Econ 144 Final
What is the current value of M2 in the US today?
$12.19 trillion
If potential GDP was $18 trillion, and actual GDP was $17 trillion, and this gap was successfully filed with an injection of government spending $600 billion, what was the value of the MPC?
0.6 Injection = gap / multiplier Multiplier = 1/1-MPC
Assume a $3.2 trillion gap between actual GDP and potential GDP (also knows as full employment GDP) is successfully filled by an injection of $800 billion in government spending. What must the value of MPC equal?
0.75 Injection = gap / multiplier Multiplier = 1/ 1-MPC
As discussed in class, the current value of GDP deflator is _____________ and the base year the government uses when it calculates the GDP deflator is ____________.
109.7; 2009
What is the value of the GDP deflator for 2014?
111.5 Find nominal and real and divide N/R
Calculate the value of the GDP deflator for 2013 (rounding to 3 decimal places)
117.513 (Calculate nominal GDP for 2013 and take Nominal/Real and multiply by 100)
What is the current reserve requirement for a bank that has $99 million in deposits?
3% (<$14.5 million 0%; >$14.5 million and <$103.6 million 3%; >103.6 10%)
Write down all the components of M1 as discussed in class and in the text.
Currency, coins, checking balance, travelers checks
What was the term, used in class and in the textbook, for the phenomenon where additional units of variable input (like labor) are added to a fixed input (like machinery) and output increases but in smaller and smaller increments.
Decreasing marginal utility
Which of the following best describes the current annual inflation as measured by CPI? a. The CPI would put current annual inflation below 1% b. The CPI would put current annual inflation between 1% and 2% c. The CPI would put current annual inflation above 2% but below 3% d. The CPI would put current annual inflation above 3%
a. The CPI would put current annual inflation below 1%
This is the market for loanable funds. Which of the following is not a part of the graph? a. The amount of net exports that makes up the "NX" of GDP b. The interest rate c. The amount of investment that makes up the "I" in GDP d. Actually all of the above are a part of the graph
a. The amount of net exports that makes up the "NX" of GDP
What was the term, discussed in class and in the text, for the number of times a dollar changes hands?
velocity
What is the value of M2?
$149,000
Based on the table above, the value of "I" is... __________
$31 million
Assume that the reserve requirement is 15% and assume that people keep 10% of their money out of the bank as currency. Also assume that an initial $10,000 deposit is made and that amount is sitting in the bank. If the bank loans out all that it can, and all the money loaned out is re-deposited into the bank- taking into account what people keep out as currency- what is the total amount of deposits, including the initial deposit, after the money has worked its way through the system?
$44,000 (1+money kept) /(reserve requirement + money kept) * initial deposit (1+.10) / (.15+.10) * 10,000
What is the value of M1?
$87,000
What is the name of the project created by Dr. Alberto Cavallo of MIT which tracks over 5 million online prices daily?
Billion Prices Project
What is the labor force participation rate based only on the table data?
80.3% (Of who could be in the labor force, who is)
As specifically discussed in the text, ____________ is the situation where a good or service is produced in accordance with customer preferences.
Allocative efficiency
What is the name of the government entity that calculates GDP?
BEA- Bureau of Economic Analysis
As discussed in class, what is the term for the portion of the Federal Reserve that is made up of seven members of the Board of Governors plus five Regional bank presidents?
FMOC (Federal Open Market Committee)
Consider the following: GDP is the total market value of all goods and services produced in a country during a given period of time (usually a year). As discussed in class, is this definition accurate and if it's not, what's wrong with it?
GDP is the total market value of all FINAL goods and services produced in a country during a given period of time (usually a year). GDP does not include intermediate goods.
