Macroeconomics Exam Review
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
Correct Answer
C. Increases in interest ratesExplanation
Increases in interest rates are unlikely to trigger increases in output because higher interest rates make borrowing more expensive for businesses and consumers. This reduces their ability and willingness to invest and spend, leading to a decrease in output. On the other hand, increases in the labor force, labor productivity, and consumer spending can all contribute to higher levels of output as they increase the availability of resources and demand in the economy.Rate this question:
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- 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
Correct Answer
A. Provide a good measure of relative living standardsExplanation
Comparisons of per capita gross domestic product between countries provide a good measure of relative living standards. Per capita GDP is a commonly used indicator to compare the average income and economic well-being of individuals in different countries. It takes into account the total economic output of a country and divides it by the population, providing an estimate of the average income per person. By comparing per capita GDP across countries, we can gain insights into the relative standards of living and economic prosperity among different nations.Rate this question:
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- 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
Correct Answer
D. Gold pricesExplanation
The "core" rate of inflation excludes changes in gold prices from the normal measures of inflation. This is because gold prices can be highly volatile and influenced by factors such as geopolitical events and investor sentiment, which may not accurately reflect the overall trend of inflation in an economy. By excluding gold prices, economists can focus on the underlying inflationary pressures in the economy, such as changes in the prices of goods and services, without the distortion caused by fluctuations in gold prices.Rate this question:
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- 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
Correct Answer
D. InflationExplanation
The correct answer is inflation. Inflation refers to the general increase in prices of goods and services over time. It erodes the purchasing power of money, causing the value of income or GDP to decrease in real terms. Nominal income or GDP represents the current value, while real income or GDP adjusts for the effects of inflation, providing a more accurate measure of economic growth or individual purchasing power. Therefore, the difference between real and nominal income or GDP arises due to inflation.Rate this question:
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- 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
Correct Answer
A. The number of unemployed rose by 110,000Explanation
The given answer suggests that the number of unemployed individuals increased by 110,000. This is because 100,000 people lost their jobs or quit, and an additional 10,000 job seekers started looking for work. Therefore, the total number of unemployed individuals increased by the sum of these two figures, which is 110,000.Rate this question:
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- 6.
Historically, the following relationships have been observed except for:
- 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
Correct Answer
C. Higher unemployment brings high wagesExplanation
Historically, it has been observed that higher unemployment leads to lower wages, not higher wages. This is because when there is a surplus of labor in the market, employers have more bargaining power and can offer lower wages. Conversely, when there is low unemployment, there is a scarcity of labor, leading to increased competition among employers for workers, which can drive up wages.Rate this question:
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- 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
Correct Answer
B. Higher rates of inflationExplanation
Increases in the rate of growth in the money supply have been shown to most likely result in higher rates of inflation. This is because when there is more money in circulation, the purchasing power of each unit of currency decreases, leading to a general increase in prices. As a result, consumers and businesses need more money to buy goods and services, which leads to an overall increase in the level of inflation in the economy.Rate this question:
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- 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
Correct Answer
D. All of the aboveExplanation
The correct answer is "all of the above" because whenever the federal budget shows a deficit, it means that the government is spending more money than it is bringing in through revenue. In order to cover this deficit, the federal government borrows money, which contributes to the growth of the U.S. federal debt. One of the ways the government borrows money is by issuing treasury securities, such as Treasury bonds, bills, and notes, which are purchased by investors. Therefore, all three statements are true and contribute to the growth of the U.S. federal debt.Rate this question:
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- 9.
