Macro Final
b
if a corporate bond with a face value of $1,000 pays yearly coupon payments of $40, what is the coupon rate? a. 2.5% b. 4% c. 25% d. 40%
B
the real rate of interest is a. nominal interest rate plus the inflation rate b. nominal interest rate minus the inflation rate c. the nominal interest rate
b
the statement "the dell laptop costs $1,200" illustrates which function of money? a. medium of exchange b. unit of account c. store of value d. standard of deferred payment
a
countries with high rates of economic growth tend to have a. a labor force that is more productive b. a lower life expectancy at birth c. low rates of technological advancement d. a declining incidence of business cycle fluctuations
a
how do lower taxes affect aggregate demand? a. they increase disposable income, consumption, and aggregate demand b. they reduce disposable income, consumption, and aggregate demand c. they increase corporate invest and aggregate demand
b
A cost that involves spending money is a. an implicit cost b. an explicit cost c. an opportunity cost d. an indirect cost
d
All of the following are characteristics of a bond except a. a bond represents a promise to repay a fixed amount of funds b. the face value is repaid when the bond matures c. the coupon payment is the interest payment on the bond d. bonds generally pay dividends each year
b
An advantage of the household survey over the establishment survey market is that the household survey a. is based on actual payrolls, rather than on unverified answers b. includes the number of self-employed persons c. includes the number of discouraged workers
d
Assuming that the United States is the domestic economy _____ are goods and services produced by ____ and purchased by _____ a. exports, foreign countries, the US b. exports, the US, the US c. imports; foreign countries, foreign countries d. imports; foreign countries; the US
C
Gross national product is defined as a. the value of final goods and services produced within the United States b. the value of final goods and services produced outside of the United States c. the value of final goods and services produced by residents of the United States even if the production takes place outside of the United States.
A
How are intermediate goods treated in the calculation of GDP? a. their value is not counted separately, but included as part of the value of the final good for which they are an input. b. their value is counted separately, and their value is also included as part of the value of the final good for which they are an input c. they are included only if they are imported
d
If you invest $10,000 in a bond that earns 8% interest per year, how many years will it take to double your money? a. 1 year 3 months b. 2 years 6 months c. 8 years d. 8 years 9 months
b
If you want to earn a real interest rate of 3% on money you lend, and you expect that inflation will be 2%, what nominal rate of interest will you charge? a. 1% b. 5% c. 6% d. 9%
b
In the circular flow diagram, ____ supply the factors of production, and ____ goods and services. a. households, sell b. households, buy c. firms, sell d. firms, buy
a
John wants to expand his microbrewery business by buying out a competitor and is going to sell newly-issued corporate bonds to do so. This is an example of using _____ for his expansion plans. a. direct finance b. indirect finance c. coupon payments d. retained earnings
a
On a balance sheet, stockholder's equity is equal to a. assets minus liabilities b. the total value of outstanding shares of stock c. long term liabilities minus current liabilities
c
Potential GDP is a. the maximum of GDP that the economy can product b. the amount of GDP produced if there is no frictional unemployment c. the level of GDP attained when all firms are producing at capacity d. the amount of GDP produced if there is no structural unemployment
C
Profits that are reinvested in a firm rather than paid to the firm's owners are called a. dividends b. stock options c. retained earnings d. corporate bonds
d
The bureau of labor statistics would categorize a retiree who is not working as a. employed b. unemployed c. a discourage worker d. out of the labor force
c
The labor force equals the number of people a. employed b. unemployed c. employed plus unemployed d. in the working age population
d
The nominal GDP of the US in 2015 was approximately $17.3 trillion. This means that a. the value of output in 2015 was around 17.3 trillion b. total income in 2015 was around $17.3 trillion c. total spending in 2015 was about $17.3 trillion d. all of the above
c
The response of investment spending to an increase in the government budget deficit is called a. expansionary investment b. private dissaving c. crowding out d. income minus net taxes
b
The unemployment rate equals the number of unemployed divided by the ____, all times 100 a. number of employed b. labor force c. working age population d. total population
b
The unemployment rate is an important economic statistic that can tell us about the health of the economy. If the unemployment rate turns out to be high or higher than anticipated, we would expect a. it is more likely that an incumbent president will be re-elected b. that the stock prices are more likely to fall c. that jobs are less difficult to find
a
When the coupon rate on newly issued bonds ____ relative to the older, outstanding bonds, the market price of the older bond_________- a. increases; falls in the secondary market b. increases; rises in the secondary market c. decreases; falls in the secondary market d. decreases; falls in the primary market
a
a good measure of the standard of living is a. real GDP per capita b. nominal GDP per capita c. total real GDP d. total nominal GDP
a
an advantage of the establishment survey over the household survey of the labor market is that the establishment survey a. is based on actual payrolls, rather than unverified answers b. includes the number of self-employed persons c. includes persons employed at newly opened firms
a
an increase in the price level results in a ____ in the quantity of real GDP demanded because _____ a. decrease; a higher price level reduces consumption, investment, and net exports. b. increase; a higher price level reduces consumption, investment, and net exports c. decrease, a higher price level increases consumption, investment, and net exports.
