Macroeconomics exam/mock 1

Suppose the United States imposes a new tariff on wines imported from France. Who benefits from this action?

U.S. winemakers

A farmer has the ability to grow either corn or cotton or some combination of the two. Given no other information, it follows that the farmer's opportunity cost of a bushel of corn multiplied by his opportunity cost of a bushel of cotton

is equal to 1

When union bargains successfully with employers, in that industry

the quantity of labor supplied increases and the quantity of labor demanded decreases

When an economy is operation inside its production possibilities frontier we know that

there are unused resources or inefficiencies in the economy

A production possibilities frontier will be a straight line if

increasing the production of one good by x units entails a constant opportunity cost in terms of the other good

Exam1Q16. Nominal GDP for 2013 is

$102,950

What is the opportunity cost to society of the movement from point A to C?

100 bananas

The Bureau of Labor Statistics uses the Consumer Price Index to measure inflation. Assume that using 2006 as the base year they got that CPI2006 was 100, that CPI2007 was 103, that CPI2008 was 110, that CPI2009 was 113, that CPI ....

23%

Ex1Q19. Using 2012 as the base year, what was the inflation rate of 2011?

4.4 percent

Ex1Q18. Using 2012 as the base year, the Consumer Price Index for 2011 is

87.2

Which of the following changes would not shift the demand curve for a good or service?

A change in the price of the good or service

One observes that the equilibrium price of T-shirt increases and the equilibrium quantity falls. Which of the following best fits the observed data? (Hint: draw the Supply and Demand graph)

A decrease in the supply and demand constant

We know that there are three methods for calculating GDP. Which one of the following is not one of those methods?

Adding the market value of all stock indexes in the country

The negative relationship between price and quantity demanded

All of the above are correct

Which of the following statements about GDP is correct?

All of the above are correct

Which of the following transactions contributes to U.S. GDP for 2013?

An Australian visitor spends $5,000 in hotels and food during his 2 month stay in the northeast (Boston, New York and buffalo)

MExam1Q4. The economy has the ability to produce at which point or points?

B, D, E

Which of the following events will definitely cause equilibrium quantity to fall?

Demand and supply both decrease

Which of the following statements is true?

Economists are usually not allowed to conduct experiments, and so they must rely on natural experiments offered by history

Which of the following statements about GDP is correct?

Nominal GDP values production at current prices, whereas real GDP values production at constant prices

A bank agrees to lend you $1,000 for one year at a nominal interest rate of 10%. Both you and the bank anticipate that the inflation rate will be 4% during the year. If instead, the inflation rate is 2% during the year, which of the following is true?

You, the borrower, will be better off as a result of the unanticipated decrease in inflation

Suppose the buyers of computers and printers regard those two goods as complements. Then an increase in the price of computers will cause

a decrease in the demand for printers and a decrease in the quantity supplied of printers

Some of the problems with measuring inflation using the CPI is that

all of the above

Which of the following events would result in an increase in the equilibrium quantity and an ambiguous change in the equilibrium price?

an increase in supply and an increase in demand

If a good is normal, then an increase in income will result in

an increase in the demand for the good

The difference between production possibilities frontiers that are bowed out and those that are straight lines is that

bowed-out production possibilities frontiers illustrate increasing opportunity cost, whereas straight-line production possibilities frontiers illustrate constant opportunity cost

Menu costs of inflation are the:

costs associated with businesses changing price

The problem of determining what goods and services society should produce

exists because there are not enough resources to provide all of the goods and services that people want to purchase

Consumers decide to buy more computers and fewer typewriters. As a result, computer companies expand production while typewriter companies lay-off workers. This is an example of

frictional unemployment created by sectoral shift in demand

Unemployment that exists because it takes time for workers to search for the job that suits them best is

frictional unemployment, which partly accounts for the natural rate of unemployment

France offers its citizens unemployment compensation that is more generous and lasts longer than what the United States offers its citizens. Considering only this information, it is likely that the unemployment rate is

greater in France than in the United States

In the simple circular-flow diagram, the participants in the economy are

households and firms

Countries that trade on the basis of comparative advantage have ____ than countries that do not

more goods and services available to them

Structural unemployment consists of people who are unemployed because of:

more people seeking jobs in a labor market than there are jobs available at the current wage rate

The natural rate of unemployment

none of the above is correct

Ex1Q17. Using 2013 as the base year, for 2011,

real GDP is $88,400 and the GDP deflator is 100

The overriding reason as to why households and societies face many decisions is that

resources are scarce

If pizza and soda are consider complements, then an increase in the price of pizza will

result in a decline in the Demand for soda

An increase in the number of firms in a given industry will

shift the supply curve to the right, but the demand curve will be unaffected

Evidence from research and studies by economists

show that increased unemployment benefits decrease the job-search efforts of the unemployed

In the circular-flow diagram,

spending on goods and services flows from firms to households

Suppose roses are currently selling for $40.00 per dozen, while the equilibrium price of roses is $30.00 per dozen. We would expect a

surplus to exist and the market price of roses to decrease

Menu costs refers to

the cost of more frequent price changes induced by higher inflation

What basket of goods is used to construct the CPI?

the goods and services that are typically bought by consumers as determined by government surveys

Which of the following is not included in GDP?

unpaid cleaning and maintenance of houses