Macro

. Total income households have after paying taxes and receiving government transfers is called: A) disposable income. B) private savings. C) aggregate spending. D) investment.

A

A country's balance of payments on financial account is the: A) difference between the dollar value of a country's exports and imports of goods and services. B) difference between the dollar value of a country's exports and imports of goods only. C) difference between the country's sale of assets to foreigners and the purchases of assets from foreigners. D) same value as the country's merchandise trade balance.

A

Construction of new homes is considered part of: A) investment spending. B) consumption. C) government spending. D) private saving.

A

Economists say that long-run economic growth is almost entirely due to: A) rising productivity. B) population growth. C) a democratically elected government. D) a balanced budget.

A

If commodity prices increase, which of the following will take place? A) SRAS curve will shift to the left. B) SRAS curve will shift to the right. C) AD curve will shift to the left. D) AD curve will shift to the right.

A

Money is anything that: A) serves as a medium of exchange for goods and services. B) can be converted into silver with relatively little loss in value. C) can be converted into gold with relatively little loss in value. D) that is traded in the stock market

A

National savings is the sum of: A) private savings plus public savings. B) private savings and government spending. C) investment spending plus consumption. D) consumption spending minus government spending.

A

One reason financial institutions become very large is: A) to decrease transactions cost. B) to enjoy the power of having a large corporation. C) to increase transactions costs. D) to offset the power of other large corporations.

A

Packaging a variety of mortgages into a single derivative asset is called A) a mortgage backed security (MBS). B) a collateralized debt obligation (CDO). C) a synthetic futures contract. D) a mortgage option.

A

Stagflation is a combination of: A) increasing unemployment and increasing inflation. B) decreasing unemployment and decreasing inflation. C) increasing unemployment and decreasing inflation. D) decreasing unemployment and increasing inflation.

A

Technological progress is advanced through: A) research and development. B) government regulation. C) consumption. D) infrastructure.

A

The model to account for changes in the quality of goods used to calculate the CPI is the ____ model A) hedonic B) least squares C) hedonistic D) probit

A

A country with a recessionary gap and a fixed exchange rate will be helped: A) by a revaluation of its currency. B) a devaluation of its currency. C) a monetary policy which is expansionary. D) No policy option will aid this country.

B

A major drawback of adopting a floating exchange rate is the: A) opportunity cost associated with the accumulation of foreign exchange reserves. B) uncertainty about the value of goods traded internationally. C) increased discipline brought on monetary policy. D) distorted incentives imposed on the normal flow of imports and exports.

B

An example of human capital would be: A) the money a person has. B) the job skills a person has. C) the capital goods or machines a person owns. D) the stocks and bonds in an individual's portfolio.

B

An example of structural unemployment is a(n): A) autoworker who is temporarily laid off from an automobile company due to a decline in sales. B) geologist who is permanently laid off from an oil company due to an increase in wages won by labor unions. C) worker at a fast-food restaurant who quits work and attends college. D) real estate agent who leaves a job in Texas and searches for a similar, higher paying job in California.

B

An increase in wealth or an increase in government spending will result in a: A) shift to the left of the aggregate supply curve. B) shift right of the aggregate demand curve. C) shift right of the aggregate supply curve. D) movement along the aggregate demand curve.

B

At the its' highest, excess reserves were close to A) $2.5 billlion B) $2.5 trillion C) $250 million D) $0

B

Due to the presence of diminishing returns to capital, doubling the amount of physical capital available for one worker to use will: A) decrease output by less than a factor of two. B) increase output by less than a factor of two. C) increase output by exactly a factor of two. D) increase output by more than a factor of two.

B

Efficiency wages are: A) market equilibrium wages. B) set above equilibrium wages to act as an incentive for better performance. C) set below the equilibrium wage to increase firm profits. D) when marginal revenue product equals the supply of labor.

B

The "core" PCE inflation rate ___ include ___ prices. A) ignores, wage B) does not; food and energy C) does include, purchases of military expenditure D) does not, goods prices

B

The American Recovery and Reinvestment Act of 2009 was a roughly _____ billion package with ____ (the) funding, more or less, going to ____. A) $6 billion; all of; tax breaks B) $800 billion; equal; grants, spending, and tax breaks C) $350 billion; over half; tax breaks D) $1 trillion; none of; increasing government spending

B

The demand curve for loanable funds slopes: A) upward, since it takes a higher rate of return to get more funds. B) downward, because there are more potential projects that yield 10% than yield 5%. C) upward, because higher rates of return are necessary to cover higher costs. D) downward, because there are fewer potential projects that yield 10% than for those that yield 5%.