Consider the following three portions of current US debt. 1. The portion of the debt we owe to the Federal Government 2. The portion of debt we owe to individual investors (like Dr. Staihr) 3. The portion of the federal debt we owe to other countries If we list these portions from largest to smallest which is the proper order? a. 3 then 2 then 1 b. 3 then 1 then 2 c. 2 then 3 then 1 d. 1 then 3 then 2
a. 3 then 2 then 1
If we calculate U3 exactly as the BLS calculates it, but use the data in the table, which of the following comes closest to U3? a. 5.6% b. 6.1% c. 5.1% d. 6.5%
a. 5.6% U3 = (unemployed/ labor force) * 100
You are looking at the demand and supply of McDonalds cheeseburgers. You look online and see that two things occur: first, 1000 new McDonalds are opening up in the next few weeks, and second, the price of beef (an input) decreases. In the market for McDonalds cheeseburgers we will see after any/all curves have moved: a. A higher equilibrium quantity and a lower equilibrium price b. A higher equilibrium quantity and we cannot say about the equilibrium price c. A higher equilibrium quantity and a higher equilibrium price d. A higher equilibrium price and we cannot say about equilibrium quantity
a. A higher equilibrium quantity and a lower equilibrium price (Both things increase supply, shifting it left, making a lower price and higher quantity)
This is the market for loanable funds. As shown in your textbook, if we see an increase in corporate taxes we will see... a. A shift from Curve B to Curve A b. A shift from Curve A to Curve B c. A shift from Curve D to Curve C d. None of the above
a. A shift from Curve B to Curve A
Consider these two events (separately)... 1. Buyers of new condos in Las Vegas expect the prices to increase in the near future 2. The price of building supplies for new condos in Vegas have decreased Which is correct? a. Both 1 and 2 will result in a higher equilibrium quantity of new condos in Vegas b.Nether 1 nor 2 will result in a higher equilibrium quantity of new condos in Vegas c. 1 will result in a higher equilibrium quantity of new condos in Vegas, but 2 will not d. 2 will result in a higher equilibrium quantity of new condos in Vegas, but 1 will not
a. Both 1 and 2 will result in a higher equilibrium quantity of new condos in Vegas (1 shifts demand right making higher p and q and 2 shifts supply right making lower p but higher q)
In Ch12 (23 in big book) when discussing AE, "household wealth" affected which component(s) of AE? a. Consumption only b. Consumption and Planned Investment c. Consumption and Government Purchases d. Consumption and Net Exports
a. Consumption only
Now compare the U6 using the table data with the real current U6 that we discussed in class. Which of the following is correct? a. The table U6 is significantly higher than the current real U6, more than 2% b. The table U6 is almost identical to the current real U6, within 1% in either direction c. The table U6 is significantly lower than current real U6, more than 2% lower d. None of the above
a. The table U6 is significantly higher than the current real U6, more than 2% Real U6 is 10.3
Which is an incorrect statement? a. "Full Employment Output" is the same thing as "Potential GDP" b. "Potential GDP" is the same thing as "SRAS" c. "Full Employment Output" is the same thing as "LRAS" d. "LRAS" represents what we can produce, but not necessarily what we do produce
b. "Potential GDP" is the same thing as "SRAS"
Consider these two statements: 1. Out current debt-to-GDP ratio is higher than it's ever been 2. Our most recent deficit (for 2014) is the lowest we've seen in the past 5 years (not counting 2015) Which is most accurate? a. 1 and 2 are both correct b. 1 and 2 are both incorrect c. 1 is correct; 2 is incorrect d. 1 is incorrect; 2 is correct
b. 1 and 2 are both incorrect
Consider the following three statements: 1. The GDP deflator contains prices of items that businesses purchase while the CPI does not 2. The CPI uses 1983 as its base year while the GDP does not 3. The CPI is affected by changes in quantities but the GDP deflator is not Which of the following is most accurate? a. 1 and 3 are correct statements; 2 is incorrect b. 1 and 2 are correct statements; 3 is incorrect c. 2 and 3 are correct statements; 1 is incorrect d. 2 is a correct statement; 1 and 3 are incorrect
b. 1 and 2 are correct statements; 3 is incorrect
In the Quantity Theory of Money, if the price level is "3" and the money supply is $12 trillion and Real GDP is $6 trillion what must velocity be? a. 4 b. 1.5 c. 2 d. We cannot tell from the information given
