Macro Exam Questions

A Delta pilot who lost his job, because demand for air travel decreased significantly this year dueto the COVID-19 pandemic and a resulting recession, is A)cyclically unemployed. B)seasonally unemployed. C)structurally unemployed. D)frictionally unemployed.

A

A pack of cigarettes is an example of a A)commodity money. B)representative money. C)fiat money. D)barter money.

A

An example of an INTERMEDIATE good would be A)the bread that goes into a sub sandwich that is sold by Quiznos. B)a sub sandwich sold by Quiznos. C)the potato chips sold by Quiznos. D)the soda pop sold by Quiznos.

A

If your parents buy you a brand new condo in Auburn in 2020, it will be included in GDP for 2020as... A)investment, I. B)consumption, C.C)government purchases, G. D)net exports, NX.

A

Marla is an architect who is designing a home for Chuck. Chuck is paying Marla $150 per hour to design his new home. When Chuck and Marla get married, Marla continues to work on designing the home, but she no longer charges Chuck for her work. As a result, GDP ________ because________. A)falls; Marla's architectural design services are no longer bought by Chuck once they're married and instead are part of the household production. B)falls; Marla's work takes place in the underground economy once she's married. C)falls; Marla's work becomes less valuable once she's married. D)rises; Marla becomes more productive once she's married.

A

The "international trade" effect states that A)an increase in the price level will lower net exports. B)an increase in the price level will lower imports. C)an increase in the price level will raise exports. D)an increase in the price level will raise net exports.

A

The "substitution" bias in the CPI refers to the idea that consumers ________ the quantity of products they buy when prices change (i.e. demand curves are elastic), but the CPI does NOT reflect this and therefore ________ the cost of the market basket and the inflation rate. A)change; overestimates. B)change; underestimates. C)do not change; overestimates. D)do not change; underestimates.

A

Which is the largest component of aggregate expenditure? A)consumption, C. B)government expenditures, G. C)net export, NX. D)planned investment expenditures, I.

A

Which of the following is a microeconomic question? A)How will Apple decide on a selling price for the iPad? B)Why do economies experience periods of recession? C)Why has growth in the economy slowed down over the past decade? D)Will government intervention lower the unemployment rate?

A

Which of the following would you expect to result in faster economic growth? A)the invention of new computers that increase labor productivity. B)a decrease in the average level of education in the economy. C)a decrease in research and development spending. D)a decrease in the stock of capital per worker.

A

If in 2020 your parents purchase a beautiful historic home that was built in 1850, what will be counted in GDP in 2020? A)the price of the house plus the fees that your parents paid to their real estate agent. B)only the fees that your parents paid to their real estate agent. C)only the price of this historic 1850's home. D)none of the above.

B

Significant economic growth did NOT begin in the world until A)1000 A.D. B)1750 A.D. C)1820 A.D. D)the 20th century A.D.

B

The "quality" bias in the CPI refers to the idea that price increases in the CPI reflect pure inflation,but ________ quality increases. This causes the CPI to ________ the cost of the market basket. A)not; understate. B)not; overstate. C)also; understate. D)also; overstate.

B

Which of the components of aggregate expenditure can be negative? A)planned investment expenditures, I. B)net export, NX. C)government expenditures, G. D)consumption, C.

B

Which of the following is a positive economic statement?A)Foreign citizens should not be allowed to work without a work visa. B)Due to a decrease in state funding, university tuition has risen. C)The government should ban diesel engines in automobiles. D)People should use public transportation more often.

B

Which of the following is an example of a worker experiencing cyclical unemployment? A)a lifeguard who was hired during the summer season is laid off after summer is over. B)a freightliner employee that got laid off because of the recession of 2020. C)a worker who quits his job because he does not get along with his boss. D)an assembly line worker who loses his job because of automation. E)a worker who changes jobs to move closer to her family.

B

Which of the following is the best measure of the cost of living? A)GDP deflator. B)CPI. C)real GDP. D)real GDP per person.

B

A student who just graduated from college but has not found a job would most likely be A)seasonally unemployed. B)structurally unemployed. C)frictionally unemployed. D)cyclically unemployed.

C

Silver is an example of a A)fiat money. B)barter money. C)commodity money. D)representative money.

C

Suppose you want to open a coffee shop in your hometown. You consider taking out a small business loan from a local bank. Which of the scenarios below would you prefer as a borrower? -Scenario I: Nominal interest rate is 10%, inflation is 3%. -Scenario II: Nominal interest rate is 15%, real interest rate is 12%. -Scenario III: Nominal interest rate is 7%, inflation is 6%. -Scenario IV: Nominal interest rate is 9%, real interest rate is 6%. A)Scenario I. B)Scenario II. C)Scenario III. D)Scenario IV.

