MACRO FINAL
What is the law of supply and how do we illustrate it? The law of supply states that other things remaining the same, the _______ the price of a good, the _______.
higher; greater is the quantity supplied
Slowdonia's current growth rate of real GDP per person is 2 percent a year. How long will it take to double real GDP per person?
35 years
The present value of $400, three years in the future if the interest rate is 2 percent is ______.
$376.93
Suppose the economy is experiencing frictional unemployment of 1 percent, structural unemployment of 3 percent and cyclical unemployment of 4 percent. What is the natural unemployment rate?
4 percent.
At the end of last year the Consumer Price Index was equal to 157.5 and at the end of this year it was equal to 163.8. What is the inflation rate over this time period?
4.0 percent
Which of the following is correct? A. Aggregate expenditure equals GDP but is less than aggregate income. B. Aggregate income, aggregate expenditure and GDP are all equal. C. Aggregate income is greater than GDP but equal to aggregate expenditure. D. Aggregate income is greater than aggregate expenditure but equal to GDP.
Aggregate income, aggregate expenditure and GDP are all equal.
The Fed decreases the quantity of real money supplied to $0.9 trillion. Draw a new MS curve that shows the effect of the Fed's action. Label it. Draw a point at the new equilibrium quantity of money and interest rate.
Before the Fed decreases the quantity of money, the equilibrium interest rate is 9 percent a year. (screenshot)
The figure shows the circular flow model. During 2017, flow A was $781 billion, flow B was $426 billion, flow D was $179 billion, and flow E was $ 15 billion. Calculate GDP and government expenditure. (screenshot)
GDP is $781 billion. Government expenditure is $161 billion.
________ predicts that real GDP per person can grow indefinitely.
New growth theory
The first table describes an economy's labor market in 2018 and the second table describes its production function in 2018. What are labor productivity and potential GDP in 2018? (screenshot)
Potential GDP is $2,800. Labor productivity is $56.00 per hour of labor.
______ has a comparative advantage in producing caps. If Sue and Tessa each specialize in producing the good in which they have a comparative advantage and trade 1 jacket for 3 caps, ______.
Sue; both Sue and Tessa gain
On January 1, 2016 Terry's Towing Service owned 7 tow trucks valued at $420,000. During 2016, Terry's bought 9 new trucks for a total of $675,000. At the end of 2016, the market value of all the firm's trucks was $969,000. What was Terry's gross investment? Calculate Terry's depreciation, and net investment.
Terry's gross investment was $675,000. Terry's depreciation was $126000. Terry's net investment was 549,000 dollars.
The table provides some data on real GDP and the population of Euronia in 2013 and 2014. What is the growth rate of real GDP in Euronia in 2014? What is the growth rate of real GDP per person in Euronia in 2014? (screenshot of table)
The growth rate of real GDP in Euronia in 2014 is 10 percent. The growth rate of real GDP per person in Euronia in 2014 is 6.24 percent.
The table provides some data on real GDP and the population of Japan in 2011 and 2012. Calculate the growth rate of real GDP and the growth rate of real GDP per person. Calculate the approximate number of years it takes for real GDP per person in Japan to double if the population growth rate and the real GDP growth rate are maintained at their 2012 levels. (screenshot of table)
The growth rate of real GDP is 1.49 percent. The growth rate of real GDP per person is 1.65 percent. If the population growth rate and the real GDP growth rate are maintained at their 2012levels, real GDP per person in Japan will double in approximately 43 years .
The table gives information reported by the Bureau of Labor Statistics for 2009. Calculate the unemployment rate, the labor force participation rate, and the employment-to-population ratio. (screenshot)
The unemployment rate is 9.25 percent. The labor force participation rate is 65.37 percent. The employment-to-population ratio is 59.32 percent.
The table shows the amounts held as the various components of M1 and M2. What are the values of M1 and M2? (screenshot)
The value of M1 is $365 billion. The value of M2 is $1180 billion.
On the Fed's balance sheet, assets include
U.S. government securities and mortgage-backed securities.
When the price level in France increases while the exchange rate and the price level in the United States remain the same, the result is that
U.S.-made goods become relatively cheaper compared to French-made goods. U.S. citizens are less likely to buy French-made goods. French citizens are more likely to buy U.S.-made goods.
It is expected that the price of a bushel of wheat will increase in one month. This belief will result in
a decrease in current supply of wheat.