Fiscal policy has been most successful when
- 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
Correct Answer
C. The government purposely increased the size of the deficit during a recessionExplanation
During a recession, the government purposely increasing the size of the deficit can be considered the most successful fiscal policy because it allows for increased government spending. By increasing the deficit, the government can inject more money into the economy, stimulating demand and helping to pull the country out of the recession. This increased spending can lead to job creation, increased consumer spending, and overall economic growth.Rate this question:
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- 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
Correct Answer
A. Rapid money supply growthExplanation
The high rates of inflation in the 1970s and early 1980s have been shown to be primarily due to rapid money supply growth. This means that the increase in the amount of money circulating in the economy led to an increase in prices. As more money was available, people had more purchasing power, which drove up demand and ultimately caused inflation. This explanation is supported by economic research and analysis of the time period.Rate this question:
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- 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
Correct Answer
C. The inflation rate should be near zeroExplanation
If the federal reserve increases the money supply at approximately the growth rate of output, the inflation rate should be near zero. This is because when the money supply increases at the same rate as the growth in output, there is a balance between the supply of money and the demand for goods and services. This prevents excessive inflation as there is no excess money chasing too few goods. Therefore, the inflation rate should remain low and stable.Rate this question:
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- 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
Correct Answer
B. An increase in interest ratesExplanation
An increase in interest rates does not increase aggregate demand because it typically leads to a decrease in borrowing and spending by consumers and businesses. Higher interest rates make borrowing more expensive, which discourages people from taking out loans to make purchases or invest in new projects. This reduction in borrowing and spending reduces overall demand in the economy, leading to a decrease in aggregate demand.Rate this question:
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- 13.
Which of the following best defines a recession?
- A.
Rising unemployment
- B.
Rising prices
- C.
Falling output
- D.
Falling stock prices
Correct Answer
C. Falling outputExplanation
A recession is defined as a period of economic decline characterized by a significant decrease in the total production of goods and services, which is represented by falling output. This decline in output is typically accompanied by a decrease in employment opportunities, as businesses reduce their production levels and lay off workers. While rising unemployment may be a consequence of a recession, it does not define it. Rising prices and falling stock prices are not direct indicators of a recession, as they can be influenced by other factors.Rate this question:
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- 14.
The money supply is controlled by
- A.
The president
- B.
Congress
- C.
The federal reserve
- D.
All of the above
Correct Answer
C. The federal reserveExplanation
The correct answer is the federal reserve. The federal reserve is responsible for controlling the money supply in the United States. It does this through various tools such as setting interest rates, regulating banks, and conducting open market operations. The president and congress have some influence over economic policies, but the actual control over the money supply lies with the federal reserve.Rate this question:
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- 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
Correct Answer
A. A rise in importsExplanation
A decrease in the value of the dollar will cause a rise in imports because it makes foreign goods relatively more expensive, thus discouraging domestic consumption and promoting imports. However, it will not cause a rise in exports as a weaker dollar makes domestic goods relatively cheaper for foreign buyers, increasing demand for exports. Additionally, a decrease in the value of the dollar will increase the inflation rate as imported goods become more expensive, but it will not lead to a reduction in the trade deficit as imports will still exceed exports.Rate this question:
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- 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
Correct Answer
D. Mike, sandyExplanation
Based on the given table, Mike is willing to pay 50.00 and Sandy is willing to pay 30.00 for the product. Since the price of the product is 22, both Mike and Sandy would be willing to purchase the product. Therefore, the answer is "mike, sandy".Rate this question:
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- 17.
The unique point at which the supply and demand cures intersect is called
- A.
Equilibrium
- B.
Cohesion
- C.
Coincidence
- D.
Market equality
Correct Answer
A. EquilibriumExplanation
The unique point at which the supply and demand curves intersect is called equilibrium. At this point, the quantity of goods or services supplied matches the quantity demanded in the market. It represents a state of balance where there is no excess supply or demand, resulting in market stability. The concept of equilibrium is fundamental in economics as it helps determine prices and quantities in a market.Rate this question:
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- 18.
A good that is produced domestically and sold abroad is called
- A.
A tariff
- B.
A quota
- C.
An export
- D.
An import
Correct Answer
C. An exportExplanation
An export refers to a good that is produced within a country and then sold to customers in other countries. It involves the process of sending goods or services from the domestic market to international markets. This can contribute to economic growth and development as it allows domestic producers to expand their customer base and earn foreign exchange. Exporting can also lead to increased competitiveness and specialization in certain industries, as well as fostering international trade relationships and promoting global integration.Rate this question:
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- 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
Correct Answer
C. Is a legal minimum at which a good or service may be soldExplanation
A price floor is a legal minimum at which a good or service may be sold. This means that the government sets a minimum price that must be charged for a particular product or service. This can be done to protect producers or workers in a specific industry by ensuring they receive a fair price for their goods or services. By setting a price floor, the government aims to prevent prices from falling too low and potentially harming businesses or workers. Therefore, the correct answer is that a price floor is a legal minimum at which a good or service may be sold.Rate this question:
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- 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
Correct Answer
A. 480Explanation
The correct answer is 480. This is because consumer surplus is calculated as the area between the demand curve and the price line up to the quantity consumed. In this case, the price floor is set at $8 per unit. The demand curve intersects the price floor at a quantity of 80 units. Using the formula for the area of a triangle (1/2 * base * height), the base is 80 units and the height is the difference between the equilibrium price and the price floor, which is $12 - $8 = $4. Therefore, the consumer surplus is equal to 1/2 * 80 * 4 = $480.Rate this question:
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- 21.
