: A) shift the aggregate demand curve to the left. B) shift the aggregate demand curve to the right. C) move the economy up along a static aggregate demand curve. D) move the economy down along a static aggregate demand curve.
d
An economic expansion tends to cause the federal budget deficit to ________ because tax revenues ________ and government spending on transfer payments ________. a.) increase; rise; falls b.) increase; fall; rises c.) decrease; rise; falls d.) decrease; fall; rises
d
Contractionary fiscal policy to prevent real GDP from rising above potential real GDP would cause the inflation rate to be ________ and real GDP to be ________. a.) higher; higher b.) higher; lower c.) lower; higher d.) lower; lower
d
Foreign direct investment occurs when a Chinese corporation: A) purchases stock issued in China. B) opens a new Chinese factory. C) purchases 1,000 shares of stock issued by an American company. D) opens a new factory in France.
d
How do you convert a price of a good from an earlier time into today's price? a.) Take the earlier price and divide by today's price, then multiply by the ratio of the con-sumer price index (CPI) today to that of the CPI in the old year. b.) Take the earlier price and multiply by the ratio of the earlier gross domestic product (GDP) deflator to today's CPI c.) Take today's price and divide by the earlier price in terms of the GDP deflator. d.) Take the earlier price and multiply by the ratio of today's CPI to the earlier CPI.
d
If the Fed pursues expansionary monetary policy then: a.) the money supply will decrease, interest rates will rise and GDP will fall. b.) the money supply will decrease, interest rates will fall and GDP will fall. c.) the money supply will increase, interest rates will rise and GDP will rise d.) the money supply will increase, interest rates will fall and GDP will rise.
d
In the aggregate expenditure model the change in inventories is explained by: a.) the federal reserve b.) the interest rate c.) unemployment cycle d.) planned investment not equal to actual investment
d
Knowledge capital is A) rival. B) nonrival. C) nonexcludable. D) both B and C
d
Quantitative Easing and TARP are policies used by: A) the fed to manage tax rates B) European banks to manage exchange rates C) shadow banks to increase profits pre-recession D) the fed to help pull the economy out of the recession
d
Savings is: a. the demand for loanable funds and is downward sloping. b. the supply of loanable funds and is horizontal. c. the supply of loanable funds and is vertical. d. the supply of loanable funds and is upward sloping.
d
Suppose you deposit $2,000 into Bank of America and that the required reserve ratio is 10 percent. How does this affect the bank's balance sheet? a.) Reserves rise by $200 b.) Required reserves rise by $2,000. c.) Deposits rise by $1,000 d.) Excess reserves rise by $1,800.
d
The invention of the Internet has reduced __________ unemployment because it allows for workers and employers to find each other more quickly. a.) structural b.) cyclical c.) discouraged d.) frictional
d
The level of aggregate supply in the long-run is not affected by: a.) changes in technology. b.) changes in the capital stock. c.) changes in the number of workers. d.) changes in the price level.
d
The long-run aggregate supply curve shows the relationship between the ________ and________. a.) inflation rate; quantity of real GDP demanded b.) real interest rate; quantity of real GDP supplied c.) nominal interest rate; quantity of real GDP supplied d.) price level; quantity of real GDP supplied
d
The unemployment rate is: A) the percentage of the labor force that is employed. B) the percentage of the number employed that is unemployed. C) the percentage of the working-age population that is unemployed. D) the percentage of the labor force that is unemployed.
d
Transfer payments refer to funds that are transferred from one group in society to another group: a.) so these payments have no impact on the government budget deficit. b.) so these payments have no impact on the government debt. c.) so these payments are unfair to those who lose money in the transfer d.) and these payments represent a growing shareof U.S. federal outlays.
