Econ Final

Scenario: Aggregate Consumption Equation Suppose that the aggregate consumption function is given by the equation: C = 200 + 0.8YD, where C represents consumption and YD represents disposable income. 37. (Scenario: Aggregate Consumption Equation) According to the scenario Aggregate Consumption Equation, if disposable income is $500, autonomous consumption is:

$200.

Scenario: Aggregate Consumption Equation Suppose that the aggregate consumption function is given by the equation: C = 200 + 0.8YD, where C represents consumption and YD represents disposable income. 39. (Scenario: Aggregate Consumption Equation) According to the scenario Aggregate Consumption Equation, if disposable income increases from $500 to $800, autonomous consumption is:

$200.

Scenario: Aggregate Consumption Equation Suppose that the aggregate consumption function is given by the equation: C = 200 + 0.8YD, where C represents consumption and YD represents disposable income. 41. (Scenario: Aggregate Consumption Equation) According to the scenario Aggregate Consumption Equation, if disposable income increases from $500 to $800, aggregate consumption will increase by:

$240

15. The Boeing Company buys $3 million worth of steel, $2.5 million worth of computer hardware and software, and $1 million worth of mechanical tools to manufacture a certain model of aircraft. Boeing sells this particular model of aircraft at $10 million. The value added by Boeing is equal to:

$3.5 million.

Scenario: Aggregate Consumption Equation Suppose that the aggregate consumption function is given by the equation: C = 200 + 0.8YD, where C represents consumption and YD represents disposable income. 38. (Scenario: Aggregate Consumption Equation) According to the scenario Aggregate Consumption Equation, if disposable income is $500, aggregate consumption is:

$600

Scenario: Aggregate Consumption Equation Suppose that the aggregate consumption function is given by the equation: C = 200 + 0.8YD, where C represents consumption and YD represents disposable income. 40. (Scenario: Aggregate Consumption Equation) According to the scenario Aggregate Consumption Equation, if disposable income increases from $500 to $800, aggregate consumption is:

$840

56. Suppose that initially a bank has excess reserves of $800 and the reserve ratio is 30%. Then Andy deposits $1,000 of cash into his checking account and the bank lends $600 to Molly. As a result of Andy's deposit, that bank can lend an additional:

$900

36. If the multiplier is 4 and investment spending falls by $100 billion, the change in equilibrium income will be:

-$400 billion

23. The consumer price index in 1979 was 72.6. In 1980 it was 82.4. What was the rate of inflation from 1979 to 1980?

13.5%

53. If the marginal propensity to consume is 0.75, the multiplier for government purchases of goods and services will be:

4

Scenario: Aggregate Consumption Equation Suppose that the aggregate consumption function is given by the equation: C = 200 + 0.8YD, where C represents consumption and YD represents disposable income. 42. (Scenario: Aggregate Consumption Equation) According to the scenario Aggregate Consumption Equation, if all employers announce in September that they guarantee to give all employees a large Christmas bonus in December, which equation could represent the new aggregate consumption function?

C = 200 + 0.9YD

24. Which price index measures the cost of living?

CPI

6. Which will NOT increase demand for laptop computers?

Dell Computers going out of business

9. Many public utilities burn oil to generate electricity. If the price of oil increases, one would expect there to be:

a shift to the left in the supply curve of electricity and a higher price for electricity.

46. The long-run aggregate supply curve is vertical because in the long run:

all prices are flexible.

27. Which would shift the production function upward?

an improvement in technology

55. Debit cards:

are considered part of the money supply, since they allow access to a part of the money supply

34. The term liquidity means that the:

asset is readily convertible to cash without much loss of value.

58. Which does NOT cause the money demand curve to shift?

change in the interest rate

17. Real GDP is nominal GDP adjusted for:

changes in prices.

51. Which is NOT a method of fiscal policy?

changes in the money supply

57. The tools of conducting monetary policy include:

changes in the required reserve requirement

45. Changes in short-run aggregate supply can be caused by changes in:

commodity prices.

54. Which asset is the MOST liquid?

currency

52. A contractionary fiscal policy:

decreases a government budget deficit or increases a government budget surplus

12. A maximum price set below the equilibrium price is a:

demand price.

21. The natural rate of unemployment is:

equal to the sum of frictional and structural unemployment

4. An economy is said to have a comparative advantage if it:

has the lowest cost for producing a particular good.

14. Disposable income in a particular period is:

income earned plus government transfer payments less taxes.

43. An autonomous increase in aggregate spending:

increases GDP by more than that amount.

28. Roads, telephone lines, power facilities, and schools are examples of a nation's:

infrastructure.

16. An economy's gross domestic product is made up of consumption,:

investment, government spending, and net exports.

8. If the quantity of housing supplied in a community is greater than the quantity of houses demanded, the existing price:

is above the market equilibrium price.

35. When a corporation borrows money from lenders in exchange for a fixed share of the firm's assets and potential profits, the corporation is:

issuing stocks.

5. Which statement describes two goods that are most likely substitutes in consumption?

loaves of bread and hamburger buns

18. A person who is not working and is not looking for work is:

not counted in the unemployment statistics.

13. Recessions are periods when:

output and employment are falling.

25. The standard of living in a country can be best measured by:

real GDP per capita.

22. An example of the frictionally unemployed is a(n):

real estate agent who leaves a job in Texas and searches for a similar, higher-paying job in California

44. An increase in aggregate demand is represented by a:

rightward shift of the entire curve.

29. A budget deficit arises when

tax revenues fall short of government expenditures

26. Human capital refers to:

the education and knowledge embodied in the workforce.

1. Macroeconomics deals with:

the working of the entire economy or large sectors of it.

7. Suppose the equilibrium price of good Y is $5 and the equilibrium quantity is 150 units. If the price of good Y is $12:

there will be an excess supply of good Y.