macro

the reserve ratio is 5% then 6000 of additional reserves can create up to

30000 of new money

in the united states, currency holdings per person average about

4490 one explanation for this relatively large amount is that criminals probably prefer currency as a medium of exchange

since 1960 the natural rate of unemployment in the us has been between

5 and 6%

what is the future value of $450 at an invetment rate of 9% two years from today

534.65

suppose you will receive $800 in two years. If the interest rate is 5percen then the presetn value of this futre payment is

725.62. it would be lower if the interest rate was higher

If real GDP is 5,100 and nominal GDP is 4,900, then the GDP deflator is

96.1 so prices are lower than in the base year.

Which of the following would make both the equilibrium real interest rate and the equilibrium quantity of loanable funds decrease?

The demand for loanable funds shifts left.

Which of the following is an example of a decrease in government purchases?​

The government cancels an order for new military equipment.

An increase in the money supply

and an investment tax credit both cause aggregate demand to shift right.

The effect of an increase in the price level on the aggregate-demand curve is represented by a

c. movement to the left along a given aggregate-demand curve.

higher inflation

causes firms to change prices more frequently and makes relative prices more variable

According to the loanable funds model, which of the following events would result in higher interest rates and greater saving?

congress passes a reform of the tac laws that encourage greater investment

You sell cupcakes. One day you double the time you spend and double all your inputs, and make twice as many cupcakes. Your cupcake production function has

constant reurns to sales

The average price level is measured by

d. the GDP deflator or the CPI.

When taxes increase, consumption

decreases as shown by a shift of the aggregate demand curve to the left.

in a fractional-reserve banking system, an increase in reserve requirements

decreases both the money multiplier and money supply

When the interest rate decreases, the opportunity cost of holding money

decreases, so the quantity of money demanded increases.

Other things the same, if the exchange rate changes from 30 Thai bhat per dollar to 25 Thai bhat per dollar, then the dollar has

depreciated and so buys fewer Thai goods.

If P = domestic prices, P* = foreign prices, and e is the nominal exchange rate, which of the following is implied by purchasing-power parity?

e = P*/P

If the U.S. imposes a quota on cotton, then

exports of other goods will fall and imports of other goods will rise.

If a country's budget deficit decreases, then the exchange rate

falls, which raises net exports.

which of the following list contains in this order natural resources human capital and physical capital

for a furniture company wood, the skills and knowledge of its workers, saws

If the actual price level is 165, but people had been expecting it to be 160, then

he quantity of output supplied rises, but only in the short run.

If the U.S. government imposed quotas on imports of clothing, then U.S

imports and exports would both fall.

The quantity of U.S. bonds foreigners want to buy is taken into account

in the U.S. demand for loanable funds and the supply of dollars in the market for foreign-currency exchange.

When a bank loans out $1000 the money supply does what?

increase

Suppose the roofers are not unionized if the roofers unionize then the supply of labor inother sectors of the eoncomy wil

increase, reducing wages in industries that are not unionized

If a country went from a government budget deficit to a surplus, national saving would

increase, shifting the supply of loanable funds right.

When Microsoft establishes a distribution center in France, U.S. net capital outflow

increases because Microsoft makes a direct investment in capital in France.

Suppose aggregate demand shifts to the left and policymakers want to stabilize output. What can they do?

institute an investment tax credit or increase the money supply

Which part of real GDP fluctuates most over the course of the business cycle?

investment expenditures

when public savings falls by $2b and private saving falls $1b in a closed economy

investment falls by $3b

One year a country has positive net exports. The next year it still has positive but larger net exports

its trade surplus rose.

Which of the following events would shift money demand to the left?

neither an increase in the interest rate nor an increase in the price level

investment

physical capital, like investment in human capital, has an oppurtunity cost

minimu wage laws and unions are similar to each other but different from efficiency wages in that minimum wage law and unions

prevent firms from lowering wages i presence of a surplus of workers

in a closed economy, what does (T-G) represent

public saving

If purchasing-power parity holds, then the value of the

real exchange rate is equal to one.

In the open economy macroeconomic model, the price that balances supply and demand in the market for foreign-currency exchange model is the

real exchange rate.