Which of the following statements are TRUE regarding the demand for labor? I. The quantity of labor demanded depends on the real wage rate. II. If the money wage rate increases and the price level remains the same, the quantity of labor demanded decreases.
both I and II
An increase in the quantity of capital increases ________ and increase in the full-employment quantity of labor increases ________.
both the SAS and the LAS; both the SAS and the LAS
An increase in potential GDP increases ______.
both long-run aggregate supply and short-run aggregate supply
Positive economic statements
can be tested against the facts.
The income earned by the people who sell the services of the factor of production _______ is called _______.
capital; interest
The monetary base does NOT include A. checking accounts at commercial banks. B. commercial banks' reserves. C. Federal Reserve notes. D. reserves of depository institutions.
checking accounts at commercial banks.
Population increases are the limiting factor in the growth process in
classical growth theory.
Which of the following exchange rate policies uses a target exchange rate, but allows the target to change?
crawling peg
Currently, the United States is a _______.
debtor nation and a net borrower
Suppose that the money multiplier is 4. If the monetary base decreases by $2 million, the quantity of money will
decrease by $8 million.
An increase in the currency drain
decreases the size of the money multiplier.
Suppose real GDP for a country is $13 trillion in 2010, $14 trillion in 2011, $15 trillion in 2012, and $16 trillion in 2013. Over this time period, the real GDP growth rate is
decreasing.
Which of the following most likely would decrease frictional unemployment?
effectiveInternet-based employment services and job registries
Producers of smartphones expect the population to increase and the number of firms producing and selling smartphones to increase. You predict that the price of a smartphone will ______ and the quantity of smartphones bought will ______.
either rise, fall, or remain the same
In goods markets ________ and in factor markets ________.
firms sell to households; households sell to firms
The larger the value of U.S. imports, the greater the quantity of ________ causing the quantity supplied of dollars to ________.
foreign currencydemanded; increase
A surplus occurs when the price is
greater than the equilibrium price.
According to the Ricardo-Barro effect,
households increase their personal saving when governments run budget deficits.
In part, microeconomics is concerned with
how a business firm decides upon the amount it produces and the price it sets.
If the exchange rate falls, then the expected profit from holding the domestic currency
increases
Which of the following is correct? The demand for money
increases as real GDP increases.
How is the money multiplier influenced by the banks' reserve ratio? An increase in banks' reserves with no change in deposits _____ the banks' reserve ratio and _____ the money multiplier.
increases; decreases
Ramen noodles and rice are substitutes. If the price of ramen noodles increases, how does the demand for rice change? If the price of ramen noodles increases, the demand for rice will _______.
increase, and the demand curve for rice will shift rightward
A demand curve that illustrates the law of demand ______.
is downward sloping
The equilibrium quantity of a good will increase and its equilibrium price might rise, fall, or stay the same when
its demand and supply both increase.
The short-run aggregate supply curve is upward sloping because
money wage rates do not immediately change when the price level changes.
A country that is borrowing more from the rest of the world than it is lending to the rest of the world is a ______, and a country that during its entire history has borrowed more from the rest of the world than it has lent to it is a ______.
net borrower; debtor nation
In neoclassical growth theory, technological change ________.
occurs by chance
The bias in the CPI typically
overstates inflation.
A new 2017 Honda Civic produced in 2017 and purchased in 2018 is
part of GDP in 2017.
If the economy is in short run equilibrium then
real GDP can be greater than, less than, or equal to potential GDP.
The relationship between real GDP and potential GDP is that
real GDP fluctuates about potential GDP.
Draw the long-run aggregate supply curve when potential GDP is $18.5 trillion. Label it.
screenshot
If new capital increases labor productivity, the supply of labor ________ and the demand for labor ________.
stays the same; increases
The virus decreases the _______.
supply of potato chips and decreases the quantity of potato chips demanded
Now suppose that the price is $ 8 a milkshake. Describe the situation in the milkshake market and explain how the price adjusts. If the price is $ 8 a milkshake, there is a ______ of milkshakes, so the price of a milkshake ______. As the market moves toward the equilibrium price, the quantity demanded _______ and the quantity supplied _______.
surplus; falls increases; decreases
The U.S. interest rate differential rises when ______.
the U.S. interest rate rises and the foreign interest rate falls
For a commercial bank, the term "reserves" refers to
the cash in its vaults and its deposits at the Federal Reserve.
