Econ Final

Net Capital Outflow equals the difference between a country's a.income and expenditure. b.investment and saving. c.purchases of foreign goods and services and sales of goods and services abroad. d.purchases of foreign assets and sales of domestic assets abroad.

B/D

Economic variables we are most interested in are a.real variables, but we usually observe nominal variables. b.nominal variables, but we usually observe real variables. c.real variables, which we usually observe. d.nominal variables, which we usually observe.

a

Fiscal policy is determined by a.the president and Congress and involves changing government spending and taxation. b.the president and Congress and involves changing the money supply. c.the Federal Reserve and involves changing government spending and taxation. d.the Federal Reserve and involves changing the money supply.

a

In an open economy, national saving equals a.domestic investment plus net capital outflow. b.domestic investment minus net capital outflow. c.domestic investment. d.net capital outflow.

a

The variable that links the market for loanable funds and the market for foreign-currency exchange is a.net capital outflow. b.national saving. c.exports. d.domestic investment.

a

If the U.S. real exchange rate appreciates, U.S. exports a.increase and U.S. imports decrease. b.decrease and U.S. imports increase. c.and U.S. imports both increase. d.and U.S. imports both decrease.

b

The catch-up effect refers to the idea that: a.saving will always catch-up with investment spending. b.it is easier for a country to grow fast and so catch-up if it starts out relatively poor. c.population eventually catches-up with increased output. d.if investment spending is low, increased saving will help investment to "catch-up."

b

Which of the following is included in the consumption component of U.S. GDP? a.purchases of staplers, paper clips, and pens by U.S. business firms. b.purchases of natural gas by U.S. households. c.purchases of newly constructed homes by U.S. households. d.All of the above are correct.

b

Which of the following typically rises during a recession? a.investment b.unemployment c.tax revenues d.new home construction

b

Changes in nominal GDP reflect: a.only changes in prices. b.only changes in the amounts being produced. c.both changes in prices and changes in the amounts being produced. d.neither changes in prices nor changes in the amounts being produced

c

Money demand refers to a.the total quantity of financial assets that people want to hold. b.how much income people want to earn per year. c.how much wealth people want to hold in liquid form. d.how much currency the Federal Reserve decides to print.

c

The purchase of U.S. government bonds by Egyptians is an example of a.U.S. imports. b.U.S. exports. c.foreign portfolio investment by Egyptians. d.foreign direct investment by Egyptians.

c

The supply of money increases when a.the value of money increases. b.the interest rate increases. c.the Federal Reserve purchases bonds. d.velocity increases.

c

Wealth is redistributed from creditors to debtors when inflation is a.high, whether it is expected or not. b.low, whether it is expected or not. c.unexpectedly high. d.unexpectedly low.

c

When a minimum-wage law forces the wage to remain above the equilibrium level, the result is a.both a shortage of labor and a shortage of jobs. b.a shortage of labor and a surplus of jobs. c.a surplus of labor and a shortage of jobs. d.both a surplus of labor and a surplus of jobs.

c

When the price level falls, the number of dollars needed to buy a representative basket of goods a.increases, so the value of money rises. b.increases, so the value of money falls. c.decreases, so the value of money rises. d.decreases, so the value of money falls.

c

You are planning a graduation trip to Mexico. Other things the same, if the dollar appreciates relative to the peso, then a.the dollar buys fewer pesos. Your hotel room in Mexico will require fewer dollars. b.the dollar buys fewer pesos. Your hotel room in Mexico will require more dollars. c.the dollar buys more pesos. Your hotel room in Mexico will require fewer dollars. d.the dollar buys more pesos. Your hotel room in Mexico will require more dollars.

c

Discouraged workers are included in a.the number of unemployed. b.frictional unemployment. c.the labor force. d.None of the above are correct.

d

Fran buys 1,000 shares of stock issued by Miller Brewing. In turn, Miller uses the funds to buy new machinery for one of its breweries. a.Fran and Miller are both investing. b.Fran and Miller are both saving. c.Fran is investing; Miller is saving. d.Fran is saving; Miller is investing.

d

GDP does not reflect: a.the value of leisure. b.the value of goods and services produced at home. c.the quality of the environment. d.All of the above are correct.

d

Most economists believe the principle of monetary neutrality is a.relevant to both the short and long run. b.irrelevant to both the short and long run. c.mostly relevant to the short run. d.mostly relevant to the long run.

d

Suppose the United States unexpectedly decided to pay off its debt by printing new money. Which of the following would happen? a.People who held money would feel poorer. b.Prices would rise. c.People who had lent money at a fixed interest rate would feel poorer. d.All of the above are correct.

d

The long-run aggregate supply curve a.is vertical. b.is a graphical representation of the classical dichotomy. c.indicates monetary neutrality in the long run. d.All of the above are correct.

d

The velocity of money is a.the rate at which the Fed puts money into the economy b.the same thing as the long-term growth rate of the money supply. c.the money supply divided by nominal GDP. d.the average number of times a year a dollar is spent.

d

U.S. GDP and GNP are related as follows: a.GNP = GDP + Value of exported goods - Value of imported goods. b.GNP = GDP - Value of exported goods + Value of imported goods. c.GNP = GDP + Income earned by foreigners in the U.S. - Income earned by U.S. citizens abroad. d.GNP = GDP - Income earned by foreigners in the U.S. + Income earned by U.S. citizens abroad.

d

Which of the following is included in the aggregate demand for goods and services? a.consumption demand b.investment demand c.net exports d.All of the above are correct.

d

Which of the following is not a tool of monetary policy? a.open market operations b.reserve requirements c.changing the discount rate d.increasing the government budget deficit

d

Which of the following measures how the level of well-being in a country has changed over time? a.level of nominal GDP per person b.growth rate of nominal GDP c.growth rate of real GDP d.growth rate of real GDP per person

d