b. 1.5 MV = PY 12 trillion * V = 3 * 6 trillion
Real GDP in 2012 is... a. 210,352 b. 213,504 c. 220,080 d. None of the above
b. 213,504 (Multiply prices from 2011 by quantities from 2012 and add everything together)
The Federal Reserve sells bonds. In the AD/SRAS/LRAS framework, this will produce, after any and all curves have shifted... a. A higher price level b. A lower price level c. No change in the price level d. Either a higher or lower price level depending on the quantity of bonds sold
b. A lower price level
Which function of money, discussed in class and in the text, eliminated the need for a "double coincidence of wants"? a. A unit of exchange b. A medium of exchange c. A store of value d. A standard of deferred payment
b. A medium of exchange
Which of the following will not cause an increase in the demand for Chipotle burritos? a. An increase in the price of Taco John's burritos b. A reduction in the price of Chipotle burritos c. An expectation (buyers) that the price of Chipotle burritos is increasing in the near future d. Actually all three will cause an increase in the demand for Chipotle buritos
b. A reduction in the price of Chipotle burritos (Remember that change in price is change in quantity demanded... NOT demand-> you would demand more at a lower price)
This is the market for loanable funds. As shown in your textbook, if we see an increase in expected future profits we will see... a. A shift from Curve B to Curve A b. A shift from Curve A to Curve B c. A shift from Curve D to Curve C d. None of the above
b. A shift from Curve A to Curve B
As discussed in class and in the text, if GDP > AE in 2013 what does this mean for 2014? a. In 2014 Unemployment and GDP will both increase b. In 2014 Unemployment will increase, GDP will decrease c. In 2014 Unemployment and GDP will both decrease d. In 2014 Unemployment will decrease, GDP will increase
b. In 2014 Unemployment will increase, GDP will decrease (produce > consume)
You are looking at the market for hot dogs. Consider two different things happening: 1) The price of hot dog buns increases significantly and 2) buyers of hot dogs expect the price of hot dogs to increase in the near future. Which of the following is correct? a. In the market for hot dogs both 1 and 2 would cause demand curve to shift left b. In the market for hot dogs only 1 would cause the demand curve to shift left c. In the market for hot dogs only 2 would cause the demand curve to shift left d. In the market for hot dogs nether 1 nor 2 would cause the demand curve to shift left.
b. In the market for hot dogs only 1 would cause the demand curve to shift left 1 Causes the demand curve to shift left 2 Causes the demand curve to shift right
Based on the table above, the largest component of "C" is... a. Durables b. Non- durables c. Services d. None of the above
b. Non- durables
Consider these three items on Aggregate Expenditure: 1. The price level 2. Taxes 3. Intrest rates Which is correct? a. 1, 2, and 3 were all listed as affecting "Planned Investment" "I" in Aggregate Expenditure b. Only 2 and 3 were listed as affecting "Planned Investment" "I" in Aggregate Expenditure c. Only 1 and 3 were listed as affecting "Planned Investment" "I" in Aggregate Expenditure d. Only 1 and 2 were listed as affecting "Planned Investment" "I" in Aggregate Expenditure
b. Only 2 and 3 were listed as affecting "Planned Investment" "I" in Aggregate Expenditure
According to the textbook how large is the "Underground Economy" in the U.S.? a. Probably no more than 5% of measured GDP b. Probably no more than 10% of measured GDP c. Probably no more than 15% of measured GDP d. None of the above
b. Probably no more than 10% of measured GDP
Assume you are looking at the AD/SRAS/LRAS model. Assume we are currently sitting at 3.9% unemployment and assume the price of oil decreases. What will we see after any/all cures have shifted? a. SRAS and AD will intersect closer to LRAS b. SRAS and AD will intersect farther away from LRAS c. SRAS and AD will intersect exactly aligned with LRAS d. None of the above
b. SRAS and AD will intersect farther away from LRAS (oil decrease shifts SRAS right)
Which is correct regarding the "G" component of GDP? a. The "G" component includes Federal Govt spending but not state or local govt spending b. The "G" component is currently the second largest component (in dollar terms), after "C" c. The "G" component includes Social Security payments d. Actually all three of the above are correct
b. The "G" component is currently the second largest component (in dollar terms), after "C"
