Macroeconomics Exam Review

58 Questions | Total Attempts: 444

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Macroeconomics Quizzes & Trivia

Quiz for macro economics. STUDY Hard!


Questions and Answers
  • 1. 
    All of the following will likely trigger increases in output except:
    • A. 

      Increases in the labor force

    • B. 

      Increases in labor productivity

    • C. 

      Increases in interest rates

    • D. 

      Increases in consumer spending

  • 2. 
    Comparisons of per capita gross domestic product between countries ______.
    • A. 

      Provide a good measure of relative living standards

    • B. 

      Is a useless task because each country uses a different method of calculating

    • C. 

      Provide information about productive capabilities, not relative standards of living

    • D. 

      Provide an accurate gauge of absolute standards of living

  • 3. 
    The "core" rate of inflation excludes changes in ______ from the normal measures of inflation.
    • A. 

      Food and energy prices

    • B. 

      Housing prices

    • C. 

      Clothing prices

    • D. 

      Gold prices

  • 4. 
    The difference between real and nominal income or GDP arises because of the presence of ________.
    • A. 

      The difference between report and actual corporate profit

    • B. 

      Difference in values of currencies

    • C. 

      People that do not report all their earnings

    • D. 

      Inflation

  • 5. 
    Suppose that last week 100,000 people lost their jobs or quit, while 10,000 new job seekers began to look for work too. we can say that ______.
    • A. 

      The number of unemployed rose by 110,000

    • B. 

      The number of unemployed increased by 100,000

    • C. 

      The number of unemployed increased by less than 100,000 since we do not count those who quit their jobs

    • D. 

      There are a total of 110,000 unemployed people in the economy

  • 6. 
    • A. 

      Lower unemployment brings higher inflation

    • B. 

      Higher inflation brings higher interest rates

    • C. 

      Higher unemployment brings high wages

    • D. 

      Higher taxes bring lower consumption

  • 7. 
    Increases in the rate of growth in the money supply have been shown to most likely result in:
    • A. 

      Higher employment

    • B. 

      Higher rates of inflation

    • C. 

      Higher rates of economic growth

    • D. 

      Smaller government budget deficits

  • 8. 
    The u.s. federal debt has grown whenever
    • A. 

      The federal budget shows a deficit

    • B. 

      The federal government borrows

    • C. 

      The federal government issues treasury securities

    • D. 

      All of the above

  • 9. 
    • A. 

      Taxes were raised during recessions

    • B. 

      Government spending was increased with the economy at full employment

    • C. 

      The government purposely increased the size of the deficit during a recession

    • D. 

      When efforts were made to eliminate a budget deficit during a recession

  • 10. 
    The high rates of inflation n the 1970s and early 1980s have been shown to be primarily due to _________.
    • A. 

      Rapid money supply growth

    • B. 

      High oil prices

    • C. 

      The vietnam war

    • D. 

      Unions and big business

  • 11. 
    If the federal reserve increases the money supply at approximately the growth rate of output, then ___.
    • A. 

      It has over stimulated the economy

    • B. 

      The unemployment rate should rise

    • C. 

      The inflation rate should be near zero

    • D. 

      The unemployment rate should approach zero

  • 12. 
    Which of the following does not increase aggregate demand?
    • A. 

      An increase in consumer spending

    • B. 

      An increase in interest rates

    • C. 

      An increase in government spending

    • D. 

      An increase in the money supply

  • 13. 
    Which of the following best defines a recession?
    • A. 

      Rising unemployment

    • B. 

      Rising prices

    • C. 

      Falling output

    • D. 

      Falling stock prices

  • 14. 
    The money supply is controlled by
    • A. 

      The president

    • B. 

      Congress

    • C. 

      The federal reserve

    • D. 

      All of the above

  • 15. 
    A decrease in the value of the dollar will cause all of the following except:
    • A. 

      A rise in imports

    • B. 

      A rise in exports

    • C. 

      An increase in the inflation rate

    • D. 

      A reduction in the trade deficit

  • 16. 
    Buyer willingness to buymike 50.00sandy  30.00jonathan 20.00haley 10.00if the table represents the willingness to pay of four buyers and the price of the product is 22, then who would be willing to purchase the product?
    • A. 

      All would be willing

    • B. 

      Mike

    • C. 

      Mike,sandy,jonathan

    • D. 

      Mike, sandy

  • 17. 
    The unique point at which the supply and demand cures intersect is called
    • A. 

      Equilibrium

    • B. 

      Cohesion

    • C. 

      Coincidence

    • D. 

      Market equality

  • 18. 
    A good that is produced domestically and sold abroad is called
    • A. 

      A tariff

    • B. 

      A quota

    • C. 

      An export

    • D. 

      An import

  • 19. 
    A price floor
    • A. 

      Increases total social welfare when business are unable to change a fair price for their goods and services

    • B. 

      Will always result in deadweight loss

    • C. 

      Is a legal minimum at which a good or service may be sold

    • D. 

