Macro Test 3 review
The inflation rate was?
35% in 2007 14.8% in 2008
If the price of italian shoes imported into the US increases, then A. the CPI will increase, but the GDP deflator will not increase B. Both GDP deflator and CPI will increase C. The GDP deflator will increase but CPI will not D. Neither will increase
A
In an imaginary economy, consumers buy only sandwiches and magazines. The fixed basket consists of 20 sandwiches and 30 magazines. In 2006, a sandwich costs 4$ and a magazine costs 2$. In 2007, a sandwich costs 5$. The base year is 2006. If CPI in 2007 was 125, then how much was a magazine in 2007? A. 2.50 B. .83 C. 2.25 D. 3.00
A
Suppose some country had an adult population of about 50 mil a labor force participation rate of 60% and an unemployment rate of 5% how many people were employed A. 28.5 B. 30 C. 47.5 D. 1.5
A
Suppose the US offered a tax credit for firms that built new factories in the US then A. The demand for loanable funds would shift right, initially creating a shortage of loanable funds at the original interest rate B. The D for loanable funds would shift right, initially creating a surplus of loanable funds at the original interest rate C. The supply of loanable funds would shift rightward, initially creating a surplus of loanable funds at the original interest rate D. The supply of loanable funds would shift rightward, initially creating a shortage of loanable funds at the original interest rate.
A
The CPI was 225 in 2008 and 232.2 in 2009. The nominal interest rate during this period was 6.5% What was the real interest rate during this period. A. 3.3 B 7.4 C 1.6 D. 5.1
A
The primary economic function of the Financial system is to A. match one person's saving with another persons investment B. Keep interest rates low C. Provide expert advice to sasvers and investors D. Match one person's consumption expenditures with another persons capital expenditures
A
When a minimum wage law forces the wage to ramain above the level that balances supply and demand, it A. raises the Q of Labor suppliedd and reduces the Q of Labor demanded compared to the equilibrium level B. Raises the Q of labor supplied and raises the QD compared to the equilibrium level C. Reduces the QS and raises the QD compared to EQ level D. reduces the QS and reduces the QD compared to EQ level
A
when quality of a good improves while its price remains the same, the purchasing power of the dollar A. Increases, so the CPI overstates the change in the cost of living if the Quality change is not accounted for B. Decreases, so the CPI overstates the change in the cost of living if the quality change is not accounted for C. Increases so the CPI understates the change in the cost of living if the quality change is not accounted for D. Decreases, so the CPI understates the change in the cost of living in the quality change is not accounted for.
A
A decrease in the Price of domestically produced nuclear reactors will be reflected in A. The CPI but not the GDP B. The GDP deflator but not in the CPI C. Both CPI and GDP D. Neither GDP nor CPI
B
For an imaginary closed economy, T=5000, S = 11000; C=50000; and the government is running a budget deficit of 1000 then A. Private saving =10000 and GDP =54000 B PS =12,000 and GDP =67000 C. PS = 12000 and GDP =72000 D =10000 and GDP =58000
B
If CPI was 104 in 1967 and is 390 today, then $10 in 1967 purchased the same amount of goods and services as A. $39.00 purchases today B. $27.50 C. $2.67 D. $104
B
If the Q of loanable funds demanded exceeds the Q of loanable funds supplied A. There is a surplus and the interest rate is below the EQ level B. There is a shortage and the IR is below the EQ level C. THere is a surplus and the IR is above the EQ level D. There is a shortage and the IR is above the EQ level
B
If the demand for loanable funds shifts to the left, then the EQ interest rate A. and Q of loanable funds rise B. and Q of loanable funds fall C. Falls and the Q of lonable funds rise D. rises and the Q of loanable funds falls
B
Joe does not have a job, but has applieed for several jobs in the previous week. Sam is an unpaid stay at home dad who has not searched for work in years. Who does the BLS count as out of the LF A. Joe but not sam B. Sam but not Joe C. Joe and Sam D. Neither
B
Nick buys stock in A to Z express company. Harvey corporation builds a new factory. Whose transaction would be an act of investment in the language of macro econ A. neither B. only Harvey C. Both D. Only Nick
B
Elena is considering expanding her dress shop. IF interest rates rise she is A. A. more likely to expand. This illustrates why the demand for loanable funds slopes upward B. More likely to expand. This illustrates why the supply of loanable funds slopes upward. C. Less likely to expand. This illustrates why the demand for loanable funds lopes downward D. Less likely to expand. This illustrates why the supply of loanable funds slopes downward
C
Elisa earned a salary of 40000 in 1996 and 65000 in 2006. The CPI was 160 in 1996 and 266 in 2006. Elisas 2006 salary in 1996 dollars is A. 108,062.50 B. 68,900 C. 39,097.74 D. 43,062.50
C
Mere is looking for work as a computer programmer. Although her prospects are good, she hasn't yet taken a job. Julie is looking for work in a steel mill. Every time she shows up for an interview, there are more people looking for work than there are openings. Someone waiting in line with her tells her it has been that way for a long time. A. Mere and Julie are both structurally unemployed. B. Mere and Julie are both frictionally unemployed C. Mere is frictionally unemployed and julie is structurally unemployed D. Mere is structurally unemployed, and Julie is frictionally unemployed
C
Minimum wage laws A. create frictional unemployment, while firms paying wages above EQ to reduce worker turnover creates structural unemployment B. Create structural unemployment, while firms pay8ing wages above EQ to reduce worker turnover creates frictional unemployment C. And firms paying wages above EQ to reduce worker turnover both created structural unemployment D. and firms paying wages above EQ to reduce worker turnover both create frictional unemployment
C
Roberto is opening a bicycle shop, and his monthly expenditures to get the shop up and running exceed his monthly income. Roberto is best described as a A. Saver or as a demander of funds B. Saver or as a supplier of funds C. Borrower or as a demander of funds D. Borrower or as a supplier of funds
C
Suppose a basket of goods and services has been selected to calculate the CPI and 2002 has been selected as teh base yar. In 2002, the baskets cost was 50 in 2004, the basket's cost was 52 and in 2006 the baskets cost was 54.60 the value of CPI in 2004 was A. 152 B. 102 C. 104 D. 96.2
C
Suppose a government that taxed all interest income changed its tax law so that the first 5,000 of a tax payers interest income was tax free. This would shift the A. Demand for a loanable funds to the left, causing interest rates to fall B. Supply of loanable funds to the left, causing interest rates to rise C. Supply of a loanable funds to the right, causing interest rates to fall. D. Demand for loanable funds to the right, causing interest rates to rise.