B

Which of the following best represents the equation for GDP? A) GDP = C+ I + G - X + IM B) GDP = C + I + G + X - IM C) GDP = C + I + G + Taxes - Value Added D) GDP = C + I + G + Taxes + X + IM

B

Which of the following price indices did we NOT discuss in class? A) Consumer price index. B) Core HICP C) Trimmed mean PCE D) Price of consumer expenditures

B

At the last FOMC meeting in November, policy makers decided to ____. A) keep the federal funds rate the same B) reduce the prime interest rate C) raise mortgage rates D) change the target rate of inflation to 1.5%

C

If the demand for British pounds in the United States rises, then: A) the U.S. dollar appreciates. B) the British pound price of the U.S. dollar increases. C) the U.S. dollar price of the British pound increases. D) the pound depreciates.

C

If the economy experiences a decline in overall spending, and thus a contraction, the government could counter this by: A) raising tax rates. B) decreasing government transfers. C) increasing government spending. D) decreasing the investment tax credit.

C

In financial markets: A) households sell liabilities. B) wealth is transformed into savings. C) households purchase financial assets. D) physical assets exchange hands.

C

The National Bureau of Economic Research announced that the U.S. economy had been in a recession in 2008. As a result, the type of unemployment that is on the rise is known as: A) frictional unemployment. B) natural unemployment. C) cyclical unemployment. D) structural unemployment.

C

The reserve ratio is the: A) bank's holdings of gold. B) government's holdings of gold at Fort Knox. C) fraction of deposits the banks hold in their vaults plus their deposits at the Federal Reserve. D) ratio of gold to the paper money in the economy.

C

The short-run aggregate supply curve would shift to the left for all the following reasons EXCEPT: A) a decrease in productivity. B) an increase in nominal wages. C) an increase in interest rates. D) an increase in the price of commodities used for production.

C

The sum of frictional and structural unemployment make up the: A) actual unemployment level. B) cyclical amount of unemployment. C) natural rate of unemployment D) amount of unemployment in an economy during a recession.

C

When government spending is less than net taxes: A) there is a budget deficit. B) government savings is negative. C) there is budget surplus. D) the economy is moving towards a balanced budget.

C

When the government has a deficit, it will most likely finance the deficit by: A) cutting the salaries of the President and Congress. B) selling some military bases. C) borrowing the money. D) charging higher admission fees at national parks.

C

Which interest rate do credit card rates follow the most closely? A) 7 year bond yield. B) 1 month bond yield. C) The prime interest rate. D) The discount rate.

C

Which of the following price index does the FED use when considering what monetary policy to adopt? A) Trimmed Mean PCE B) Core CPI C) Core PCE D) Sticky Price CPI

C

Which of the following would be a part of macroeconomics? A) a study of the change in automobile sales due to a change in the price of automobiles B) a study of the impact of a tax reduction on the profits of a business C) a study of recessions D) a study of the unemployment of workers displaced by technological change in the typesetting industry

C

Economists say an economy is efficient when: A) the problem of scarcity is eliminated. B) output is distributed equitably. C) all opportunities to make some people better off without making other people worse off have been taken. D) all opportunities to make some people worse off without making other people better off have been taken.

C (probably)

According to the official unemployment rate a person who is not working and is not looking for work is: A) unemployed. B) underemployed. C) a member of the labor force not working. D) not counted in the unemployment statistics.

D

China has much higher rate of growth compared to the United States, but an average Chinese household is: A) as well off as a typical U.S. household, because China's real GDP per capita is catching up with that of the United States. B) richer than a typical U.S. household, because China's real GDP per capita is much higher than that of the United States. C) still a bit poorer than a typical U.S. household, but China's real GDP per capita is growing faster to equal that of the United States in a matter of few years. D) still far poorer than a typical U.S. household, because China's real GDP per capita is much lower than that of the United States.

D

Crowding out negatively affects the economy by: A) decreasing government borrowing. B) decreasing consumption. C) increasing private borrowing. D) reducing investment spending on physical capital.

D

If the state government allocates additional spending on education, the opportunity cost is: A) zero. B) the dollar amount of the additional spending. C) only considered if additional taxes need to be raised to fund the spending. D) measured in terms of the alternative uses for that money.

D

The FED's preferred rate of inflation is A) 5% B) -2% C) 0% D) 2%

D

The current base year for real GDP is A) 2009 B) 1983 C) 2000 D) 2012

D

The money multiplier is currently about A) 0.0 B) 3.0 C) 0.5 D) 1.0

D

To identify periods of financial instability and increasing risk, we use ____. A) the value of NASDAQ B) the risk premium C) the VIX index D) B and C

D

We care about economic growth because ____ A) a reduction in murder per 100,000. B) a higher ratio of girls-to-boys in school. C) the reduction of infant mortality. D) All of the above

D