When an event occurs that changes the demand for coffee makers, _______ if demand increases and ______ if demand decreases.
the demand curve shifts rightward; the demand curve shifts leftward
The opportunity cost of something you decide to get is
the highest valued alternative you give up to get it.
When cyclical unemployment increases and other things remain the same, ______.
the natural unemployment rate does not change
As we move up along the long-run aggregate supply curve, ______.
the real wage rate remains constant
Which of the following tools is NOT a policy tool of the Fed?
the tax rate on interest income
In the figure, at the real wage rate of $50 (screenshot)
there is a surplus of 60 billion hours per year.
When an economy produces more houses and fewer typewriters, it is answering the ________ question.
what
When a textile company keeps track of its inventory using a computer and its competitor uses a pad of paper and a pencil, they are both answering the ________ part of one of the two big economic questions.
"how"
Use the information in the table above to calculate the value of national saving. (screenshot of table)
$25 million
If saving is $850 billion, investment is $500 billion, government expenditure on goods and services is $600 billion and net exports is $100 billion, then calculate private sector balance.
$350 billion
The demand curve for U.S. dollars slopes downward because as the dollar ________ U.S. goods become ________ expensive to foreign residents, so they purchase fewer U.S. goods, and the quantity of dollars demanded decreases.
appreciates; more
Suppose the market for loanable funds is in equilibrium. If the expected profit falls, the equilibrium real interest rate ________ and the quantity of loanable funds ________.
falls; decreases
The price of a bond _______ and the interest rate _______.
falls; rises
The ________ the exchange rate, the ________ are foreignminusproduced goods and hence the greater the quantity of dollars supplied.
higher; cheaper
What is the law of demand and how do we illustrate it? The law of demand states that other things remaining the same, the _______ the price of a good, the _______.
higher; smaller is the quantity demanded
When the population increases with no change in labor productivity, employment ________ and potential GDP ________.
increases; increases
In the absence of a Ricardo-Barro effect, a government budget deficit ________ the demand for loanable funds, ________ the real interest rate, and ________ investment.
increases; increases; crowds out
The resources that are used to produce goods and services - _____ are factors of production.
land, labor, capital, and entrepreneurship
After the Fed decreases the quantity of money, at an interest rate of 9 percent a year, people want to hold _______ money than the quantity supplied, so they _______ bonds.
more; sell
The aggregate demand curve shows the ________ relationship between the price level and ________.
negative; the quantity of real GDP demanded
Think about the demand for three game consoles: XBox One, PlayStation 4, and Wii U. What is the effect of the following events on the demand for Xbox One games and the quantity of Xbox One games demanded, other things remaining the same? The events are A. Upper A new game console comes onto the market comma which is a close substitute for XBox One. B. The prices of a PS 4 and a Wii Upper U fall. C. Consumers' incomes increase. D. The expected future price of an XBox One game falls.
Event A ______ the ______ Xbox One games. decreases; demand for Event B ______ the ______ Xbox One games. decreases; demand for Event C ______ the ______ Xbox One games. increases; demand for Event D ______ the ______ XBox One games. decreases; demand for
________ economists believe that active help from fiscal and monetary policy is needed to insure that the economy is operating at full employment.
Keynesian
Michael, an Internet service provider, bought an existing business worth $500,000 on December 31, 2017. During 2018, his business grew and he bought $200,000 of new servers. The market value of his older servers fell by $150,000. What was Michael's gross investment, depreciation and net investment during 2018?
Michael's gross investment during 2018 was $200,000. Michael's depreciation during 2018 was $150000. Michael's net investment during 2018 was $50,000.
The people on Coral Island buy only juice and cloth. The CPI basket contains the quantities bought in 2013 (the reference base year). The average household spent $60 on juice and $30 on cloth in 2013 when the price of juice was $2 a bottle and the price of cloth was $5 a yard. In 2014, juice is $4 a bottle and cloth is $6 a yard. Calculate the CPI and the inflation rate in 2014.
The CPI in 2014 is 173.3. The inflation rate in 2014 is 73.3 percent.
The people who live on Second Life Island consume only juice and cloth. Last year, which was the CPI base year, the price of juice was $3 a bottle, the price of cloth was $5 a length, and the average urban household spent $15 on juice and $35 on cloth. This year, the price of juice is $2 a bottle and the price of cloth is $7 a length. What is the CPI in the current year?
The CPI in the current year is 118.