c
because of the slope of the aggregate demand curve, we can say that a. a decrease in the price level leads to a lower level of real GDP demanded b. an increase in the price level leads to no change in the level of real GPD demanded c. a decrease in the price level leads to a higher level of real GDP demanded
a
if a corporate bond with face value of $8,000 has an interest rate of 4 percent paid once a year for a term of 30 years, what is the size of the coupon payment? a. $320 b. $2,000 c. $8,000 d. $9,600
a
if a firm has implicit costs as well as explicit costs a. accounting profit might be greater than economic profit b. economic profit will always be greater than accounting profit c. accounting profit will be equal to economic profit d. the firm has no economic profit
b
if a person withdraws $500 from his/ her savings and puts it in his/ her checking account, then M1 will ___ and M2 will _____ a. increase, decrease b. increase, not change c. not change, increase d. increase, increase
b
if nominal GDP exceeds real GDP for a specific year, then the GDP deflator must be a. equal to 100 b. greater than 100 c. less than 100 d. less than 0
a
if the nominal interest rate is 6% and the inflation is 9% then the real interest rate is ? a. -3% b. 3% c. 6% d. 15%
b (1/ .2)
if the required reserved ratio (RR) is 20% the simple deposit multiplier is ? a. 2 b. 5 c. 10 d. 20
b
in many corporations, the managers of the corporation run the corporation, although the shareholders own the corporation. In this situation a. there are no inside directors on the board of directors b. there is separation of ownership from control c. there are no outside directors on the board of directors
a
interest rates in the economy have fallen. How will this affect aggregate demand and equilibrium in the short run? a. aggregate demand will rise, the equilibrium price level will rise, and the equilibrium level of GDP will rise. b. aggregate demand will rise, the equilibrium level will fall, and the equilibrium level of GDP will rise.
a
silver is an example of a. commodity money b. barter money c. fiat money d. representative money
d
on the long-run aggregate supply curve a. a decrease in the price level decreases the level of potential GDP b. a decrease in the price level increases the aggregate quantity of GDP supplied c. a decrease in the price level decreases the aggregate quantity of GDP supplied d. a decrease in the price level has no effect on the aggregate quantity of GDP supplied.
b
people hold money as opposed to financial assets because money is a. earns interest b. is perfectly liquid c. earns no interest d. earns a higher return than other financial assets
a
potential GDP refers to the level of a. real GDP in the long run b. nominal gdp in the long run c. real gdp in the short run d. nominal gdp in the short run
14 years
qaccording to the "rule of 70" how many years will it take for real GDP per capita to double when the growth rate of real GDP per capita is 5%?
c
suppose the labor force stays constant, and the working-age population stays constant, but a greater number of persons who were unemployed became employed. The labor force participation rate will a. increase b. decrease c. remain constant d. not change
b
the ___ the reserve ratio, the ____ the money multiplier a. smaller, smaller b. smaller, larger c. larger, larger
a
the ____ curve has a positive slope because as prices of final goods and services rises, prices of inputs rise more slowly. a. short-run aggregate supply b. long-run aggregate supply c. short-run aggregate demand d. long-run aggregate demand
b
the more excess reserves bank choose to keep a. the larger the deposit multiplier b. the smaller the deposit multiplier c. the higher the required reserve ratio
c
the three main monetary policy tools used by the federal reserve to manage the money supply are a. interest rates, tax rates, and government spending b. tax rates, government purchases, and government transfer payments c. open market operations, discount policy, and reserve requirements
b
to calculate GDP by the expenditure method one must add a. wages, rents, interest, and profits b. consumption spending, investment spending, government spending, and net exports c. consumption spending investment spending, government spending, and exports.
a
to reduct the principal-agent problem a. a board of directors can tie the salaries of top management to the profitability of the firm. b. managers can take on more risk than they disclose to investors. c. managers can inflate profits on financial statements
b
unlike a sole proprietorship, a corporations shareholders a. own the firm and directly manage it as well b. own the firm but do not directly manage it c. do not own the firm but directly manage it d. do not own the firm and do not directly manage it
b
when an investor buys a corporate bond, the face value of the bond is _____ a. a measure of ownership in the corporation b. a loan to the corporation c. the coupon rate of the bond d. a dividend payment on the bond
a
when you open a checking account at the bank of America, bank of America a. has more reserves and more excess reserves b. has more reserves, but excess reserves remain unchanged c. has more deposits and less in excess reserves
b
which aggregate supply curve has a positive slope? a. long run only b. short run only c. both d. neither
c
which of the following causes the unemployment rate to understate the true extent of joblessness? a. many full time workers really want to be part time workers. b. persons who collect unemployment benefits report themselves to be searching for a jon c. discouraged workers are not counted as unemployed
D
which of the following is an asset for a bank? a. deposits of its customers b. short term borrowing c. shareholders equity d. loans
d
which of the following will shift the aggregate demand curve to the right, ceteris paribus? a. an increase in interest rates b. a decrease in disposable income c. a decrease in expected profits for firms d. an increase in net exports
c
which of the following would cause the short-run aggregate supply curve to shift to the right? a. an increase in price level b. a decrease in inflation c. technological advance d. an increase in interest rates
