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19 Cards in this Set
- Front
- Back
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Which of the following equalsdemand in an open economy? a. C + I + G + X - N b. C + I + G + N - X c. C + I + Gd. C + I + G + X d. C + I + G + X |
a. C + I + G + X - N |
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Suppose a central bank implements amonetary contraction. Which of the following would we expect to occur in themedium run? a. all of the mention answers are correct b. none of the mentioned answers is correct c. a decrease in the nominal wage d. a decline inoutput e. an increase in the interest rate |
d. a decline in output |
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Suppose there are two countries thatare identical with the following exception. The saving rate in country A isgreater than the saving rate in country B. Given this information, we know thatin the long run: a. the capital-laborratio (K/N) will be greater in A than in B b. the capital-labor ratio (K/N) will be the same in thetwo countries c. economic growth will be higher in A than in B d. the capital-labor ratio (K/N) will be greater in B thanin A |
a. the capital-labor ratio (K/N) will be greater in A than in B |
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When an economy is operating at thesteady state, we know that: a. steady state saving exceeds depreciation each year by aconstant amount b. steady state saving equals consumption c. steady statesaving is equal to depreciation d. steady state saving is less than total consumption |
c. steady state saving is equal to depreciation |
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Suppose the following situationexists for an economy: Kt+1/N > Kt/N. Given this information, we know that: a. saving per worker equals depreciation per worker inperiod t b. the saving rate fell in period t c. saving per worker is less than depreciation per workerin period t d. none of thementioned answers is correcte. saving per worker is greater than depreciation perworker in period t |
d. none of the mentioned answers is correct |
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For this question, assume that thedomestic interest rate is 8% and that the foreign interest rate is 6%. Andfinally, assume that the domestic currency is expected to depreciate by 3% duringthe coming year. Given this information, we know that: a. individuals will only hold domestic bonds b. individuals will be indifferent about holding domesticor foreign bonds c. individuals willonly hold foreign bonds d. the interest parity condition holds |
c. individuals will only hold foreign bonds |
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The quantity of imports will increasewhen there is: a. none of the answer is correct b. an increase in foreign output c. all of the answers are correct d. a reduction in the real exchange rate e. an increase indomestic output |
e. an increase in domestic output |
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Assume that the nominal exchange rateincreases by 2%. If prices (both domestic and foreign do not change), we knowthat: a. foreign goods are now relatively cheaper b. domestic goods are now relatively more expensive c. domestic goods are now relatively cheaper d. domestic goods are nowrelatively more expensive and foreign goods are now relativelycheaper |
d. domestic goods are now relatively more expensive and foreign goods are now relatively cheaper |
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In an open economy under flexibleexchange rates and represented by the IS-LM model, a reduction in governmentspending will cause a reduction in which of the following? a. all of the answers are correct b. net exports c. exports d. the exchange rate e. none of the answer is correct |
d. the exchange rate |
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Which of the following is anadvantage of a common currency in Europe? a. Exchangerate uncertainty within the common currency area would be eliminated b. Each country could conduct its own, independent monetarypolicy c. None of the answer is correct d. All of the answers are correct e. Each country could conduct its own, independent fiscalpolicy |
a. Exchange rate uncertainty within the common currency area would be eliminated |
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In a small open economy, the interestrate is determined by the: a. excess of government spending over government revenue b. interest rate inthe rest of the world c. value of net capital outflow d. equilibriumof saving and investment |
b. interest rate in the rest of the world |
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According to the Phillips curve, theinflation rate depends on: a. The stocks of labor and capital on hand for use inproduction b. Expectedinflation and the level of aggregate demand relative to potential output c. The money supply and the real interest rate d. Menucosts and staggered wage and price setting |
b. Expected inflation and the level of aggregate demand relative to potential output |
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In the wage-setting relation, thenominal wage tends to decrease when: a. the unemployment rate decreases b. unemploymentbenefits decrease c. the price level increases d. all of the answers are correct e. the minimum wage increases |
b. unemployment benefits decrease |
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Which of the following is most likelyto cause an increase in the long run aggregate supply curve a. An increase in government spending b. An increase in interest rates c. An increase in aggregate demand d. An increase inliteracy levels of the population e. An increase in taxes |
d. An increase in literacy levels of the population |
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Suppose, labor market is operating ata equilibrium level and equilibrium wage is 100. The government sets theminimum wage 80. What consequences this change will have on a market a. Employmentwill remain stable b. Effective wage will increase c. Equilibrium real wage will increase d. Unemployment in equilibrium will increase |
a. Employment will remain stable |
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Which of the following people wouldbe considered structurally unemployed? a. Unemployedauto assembly line factory worker who was replaced with a robot b. An auto assembly line worker who quit her job to go backto school full-time to improve her job skills c. A high school student who mows lawns during the summer,but is out of work because it is winter d. Unemployed auto assembly line factory worker during arecession e. A high school economics teacher who is not workingduring the summer, but plans to go back and teach in the fall |
a. Unemployed auto assembly line factory worker who was replaced with a robot |
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A production possibility curve ismost closely related to which of the following? a. all of the mentioned curves b. aggregate demand curve c. short run aggregate supply curve d. long runaggregate supply curve |
d. long run aggregate supply curve |
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An increase in price levels whenaggregate supply remains the same could be caused by: a. increased imports b. increased taxes c. increasedgovernment spending d. decreased investment |
c. increased government spending |
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A nation has a population of 260million people. Of these, 60 million are retired, in the military, ininstitutions, or under 16 years old. There are 188 million who are employed and12 million who are unemployed. What is the unemployment rate? a. 27% b. 9% c. 6% d. 4% |
c. 6% |