      All of the above

  • 20. 
    If a price floor of $8 per unit is established, what will consumer surplus be?(graph on paper)cs=1/2bh        1/2(12)80   480
    • A. 

      480

    • B. 

      680

    • C. 

      1120

    • D. 

      None of the above

  • 21. 
    • A. 

      22

    • B. 

      19

    • C. 

      16

    • D. 

      13

  • 22. 
    The opportunity cost of 1 bushel of wheat in texas is(table on paper)
    • A. 

      8 bushels of wheat

    • B. 

      8 bushels of oats

    • C. 

      24 bushels of oats

    • D. 

      1 bushel of oats

  • 23. 
    If texas and california were to specialize and engage in trade that would benefit both states(table on paper)
    • A. 

      Both states would produce both products

    • B. 

      Texas would produce wheat, texas would produce oats

    • C. 

      Texas would produce oats, california would produce wheat

    • D. 

      There is no telling what the states would do

  • 24. 
    What is the opportunity cost to move from point c to point b(figure on paper)
    • A. 

      100 baseballs

    • B. 

      100 bananas

    • C. 

      300 bananas

    • D. 

      200 bananas

  • 25. 
    Assume this country has a lower opportunity cost to produce baseballs than another country, and they can trade 1 baseball for 5 bananas. if they country represented in the figure were to specialize i the good in which they have a comparative advantage, then trade half of that good to the other country, what will be consumed?
    • A. 

      200 baseballs, 0 bananas

    • B. 

      100 baseballs, 500 bananas

    • C. 

      0 baseballs, 400 bananas

    • D. 

      40 baseballs, 200 bananas

  • 26. 
    If a consumer is willing and able to pay 22 for a particular good and if he pays 12 for the good, then for that consumer , consumer surplus amounts to 22-12
    • A. 

      22

    • B. 

      10

    • C. 

      12

    • D. 

      0

  • 27. 
    When we minimize waste, we are said to be
    • A. 

      Environmentally friendly

    • B. 

      Fair in our outcomes

    • C. 

      Efficient

    • D. 

      Cleaner than primates

  • 28. 
    A price floor will be binding only if it is set
    • A. 

      Below equilibrium price

    • B. 

      Above equilibrium price

    • C. 

      At equilibrium price

    • D. 

      If the government says it is binding

  • 29. 
    Trade between nations is based on
    • A. 

      Absolute advantage

    • B. 

      Strategic alliances

    • C. 

      Consumer preferences

    • D. 

      Comparative advantage

  • 30. 
    When the consumer price index rises, the typical family
    • A. 

      Has to spend more dollars to purchase the same goods

    • B. 

      Can spend fewer dollars to purchase the same goods

    • C. 

      Finds their standard of living unaffected

    • D. 

      Offsets rising prices by saving more

  • 31. 
    Last year real GDP per person in tunisia was 5700. the year before it was 3950. what was the growth rate of real GDP per person?5700-3950     3950
    • A. 

      44.3%

    • B. 

      30.7%

    • C. 

      50%

    • D. 

      27.4%

  • 32. 
    If trade is allowed, what is the price of baskets in this country?(graph on paper)
    • A. 

      7

    • B. 

      14

    • C. 

      10

    • D. 

      1

  • 33. 
    If trade is allowed, what is the net gain in total economic surplus for this country?(graph on paper)                                              
    • A. 

      80

    • B. 

      245

    • C. 

      97.5

    • D. 

      472.5

  • 34. 
    Let 2004 be the base year; then
    • A. 

      Inflation rate in 2005= CPI in 2005- CPI in 2004 x 100 CPI in 2004

    • B. 

      Inflation rate in 2005= CPI in 2005-CPI in 2004 x100 CPI in 2005

    • C. 

      Inflation rate in 2005= CPI in 2004 - CPI in 2005 x100 CPI in 2004

    • D. 

      Inflation rate in 2005 = CPI in 2004 -CPI in 2005 x100 CPI in 2005

  • 35. 
    Which of the following is a determinant of productivity
    • A. 

      Human capital per worker

    • B. 

      Physical capital per worker

    • C. 

      Natural resources per worker

    • D. 

      All of the above

  • 36. 
    All else equal, which of the following would tend to cause real GDP per person to rise?
    • A. 

      A tax cut

    • B. 

      Reductions to the level of openness to trade

    • C. 

      An unexpected baby boom

    • D. 

      Investments in secondary education programs

  • 37. 
    Lucy starts her own psychiatric practice, but her expenditures to open the practice exceed her income. lucy is
    • A. 

      A saver who demands money from the financial system

    • B. 

      A borrower who demands money from the financial system

    • C. 

      A saver who supplied money to the financial system

    • D. 

      In need of her own psychiatric help

  • 38. 
    If then nominal interest rate is 11.5 percent and the rate of inflation is 6.3 percent, then the real interest rate is11.5-6.3=
    • A. 

      11.5%

    • B. 

      6.3%

    • C. 

      5.2%

    • D. 

      None of the above

  • 39. 
    The natural rate of unemployment is the
    • A. 