d
What is a benefit of the financial system? a.) Information b.) Risk-sharing c.) Liquidity d.) All of the above
d
When an unemployed worker receives a payment from the government as result of being unemployed, it is: a.) included in the government spending category of GDP b.) included in the investment category of GDP c.) included in the net export category of GDP d.) not included in any of the expenditure categories
d
When banks gain ________, they can ________ their loans; and the money supply ________. a.) reserves; increase; contracts b.) withdrawals; increase; expands c.) withdrawals; decrease; expands d.) reserves; increase; expands
d
When the labor market is at full employment: A) there is only cyclical unemployment in the economy. B) there is only structural unemployment in the economy. C) the unemployment rate is 0%. D) there is no cyclical unemployment in the economy.
d
When you include discouraged workers and unemployed workers in calculations of the unemployment rate: a.) this alternate measure is much lower than the official unemployment rate. b.) the difference between this alternate measure and the official unemployment rate increases significantly during economic expansions. c). this alternate measure is the same as the official unemployment rate. d.) this alternate measure is much higher than the official unemployment rate.
d
Which if the following people would be officially considered unemployed? a.) Mitchell, who is a full-time student working part-time at the bookstore b.) Janice, who is actively seeking a full-time job while currently working at a part-time job c.) Jade, who has stopped looking for a job because she feels there are no jobs available for her d.) Jenna, who just graduated college and is searching for a job that fits her graphic design skills
d
Which of the following can explain why some countries have not experienced relatively high growth rates in real GDP per capita despite relatively low initial levels of real GDP per capita? A) Many of these developing countries do not have a functioning court system that can enforce laws. B) Countries that are relatively poor are more likely to experience wars and revolutions. C) Countries that are relatively poor are likely to have a lower quality of health care. D) all of the above
d
Which of the following could explain why there is an increase in potential GDP but the equilibrium level of GDP falls? a.) SRAS shifted to the right by more than LRAS. b.) AD shifted to the right by more than SRAS. c.) AD shifted to the right by less than SRAS. d.) AD did not shift and SRAS shifted to the left.
d
Which of the following describes actual trends in the U.S. labor force participation rate? A) The labor force participation rate of adult men has risen since 1950. B) The labor force participation rate of adult women has fallen since 1950. C) The labor force participation rate of adult men not in school, but too young to retire has risen since 1950. D) The labor force participation rate of adult women has risen since 1950.
d
Which of the following indicates that the U.S. economy has become more stable since 1950? A) shorter recessions B) longer expansions C) less severe fluctuations in real GDP D) All of the above indicate that the U.S. economy has become more stable since 1950.
d
Which of the following influences the consumption component of AE? a.) Current income b.) household wealth c.) expected future income d.) all of the above
d
Which of the following is NOT a reason why the wages of workers and the prices of inputs risemore slowly than the prices of final goods and services? a.) Contracts make prices and wages ʺsticky.ʺ b.) Firms are often slow to adjust wages. c.) Menu costs make some prices sticky. d.) Unions are successful in pushing up wages.
d
Which of the following is a goal of the fed? a.) Price stability b.) Economic Growth c.) High employment d.) All of the above
d
Which of the following is a true statement about real and nominal GDP? A) If nominal GDP increases from one year to the next, we know that production of goods and services has risen. B) Nominal GDP is a better measure than real GDP in comparing changes in the production of goods and service year after year. C) Increases in average prices do not affect the calculation of nominal GDP. D) If real GDP increases from one year to the next, we know that production of goods and services has risen.
d
Which of the following is considered a detriment to a countries business growth? a.) failure to enforce the law b.) corruption c.) low savings and investment d.) all of the above
d
Which of the following is true? a.) The GDP gap is the difference between full employment real GDP and actual real GDP. b.) We desire economic growth because it increases the nation's real GDP c.) Economic growth is measured by the annual percentage increase in a nation's real GDP d.) All of the above are true.
d
Workers who lose their jobs because the skill set they possess is no longer required in the economy are considered to be: a.) discouraged workers. b.) cyclically unemployed. c.) frictionally unemployed. d.) structurally unemployed.
d
