econ final study prep
A worker received $5 for a daily wage in 1930, which has the equivalent value of $63.24 today. If the CPI was 17 in 1930 what is the value of the CPI today, rounded to the nearest whole number?
215
according to calssical macroeconomic theory,
all are correct: -output is determined by the supplies of capital and labor and the available production technology. -for any given level of output, the interest rate adjusts to balance the supply of, and demand for, loanable funds. -given output and the interest rate, the price level adjusts to balance the supply of, and demand for, money
which of the following is an example of crowding out
an increase iin gov spending increases interest rates, causing investment to fall
in a market economy
both a and b are correct: A. households decide which firms to work for and what to buy with their income B. firms decide whom to hire and what to make
the open market economy in macroeconomic model includes;
both the both the market for loanable funds and the market for foreign currency exchange
a policy that raised the natural rate of unemployment would shift
both the short run and the long run phillips curve to the right
a basis for the slope of the short run phillips curve is that when unemployment is high there are,
downward pressures on prices and wages
When an Egyptian firm purchases a cement mixer from Slovakia,
egyptian investment increases, egyptian net exports decrease, egyptian GDP is unaffected, slovakian nx increase, and slovakian GDP increases
if a country has a negative net capital outflow then
on net other countries are purchasing assets from it. This subtracts from its demand for domestically generated loanable funds.
If a central bank increases the money supply in response to an adverse supply shock, then which of the following quantities moves closer to its pre-shock value as a result?
output but not the price level
All else equal, if there are diminishing returns and constant returns to scale, then what happens to productivity if capital and labor both increase but capital increases by more?
productivity will definitally rise
other things the same, automatic stabilizers tend to
raise expenditures during recessions and lower expenditures during expansions
Which of the following is not a reason perfect competition is a useful simplification, despite the diversity of market types we find in the world?
there are many buyers and many sellors in all types of markets
which of the following events must cause equilibrium quantity to rise
demand and supply both increase
When the money market is drawn with the value of money on the vertical axis, if the price level is below the equilibrium level, there is an
excess supply of money, so the price level will rise
the federal funds rate is the
interest rate at which banks lend reserves to each other over night
If the economy is initially at long-run equilibrium and aggregate demand declines, then in the long run the price level
is lower and the output is the same as the original long-run equilibrium
in the long run inflation
is primarily determined by the rate of money supply growth while unemployment is primarily determined by labor market factors.
the catch up effect refers to the idea that
it is easier for a country to grow fast and so catch up if it starts out relatively poor
Suppose that during the Great Depression long-run aggregate supply shifted left. To be consistent with what happened to the price level and output, what would have had to happen to aggregate demand?
it would have to be shifted left by more than aggregatte supply
frictional unemployment results from
job searching. it is often thought to explain relatively short spells of unemployment
if inflation expectations decline, then the short run phillips curve shifts
left so that at any inflation rate unemployment is lower in the short run than before
Suppose a central bank announced that it was going to make a serious effort to fight inflation. A few years later the inflation rate is lower, but there had been a serious recession. We could conclude with certainty that
none are certain: -a. the rational expectations hypothesis is false. -b. the rational expectations hypothesis is true. -c. the policymakers lacked credibility.
Other things the same, if foreign companies desired to buy more U.S. medical equipment and U.S. residents desired to buy more foreign bonds
nx would rise, but what would happen to the interest rate is uncertain
the basket of goods in a CPI changes
occasionally whereas the group of goods used to compute the GDP deflator changes automatically
if the wage is kept above the equilibrium wage for any reason the result is
structural unemployment
In 2009 President Obama and Congress increased government spending. Some economists thought this increase would have little effect on output. Which of the following would make the effect of an increase in government expenditures on aggregate demand smaller?
the MPC is small and changes to the interest rate have large effect on investment
the fed can influence unemployment in
the short run butt not the long run
other things the same, if the central bank decreases the rate at which it increases the money supply, then in the long run,
the short run phillips curve shifts left
which of the following is not correct
unemployment can be changed only by the use fo government policy
the natural rate of unemployment
varies less than the measured unemployment rate
which of the following is NOT correct
with a growth rate of about 2 % each year, average income per person would double about every 60 years
Suppose the government 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
which of the following is correct
The level of real GDP per person is a good gauge of economic prosperity, and the growth rate of real GDP per person is a good gauge of economic progress.
Suppose buyers of computers and printers regard the two goods as complements. Then an increase in the price of computers will cause a(n)
a decrease in the demand for printers and a decrease in the quantity supplied of printers
the long run effects of an increase in the saving rate include
a higher level of productivity
Rational people make decisions "at the margin" by comparing
additional costs and benmefits
who of the following are included in the bureau of labor statistics "employed" category
all of the below: -certian unpaid workers -part-time workers -workers on vacation
Last year the imaginary country of Basova had a population of 10,000, 6,000 people worked 8 hours a day, and produced a real GDP of $30,000,000. The imaginary country of Andovia had a population of 12,000, 8,000 people worked 8 hours a day, and produced a real GDP of $38,000,000. Which of the following is correct?
basova had the higher productivity while andovia had the higher real GDP per person
to improve living standards, policy makers should
formulate policies designed to increase productivity
which of the following transactions would be included in the GDP for 2015
in march 2015 amanda buys a ticket to visit a zoo in florida. she visits the zoo in feb. of 2016
A U.S. firm buys apples from New Zealand with New Zealand dollars it got in exchange for U.S. dollars. New Zealand residents then use these dollars to purchase oranges from the U.S. Which of the following increases?
neither new zealands nx or capital overflow
Currently a country has real GDP per person of 500. Raising capital per worker by one would increase output per worker by 4. Other things the same, which of the following long-run combinations are consistent with the effects of this country increasing its saving rate?
real GDP per person is 520 and raising capital per worker by one would increase output per worker by 3
other things the same, if the US real exchange rate depreciated then the US net exports would
rise and the quantity of dollars demanded in the market for foreign-currency exchange would rise.
if the central bank increases the money supply then in the short run output
rises so unemployment falls
if purchasing power parity between france and the US holds but then prices in the US rise,
the real exchange rate is above its purchasing-power parity value. A decrease in the nominal exchange rate can move it back.