If wages are sticky, then a greater than expected increase in the price level

reduces the real costs of production, so the aggregate quantity of goods and services rises.

An economic expansion caused by a shift in aggregate demand remidies itself over time as the expected price level

rises, shifting aggregate supply left

At the broadest level, the financial system moves the economy's scarce resources from

savers to borrowers

if the governments expenditures exceeded its receipts it would likey

sell bonds directly to the public

Which of the following is the correct way to show the effects of a newly imposed import quota?

shift the demand for dollars in the market for foreign-currency exchange to the right

In the mid-1970s the price of oil rose dramatically. This

shifted aggregate supply left, the price level rose, and real GDP fell

frictional unemployment is thought to explain relatively

short spells of unemployment while the structural unemployment is thought too explain relatively short spells of unemployment

Which of the following would cause the real exchange rate of the U.S. dollar to depreciate?

the U.S. government budget deficit decreases

You are planning a graduation trip to Mexico. Other things the same, if the dollar appreciates relative to the peso, then

the dollar buys more pesos. Your hotel room in Mexico will require fewer dollars.

Other things the same, the aggregate quantity of goods demanded in the U.S. increases if

the dollar depreciates.

Using the liquidity-preference model, when the Federal Reserve decreases the money supply,

the equilibrium interest rate increases.

The Federal Open Market Committee is ​

the group at the Federal Reserve that sets monetary policy.

the idea that inflation by itself reduces people's purchasing power is called

the inflation fallacy

Other things the same, as the price level rises,

the interest rate rises causing a movement along a given aggregate-demand curve.

The long-run aggregate supply curve shifts left if

there is a natural disaster.

the measure of the money stock called MI includes

wealth held by people in thei rchecking account

When a country experiences capital flight, its net capital outflow,

which is part of the demand for loanable funds, increases.

In equilibrium a country has a net capital outflow of $200 billion and domestic investment of $150 billion. What is the quantity of loanable funds demanded?

$350 billion

Suppose the MPC is 0.60. Assume there are no crowding out or investment accelerator effects. If the government increases expenditures by $200 billion, then by how much does aggregate demand shift to the right? If the government decreases taxes by $200 billion, then by how much does aggregate demand shift to the right?

$500 billion and $300 billion

Bill, a U.S. citizen, pays a Spanish architect to design a metal casting factory. Which country's exports increase?

. Spain's

if m=9000 p=6 and y=1500 what is velocity

1

A country has net capital outflow of -10 billion euros and domestic investment of 20 billion euros. What is its national saving?

10 billion euros

if the reserve ratio is 5% then $600 of additional reserves can create up to

12000 of new money

The manager of the bank where you work tells you that your bank has $10 million in excess reserves. she also tells you that the bankhas 400$ mill in deposits and 375$ mill in loans. Gives the information you find htat the reserve requirement must be

15/400

fourteen years ago William put money in his account at First national Bank. William decides to cash in his account and is told that his money has quadrupled. According to the rule of 70, what rate of interested did Alfred earn?

1o percent

if the internet is 7l5 percent then what is the present value of 4000$ to be recieved in 6 years?

2591.85

Which of the following correctly explains the crowding-out effect?

An increase in government expenditures increases the interest rate and so reduces investment spending

efficiency wages, minimum wage laws, and unions all keep wages

above the equillibrium level causing a surplus of labor

Suppose that political instability in other countries makes people fear for the value of their assets in these countries so that they desire to purchase more U.S assets. Refer to Political Instability Abroad. What would happen to the dollar?

It would appreciate in foreign exchange markets making U.S goods more expensive compared to foreign goods.

A basket of goods costs $800 in the U.S. In Canada the same basket of goods costs 800 Canadian dollars and the exchange rate is 1.25 Canadian dollars per U.S. dollars. In Turkey the same basket of goods costs 2400 lira and the exchange rate is 3 lira per dollar. Which country has purchasing-power parity with the U.S.?

Turkey but not Canada

When the interest rate is above the equilibrium level,

a. the quantity of money that people want to hold is less than the quantity of money that the Federal Reserve has supplied. b. people respond by buying interest-bearing bonds or by depositing money in interest-bearing bank accounts. c. bond issuers and banks respond by lowering the interest rates they offer. d. All of the above are correct.