Calculate the M1 and M2 money multipliers using the information on the right. (screenshot of info)
The M1 money multiplier is 1.75 and the M2 money multiplier is 11.33.
Suppose the exchange rate is 90 yen per U.S. dollar and the United States wants to keep the exchange rate at a target rate of 90 yen per U.S. dollar. If the demand for U.S. dollars decreases, the Fed ______.
buys dollars to raise the exchange rate
Unemployment caused by the fluctuation of the business cycle is called ________ unemployment.
cyclical
A flexible exchange rate is an exchange rate that is determined by ______ in the foreign exchange market with no direct intervention by the _____.
demand and supply; central bank
An increase in labor productivity increases potential GDP because ______.
employment increases and a given amount of employment produces more real GDP
Leisure Land produces only sunscreen and camel rides. The table shows the marginal benefit and marginal cost schedules for camel rides. If Leisure Land produces 53 camel rides, the marginal benefit from camel rides ______ the marginal cost of camel rides. To achieve allocative efficiency, Leisure Land must ______ the quantity of camel rides produced. (table in screenshots)
exceeds; increase
A decrease in the demand for hot dogs brings a ______ in the price of a hot dog and ______ in the quantity of hot dogs supplied.
fall; a decrease
"As more people buy bicycles, the demand for bicycle helmets will increase and the price of a helmet will decrease. The fall in the price of a bicycle helmet will decrease the supply of bicycle helmets."
false; an increase in demand for bicycle helmets does not decrease the price of a bicycle helmet and a decrease in the price of a bicycle helmet does not decrease the supply of bicycle helmets
The exchange rate policy adopted by China until July 2005 was a _______ exchange rate. To make it work, China _______.
fixed; buys and sells U.S. dollar reserves to maintain the target exchange rate
When the economy is operating at full employment, the natural unemployment rate consists of only
frictional and structural unemployment.
Suppose that the exchange rate rises from 80 yen per U.S. dollar to 90 yen per U.S. dollar. What is the effect of this change on the quantity of U.S. dollars that people plan to sell in the foreign exchange market? The quantity of U.S. dollars that people plan to sell in the foreign exchange market _______.
increases and a movement up along the supply curve of U.S. dollars occurs
Why does the PPF bow outward and what does that imply about the relationship between opportunity cost and the quantity produced? The PPF bows outward because as we move from point A to point B to point C, the opportunity cost of producing a blanket ______. (graph in screenshot)
increases. Resources are not equally productive in all activities
If the price of a milkshake falls, a ______ the demand curve occurs. If any factor that influences buying plans other than the price changes, then a ______ the demand curve occurs.
movement down along; shift of
The currently used method for calculating the CPI
probably overstates inflation.
In the long-run
real GDP is equal to potential GDP.
Dairies make low-fat milk from full-cream milk. In the process of making low-fat milk, the dairies produce cream, which is made into ice cream. The graph shows the supply curve of low-fat milk. Suppose the wage rate of dairy workers rises. Draw a new supply curve that shows the effect of this event. Label the curve.
screenshot
Draw a graph to illustrate how an increase in the supply of loanable funds and a decrease in the demand for loanable funds can lower the real interest rate and leave the equilibrium quantity of loanable funds unchanged. Draw a demand for loanable funds curve. Label it DLF0. Draw a supply of loanable funds curve. Label it SLF0. Draw a point at the equilibrium real interest rate and quantity of loanable funds. Label it 1. Draw a curve that shows a decrease in the demand for loanable funds. Label it DLF1. Draw a curve that shows an increase in the supply of loanable funds. Draw it in such a way that the equilibrium quantity of loanable funds does not change. Label it SLF1. Draw a point at the new equilibrium real interest rate and quantity of loanable funds. Label it 2.
screenshot
Draw a labor supply curve and a labor demand curve. Label them LS0 and LD0. Draw a point the equilibrium quantity of labor and the equilibrium real wage rate. Label it 1. Draw and label a curve that shows the effect of an increase in labor productivity. Draw a point at the new equilibrium quantity of labor and the equilibrium real wage rate. Label it 2.
screenshot
Suppose that the United States cracks down on illegal immigrants and returns millions of workers to their home countries. Draw a labor supply curve and a labor demand curve for the United States. Label the curves LS0 and LD0. Draw a point at the equilibrium quantity of labor and the equilibrium real wage rate. Label it 1. Now suppose the United States returns millions of illegal immigrant workers to their home countries. Draw and label a curve that shows the effect of this return of workers. Draw a point at the new equilibrium quantity of labor and the equilibrium real wage rate. Label it 2.
