macro exam 2 old test questions
A change in the price level produces a ________ the aggregate demand curve. i. shift in ii. change in the slope of iii. movement along A. iii only B. i only C. i and ii D. ii only E. i and iii
A
A government budget deficit _______ the real interest rate because _______. A. raises; the demand for loanable funds increases B. lowers; the supply of loanable funds increases C. lowers; the demand for loanable funds decreases D. raises; the supply of loanable funds decreases
A
Bill just graduated with his degree in economics. Through Career Services he submitted his resume to several companies and he will visit them during the next two weeks. Bill is considered A. frictionally unemployed. B. structurally unemployed. C. cyclically unemployed. D. employed because he is visiting firms. E. not in the labor force.
A
Economic growth is _______. A. the expansion of production possibilities B. the annual percentage change in the quantity of money C. the annual percentage change in labor productivity D. the return to full employment in an expansion phase of the business cycle
A
If people's expectations about future income improve so they think their future income will be higher than previously believed, then the AD curve A. will shift rightward because people will increase spending now. B. will not change until income actually rises. C. and the AS curve will both shift leftward because people will increase their saving. D. will not shift but potential GDP will increase. E. will shift leftward because people will spend less now
A
In 2020 and in 2021, consumers in Dexter consumed only books and pens. The inflation rate in 2021 is _______ percent. A. −17.2 B. 48.0 C. 82.8 D. −5.8
A
Rob is considered unemployed in the Current Population Survey if he A. has looked for a job in the last four weeks but has not found a job. B. is in his last term of college before he graduates. C. does not have a job and stopped looking for a job at least two months ago. D. has worked at least 1 hour but not more than 15 hours as a paid employee during the last week. E. has a part−time job but would like a full−time job.
A
The table provides some data on real GDP and the population of Asiana in 2020 and 2021. The growth rate of real GDP in Asiana in 2021 is ___ percent. The growth rate of real GDP per person in Asiana in 2021 was ___ percent. A. 7;4 B. 4;7 C. 8;16 D. 16;8
A
China's real GDP per person was 11,480 yuan in 2011 and 12,515 yuan in 2012. India's real GDP per person was 45,045 rupees in 2011 and 47,995 rupees in 2012. The population of China is growing at 1 percent a year and the population of India is growing at 1.4 percent a year. The growth rate of real GDP in China is ___ percent. The growth rate of real GDP in India is ____ percent. A. 10; 7.9 B. 5; 3.7 C. 7.9; 10 D. 3.7; 5
A
According to the income approach to measuring GDP, the largest income category is A. rent. B. wages. C. interest. D. consumption expenditure. E. profits.
B
In the figure, the economy is at an equilibrium with real GDP of $20 trillion and a price level of 110. As the economy moves toward its ultimate equilibrium, the ________ curve shifts ________. A. potential GDP; leftward B. aggregate supply; rightward C. aggregate demand; rightward D. aggregate demand; leftward E. aggregate supply; leftward
B
Phillip is a 22−year old who has no job and is available for work, but has not actively looked for a job in the last month. The Current Population Survey identifies Phillip as ________ , ________ the labor force, and ________ the working−age population. A. not unemployed; not part of; not part of B. not unemployed; not part of; part of C. not unemployed; part of; part of D. unemployed; part of; part of E. unemployed; part of; not part of
B
Saving is the amount of income that is _____ in net taxes or spent on _____ goods and services. A. paid; consumption B. not paid; consumption C. not paid; capital D. paid; capital
B
The firm that printed your textbook bought the paper from XYZ Paper Mills. This purchase of paper _______ part of GDP because the paper is _______ good. A. is; an intermediate B. is not; an intermediate C. is; a final D. is not; a final
B
The three main types of markets for financial capital are _______. A. loan markets, bond markets, and commercial banks B. loan markets, bond markets, and stock market C. bond markets, stock markets, and commercial banks D. investment banks, commercial banks, and insurance companies
B
The crowding-out effect is the tendency for a government budget deficit to _______ the real interest rate and decrease _______. A. raise; investment by the full amount of the government budget deficit B. raise; investment C. lower; saving by the full amount of the government budget surplus D. lower; saving
B
Wealth is the value of all the things that people _____. A. spend B. own C. demand D. save
B
When Jamie purchases a classic 1968 Plymouth Cuda convertible from Shane, GDP A. increases, because the car is a durable good and increases consumption. B. does not change, because the car was not produced this year. C. increases, because this expenditure decreases saving. D. does not change, because Jamie did not buy the car from a dealership. E. increases, because the car is a durable good and increases investment.
B
Which of the following is NOT directly included in Canadian GDP? A. Bus tickets sold to tourists for a tour bus ride in Montreal. B. Gasoline purchased by a tour bus operator in Quebec. C. The sale of tickets to the Vancouver Oympics to U.S. citizens. D. The purchase of tickets to a Kanye West concert in Montreal. E. All of the items would be included in Canadian GDP.
B
Which of the following is an example of an intermediate good or service? A. Mike bought Puma shoes. B. Samsung buys compressors for manufacturing refrigerators. C. Sarah bought a Sony HDTV. D. United buys Boeing aircrafts.