Which of the following prices would represent a binding price ceiling?(graph on paper)
- A.
22
- B.
19
- C.
16
- D.
13
Correct Answer
D. 13Explanation
A binding price ceiling is a government-imposed maximum price set below the equilibrium price. In this case, the answer is 13 because it is the only price listed that is below the equilibrium price. This means that if the government sets a price ceiling at 13, it will be binding and prevent the price from rising to the equilibrium level.Rate this question:
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- 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
Correct Answer
B. 8 bushels of oatsExplanation
The opportunity cost of 1 bushel of wheat in Texas is 8 bushels of oats. This means that if Texas chooses to produce 1 bushel of wheat, it would have to give up the opportunity to produce 8 bushels of oats. This indicates that the production of oats has a higher opportunity cost compared to wheat in Texas.Rate this question:
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- 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
Correct Answer
C. Texas would produce oats, california would produce wheatExplanation
The given answer suggests that if Texas and California were to specialize and engage in trade that would benefit both states, Texas would focus on producing oats while California would focus on producing wheat. This specialization would allow each state to focus on producing the product they have a comparative advantage in, leading to increased efficiency and overall economic benefits for both states.Rate this question:
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- 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
Correct Answer
B. 100 bananasExplanation
The opportunity cost of moving from point C to point B is 100 bananas. This means that if someone decides to move from point C to point B, they would have to give up the opportunity to have 100 bananas. This suggests that there is a trade-off involved in this decision, where the person would have to sacrifice the benefit of having 100 bananas in order to make the move.Rate this question:
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- 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
Correct Answer
B. 100 baseballs, 500 bananasExplanation
If the country specializes in the good in which it has a comparative advantage (baseballs) and trades half of that good to the other country, it will consume 100 baseballs and 500 bananas. This is because the country can produce baseballs at a lower opportunity cost than the other country, so it is more efficient for them to specialize in baseball production. By trading half of their baseballs, they can acquire 500 bananas from the other country.Rate this question:
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- 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
Correct Answer
B. 10Explanation
Consumer surplus is the difference between the maximum price a consumer is willing to pay for a good and the actual price they pay. In this case, the consumer is willing and able to pay 22 for the good but only pays 12. Therefore, the consumer surplus is calculated by subtracting the actual price (12) from the maximum price (22), which equals 10. This means that the consumer benefits by 10 units of value from purchasing the good at a lower price than they were willing to pay.Rate this question:
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- 27.
When we minimize waste, we are said to be
- A.
Environmentally friendly
- B.
Fair in our outcomes
- C.
Efficient
- D.
Cleaner than primates
Correct Answer
C. EfficientExplanation
When we minimize waste, we are considered efficient because we are utilizing resources effectively and not wasting unnecessary materials or energy. This approach helps to optimize processes, reduce costs, and improve overall productivity. Being efficient is an important aspect of sustainability and environmental responsibility as it helps to conserve resources and reduce negative impacts on the environment.Rate this question:
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- 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
Correct Answer
B. Above equilibrium priceExplanation
A price floor will be binding only if it is set above equilibrium price. This means that the government has set a minimum price for a good or service that is higher than what the market would naturally determine as the equilibrium price. When the price floor is above the equilibrium price, it creates a surplus of the good or service, as suppliers are willing to supply more than what consumers demand at that higher price. This surplus indicates that the price floor is binding, as it is causing a market imbalance.Rate this question:
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- 29.
Trade between nations is based on
- A.
Absolute advantage
- B.
Strategic alliances
- C.
Consumer preferences
- D.
