Macroeconomics Exam 2

Front 1

Compared to short-term bonds

Back 1

other things the same, long-term bonds generally have,more risk and so they pay higher interest rates.

Front 2

Banks

Back 2

play a role in creating an asset that people can use as a medium of exchange.

Front 3

If national saving in a closed economy is greater than zero

Back 3

which of the following must be true?,All of the above are correct.

Front 4

In a closed economy

Back 4

what does (Y - T - C) represent?,private saving

Front 5

Which of the following equations will always represent GDP in an open economy?

Back 5

Y= C + I + G + NX

Front 6

Suppose that in a closed economy GDP is equal to 11000 taxes are equal to 1500 consumption equals 7500 and government purchases equal 2000. What is national saving?

Back 6

1500

Front 7

The country of Meditor uses the merit as its currency. Recent national income statistics showed that it had GDP of $700 million merits

Back 7

no government transfer payments, taxes of $210 million merits, a budget surplus of $60 million merits, and investment of $100 million merits. What were its consumption and government expenditures on goods and services?, 450 milion merits and 150 million merits

Front 8

Consider three different closed economies with the following national income statistics. Country A has taxes of $40 billion

Back 8

transfers of $20 billion, and government expenditures on goods and services of $30 billion. County B has private savings of $60 billion, and investment expenditures of $50 billion. Country C has GDP of $300 billion, investment of $70, consumption of $180 billion, taxes of $60 billion and transfers of $20 billion. From this information we know that there is a $10 billion government budget deficit for, all three countries

Front 9

The country of Growpaw does not trade with any other country. Its GDP is $20 billion. Its government purchases $3 billion worth of goods and services each year

Back 9

collects $6 billion in taxes, and provides $2 billion in transfer payments to households. Private saving in Growpaw is $4 billion. What is investment in Growpaw?, 5 billion

Front 10

Refer to Figure 26-1. What is measured along the vertical axis of the graph?

Back 10

the real interest rate

Front 11

Refer to Figure 26-1. Which of the following events would shift the supply curve from S1 to S2?

Back 11

In response ot tax reform, household are encouraged to save more than they previously saved

Front 12

What would happen in the market for loanable funds if the government were to increase the tax on interest income?

Back 12

interest rate would rise.

Front 13

Assuming the market for loanable funds is in equilibrium

Back 13

use the following numbers to determine the quantity of lonable funds supplied,2.5

Front 14

Other things the same

Back 14

an increase in the interest rate, would decrease the quantity of loanable funds demanded

Front 15

Any item that people can use to transfer purchasing power from the present to the future is called

Back 15

a store of value

Front 16

Fiat money

Back 16

has no intrinsic value

Front 17

Which of the following is a store of value

Back 17

currency fine art and us bonds

Front 18

You pay for cheese and bread form the deli with currency. Which function of money does this best illustrate?

Back 18

medium of exchange

Front 19

Which list ranks assests from most to least liquid?

Back 19

money bonds cars houses

Front 20

Which of the following is included in M2 but not M1

Back 20

saving deposits

Front 21

Credit card limits are included in

Back 21

neither m1 or m2

Front 22

Suppose the banking system currently has $300 billion in reserves; the reserve requirement is 10 percent; and excess reserves amount to $3 billion. What is the level of deposits?

Back 22

2970

Front 23

If the reserve ratio is 20% how much money can be created from 100 of reserves

Back 23

2500

Front 24

The Fe'd primary tool to change the money supply is

Back 24

conducting open market operations

Front 25

From time to time

Back 25

the demand for workers has risen in one region of the United States and fallen in another. This illustrates, frictional unemployment created by sectoral shifts

Front 26

Unemployment insurance

Back 26

reduces search effort which raises unemployment

Front 27

If the wage is kept above the equilibrium wage for any reason the result is

Back 27

structural unemployment

Front 28

Which of the following is not a reason economies experience structural unemployment

Back 28

job search

Front 29

Sam has no job but keeps applying to get a job with a business that is unionized. He is qualified and finds the pay attractive

Back 29

but the firm is not hiring Sam is, structurall unemployed. Struc un exists even in the long run

Front 30

Introduction of a union into an industry

Back 30

raises wages and lowers employment in that industry

Front 31

Which of the following do unions not cause?

Back 31

frictional unemployment

Front 32

Your brother-in-law wants to buy either stock or bonds in Cedar Valley Furniture which manufactures wooden furniture. He wants your advice on whether to buy stock or bonds. Which of the following quotes implies that he should buy bonds?

Back 32

" I do not want to take on much risk"

Front 33

For an economy as a whole

Back 33

income must equal expenditure because, every dollar of spending by some buyer is a dollar of income for some seller

Front 34

Which of the following is not included in GDP

Back 34

carrots grown and eaten by your family

Front 35

In the economy of Ukzten in 2010

Back 35

consumption was $5000 exports were $100 government purchases were $900 imports were $200 and investment was $1000. What was Ukzten’s GDP in 2010?, 6800

Front 36

If in some year nominal GPD was 18 bil and GDP deflator was 120 what was real gdp

Back 36

15bil

Front 37

Suppose a basket of goods and services has been selected to calculate the CPI and 2002 has been selected as the base year. In 2002

Back 37

the basket’s cost was $50; in 2004,the basket’s cost was $52; and in 2006, the basket’s cost was $54.60. The value of the CPI in 2004 was, 104.0

Front 38

The price index was 128.96 in 2006 and the inflation rate was 24 percent between 2005 and 2006. The price index in 2005 was

Back 38

104

Front 39

Table 24-4 base year 2006 inflation in 2005 was

Back 39

12.5

Front 40

Hoovers salary if 75k

Back 40

1058388

Front 41

Nominal interest rate is 8 and real is 5.5 then inflation is

Back 41

2.5

Front 42

Rachel babysists for her sister for no pay but when she babysits for someone else she charges 8 an hour

Back 42

included in gdp when she babysits for someone else not when for sister

Front 43

According to the circular-flow diagram GDP

Back 43

can be computed as the total income paid by firms or as expenditures on final goods and services.

Front 44

GDP is defined as the

Back 44

value of all final goods and services produced within a country in a given period of time.

Front 45

Over the last few decades Americans have chosen to cook less at home and eat more at restaurants. This change in behavior has

Back 45

increased measured GDP by the value added by the restaurant’s preparation and serving of the meals.

Front 46

Household spending on education is counted in which component or sub-component of GDP?

Back 46

consumption of services

Front 47

For the purpose of calculating GDP investment is spending on

Back 47

capital equipment inventories and structures including household purchases of new housing

Front 48

The russian one with lots of numbers n stuff

Back 48

334% and 173%