Final Eco/372 Essay

1484 Words Oct 5th, 2012 6 Pages
ECO/372– Principles of Macroeconomics – Final Exam Study Guide 2012

1. the market where business sell goods and services to households and the government is called
a. goods market XXX
b. factor market
c. capital market
d. money market

2. Real gross domestic product is best defined as
a. the market value of intermediate goods and services produced in an economy including exports
b. all goods and services produced in an economy, stated in prices in a given year and multiplied by quantity
c. the market value of all final goods and services produced in an economy stated in the prices of a given year XXX
d. the market value of goods and services produced in an economy stated in current year prices

3. underemployment
…show more content…
In the short run, a trade deficit allows more consumption, but in the long run, a trade deficit is a problem because

A. the country eventually will consume more and produce less XXX
B. the country eventually will sell all its financial assets to foreigners
C. the domestic currency will appreciate
D. the country eventually has to produce more than it consumes in order to pay foreigners their profits

22. Considering an economy with a current trade deficit and considering only the direct effect on income, an expansionary monetary policy tends to

A. decrease the exchange rate and increase the trade deficit
B. increase the exchange rate and increase the trade deficit
C. decrease the exchange rate and decrease the trade deficit XXX
D. increase the exchange rate and decrease the trade deficit

23. The balance of trade measures the

A. difference between the value of imports and exports XXX
B. share of U.S. imports coming from various regions of the world
C. share of U.S. exports going to various regions of the world
D. exchange rate needed to make imports equal exports 24. When a country runs a trade deficit, it does so by:

A. borrowing from foreign countries or selling assets to them. XXX
B. borrowing from foreign countries or buying assets from them.
C. lending to foreign countries or selling assets to them.
D. lending to foreign countries or buying assets from them.

25.

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