Sample Midterm 2 macroeconomics
Which of the following is an explanation for the existence of frictional unemployment
job search
If an American based firm opens and operates a new clothing factory in Honduras, then it is engaging in
Foreign direct investment
Janet is a farmer. What she has learned from experience but not her tractor is
Human capital
Greg learns how to bake from his grandmother. This is an example of
Human capital but not technological knowledge
Esmeralda worked part time for her mother's business without pay. Tabitha was absent from work because she had strep throat. Who is counted as "employed"
Both Esmeralda and Tabitha
Which of the following functions as both a store of value and a medium of exchange
Cash but not stocks
What promotes growth
Decrease barriers to trade
If it could increase its growth rates slightly, a country with low income would catch up with rich countries in about ten years.
False
Esther is considering expanding her dress shop. If interest rates rise she is
Less likely to expand. This illustrates why the demand for loanable funds slopes downward
John and Jane decide to go on a vacation. As a result, they withdraw $2,500 from their savings account to purchase $2,500 worth of traveler's checks. As a result of these changes,
M1 increases by $2,500 and M2 stays the same.
When the government's budget deficit increases, the government is borrowing
More and public savings falls
Other things the same, when the interest rate rises,people would want to lend
More, making the quantity of loanable funds supplied increase
An increase in the government's budget surplus means public saving is
Positive and increasing
What does not promote growth
Restricting foreign portfolio investment
Tatiana is waiting to be recalled to a job from which she was laid off. Ivan was fired but has not looked for work during the last two months. Who does the Bureau of Labor Statistics count as "unemployed"?
Tatiana but not Ivan
The quantity of loanable funds demanded is
Taxes(minus transfers)+government purchases
In a closed economy, private saving is
The amount of income that households have left after paying for their taxes and consumption
If a production function has constant returns to scale, then if all inputs double so does production
True
Sheila is on a temporary layoff from her automobile factory job but has not looked for work in the last four weeks. The BLS counts Sheila as
Unemployed and in the labor force
The natural rate of unemployment
Varies less than the measured unemployment rate
If the demand for loanable funds shifts to the right, then the equilibrium interest rate
and quantity of loanable funds rise
Which of the following is included in both M1 and M2
currency, demand deposits, other checkable deposits
If the natural rate of unemployment is 5.2 percent and the actual rate of unemployment is 5.7 percent, then by definition there is
cyclical unemployment amounting to 0.5 percent of the labor force.
To be counted as "employed" in the U.S. labor force statistics, a person
does not have to be working for pay if they are working for a family business and does not have to be working full time
You pay for cheese and bread from the deli with currency. Which function of money does this best illustrate?
medium of exchange
The slope of the demand for loanable funds curve represents the
negative relation between the real interest rate and investment.
The equipment and structures available to produce goods and services are called
physical capital
Which of the following is not a function of money
protection against inflation
In a closed economy, what does (T - G) represent?
public saving
Given that Monika's income exceeds her expenditures, Monika is best described as a
saver or as a supplier of funds
Which of the following is included in M2 but not in M1
savings deposits
If the government's expenditures exceeded its receipts, it would likely
sell bonds directly to the public
Cyclical unemployment refers to
short-run fluctuations around the natural rate of unemployment
Dollar bills, rare paintings, and emerald necklaces are all
stores of value
What can be measured by the level of real GDP per person
the standard of living but not productivity
Who of the following is not included in the Bureau of Labor Statistics' "employed" category?
those waiting to be recalled to a job from which they had been laid off
