Macro Final

Countries with a strong rule of law have faster economic growth.

Which of the following accurately describes the impact of the rule of law on a country's economic growth rate?

price stability, economic growth, and high employment

Which of the following are goals of monetary policy?

D) all of the above

Which of the following is a function that money serves? A) medium of exchange B) unit of account C) store of value D) All of the above are correct.

government subsidization of research and development

Which of the following policies are designed specifically to directly promote technological change in an economy?

a $5,000 per-car fee imposed on all sports utility vehicles imported into the United States

example of a tariff?

move the economy to a lower point on the short-run Phillips curve.

A decrease in aggregate demand will

savers; borrower

A financial intermediary's main function is to match ________ with excess funds to ________ with a shortage of funds.

short-run

According to the ________ Phillips curve, the unemployment rate and the inflation rate are negatively related.

national saving in excess of domestic investment will decrease by $35 million.

According to the saving and investment equation, if net foreign investment falls by $35 million,

Alejandro's real wage falls.

Alejandro expects the price level to rise from 105 this year to 108 next year. If the price level rises to 110 next year instead of 108, which of the following will occur?

The price of milk is too high.

An example of normative economic statement?

China has a lower opportunity cost of producing corn relative to Japan.

Assume that China has a comparative advantage in producing corn and exports corn to Japan. We can conclude that

Exports are $15 billion, and imports are $10.5 billion.

Consumption spending is $4.5 billion, gross private domestic investment is $3 billion, and government expenditures are $2 billion. If GDP is $14 billion, which of the following could be true regarding exports and imports in the economy?

the reduction in economic surplus resulting from not being in competitive equilibrium.

Deadweight loss refers to

access to funds for investment and access to technology.

Foreign investment can give a low-income country

The aggregate demand curve would have shifted to the left.

German automobile exports were hurt in 2008 as a result of the recession. How would this decrease in exports have affected Germany's aggregate demand curve?

smaller than 1/RR.

If banks do not loan out all their excess reserves, then the real world multiplier is

changes in the CPI overstate the true rate of inflation.

If consumers purchase fewer of those products that increase most in price and more of those products that decrease in price as compared to the CPI basket, then

not be affected.

If expected inflation falls, the long-run Phillips curve will

aggregate demand will rise, and the price level will rise.

If the Fed pursues expansionary monetary policy,

5%.

If the number employed is 190 million, the working-age population is 230 million, and the number unemployed is 10 million, then the unemployment rate is

quantity demanded equals quantity supplied. The market price will then equal the equilibrium price.

If the quantity demanded for a product exceeds the quantity supplied, the market price will rise until

not change; not change

If you transfer all of your currency to your checking account, then initially, M1 will ________ and M2 will ________.

consumer surplus plus producer surplus is maximized.

In a competitive market when there is no deadweight loss,

a U.S. export and an French import.

When Sophie, a French citizen, purchases a Dell computer in Paris that was produced in Texas, the purchase is

C) The Fed is concerned that aggregate demand would continue to exceed the growth in potential GDP.

In which of the following situations would the Fed conduct contractionary monetary policy? A) The Fed believes that aggregate demand was growing too slowly to keep up with potential GDP. B) The Fed fears that unemployment is climbing above the natural rate. C) The Fed is concerned that aggregate demand would continue to exceed the growth in potential GDP. D) The Fed is worried that deflation will become a problem.

quantity of capital per hour worked; technology improves

Labor productivity will increase if the ________ increases and ________.

the level of GDP attained when all firms are producing at capacity.

Potential GDP is defined as

Unlimited wants exceed limited resources

Scarcity refers to the situation in which

10%

Suppose that real GDP for 2010 was $10,000 billion and real GDP for 2011 was $11,000 billion. What is the rate of growth of real GDP between 2010 and 2011?

attainable

The ________ production points on a production possibility curve are the points along and inside the production possibility frontier.

balance of trade.

The difference between the value of the goods a country exports and the value of the goods a country imports is the country's

transfer payments.

The fastest growing category of government expenditure is

increases; decreases

The federal government debt ________ when the federal government runs a deficit and ________ when the federal government runs a surplus.

increases, the quantity of yogurt demanded will decrease.

The law of demand implies, holding everything else constant, that as the price of yogurt

A) changes in price level

The level of long-run aggregate supply is affected by all of the following except A) changes in the price level. B) changes in the technology. C) changes in the capital stock. D) changes in the number of workers.

a price floor.

The minimum wage is an example of

the dollar has depreciated.

When the market value of the dollar falls relative to other currencies around the world, we say that

What goods and services to produce;how will these goods and services be produced; and who receives them?

Trade offs force society to make choices when answering what three fundamental questions?

D) all the above

What factors are most important for determining exchange rate fluctuations in the long run? A) relative price levels across countries B) relative rates of productivity growth across countries C) preferences for domestic and foreign goods across countries D) All of the above are correct.

through an increase in supplies of factors of production

Without technological advancement, how can a nation achieve economic growth?

A freightliner employee that got laid off because of the recession of 2007-2009.

an example of a worker experiencing cyclical unemployment?