Comparative advantage
Correct Answer
D. Comparative advantageExplanation
Trade between nations is based on comparative advantage. This means that countries specialize in producing goods or services in which they have a lower opportunity cost compared to other countries. By focusing on producing what they are relatively more efficient at, countries can maximize their output and trade the surplus with other nations. This leads to increased efficiency and overall economic growth as countries can benefit from the differences in their resources, skills, and technology. Strategic alliances, consumer preferences, and absolute advantage may also play a role in international trade, but comparative advantage is the main driving force behind it.Rate this question:
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- 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
Correct Answer
A. Has to spend more dollars to purchase the same goodsExplanation
When the consumer price index rises, it means that the overall prices of goods and services have increased. This implies that the cost of purchasing the same goods and services will also increase. Therefore, the typical family will have to spend more dollars to purchase the same goods. This can lead to a decrease in their purchasing power and potentially affect their standard of living.Rate this question:
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- 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%
Correct Answer
A. 44.3%Explanation
The growth rate of real GDP per person can be calculated by finding the percentage increase from the initial value to the final value. In this case, the initial value is 3950 and the final value is 5700. The difference between these two values is 5700 - 3950 = 1750. To find the percentage increase, we divide this difference by the initial value and multiply by 100. (1750/3950) * 100 = 44.3%. Therefore, the growth rate of real GDP per person is 44.3%.Rate this question:
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- 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
Correct Answer
C. 10Explanation
The price of baskets in this country is 10. This can be inferred from the given information that "if trade is allowed," implying that there is a possibility of trade occurring. Since the price of baskets is not specified in any other way, we can assume that the price of 10 is the equilibrium price in the country when trade is allowed.Rate this question:
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- 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
Correct Answer
C. 97.5 -
- 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
Correct Answer
A. Inflation rate in 2005= CPI in 2005- CPI in 2004 x 100 CPI in 2004Explanation
The correct answer is "inflation rate in 2005= CPI in 2005- CPI in 2004 x 100 / CPI in 2004". This formula calculates the inflation rate in 2005 by subtracting the CPI (Consumer Price Index) in 2004 from the CPI in 2005, and then dividing the result by the CPI in 2004. This formula is commonly used to measure the percentage change in prices over time and determine the inflation rate.Rate this question:
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- 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
Correct Answer
D. All of the aboveExplanation
All of the options mentioned - human capital per worker, physical capital per worker, and natural resources per worker - are determinants of productivity. Human capital refers to the knowledge, skills, and abilities possessed by individuals, which can greatly impact their productivity. Physical capital, such as machinery and equipment, can enhance productivity by enabling workers to perform tasks more efficiently. Natural resources, such as raw materials and energy sources, are essential inputs for production and can influence productivity levels. Therefore, all of these factors contribute to determining productivity.Rate this question:
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- 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
Correct Answer
A. A tax cutExplanation
A tax cut would tend to cause real GDP per person to rise because it would increase disposable income and incentivize consumer spending. With more money in their pockets, individuals would have more purchasing power, leading to increased demand for goods and services. This, in turn, would stimulate economic growth and potentially lead to higher production levels, job creation, and overall economic expansion.Rate this question:
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- 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
Correct Answer
B. A borrower who demands money from the financial systemExplanation
Lucy starting her own psychiatric practice and her expenditures exceeding her income suggests that she requires additional funds to cover the expenses. As a result, she becomes a borrower who demands money from the financial system. This means that she is seeking financial assistance to support her practice and cover the shortfall between her income and expenses.Rate this question:
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- 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
Correct Answer
C. 5.2%Explanation
The real interest rate is calculated by subtracting the rate of inflation from the nominal interest rate. In this case, the nominal interest rate is 11.5 percent and the rate of inflation is 6.3 percent. Subtracting 6.3 percent from 11.5 percent gives us a real interest rate of 5.2 percent. Therefore, the correct answer is 5.2%.Rate this question:
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- 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
Correct Answer
D. The unemployment rate that prevails when there is full economic outputExplanation
The natural rate of unemployment refers to the unemployment rate that prevails when there is full economic output. This means that all available resources in the economy are being utilized efficiently, and there is no cyclical unemployment caused by a lack of demand or economic downturns. It represents the lowest level of unemployment that can be sustained without causing inflationary pressures in the economy.Rate this question:
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- 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
Correct Answer
C. 720Explanation
The correct answer is 720. The reserve ratio is given as 6 percent, which means the bank must hold 6 percent of its deposits as reserves. To calculate the amount of reserves, we multiply the reserve ratio (0.06) by the amount of deposits (12,000). Therefore, 0.06 x 12,000 = 720.Rate this question:
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- 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
Correct Answer
A. 70 millionExplanation
The total adult male population in Metzgerland is 70 million because the table shows that there are 12 million males not in the labor force, 8 million males unemployed, and 50 million males employed. Adding these three categories together gives a total of 70 million adult males in Metzgerland.Rate this question:
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- 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%
Correct Answer
B. 85.7%Explanation
The correct answer is 85.7%. This indicates that 85.7% of the female population in Metzgerland is participating in the labor force. This statistic provides insight into the level of women's involvement in the workforce, highlighting the extent to which they contribute to the economy and society.Rate this question:
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- 43.