Assuming 2012 is the base year, and assuming the CPI market basket contains exactly one of each good or service in the table, which of the following is a correct statement? Based on the data in the table... a. The GDP deflator showed a much larger cumulative price increase than the CPI showed for the years 2012-2014 (a difference greater than 4.00) b. The CPI showed a slightly larger cumulative price increase than the GDP deflator showed for the years 2012-2014 (a difference greater than 1 but less than 4) c. The CPI showed much larger cumulative price increase than the GDP deflator showed for the years 2012-2014 (a difference greater than 4) d. Its a trick question because we cant compare the CPI and the GDP deflator
b. The CPI showed a slightly larger cumulative price increase than the GDP deflator showed for the years 2012-2014 (a difference greater than 1 but less than 4)
Which of the following is correct if we compare the U3 based on the table data with the real, current U3 we studied in class? a. The U3 from the table data is nearly identical to the current real U3 (within 2/10ths of a % either direction) b. The U3 from the table is higher than the current real U3 (at least 3/10ths of a % higher) c. The U3 from the table is lower than the current real U3 (at least 3/10ths of a % lower) d. None of the above is correct
b. The U3 from the table is higher than the current real U3 (at least 3/10ths of a % higher) The real U3 is 5.1%
As discussed in class which of the following would be most affected by the business cycle- in either direction, positively or negatively? a. The quantity of Burger King Whoppers in the market b. The quantity of Dodge pick up trucks in the market c. The quantity of t-shirts in the market d. Its a trick question; all of the above would be affected the same since they are a part of "C" in GDP
b. The quantity of Dodge pick up trucks in the market Non-Durable goods are most affected
Following directly from the question above, which of the following is correct? When you deposited the coins... a. The demand for loanable funds shifted right b. The supply of loanable funds shifted right c. The demand for loanable funds shifted left d. The supply of loanable funds shifted left
b. The supply of loanable funds shifted right
As the price of Product X decreases the demand curve for Product Y shifts right. What do we know for sure? a. Both X and Y are normal goods b. X and Y are compliments c. Y is a normal good but we cannot say about X d. X and Y are substitutes
b. X and Y are compliments
If nominal GDP in 2010 was exactly $14.5 trillion and the GDP deflator in 2010 was exactly 102.5 which of the following figures comes closest to real GDP in 2010? a. $13.98 trillion b. $14.72 trillion c. $14.15 trillion d. $13.64 trillion
c. $14.15 trillion 14.5/x * 100 = 102.5 (solve for x) x = $14.15 trillion
Assume that the reserve requirement is 8% and assume that people keep 12% of their money out of the bank as currency. Also assume that an initial $10,000 deposit is made and that amount is sitting in the bank. If the bank loans out all that it can, and all the money loaned out is re-deposited in to the bank- taking into account what people keep out as currency- which comes closest to the total amount of deposits, including the initial deposit, after the money had worked its way through the system? a. $126,000 b. $86,000 c. $56,000 d. $36,000
c. $56,000 (1+money kept) /(reserve requirement + money kept) * initial deposit (1+.12) / (.08 + .12) *10,000
In Ch12 (23 in the big book) we examined what affected each component of Aggregate Expenditure (AE). Consider these three statements: 1. The interest rate affected the "C" component of AE 2. The interest rate affected the "I" component (Planned Investment) of AE 3. The interest rate affected the NX component of AE Which is most correct? a. 1 and 3 are correct; 2 is not b. 2 and 3 are correct; 1 is not c. 1 and 2 are correct; 3 is not d. All three (1, 2, 3) are correct
c. 1 and 2 are correct; 3 is not
Assuming 2012 is the base year, which comes closest to the value of the GDP deflator for 2013? a. 106.2 b. 103.2 c. 109.4 d. 104.7
c. 109.4 Find nominal and real and divide N/R
If we calculate U6 the exact same way the BLS calculates it, but using the data in the table, which of the following comes closest to U6? a. 11.3% b. 13.3% c. 15.3% d. 17.3%
c. 15.3% U6= (MA + unemp. + PT for economic reasons)/ (LF + MA)
