Macroeconomics Final Exam Prep

7. Country A has a higher GDP than country B. What does this mean? a. It means that on a per-capita basis the residents of country A are richer than the residents of country B. b. It means that on a per-capita basis the residents of country A are relatively better off (in terms of the goods and services they have available to them) than the residents of country B. c. It means that the total market value of the final goods and services produced in country A is greater than the total market value of the final goods and services produced in country B. d. It means that more goods and services were produced in country A than country B.

c. It means that the total market value of the final goods and services produced in country A is greater than the total market value of the final goods and services produced in country B.

12. Consumption and disposable income are a. Directly related b. Not related c. Indirectly related d. Sometimes directly and sometimes indirectly related, depending upon whether consumption is planned or unplanned

a. Directly related

An increase in the price of nonlabor inputs a. Shifts the SRAS curve leftward b. Shifts the SRAS curve rightward c. Is the same thing as a beneficial supply shock d. Shifts the AD curve rightward e. Shifts the AD curve leftward

a. Shifts the SRAS curve leftward

Natural unemployment is caused by frictional and structural factors in the economy. a. True b. False

a. True

The discount rate is the interest rate a. the Fed charges when it lends reserves to banks. b. the Fed pays on reserves held by banks. c. banks charge their loan customers. d. on short-term Treasury securities. e. banks pay on certificates of deposit.

a. the Fed charges when it lends reserves to banks.

The term human capital refers to education, training and experience. a. true b. false

a. true

An economy produces 10X, 20Y, and 30Z in a year. Base-year prices for these goods are $1, $2, and $3, respectively. Current-year prices for these goods are $2, $3, and $4, respectively. What is Real GDP? a. $200 b. $140 c. $180 d. $240

b. $140

The word that best describes the relationship between the required reserve ratio and the money supply is a. Direct b. Inverse c. Roundabout d. Constant

b. inverse

An increase in the price of nonlabor inputs a. a decrease in personal income taxes b. an increase in wealth c. an increase in foreign real national income d. a change in the price level e. a decrease in business taxes

d. a change in the price level

Real GDP is GDP a. In current-year prices b. In GDP process c. In that year's prices d. in base-year prices

d. in base-year prices