What is the unemployment rate in metzgerland?(refer to labor stats)
- A.
12.7%
- B.
11.7%
- C.
13.8%
- D.
4.8%
Correct Answer
A. 12.7%Explanation
The correct answer is 12.7%. This indicates that the unemployment rate in Metzgerland is 12.7%.Rate this question:
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- 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
Correct Answer
C. Short-term fluctuations in the unemployment rate around its natural rateExplanation
Cyclical unemployment refers to short-term fluctuations in the unemployment rate around its natural rate. This means that during economic downturns or recessions, there is an increase in unemployment as businesses reduce their workforce. Conversely, during economic expansions, unemployment decreases as businesses hire more workers. These fluctuations are temporary and are caused by changes in the overall demand for goods and services in the economy. Cyclical unemployment is different from other types of unemployment, such as structural or frictional unemployment, which are not directly related to the business cycle.Rate this question:
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- 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
Correct Answer
C. 3 trillionExplanation
National savings is the sum of public savings and private savings in a closed economy. In this case, the public savings are negative 2 trillion, indicating that the government is running a deficit. The private savings are 5 trillion. Therefore, the national savings can be calculated by adding the public and private savings, resulting in 3 trillion.Rate this question:
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- 46.
A tax on an imported good is called a
- A.
Quota
- B.
Tariff
- C.
Supply tax
- D.
Import tax
Correct Answer
B. TariffExplanation
A tax on an imported good is called a tariff. A tariff is a tax imposed by a government on goods that are imported into a country. It is designed to make imported goods more expensive and less competitive compared to domestically produced goods. Tariffs are used to protect domestic industries, promote local manufacturing, and generate revenue for the government. By imposing tariffs, the government aims to regulate international trade and maintain a balance between domestic and foreign goods.Rate this question:
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- 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
Correct Answer
C. Medium of exchangeExplanation
The purchase of tickets to watch the Texas Longhorns get crushed by the Oklahoma Sooners in the annual Red River Shootout game exemplifies the function of money as a medium of exchange. In this scenario, money is being used to facilitate the exchange of tickets for the opportunity to attend the game. The transaction involves the transfer of money from the fan to the seller in exchange for the tickets, demonstrating the role of money as a medium that enables the exchange of goods or services.Rate this question:
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- 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%
Correct Answer
D. 4.35%Explanation
The correct answer is 4.35%. The reserve ratio is calculated by taking the reciprocal of the money multiplier. In this case, the money multiplier is 23, so the reserve ratio would be 1/23, which is equal to 0.0435 or 4.35%.Rate this question:
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- 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
Correct Answer
C. 75000Explanation
The correct answer is 75000. This is calculated by dividing the reserve ratio (2%) into 1, which gives us a multiplier of 50. Then, we multiply this multiplier by the amount of additional deposits ($1500) to find that $75,000 in new money is created.Rate this question:
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- 50.
When prices are rising while output is falling, it is called
- A.
Inflation
- B.
Recession
- C.
Stagflation
- D.
Reaganomics
Correct Answer
B. RecessionExplanation
When prices are rising while output is falling, it is called a recession. In a recession, there is a decline in economic activity, which leads to a decrease in output. At the same time, inflation may still occur, causing prices to rise. This combination of falling output and rising prices is characteristic of a recessionary period. Stagflation, on the other hand, refers specifically to a situation where there is both inflation and high unemployment, which is not mentioned in the question. Reaganomics is a term used to describe the economic policies implemented by President Ronald Reagan in the 1980s and is not relevant to the given scenario.Rate this question:
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Mar 22, 2023Quiz Edited by
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Dec 14, 2009Quiz Created by
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