C
Suppose that over the past year, the real interest rate was 5% and the inflation rate was 3%. IT follows that A. the dollar value of savings increased at 8%, and purchasing power of savings icreased 2% B. The dollar value of savings increased 5%, and the purchasing power of savings increased at 2% C. The Dollar value of savings increased at 8%, and purchasing power of savings increased 5% D. The dollar value of savings increased at 5% and the purchasing power of savings increased at 8%
C
Voldemort has just finished high school and started looking for his first job, but has not yet found one. Other things the same, the unemployment rate A. Is unaffected and the LF participation rate increases B. And LF participation rate are both unaffected C. And LF participation rate both increase D. Increases and the LF participation rate is unaffected.
C
When the CPI falls, the typical family A. has to spend more dollars to maintain the same standard of living. B. Can save less because they do not need to offset the effects of rising prices C. can spend fewer dollars to maintain the same standard of living D. finds that its standard of living is not affected
C
Which of the following includes everyone in the Adult population that the BLS counts as unemployed A. anyone who is not employed B. ANyone who is not employed, is available for work, and has looked for work in the past 4 weeks C. Anyone who is not employed, is available for work, has looked for work in the past 4 weeks, and anyone who is waiting to be recalled from a job from which they have been laid off
C
Year Price of Book Price of calc 2006 24 8 2007 30 12 2008 32 15 If 2007 is a base year then the CPI was A. 74.1 in 2006, 270 in 2007, 310 in 2008 B. 200 in 2006, 100 in 2007, 114.8 in 2008 C. 74.1 in 2006, 100 in 2007, 114.8 in 2008 D. 200 in 2006, 270 in 2007, 310 in 2008
C
Babe Ruth's 1931 salary was 80000. Government statistsics show a CPI of 15.2 for 1931 and 214.5 for 2009. Ruths 1931 salary was equivalent to a 2009 salary of about A. 5874 B. 822,566 C. 13560020 D. 1128947
D
If there is a surplus of loanable funds, then A. The Q of loanable funds supplied is greater than the Q of loanable funds demanded and the interest rate is below equilibrium B. The Q of loanable funds demanded is greater than the Q of loanable funds supplied and the interest rate is below equilibrium C. The Q of loanable funds demanded is greater than the Q of loanable funds supplied and the interest rate is above equilibrium D. The Q of loanable funds supplied is greater than the Q of loanable funds demanded and the interest rate is above EQ.
D
Public Policy A. can't reduce either frictional unemployment or the natural rate of unemployment B. Can't reduce frictional unemployment, but it can reduce the NR of unemployment C. Can reduce Frictional Unemployment but cant reduce NR of unemployment D. Can reduce both
D
Ron works part-time as a babysitter A. Unemployed and not in LF B. Unemployed and in the LF C. employed and not in the LF D. Employed and in the LF
D
Sirius, the owner of an electronics factory, decides to raise the wages of his workers even though he faces an excess supply of labor. His decision A. will increase the excess supply of labor. B. might increase profits if it attracts a better pool of workers to apply for his firm's jobs C. May increase the quality of his work force. D. ALl of the above is correct
D
Suppose that consumers choose to smoke less and chew gum more. Tobacco companies cut back on the number of people they employ while chewing gum manufactures employ more. This is an example of A. Structural unemployment created by sectoral shifts B. Frictional unemployment created by efficiency wages C. Structural unemployment created by efficiency wages. D. Frictional unemployment created by sectoral shifts
D
Suppose the ecnomy is closed and consumption is 6500 taxes are 1500 and Government purchases are 2000 If National saving amounts to 1000, the what is GDP A.10500 B. 11000 C. 10000 D. 9500
D
Which of the following expressions must be equal to National savings in a closed economy A. Y - I - G - NX B. Y - I - C C. G + C - Y D. Y - C - G
D
Which is the most accurate statement about the GDP and the CPI
The CPI compares the price of a fixed basket of goods and services to the price of the basket in the base year, whereas the gDP deflator compares the price of currently produced goods and services to the price of the same goods and services in the base year