screenshot
The figure shows the demand curve for milkshakes. Suppose that the price of a milkshake falls but all other influences on buyers' plans remain the same. Show the effect in the graph. Draw either an arrow on the demand curve showing the direction of change or a new demand curve.
screenshot
A south sea island produces only coconuts. In 2014, the price of a coconut is $2.50 and the quantity produced is 400. In 2017, the price of a coconut is $3.00 and the quantity produced is 300. 2014 is the reference base year. What is real GDP in 2017 in terms of base-year prices? Real GDP in 2017 in terms of base-year prices is ______.
$750
In one hour, Sue can produce 60 caps or 18 jackets and Tessa can produce 60 caps or 24 jackets. Sue's opportunity cost of producing a cap is ______ jackets and Tessa's opportunity cost of producing a cap is ______ jackets.
0.3; 0.40
If the US interest rate is 1.5 per cent, Canada's interest rate is 1 per cent, the US inflation rate is 1.2 per cent and Canada's inflation rate is 0.70 per cent, then calculate the US interest rate differential.
0.5 per cent
In 2016 and in 2017, consumers in Dexter consumed only books and pens. The prices and quantities for 2016 and 2017 are listed in the table. The reference base period for Dexter's CPI is 2016, and 2016 is also the year of the Consumer Expenditure Survey. Calculate the inflation rate in 2017. The inflation rate in 2017 is ______ percent. (table in screenshot)
140.0
The CPI basket contains 400 oranges and 800 pens. In the base year, the price of an orange is $1.00 and the price of a pen is $0.75. This year, urban consumers each buy 300 oranges at $2.00 each and 850 pens at $1.00 each. The CPI this year is ________.
160
If the nominal interest rate is 8 percent and inflation is 3 percent, what is the real interest rate?
5 percent
The table above represents the marginal cost and marginal benefit associated with pizza (in terms of movies). What amount of pizza should be produced if resources are to be used efficiently? (look in screenshots for table)
7 pizzas
The graph gives a long-run aggregate supply curve and a short-run aggregate supply curve. Technology advances and the full-employment price level remains constant. Draw the new long-run aggregate supply curve and the new short-run aggregate supply curve. Label the curves. Draw a point at the full-employment price level and the new potential GDP.
screenshot
The graph shows an aggregate demand curve. Suppose there is a decrease in foreign income. Draw a new curve to show the effect of this change on aggregate demand. Label the new curve C1. Now suppose that there is a decrease in taxes. Draw a new curve to show the effect of this change on the original AD curve. Label the new curve C2.
screenshot
The graph shows the demand curve for U.S. dollars. Draw a new demand curve that shows the effect of an increase in the U.S. interest rate differential. Label it.
screenshot
The graph shows the demand for and supply of potato chips. Draw a curve that shows the effect of a virus that destroys potato crops and decreases the quantity of potato chips produced by 40 million bags a week at each price. Label the curve. Draw a point at the new equilibrium price and quantity.
screenshot
The graph shows the foreign exchange market prior to any intervention by China. Draw a point at the equilibrium exchange rate and equilibrium quantity of dollars. Suppose that China's target exchange rate is 7 yuan per U.S. dollar. Draw a horizontal line at the target exchange rate. Label it. Draw an arrow to show the surplus or shortage of U.S. dollars at China's target rate. Label it.
screenshot
The left graph shows an economy's labor market. Draw a point that shows equilibrium in the labor market. The right graph shows the economy's production function. Draw a point on the production function that shows potential GDP in this economy.
screenshot
The table shows the demand and supply schedules for milkshakes. (screenshot) Draw a demand curve and a supply curve using the numbers in the table. Label the curves. Draw a point to show the equilibrium price and equilibrium quantity.
screenshot
What are the influences on buying plans that change demand, and do these influences increase or decrease demand? Complete the following question about a change in demand. The graph shows a demand curve for coffee makers. Draw a demand curve that shows what happens in the market for coffee makers if the price of a takeout coffee comma a substitute for a coffee maker comma rises but all other influences on buying plans remain the same. Label the curve D1.
