Macroeconomics Final
False
(Last Word) The statisticians at the BEA who compile the National Income and Product Accounts have decided that quality improvements do not matter and should be ignored.
False
1+ MPS=MPC
1, 2, 5, and 6 only.
1. Improvements in technology. 2. Increases in the supply (stock) of capital goods. 3. Purchases of expanding output. 4. Obtaining the optimal combination of goods, each at least-cost production. 5. Increases in the quantity and quality of natural resources. 6. Increases in the quantity and quality of human resources. Use the accompanying list to answer the following question. As distinct from the demand and efficiency factors of economic growth, the supply factors of economic growth are
False
A decline in the real interest rate will shift the investment demand curve to the right.
cause its production possibilities curve to shift outward.
A nation that devotes more of its resources to the production of capital goods rather than consumer goods is likely to
True
A nation that wants to invest in more newly created capital in the present must be willing to forgo present consumption.
decrease in the value of one variable causes the value of the other to decrease
A relationship illustrated by an upward-sloping graph means that
The increase in excess reserves in the banking system virtually eliminated the need for banks to borrow in the federal funds market.Correct
After the 2008 financial crisis, why did the Federal Reserve effectively lose its ability to increase the money supply by manipulating the federal funds rate target?
GO fell by $10 billion, while GDP was unchanged.
Answer this question based on the given information for an economy in year 1. Dollar value of resource extraction activity = $20 billion Dollar value of production activity = $50 billion Dollar value of distribution activity = $80 billion Dollar value of final output = $110 billion Suppose the next year, the dollar value of distribution activity fell to $70 billion, but the other values remained the same. Based on this, we could conclude that from year 1 to year 2,
Federal Open Market Committee.
As it relates to Federal Reserve activities, the acronym FOMC describes the
"You can lead a horse to water, but you can't make it drink."
Assume the Fed creates excess reserves in the banking system by buying government bonds, but banks do not make more loans because economic conditions are bad. This situation is a problem of
income levels.
Benefits from international trade are based on differences in the following areas, except
the deposits held by banks and thrifts on which checks can be written.
Checkable deposits include
underlying increases in the CPI after removing volatile food and energy prices.
Core inflation measures
True
Demand-pull inflation is usually accompanied by low unemployment and higher real output.
simplifications
Economic models do not reflect the full complexity of reality, but instead are based on
are somewhat arbitrary in assigning independent and dependent variables to the horizontal and vertical axes
Economists
none of these
Environmental pollution is accounted for in
rise as fast as the price index.
For a person to keep his real income steady at a certain level from one year to the next, his nominal income must
Okun's law.
For every 1 percentage point that the actual unemployment rate exceeds the natural rate, a 2 percentage point negative GDP gap occurs. This is a statement of
all final goods and services produced in an economy in a given year.
GDP is the market value of
solvent.
If a firm possesses assets whose value exceeds the value of its debts, the firm is said to be
decrease by $75.
If disposable income decreases from $1,800 to $1,500 and MPC = 0.75, then saving will
False
If falling gasoline prices are good for the consumers, then they must be good for everyone in the economy.
saving more
If households consume less at each level of disposable income, they are
conclude that its average annual rate of growth is about 3.9 percent.
If the economy's real GDP doubles in 18 years, we can
the vertical intercept would be −10.
If the equation y = −10 + 2.5x was plotted,
a straight downward-sloping line.
If the opportunity cost of producing extra units of one good (expressed in terms of the amount of another good given up) remains constant, then the shape of the production possibilities curve is
the APC rises and the APS falls.
If there is a decrease in disposable income in an economy, then
the price level may change over time.
In comparing GDP data over a period of years, a difference between nominal and real GDP may arise because
automobiles for personal use but not houses.
In national income accounting, the personal consumption expenditures category includes purchases of
advancements in technology that make labor more productive
In recent years the economy of Japan has grown, despite the fact that the population of Japan has declined. Which of the following would best explain Japan's economic growth despite having a smaller population?
African-American teenagers.