C

The construction of a new highway is included in U.S. A)consumption expenditures, C. B)investment, I. C)government purchases, G. D)net exports, NX.

C

Which of the following is a normative economic statement? A)Better awareness of health risks has decreased tobacco use. B)A reduction in tobacco subsidies has caused the price of tobacco to increase. C)Tobacco products should be banned in all public spaces. D)The increase in tobacco taxes has caused an increase in the price of cigarettes.

C

Which of the following would cause the short-run aggregate supply curve, SRAS, to shift to the right? A)a decrease in labor force. B)a decrease in labor productivity. C)a technological advance. D)an increase in the price level.

C

In a market economy, who decides what goods and services will be produced?

Consumers and producers

If a person withdraws $1,000 from his/her savings account and puts it in his/her checking account, then M1 will ________ and M2 will ________. A)not change; not change. B)not change; decrease. C)not change; increase. D)increase; decrease. E)increase; not change.

E

All of the following policies are ways for a country to promote long-run economic growth except A)increasing vaccinations against infectious diseases. B)undergoing political reform to decrease corruption. C)enacting stronger laws to protect property rights. D)imposing stricter regulations to limit foreign direct investment.

D

If U.S. dollar appreciates against the Australian dollar from $1=1.2 AU $ to $1=1.5 AU $, what will happen to net exports, NX? A)NX will increase because exports to Australia will increase. B)NX will increase because exports to Australia will decrease. C)NX will decrease because exports to Australia will increase. D)NX will decrease because exports to Australia will decrease.

D

If a person withdraws $500 from his/her savings account and puts it in his/her checking account,then M1 will ________ and M2 will ________. A)not change; not change. B)not change; increase. C)not change; decrease. D)increase; not change. E)increase; decrease.

D

In a centrally planned economy, who decides what goods and services will be produced? A)consumers AND producers. B)only consumers. C)only the producers. D)the government.

D

The Bureau of Labor Statistics would categorize a full-time student who is not working or looking for a job as A)unemployed. B)employed. C)a discouraged worker. D)out of the labor force.

D

The advice to "keep searching, there are plenty of jobs around here for which you are qualified,"would be most appropriate for which of the following types of unemployment? A)seasonal unemployment. B)structural unemployment. C)cyclical unemployment. D)frictional unemployment.

D

The long-run aggregate supply curve, LRAS A)has a steep but positive slope. B)has a negative slope. C)is horizontal. D)is vertical.

D

Which of the following best describes the "wealth effect"? A)When the price level falls, the nominal value of household wealth falls. B)When the price level falls, the nominal value of household wealth rises. C)When the price level falls, the real value of household wealth falls. D)When the price level falls, the real value of household wealth rises.

D

Which of the following goods is a FINAL good and is, therefore, directly counted in GDP? A)the plastic bags that Subway purchases to wrap its sandwiches. B)the bread that Subway purchases for its sandwiches. C)the lettuce that Subway purchases for its sandwiches. D)a 12-inch Subway sandwich purchased by a student.

D

Which of the following is a macroeconomic question? A)What determines the production of video game consoles? B)What determines the salaries of college professors? C)What factors determine the price of Oreo cookies? D)What determines the unemployment rate?

D

Which of the following is an example of a worker experiencing structural unemployment? A)a lifeguard who was hired during the summer season is laid off after summer is over. B)a freightliner employee that got laid off because of the recession of 2020. C)a worker who quits his job because he does not get along with his boss. D)an assembly line worker who loses his job because of automation. E)a worker who changes jobs to move closer to her family.

D

Which of the following is likely to increase measured GDP?2 A)More people decide to do their own lawn maintenance and give up using a professional service. B)Tax rates increase and more people attempt to underreport their income for tax purposes. C)A greater number of women decide to stay at home and take care of their children under theage 5. D)Marijuana becomes legal to grow and sell in all 50 U.S.states.

D

Which of the following will decrease investment, I? A) a decrease in corporate taxes, T. B)a decrease in real interest rates. C)an increase in cash flow, CF. D)investors become pessimistic.

D

Which of the following would cause the short-run aggregate supply curve, SRAS, to shift to the left? A)an increase in the price level. B)an increase in labor force. C)a decrease in the price level. D)a decrease in capital stock.

D