Consider these headlines: 1. US Economy Grows at 3.7% in second quarter 2. New product offering by apple fails to excite consumers 3. Travel industry benefitting from low oil prices 4. US unemployment drops to 5.1%, lowest in 8 years Which is correct? a. 1,2,and 4 describe macroeconomic subjects; 3 describes a microeconomic subject b. 1,3,and 4 describe macroeconomic subjects; 2 describes a microeconomic subject c. 1and 4 describe macroeconomic subjects; 2 and 3 describe microeconomic subjects d. 1,2,and 4 describe microeconomic subjects; 3 describes a macroeconomic subject
c. 1and 4 describe macroeconomic subjects; 2 and 3 describe microeconomic subjects
Consider the following three statements: 1. Wages today for most workers are too low 2. Wages today are more unequal than they were 20 years ago 3. Wage inequality will be a key issue in the next year's elections Which is most accurate? a. 1, 2, and 3 are all normative statements b. 1 and 3 are normative statements; 2 is a positive statement c. 2 and 3 are positive statements; 1 is a normative statement d. 2 and 3 are normative statements; 1 is a positive statement
c. 2 and 3 are positive statements; 1 is a normative statement positive statement: what is normative: what should be
Nominal GDP in 2011 is... a. 240,000 b. 216,500 c. 203,000 d. 196,420
c. 203,000 (Multiply prices by quantities from 2011 and add everything together)
Real GDP in 2013 is... a. 250,050 b. 215,500 c. 218,700 d. None of the above
c. 218,700 (Multiply prices from 2011 by quantities from 2013 and add everything together)
Assume the nominal interest rate on a mortgage is 3.6%. If annual inflation is measured by the CPI, which of the following comes closest to the real interest rate on the mortgage based on the CPI's most recent annual information? a. 5.6% b. 2.4% c. 3.2% d. 4.1%
c. 3.2% real = nominal - inflation
What is the value of nominal GDP in 2012? a. 450,000 b. 390,000 c. 300,000 d. None of the above
c. 300,000 (PxQ then add all together)
You are looking at the supply and demand for hot dogs. You open up the paper and read that both buyers AND sellers of hot dogs expect the price to decrease in the near future. On this graph, after any/all curves have moved, we will see: a. A higher equilibrium price and higher equilibrium quantity b. A higher equilibrium price and we cannot say about the equilibrium quantity c. A lower equilibrium price and we cannot say about the equilibrium quantity d. A lower equilibrium price and a higher equilibrium quantity
c. A lower equilibrium price and we cannot say about the equilibrium quantity (When curves shift in opposite direction you know price, and not quantity)
In the country of Brianlandia there are 33 million people currently working (either full or part time). There are 28 million people who are 16 years or older, are not working, have not looked in the past 4 weeks, are not in the hospital, are not in prison, and are not in the military. There are 5 million people who are not working but have looked for a job in the past 4 weeks. These 3 numbers represent ALL the people in Brianlandia. If Brialnlandia calculated the labor force participation rate exactly as the BLS does what is the labor force participation rate in Brianlandia? a. Appx 52% b. Appx 63% c. Appx 58% d. Appx 66%
c. Appx 58% (Employed + Unemployed)/ (Employed + Not in Labor Force + Unemployed) X 100 Of who COULD BE in the labor force, who IS
You are looking at the AD/SRAS/LRAS model. You open up the newspaper and read that the US dollar has recently become stronger against all foreign currencies such as the euro or the yen. In the AD/SRAS/LRAS framework what will we see when any/all curves have moved? a. A lower price level b. A lower output level c. Both a and b d. Neither a nor b
c. Both a and b (Net exports have decreased shifting AD left)
You open up the newspaper and read that tho things are happening at once. Foreign incomes are increasing AND the Federal Reserve has increased the target for the Fed Funds Rate. Which of the following is correct? a. Both of these will shift AD but they will shift it in opposite directions. b. Both of these will shift AD and they will shift it in the same direction c. Both of these will shift SRAS and they will shift it in the same direction d. None of the above
c. Both of these will shift SRAS and they will shift it in the same direction
During the presidency of former President George W Bush Congress reduced taxes three times. This was an example of ________ policy designed to __________. a. Monetary; shift AD right b. Fiscal; shift AD left c. Fiscal; shift AD right d. None of the above
c. Fiscal; shift AD right
