Macroeconomics

The MPS is

the change in saving divided by the change in income

If Mr. Garrison is paid an interest rate of 4% on his savings, but the inflation rate is 11%, the real interest rate Mr. Garrison earns is

-3%

If the MPS is 0.60, MPC

0.40

You want to make a 6% real return on a loan that you are planning to make, and the expected inflation rate during the period of the loan is 4%. You should charge a nominal interest rate of

10%

Refer to Table 21.1. The value for net exports in billions of dollars is

150

Lola wants to make an 11% real return on a loan that she is planning to make, and the expected inflation rate during the period of the loan is 5%. She should charge an interest rate of

16%

Refer to Table 22.1. The labor force equals

17,000 people

Refer to Table 22.1. The unemployment rate is

17.6%

Refer to Table 21.1. Personal consumption expenditures in billions of dollars

2,000

Refer to Table 21.1. The value of gross domestic product in billions of dollars is

3,075

Refer to Table 21.1. The value for gross private domestic investment in billions of dollars is

425

Refer to Table 21.1. The value of government spending in billions of dollars is

500

Refer to Table 22.1. The labor-force participation rate is

80.9%

Refer to Table 22.1. The employment rate is

82.4%

Which of the following represents an action by the Federal Reserve that is designed to increase the money supply

a decrease in the required reserve ratio

If the Fed sells government securities, then there is

a decrease in the supply of money

The government wants to encourage consumer spending through cutting income taxes. This is an example of

a fiscal policy

Which of the following is a topic studied in Macroeconomics

aggregate behavior of households and industries

The Fed uses open market operations to

buy or sell government securities

When the Fed slows the rate of growth of the money supply to slow down the economy, the unemployment type that will be directly affected is the

cyclical unemployment.

Higher interest rates are likely to

decrease consumer spending and increase consumer saving

A man is fired from his job because he was late for work too many times. While he is searching for another job he would be classified as

frictionally unemployed

When an economics professor quits his/her job at a university and starts looking for a better job in another university, he/she is

frictionally unemployed

Which of the following is a topic studied in Macroeconomics?

gross domestic product

Lower interest rates are likely to

increase consumer spending and decrease consumer saving

Inflation is a(n)

increase in the overall price level

An increase in the overall price level is

inflation

An increase in the overall price level is known as

inflation

Household income is ________ related to consumption and ________ related to household saving

positively; positively

Which of the following represents an action by the Federal Reserve that is designed to decrease the money supply?

selling government securities in the open market

The term business cycle refers to the

short-term ups and downs in the level of economic activity

The demand for corn has increased in May without any change in supply. Eight months later there still has been no change in corn prices. This is an example of a

sticky price

Prices that do not always adjust rapidly to maintain equality between quantity supplied and quantity demanded are

sticky prices

An individual who cannot find a job because his or her job skills have become obsolete is an example of

structural unemployment

The natural rate of unemployment is generally thought of as the

sum of frictional unemployment and structural unemployment

The government implements fiscal policy when it changes

taxes and/or spending

Deflation occurs when

the average price level declines

Aggregate behavior is

the behavior of each household and firm

The MPC is

the change in consumption divided by the change in income

Which of the following instruments is not used by the Federal Reserve to change the money supply?

the federal tax code

The discount rate is

the interest rate the Fed charges commercial banks for borrowing funds

The fraction of a change in income that is consumed or spent is called

the marginal propensity to consume

Which of the following is not a topic studied in Macroeconomics?

the price of Dell computers

A decrease in the required reserve ratio

will increase the money supply.

If you save $80 when you experience a $400 rise in your income

your MPC is 0.80