macro quizzes 5-7 solutions
in a imaginary economy, consumers buy only sandwiches and magazines. the fixed basket consist 20 sandwiches and 30 magazines. in 2006 sandwich cost 4 and mag cost 2. in 2007 sandwich cost 5. the base year is 2006. if the consumer price index in 2007 was 125, the how much did a mag cost in 2007.
2.50
the consumer price index and the GDP deflator are two alternative measures of the overall price level. which of the following statements about the two measures is correct
CPI reflects a fixed basket of goods and services; the GDP deflator reflects current production of goods and services
other things the same, an increase in population growth
dec capital per worker. however, there is some evidence that a higher population growth rate may increase the oace of technological progress
if national saving in a closed economy is greater than zero, which of the following must be true
either public saving or private saving must be greater than zero, investment is positive, Y-C-G>0
financial intermediaries are
financial institutions through which savers can inderctly provide funds to borrowers
the steps involved in calculating the consumer price index and the inflation rate, in order, are as follows
fix the basket, find the prices, compute the baskets cost, choose a base year and compute the index, and compute the inflation rate
the shape of the curve is consistent with which of the following statements about the economy to which the curve applies
in the long run a higher savings rate leads to a higher level of productivity and income, or leads to neither a higher growth rate of productivity nor a higher growth rate of income
according to the definitions of national saving and provate saving, if Y,C, and G remained the same, an increase in taxes would
leave national saving unchanged and reduce private saving
the consumer price index is used to
monitor changes in the cost of living over time
the inflation rate is defined as the
percentage change in the price level from the previous period
which of the following items plays a role in determining productivity
physical capital, natural resources, technological knowledge
in a closed economy, what does (Y-T-C) represent
private saving
productivity is the amount of goods and services
produced for each hour of a workers time. it is linked to a nations economic policies
in a closed economy, what does (T-G) represent
public saving
a nations standard of living is best measured by its
real GDP per person
the shape of the curve is consistent with which of the following statements about the economy to which the curve applies.
return to capital bacome increasingly smaller as the amout of captial per worker increases
price change from year to year are not proportional, and consumers respond to these changes by altering their spending patterns. the problem this creates for inflation calculation is called
substitution bias
the supply of loanable funds would shift to the right if either
tax reforms encouraged greater saving or the budget deficit became smaller
thomas malthus's predictions turned out to be wrong due to
technological advances such as those during the industrial revolution
which of the following statements about real and normal interest rate is correct
when the inflation rate is positive, the nominal interest rate is necessarily greater than the real interest rate
suppose the govm were to replace the income tax with a consumption tax so that interest on savings was not taxed. the result would be that the interest rate
would decrease and investment would increase
if there are constant returns to scale, the production function can be written as
Y/L = A F(1, K/L, H/L, N/L)
which of the following movements shows the effects of the government going from a budget deficit to a budget surplus
a movement from point B to A
for the given year, the CPI is the price of the bastet of goods and services in the
base year divided by the price of the basket inthe given year, then multiply by 100
all else equal, which of the following would tend to cause real GDP per person to rise
change from inward oriented policies to outward oriented policies, an increase in investment in human capital, strengthening of property rights
according to the loanable funds model, which of the following events would result in higher interest rate and greater saving
congress passes a reform of the tax laws that encourages greater investment
which of the following is not correct
countries that have has higher output growth per person have typically done so without higher productivity growth
suppose that in a closed economy GDP is equal to 11000, taxes are equal 2500, consumption equals 7000, and govmt purchases equal 3000. what are private saving and public saving.
1500 and -500, respectively
the price index was 220 in one year and 260 in the next year. what was the inflation rate
18.2 percent
suppose a basket of goods and services has been selected to find CPI and 2002 has been selected as the base year. in 2002, the baskets cost was 50; in 2004, the baskets cost was 52; and in 2006, basket cost 54.60. the value in 2004 was
104