MacroeconomicsFinalExam

Which one of the following expressions best states the idea of opportunity cost?

" there is no such thing as a free lunch "

Assume that manufacturer of stereo speakers purchases $40 worth of components for each speaker. The completed speaker sells for $70. The value added by the manufacturer for each speaker is

$30

Answer the question on the basis of the following information about the hypothetical economy of Scoob. All figures are in millions. Refer to the given information. The labor force in Scoob is

102 million.

Suppose that real domestic output in an economy is 20 units, the quantity of inputs is 10, and the price of each input is $4. Answer the following question on the basis of this information. Refer to the information. The level of productivity is:

2

In the diagram, the economy's relevant aggregate demand and immediate-short-run aggregate supply curves, respectively, are lines:

4 and 3.

The demand curve shoes the relationship between

price and quantity demanded

The law of demand states that other things equal

price and quantity demanded are inversely related

If the intermediate goods and services were included in GDP

the GDP would be overstated

Opportunity costs exist because

the decision to engage in one activity means forgoing some other activity

If depreciation exceeds gross investment

the economy stock of capital is shrinking

The difference between M1 and M2 is that

the latter includes small-denominated time deposits, noncheckable savings accounts, money market deposit accounts, and money market mutual fund balances

When the price of a product rises, consumers with a given money income shift their purchases products whose prices are now relatively lower. this statement describes

the substitution effect

The shape of the immediate-short-run aggregate supply curve implies that

total output depends on the volume of spending

In the United States, the rate of unemployment is highest for:

African-American teenagers

A $20 bill is a:

Federal Reserve Note

Suppose the total monetary value of all final goods and services produced in a particular country in 2010 is $500 billion and the total monetary value of final goods and services sold is $450 billion. We can conclude that

GDP in 2010 is $500 billion

Which of the following transactions would be included in GDP?

Peter buys a newly constructed house

When economists say that money serves as a medium of exchange, they mean that it is:

a means of payment.

The phase of the business cycle in which real GDP declines is called

a recession.

When economists say that money serves as a store of value, they mean that it is

a way to keep wealth in a readily spendable form for future use.

Other things equal, if the U.S. dollar were to depreciate, the

aggregate supply curve would shift to the left.

Economic profits and losses

are essential to the reallocation of resources from less desired to more desired goods

Currency in circulation is part of

both M1 and M2.

A nation's gross deomest product (GDP)

can be found by summing C+ Ig + G + Xn

The largest component of the money supply (M1) is

checkable deposits

Answer the question on the basis of the following information about the hypothetical economy of Scoob. All figures are in millions. Refer to the given information. If the natural rate of unemployment in Scoob is 5 percent, then:

cyclical unemployment is about 2 percent.

The aggregate demand curve is

downsloping because of the interest-rate, real balances, and foreign purchases effects

The labor force includes:

employed workers and persons who are officially unemployed.

the determinants of aggregate demand

explain shifts in the aggregate demand curve

Net exports are

exports less imports

The immediate-short-run aggregate supply curve is

horizontal.

Checkable deposits are

included in M1.

The foreign purchases effect suggests that a decrease in the US price level relative to other countries will

increase US exports and decrease US imports

In the diagram, a shift from AS1 to AS3 might be caused by a(n)

increase in the prices of imported resources

The M2 money supply includes:

individual shares in money market mutual funds.

A nations gross domestic product (GDP)

is the dollar value of all final output produced within the border of the nation during a specific period time

The near-money components of M2 are:

less liquid than the M1 components of M2

Most economists agree that the immediate determinant of the volume of output and employment is the

level of total spending

An economy's aggregate demand curve shifts leftward or rightward by more than changes in initial spending because of the:

multiplier effect.

the basic of the information , it can be said that

no coincidence of wants exists between any two states