In the United States, the rate of unemployment is highest for
prices on average are rising, although some particular prices may be falling.
Inflation means that
M1 increases and M2 stays the same
Michelle transfers $4,000 from her savings account to her checking account. What effect is this change likely to have on M1 and M2?
False
Modern economic growth is defined as increases in real GDP over time.
the U.S., Mexico, and Canada.
NAFTA established a free-trade area and eliminated trade barriers between
escape the complications of barter.
One major advantage of money serving as a medium of exchange is that it allows society to
Federal Reserve Banks.
Paper money (currency) in the United States is issued by the
negative $5 billion.
Refer to the accompanying data (all figures in billions of dollars). From this information we can conclude that the net foreign factor income is
data sets 1 and 3 only
Refer to the data sets. The vertical intercept is positive for
recession
Refer to the given graph. A movement from b to a along C1 might be caused by a(n)
D
Refer to the provided graph. Which point in the graph would allow a simultaneous increase in the production of both investment and consumer goods?
108.3
Refer to the table. (GDP figures are in billions of dollars.) What is the GDP price index in Year 1?
50 fewer pizzas will be purchased per week for every $1 increase in price.
The amount of pizzas that consumers want to buy per week is reflected in the equation P = 15 − .02Qd, where Qd is the amount of pizzas purchased per week and P is the price of pizzas. On the basis of this information, we can say that
False
The largest factor that raised labor productivity in the U.S. economy since the 1950s has been the increased amount of capital available.
differs over time as prices become increasingly flexible in the months and years following a shock.
The overall behavior of the economy
the combinations of two goods that can be produced with society's available resources.
The production possibilities curve tells us
this is a nonmarket transaction.
The service a homeowner performs when she mows her yard is not included in GDP because
4 and 6.
The table shows items and figures taken from a consolidated balance sheet of the 12 Federal Reserve Banks. All figures are in billions of dollars. In this balance sheet, the assets would be items 5 and
1 − MPS
What is the slope of the consumption schedule or consumption line for a given economy?
deflation
When a recession begins and unemployment begins to rise, the demand for goods and services will fall. If the decline in demand is precipitous, which of the following will occur?
the diversification-for-stability argument
Which of the following arguments for trade protection is based on the premise that a nation should have a wide enough range of domestic industries to be self-sufficient if necessary?
Will a new type of electronic reader or tablet increase the number of buyers?
Which of the following exemplifies a microeconomic question?
an increase in the possibility of retaliatory tariffs
Which of the following is a likely result of imposing tariffs to increase domestic employment?
extra benefits resulting from the action
Which of the following is another way of saying "marginal benefits of an action"?
Total output = worker-hours × labor productivity.
Which of the following is correct?
to make routine pricing decisions
Which of the following is not a main function of the entrepreneur?
Quantitative easing refers to the Fed's use of open-market operations to buy trillions of dollars' worth of medium- and longer-maturity financial assets.
Which of the following statements about quantitative easing is most accurate?
Economies experience a positive growth trend over the long run but experience significant variability in the short run.
Which of the following statements is accurate about most economies?
The value of the dependent variable is determined by the value of the independent variable.
Which of the following statements is correct?
a van used by a father to transport his family around
Which of the following would not be considered a capital resource by economists?
the destruction caused by bombing and warfare in a losing military conflict
Which situation would most likely cause a nation's production possibilities curve to shift inward?
tax
a tariff is a
society would consider additional units of shoes to be more valuable than alternative uses of those resources.
refer to the diagram for athletic shoes. if the current output of shoes is Q3, then
maximum quantity of good Y that the consumer could buy with a given budgetsociet
suppose that a consumer purchases just two goods, X and Y. the y-intercept of the budget line in this case would indicate the
E and A only
the graph provided shows the production possibilities curve for an economy producing two goods, x and y. which of the points on the graph indicate(s) unemployed resources?
will the merger of two airlines likely lead to a higher cost of air travel in the economy?
which of the following is an example of a microeconomic question?
