Macroeconomics In The Global Economy
Answer 10 questions. Only one answer is correct. If you want to be under time pressure, use no more than 10 minutes.
- 1.There are several methodologies to measure GDP. If you compare two of them: the product and expenditures methodologies, they should provide you with the same estimate of GDP...
- A.
Only for economies with a balanced current account
- B.
For all economies
- C.
Only when we measure GDP in PPP (purchasing power parity)
- D.
Only when inventories are constant
- 2.An expected decrease in future income will tend to lead to
- A.
Higher consumption and higher saving
- B.
Lower consumption and lower saving
- C.
Lower consumption and higher saving
- D.
Lower consumption but no effect on saving
- 3.Assume that investment opportunities at any given interest rate are the same in Japan and in the US. The nominal interest rate in Japan is 0.8%, in the US it is 0%. Inflation in the US is 3% and in Japan inflation is -1.5% (there is deflation in Japan). Based on this information, where would you expect more investment?
- A.
In Japan because nominal interest rate is higher
- B.
In the US because nominal interest rate is lower
- C.
In the US because the real interest rate is lower
- D.
In the US because the real interest rate is higher
- 4.Suppose that a German citizen crosses the border each day to work in France. Her income from this job would be counted in...
- A.
French GNI and German GNI
- B.
French GNI and German GDP
- C.
French GDP and German GNI
- D.
French GDP and German GDP
- 5.Money supply in an economy is
- A.
Equal to the number of notes and currency in circulation
- B.
Twice as large as GDP
- C.
Fixed by the government
- D.
The result of central bank policy and response of the private sector
- 6.Over the past twenty years the US net foreign asset position has deteriorated and from a net creditor to the rest of the world the US has become a net debtor. This implies that over these past twenty years, on average, the US has:
- A.
Been running a capital and financial account deficit
- B.
Been running a capital and financial account surplus
- C.
Kept the interest rate too low
- D.
Been running inadequate monetary policy that led to the depreciation of the dollar
- 7.When we look at a large sample of countries over the last 5 decades we do not observe convergence in GDP per capita because
- A.
Of differences in inflation rates
- B.
Poor countries do not have enough resources to invest and grow
- C.
The interest rate is always higher in poor countries
- D.
Not all poor countries provide the necessary environment for investment to happen
- 8.When the currency-to-deposit ratio increases, then if everything else is held constant we will see:
- A.
An increase in money supply
- B.
A decrease in money supply
- C.
No change in money supply
- D.
A sharp acceleration in consumption
- 9.The supply of loanable funds, or "national saving," is equal to
- A.
income - consumption - government spending
- B.
Income - consumption - government spending - taxes
- C.
Income - consumption
- D.
Income - consumption - taxes
- 10.A high ratio of consumption to GDP...
- A.
Is a necessary condition for long-term growth, demand needs to grow
- B.
Can be a barrier to growth unless the country can attract capital from other countries
- C.
Is a characteristic of large economies because they are self sufficient
- D.
Is a consequence of high wages
Questions: 25 | Attempts: 444 | Last updated: Jan 17, 2013
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