Brian got fired from teaching at KU about 10 months ago and he looked for work for a few days but gave up looking completely because he believes there are no jobs to be found. In a normal calculation of U3, as measured by the BLS, Brian would be... a. Included in the denominator only b. Included in the numerator only c. Included in both the numerator and denominator d. Not included in either the numerator or denominator
c. Included in both the numerator and denominator (Brian is considered marginally attached which appears in both the numerator and denominator for U6 calculations)
What is the actual mechanism that the Fed uses to target the Fed Funds rate? a. It increases the reserve requirement, making banks increase the rate they charge each other b. It lowers the discount rate and this makes banks lower the rate they charge each other c. It buys or sells bonds to banks, this changes the quantity of reserves a bank has to loan to other banks d. It simply sets the Fed Funds Rate, and banks are required by law to charge each other that rate
c. It buys or sells bonds to banks, this changes the quantity of reserves a bank has to loan to other banks
The SRAS curve slopes upward primarily because of what phenomenon, discussed in class and in the text... a. Technology can be slow to change b. The overall capital stock can be slow to change c. Prices and wages can be slow to change d. The demand for labor can be slow to change
c. Prices and wages can be slow to change
In class and in the text we discussed why the entire world isn't rich. Which of the following was not one of the reasons given? a. Corruption (failure to enforce the rule of law) b. Low rates of savings and investment c. Rapid price fluctuations that bring uncertainty to the market d. Actually all three of these were reasons given for why some countries don't experience rapid growth
c. Rapid price fluctuations that bring uncertainty to the market
As discussed in class and in the text, in the Quantity Theory of Money what is "Y"? a. Nominal GDP b. The Fed Funds Rate c. Real GDP d. The Discount Rate
c. Real GDP
If AD and SRAS are intersecting to the left of LRAS, and we leave the market to correct itself, what will ultimately happen? a. LRAS will shift left, and now intersect with SRAS and AD b. SRAS will shift left because labor costs will rise c. SRAS will shift right because labor costs will fall d. AD will shift right, returning us to full employment output
c. SRAS will shift right because labor costs will fall
Brian was recently fired from his job teaching econ because he refuses to use any online resource to post grades; rather than post grades online he uses a notebook to keep track of grades and students must come ask him what his grades are. His situation is best described as... a. Cyclical unemployment b. Frictional unemployment c. Structural unemployment d. Seasonal unemployment
c. Structural unemployment
Which of the following would not shift AD to the left? a. The Federal Reserve sells bonds b. Congress votes to increase taxes c. The price of oil increases d. Actually all three of these will shift AD to the left
c. The price of oil increases
We know, from the text and lecture, that the CPI "housing" is weighted most heavily. Which of the following is weighted the next most heavily? a. Medical expenditures b. Food and beverages c. Transportation (gasoline) d. Utilities
c. Transportation (gasoline)
Assume the reserve requirement is 6.25% and assume that people keep nothing out of the bank as currency. Also assume that an initial $18,000 deposit is made and that amount is sitting in the bank. If the bank loans out all that it can, and all the money loaned out is re-deposited into the bank, which comes closest to the total amount of deposits, including the initial deposit, after the money has worked its way through the system? a. $320,000 b. $266,000 c. $196,000 d. $288,000
d. $288,000 (1+money kept) /(reserve requirement + money kept) * initial deposit (1+0) / (0.0625+ 0) * $18,000
Assume we know that full employment GDP = $19.4 trillion and current GDP is at $17 trillion. If we know the MPC is .75 how large would an injection of government spending need to be in order to successfully fill the gap? a. $1 trillion b. $500 trillion c. $1.2 trillion d. $600 trillion
d. $600 trillion (injection = gap/multiplier) (multiplier = 1/1-MPC)
Consider the following three items: 1. A chipotle burrito you bought (and consumed) last week in Lawrence, KS 2. A 2012 Toyota Camry you saw on eBay and bought last week from the original purchaser in Kansas City, MO 3. A brand new Hewlett Packard copier the KU Econ Department bought last week for its office. Which is correct? a. 1 and 3 would both be considered part of the current GDP and would both be a part of "C" b. 2 and 3 would both be considered part of the current GDP and would both be a part of "C" c. 1 and 2 would both be considered part of the current GDP and would both be a part of "C" d. 1 and 3 would both be considered part of the current GDP but only 1 would be part of "C"
