Macroeconomics In The Global Economy

10 Questions | By Afatas | Last updated: Mar 22, 2022 | Total Attempts: 1410

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Macroeconomics In The Global Economy - Quiz

Answer 10 questions. Only one answer is correct. If you want to be under time pressure, use no more than 10 minutes.

Questions and Answers

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