screenshot
The table gives an economy's aggregate demand, short-run aggregate supply, and long-run aggregate supply schedules. (screenshot) Draw the LAS curve, the SAS curve and the AD curve. Label the curves. Draw a point at the short-run macroeconomic equilibrium. Draw a horizontal arrow at the equilibrium price that shows the output gap. The graph shows _______ gap.
screenshot a recessionary
What is the effect on the price and quantity of laptops if more firms produce laptops? The graph shows the demand curve for laptops and the supply curve of laptops. Draw a point at the equilibrium price and quantity of laptops. Label it 1. Draw a second supply curve that shows what happens in the market for laptops if more firms produce laptops but all other influences on selling plans remain the same. Label the curve S1. Draw a point at the new equilibrium price and quantity. Label it 2.
screenshots
As labor continues to increase, a nation will
see a movement along the aggregate production function, but real GDP will increase less and less.
Economic growth can be pictured in a production possibilities frontier diagram by
shifting the production possibilities frontier outward.
In the figure, if the real wage is $10 per hour, a labor (screenshot of graph)
shortage will occur and the real wage will rise.
A supply curve that illustrates the law of supply _______.
shows that the quantity supplied increases as the price rises
Structural unemployment is the result of
technological change or foreign competition.
Which, if any, of the following causes a country's reported GDP to be less than its total economic production?
the exclusion of household production
In the figure, point A is undesirable because (screenshot)
there is an inefficient use of resources.
When is an economy at full employment? An economy is at full employment when ______.
there is no cyclical unemployment
If you have $1,000 in wealth and the price level increases by 20 percent, then
the $1,000 will buy fewer goods and services.
A major characteristic of structural unemployment that differentiates it from frictional unemployment is that structural unemployment
usually lasts longer than frictional unemployment.
In the graph, the People's Bank of China must _______ U.S. dollars to maintain its target rate, and if it stopped the U.S. the yuan would _______.
buy; appreciate
How do a decrease in foreign income and a decrease in taxes change aggregate demand? Aggregate demand _______ when a decrease in foreign income occurs. Aggregate demand _______ when a decrease in taxes occurs.
decreases; increases
The required reserve ratio is the minimum percentage of _____ that _____ are required to hold as reserves.
deposits; depository institutions
The term human capital refers to
people's knowledge and skill.
The land of Mordor increases its capital stock. As a result, the long-run aggregate supply curve shifts ________ and so does the ________ curve.
rightward; short-run aggregate supply
The long-run aggregate supply curve is ________ because along it, as prices rise, the money wage rate ________.
vertical; rises
The table shows the demand and supply schedules for milk. Now two changes occur in the market for milk. Excellent weather increases the quantity supplied by 20 cartons a day at each price. And a news story on CNN that says "Milk is good for your health" increases the quantity demanded by 80 cartons a day at each price. What is the new equilibrium in the market for milk? (table in screenshots)
At the current price a shortage emerges. The new equilibrium price is $2.15 a carton and the new equilibrium quantity is 220 cartons a day.
The table shows answers given by people interviewed in the Current Population Survey. Which people are structurally unemployed? (table in screenshot)
B and C.
Lori is a student who teaches golf on Saturdays. In a year she earns $25,000 after paying her taxes. At the beginning of 2017, Lori owned $2,500 worth of books, DVDs, and golf clubs and she had $3,000 in a savings account at the bank. During 2017, the interest on her savings account was $180 and she spent a total of $15,000 on consumption goods and services. There was no change in the market values of her books, DVDs, and golf clubs. How much did Lori save in 2017? What was her wealth at the end of 2017?
In 2017, Lori saved $10180. Lori's wealth at the end of 2017 was $15680
An economy produces only apples and oranges. The base year is 2015, and the table gives the quantities produced and the prices. Calculate real GDP in 2015 and 2016 expressed in base- year prices. (screenshot)
Real GDP in 2015 expressed in base-year prices is $150. Real GDP in 2016 expressed in base-year prices is $405.
Suppose that yesterday, the U.S. dollar was trading on the foreign exchange market at 100 yen per U.S. dollar and today the U.S. dollar is trading at 95 yen per U.S. dollar. Which of the two currencies (the dollar or the yen) has appreciated and which has depreciated today?
The dollar depreciated and the yen appreciated.
The table gives the demand and supply schedules for mechanical pencils. What is the equilibrium price of a mechanical pencil and the equilibrium quantity of mechanical pencils per day? (table in screenshots)
The equilibrium quantity of mechanical pencils is 25 a day. The equilibrium price is $ 2 a mechanical pencil.