d. 1 and 3 would both be considered part of the current GDP but only 1 would be part of "C" 1- GDP "C" 2- NOT GDP 3- GDP "I"
This is the market for loanable funds. If everyone in the US decided to consume more today (that is to increase consumption today rather than in the future) which would we see? a. A shift from Curve A to Curve B b. A shift from Curve B to Curve A c. A shift from Curve D to Curve C d. A shift from Curve C to Curve D
d. A shift from Curve C to Curve D (decrease in supply)
Based on discussions in lecture, which of the following statements is correct? In reality, the Federal Reserve... a. Does not often use open market operations to adjust the money supply b. Does not often use changes to the reserve requirement to adjust the money supply c. Does not have the ability to buy and sell government bonds d. Actually all three of the above are correct
d. Actually all three of the above are correct
Which of the following will not have the effect of producing a higher equilibrium price? a. You're looking at the market for chips, and the price of salsa decreases b. You're looking at the market for chips (which are made of corn), and the price of corn increases c. You're looking at the market for chips, and chips are a normal good, and incomes increase d. Actually all three of the above would have the effect of increasing equilibrium price
d. Actually all three of the above would have the effect of increasing equilibrium price
Which is correct? a. The current value of NX is negative because the US exports more than it imports b. The current value of NX is negative and this is a relatively rare occurrence c. Actually both a and b are correct d. Actually nether a not b are correct
d. Actually nether a nor b are correct (NX is negative because we import more then export, and it is a very common occurrence)
According to the textbook, which of the following countries has what some economists would refer to as a "mixed" economy? a. Japan b. Canada c. United States d. All of the above
d. All of the above
Assuming 2012 is the base year, and assuming the CPI market basket contains exactly one of each good or service in the table which comes closest to the value of the CPI in 2013? a. Appx 108.7 b. Appx 116.6 c. Appx 105.2 d. Appx 110.6
d. Appx 110.6 Add only prices from each and divide 2013 CPI / 2012 CPI multiplied by 100
In 1937 (and again in 2008) we saw dramatic increases in the price of oil. In the AS/SRAS/LRAS framework this would show up as... a. An increase in the price level b. A reduction in the output level c. A reduction in the interest rate d. Both a and b but not c
d. Both a and b but not c (shifts SRAS left)
Consider the 2009 Stimulus Act as discussed in class. Which of the following is most accurate? The ARRA was an example of ___________ policy and was made up _________. a. Fiscal; tax cuts but not government spending b. Monetary; government spending but not tax cuts c. Monetary; both tax cuts and government spending d. Fiscal; both tax cuts and government spending
d. Fiscal; both tax cuts and government spending
You take $1000 out of a savings account that you own and you keep it hidden in a bookshelf in your house. Which of the following will occur? a. M2 will decrease and M1 will decrease b. M2 will decrease and M1 will increase c. Both M2 and M1 will increase d. M1 will increase and M2 will remain inchanged
d. M1 will increase and M2 will remain inchanged
You have $100 worth of coins sitting in a jar in your bedroom. You take these coins to your bank and deposit them into your checking account. They are not loaned out; they remain in your checking account. Which of the following is correct? a. M1 increased but M2 didn't b. M2 increased but M1 didn't c. Both M1 and M2 increased d. Neither M1 or M2 increased
d. Neither M1 or M2 increased
Consider the following facts in this scenario: 1. Unemployment is 4.6% 2. The money supply is slowing increasing 3. Labor costs are rising Which of the following best describes this scenario, based only on the facts above? a. SRAS and AD are currently intersecting to the right of LRAS; AD is moving right and SRAS is moving right. b. SRAS and AD are currently intersecting to the right of LRAS; AD is moving left and SRAS is moving right. c. SRAS and AD are currently intersecting to the left of LRAS; AD is moving right and SRAS is moving right. d. None of the above