B
A multiplier is the amount by which a change in any component of _____ is magnified or multiplied to determine the change in _____ and _____ that it generates. A. real GDP; exports; imports B. consumption expenditure; government expenditure; tax receipts C. autonomous expenditure; equilibrium expenditure; real GDP D. autonomous expenditure; consumption expenditure; nominal GDP
C
An economy has no imports and no taxes. The marginal propensity to save is 0.2. By how much must autonomous expenditure increase to increase equilibrium expenditure by $60 billion? What is the multiplier? A _______ increase in autonomous expenditure increases equilibrium expenditure by $60 billion. The multiplier is _______. A. $48 billion; 1.25 B. $75 billion; 12 C. $12 billion; 5.00 D. $300 billion; 5.00
C
An increase in labor productivity _______ potential GDP and _______ potential GDP per hour of labor. A. decreases; decreases B. increases; decreases C. increases; increases D. decreases; increases
C
An increase in labor productivity _______ the real wage rate and _______ the equilibrium quantity of labor. A. increases; decreases; B. decreases; decreases; C. increases; increases; D. decreases; increases
C
The firm that printed your textbook bought the paper from XYZ Paper Mills. The value of the paper is counted in GDP as _______. A. an intermediate good B. investment C. part of the value of the textbook D. an import because most paper is imported into the United States
C
The inflation rate for the year ended June 2009 is negative ___ percent. The inflation rate for the year ended June 2010 is ___ percent. A. 1.2; -1.1 B. 1.1; -1.2 C. -1.2; 1.1 D. -1.1; 1.2
C
What are the effects of an increase in the population on potential GDP, the quantity of labor, the real wage rate, and potential GDP per hour of labor? An increase in the population _______ the real wage rate and _______ the equilibrium quantity of labor. A. decreases; decreases B. increases; increases C. decreases; increases D. increases; increases
C
What are the effects of an increase in the population on potential GDP, the quantity of labor, the real wage rate, and potential GDP per hour of labor? Potential GDP _______ and potential GDP per hour of labor _______. A. decreases; decreases B. increases; increases C. increases; decreases D. increases; increases
C
An economy has a fixed price level, no imports, and no income taxes. MPC is 0.8, and real GDP is $150 billion. Businesses increase investment by $2 billion. Calculate the multiplier and the change in real GDP The multiplier is ___ The increase in real GDP is $___ billion. A. 10; 5 B. 5; 160 C. 2; 10 D. 5; 10
D
Growth rates are calculated in a similar manner for all variables. Real GDP growth rate = [(Real GDP in _______ year−Real GDP in _______ year)÷Real GDP in _______ year ]×100. A. previous; current; current B. current; previous; current C. previous; current; previous D. current; previous; previous
D
If real GDP and aggregate expenditure are greater than equilibrium expenditure, what happens to firms? inventories? How do firms change their production? And what happens to real GDP? Firms' inventories increase, ... ... so they _______ production, and real GDP _______. A. decrease; increases B. increase; decreases C. increase; increases D. decrease; decreases
D
In the figure, the economy is at an equilibrium with real GDP of $20 trillion and a price level of 110. At this point, there is A. an inflationary gap. B. a full-employment equilibrium. C. price stability. D. a recessionary gap. E. an above full-employment equilibrium.
D
The calculation of GDP excludes the value of A. households' purchases of shampoo. B. government expenditure on office supplies. C. businesses' purchase of new machine tools. D. a family member painting the family home. E. expenditure on durable goods.
D
The people on Coral Island buy only juice and cloth. The CPI basket contains the quantities bought in 2020 (the reference base year). The average household spent $60 on juice and $30 on cloth in 2020 when the price of juice was $2 a bottle and the price of cloth was $5 a yard. In 2021, juice is $4 a bottle and cloth is $6 a yard. Calculate the CPI and the inflation rate in 2021. The CPI in 2021 is ___. The inflation rate in 2021 is ___ percent. A. 173.3; 10 B. 10; 73.3 C. 73.3; 173.3 D. 173.3; 73.3
D
The supply of loanable funds is influenced by _______. A. expected profit B. the real interest rate, and as the real interest rate rises, the supply of loanable funds increases C. a household's wealth, and the greater a household's wealth, the greater is its saving D. expected future income, and the higher a household's expected future income, the smaller is its saving today
D
Using the table above, the labor participation rate is A. 67 percent. B. 83 percent. C. 40 percent. D. 75 percent E. 48 percent.
D
Using the table above, the unemployment rate is A. 10 percent. B. 6.3 percent. C. 11.2 percent. D. 4.2 percent. E. 5.8 percent.
D
Which of the following is an example of investment? A. Mike buying an Apple iPad B. Randy buying a BMW C. Ron buying stocks and bonds D. Continental buying Airbus planes
D
An economy experiences a recessionary gap. As the economy adjusts to full employment, the money wage rate A. falls, shifting the aggregate demand curve leftward. B. rises, shifting the aggregate demand curve rightward. C. falls, increasing potential GDP. D. rises, shifting the aggregate supply curve leftward. E. falls, shifting the aggregate supply curve rightward.
E
For twenty years, Jim was a customer service representation at a call center in Minnesota. In order to save money, his firm moved the call center to India and laid off Jim two years ago. Jim has been unable to find a similar job anywhere. Jim's unemployment is best classified as A. frictional. B. cyclical. C. competitive. D. seasonal. E. structural.
E
Structural unemployment includes people who become unemployed from A. changes in the business cycle. B. changes in the seasons. C. normal changes in the labor force. D. going back to school. E. technological changes.
E
The table gives data for a nation. What is the amount of the country's GDP? A. $6,000 billion B. $6,900 billion C. $5,800 billion. D. $6,600 billion E. $6,200 billion
E
Which of the following decreases aggregate demand and shifts the AD curve leftward? A. a decrease in price level B. a decrease in potential GDP C. a decrease in the price of exported goods and services D. a tax cut E. a decrease in government expenditures
E