The first table describes an economy's labor market in 2018 and the second table describes its production function in 2018. What are the equilibrium real wage rate, the quantity of labor employed in 2018, labor productivity, and potential GDP in 2018? (tables in screenshot)
The equilibrium real wage rate is $40 an hour. The quantity of labor employed is 125 hours. Potential GDP is $8125. Labor productivity is $65 per hour of labor.
The table gives some items from the national income and product accounts. Calculate the government sector balance, the private sector balance, and net exports (screenshot)
The government sector balance is 450 billion dollars. The private sector balance is 250 billion dollars. Net exports is 700 billion dollars.
In Japan, potential GDP is 600 trillion yen and the graph shows the aggregate demand curve, the short-run aggregate supply curve, and the long-run aggregate supply curve. Does Japan have an inflationary gap or a recessionary gap and what is its magnitude? Draw a horizontal arrow at the equilibrium price that shows the output gap. (graph in screenshots)
The graph shows that Japan has an output gap that is an inflationary gap. The size of the inflationary gap is yen 100 trillion.
Singapore's real GDP was 369 billion dollars in 2014 and 394 billion dollars in 2015. Singapore's population growth rate in 2015 was 1.2 percent. Calculate A. The growth rate of real GDP. B. The growth rate of real GDP per person. C. The approximate number of years it takes for real GDP per person in Singapore to double if the 2015 growth rate of real GDP and the population growth rate are maintained.
The growth rate of real GDP in Singapore in 2015 was 6.8 percent. The growth rate of real GDP per person in Singapore in 2015 was 5.6 percent. The approximate number of years it takes for real GDP per person in Singapore to double if the 2015 growth rate of real GDP and population growth rate are maintained is 12.5.
The table gives the demand and supply schedules for batteries. Suppose that demand increases by 200 batteries a day and supply decreases by 100 batteries a day. What is the new equilibrium price of a battery and what is the new equilibrium quantity of batteries? (table in screenshot)
The new equilibrium price is $2.5 per battery. The new equilibrium quantity is 750 batteries per day.
Which of the following occurs while moving along a short-run aggregate supply curve?
The price level changes and the money wage rate is constant.
A firm agreed to pay its workers $40 an hour in 2016 and $42 an hour in 2017. The price level for these years was 241 in 2016 and 245 in 2017. Calculate the real wage rate in each year (to the nearest cent). What is the real wage increase received by these workers in 2017?
The real wage rate in 2016 was $16.60. The real wage rate in 2017 was $17.14. The change in the real wage rate between 2016 and 2017 is 0.54 dollars.
"The recent hurricanes in Florida are bringing financial gain to California citrus growers. Due to extensive damage to the Florida citrus crop, California citrus products are commanding their highest prices ever." Which of the following statements best explains the economics of this quotation?
The supply of Florida oranges decreased, causing their price to increase, which then increased the demand for substitute California oranges.
Which of the following questions is a macroeconomic issue? A. How many workers should the owner of a business hire? B. How many more pounds of cookies will a consumer purchase if the price of cookies decreases? C. What effect would a cure for Mad Cow Disease have on the market for beef? D. What is the future growth prospect for an economy?
What is the future growth prospect for an economy?
Which of the following shifts the supply curve for gasoline rightward? A. a situation in which the quantity demanded exceeds the quantity supplied B. a decrease in the price of a resource used to produce gasoline, such as crude oil C. an increase in the price of gasoline D. an increase in the demand for gasminusguzzling, sport utility vehicles
a decrease in the price of a resource used to produce gasoline, such as crude oil
Suppose consumers decrease their consumption expenditure because they worry about what their income will be in the future. There is
a leftward shift of the aggregate demand curve.
The effect of the United States returning millions of workers to their countries of origin is _____ the U.S. PF and _____ in potential GDP.
a movement down along; a decrease
People expect that the El Nino effect will cause drought in Australia in coming years. If most Australian firms expect that their profits will fall during the next five years, Australia's _________ this year.
aggregate demand will decrease
The quantity theory of money states that in the long run
an increase in the quantity of money results in an equal percentage increase in the price level.
Complete the following sentence. Money is ______.
any commodity or token that is generally acceptable as a means of payment
A short-run macroeconomic equilibrium occurs
at the intersection of the short-run aggregate supply curve and the aggregate demand curve.