d. None of the above
Consider the following three statements regarding the business cycle: 1. If we're in an expansion we know unemployment is falling 2. If we're in a recession we know real GDP is declining 3. If we're in an expansion we know real GDP is increasing Which is most accurate? a. 1 and 3 are correct; 2 is not b. 1 and 2 are correct; 3 is not c. 1, 2, and 3 are correct d. None of the above
d. None of the above
Based on the table above, the correct value of "G" in GDP is a. $23 million b. $28 million c. $15 million d. None of the above
d. None of the above $8 million
Consider these two statements: 1. The price of cookies- a substitute in production for cake- increases 2. The price of sugar- an input to cake- decreases a. Both 1 and 2 will shift the demand curve for cake but only 1 will shift it left b. Both 1 and 2 will shift the supply curve for cake, but only 1 will shift it left c. Only 2 will shift the supply cure for cake d. None of the above
d. None of the above (1 shifts the supply curve right, and 2 shifts the supply curve right key words substitute in PRODUCTION)
In 2008 we saw the price of apples increase significantly. Apples are of course an input to apple pie. In the market for apple pie this would ultimately cause us to see... a. A lower equilibrium quantity and a lower equilibrium price b. A higher equilibrium quantity and a higher equilibrium price c. A higher equilibrium quantity and a lower equilibrium price d. None of the above
d. None of the above (Increase in input causes supply to shift left resulting in a higher eq price and a lower eq quantity)
Which is correct: The entity that determines the business cycle is the _________, while the entity that determines the unemployment rate is __________. a. Bureau of Labor Statistics; National Bureau of Economic Research b. Bureau of Economic Analysis; also the Bureau of Economic Analysis c. National Bureau of Economic Research; Bureau of Economic Analysis d. None of the above
d. None of the above (National Bureau of Economic Research; Bureau of Labor Statistics)
As discussed in lecture, if the Federal Reserve wants to engage in open market operations in order to adjust the money supply which of the following is correct? a. The Fed must obtain approval from Congress b. The Fed must obtain approval from the President c. The Fed must obtain approval from the Secretary of Treasury d. None of the above
d. None of the above (The Fed does not need approval)
This saturday night John and Terri are planning to go to the movies to see "Ant- Man." They will be gone a total of 3 hours. During the time they will pay a babysitter $10 per hour to watch the kids ($30 total), and the movie tickets will cost $10 each, a total of $20. The opportunity cost of attending the movie will be... a. $30 they have to pay the babysitter b. $30 (babysitter) + $20 (tickets) or $50 c. $10 (the difference between what they spent at the movie and what they paid the babysitter) d. None of the above
d. None of the above (opportunity cost is what they DIDNT do, which is stay home or $0)
As discussed in the text, sometimes the CPI market basket contains one good, such as McDonalds cheeseburgers, and an increase in the price of the McDonalds cheeseburger causes people to shift their purchases to Burger King cheese burgers instead (and the Burger King burger is not a part of the market basket). This is called __________ and it means that the CPI may __________ how price changes affect consumers. a. Quality bias; overstate b. New Product Bias; understate c. Substitution Bias; understate d. None of the above
d. None of the above Substitution bias; overstate
Brian got fired from teaching at KU about 10 months ago and he looked for work for a few days but gave up looking completely because he believes there are no jobs to be found. In a normal calculation of U3, as measured by the BLS, Brian would be... a. Included in the denominator only b. Included in the numerator only c. Included in both the numerator and denominator d. Not included in either the numerator or denominator
d. Not included in either the numerator or denominator (He is not in the labor force)
Exactly what is shown or measured on the vertical axis of the graph? a. Capital per unit of labor b. Labor per unit of capital c. Total output (or total GDP) d. Output (or GDP) per unit of labor
d. Output (or GDP) per unit of labor
A bank needs to borrow funds to meet its reserve requirement; if it chooses to borrow from the Fed itself what is the make of the interest rate it will pay?
discount rate