      Unemployment rate when we have no inflation

    • B. 

      Unemployment rate when we have smart politicians in office

    • C. 

      Unemployment rate of zero

    • D. 

      The unemployment rate that prevails when there is full economic output

  • 40. 
    Suppose that the reserve ration is 6 percent and that a bank has 12,000 in deposits. it reserves are.06x12000
    • A. 

      12,000

    • B. 

      7200

    • C. 

      720

    • D. 

      0

  • 41. 
    Labor statsthe labor markerthis table shows the 2007 date for males and females ages 16 and over in the imaginary country of metzgerland1.not in labor force a. male:12 million b. female: 10  million2.unemployed  a. male: 8 million b. female: 7 million3.employed a. male: 50 million b. female: 53 millionwhat is the total adult male population in metzgerland?
    • A. 

      70 million

    • B. 

      58 million

    • C. 

      140 million

    • D. 

      50 million

  • 42. 
    What is the female labor force participation rate in metzgerland?(use labor stats)
    • A. 

      88.3%

    • B. 

      85.7%

    • C. 

      75.7%

    • D. 

      11.7%

  • 43. 
    What is the unemployment rate in metzgerland?(refer to labor stats)
    • A. 

      12.7%

    • B. 

      11.7%

    • C. 

      13.8%

    • D. 

      4.8%

  • 44. 
    Cyclical unemployment refers to
    • A. 

      The relation between the probability of unemployment and a workers changing level of experience

    • B. 

      Long-term trends in employment

    • C. 

      Short-term fluctuations in the unemployment rate around its natural rate

    • D. 

      The number of years the average person stays at one job

  • 45. 
    Supposed a closed economy had public savings of negative 2 trillion and private saving of 5 trillion. what is national savings?
    • A. 

      7 trillion

    • B. 

      5 trillion

    • C. 

      3 trillion

    • D. 

      2 trillion

  • 46. 
    A tax on an imported good is called a 
    • A. 

      Quota

    • B. 

      Tariff

    • C. 

      Supply tax

    • D. 

      Import tax

  • 47. 
    You are a texas longhorn fan and you purchase tickets to watch them get crushed by the oklahoma sooners in the annual red river shootout game. your purchase illustrated which function of money?
    • A. 

      Unit of account

    • B. 

      Store of value

    • C. 

      Medium of exchange

    • D. 

      The wasting of

  • 48. 
    If the money multiplier is 23, what is the reserve ratioRR = 1/mm4.35 =1/23
    • A. 

      .23%

    • B. 

      23%

    • C. 

      43.5%

    • D. 

      4.35%

  • 49. 
    If the reserve ration is 2%, how much new money is created by $1500 in additional deposits.MM = 1/RR50 = 1/.0250X1500=75,000
    • A. 

      50000

    • B. 

      150000

    • C. 

      75000

    • D. 

      3000

  • 50. 
    When prices are rising while output is falling, it is called
    • A. 

      Inflation

    • B. 

      Recession

    • C. 

      Stagflation

    • D. 

      Reaganomics

  • 51. 
    What determines the demand for money?
    • A. 

      The president

    • B. 

      Congress

    • C. 

      The federal reserve

    • D. 

      Consumers, firms, investors, etc.

  • 52. 
    Using the quantity theory, money supply is equal toMS=(PxY)/V
    • A. 

      V=P x Y

    • B. 

      (P x Y)/V

    • C. 

      (P x Y)/M

    • D. 

      (M x V)/P

  • 53. 
    Based on the quantity equation , if P=2, M=5 and V=4, Y is equal tom-v   = y        5x4 = y  p                   2
    • A. 

      5

    • B. 

      12

    • C. 

      20

    • D. 

      10

  • 54. 
    If v is constant over time and y is not impacted by nominal variables, based on the quantity equation we must then explain changes in price by equating them to
    • A. 

      Increased demand for goods and services

    • B. 

      A shift in the long run aggregate supply curve

    • C. 

      Changes in money supply

    • D. 

      None of the above

  • 55. 
    If you were told that the exchange rate was 1.15 canadian dollars per u.s. dollar, a watch that cost 145 us dollars would cost _____ canadian dollars
    • A. 

      166.75

    • B. 

      126.09

    • C. 

      145.00

    • D. 

      Need more information to determine

  • 56. 
    Suppose the same basket of goods cost 550 in the us and 480 euros in belgium. according to purchasing power parity, what is the nominal exchange rate?480/550 = 
    • A. 

      1.15 euros per dollar

    • B. 

      .87 euros per dollar

    • C. 

      .87 dollars per euro

    • D. 

      None of the above

  • 57. 
    A depreciation of the us real exchange rate induces us consumers to buy
    • A. 

      Fewer domestic and fewer foreign goods

    • B. 

      More domestic and fewer foreign goods

    • C. 

      More domestic and more foreign goods

    • D. 

      Fewer domestic and more foreign goods

  • 58. 
    Your professors name is 
    • A. 

      Dude

    • B. 

      Butch

    • C. 

      Skip

    • D. 

      Metzger