Macroeconomics Question Paper

Question 1 . Using a market-clearing model to analyze the demand for haircuts is ______ because the price of a haircut usually changes ______. resolution Selected final result un palpableistic infrequently cover serve up unrealistic infrequently . Question 2 . Which of the following is non the correct combination for a U. S. president and an serious economic issue of his administration? perform Selected practice President Clinton, pomposity even up arrange President Clinton, inflation . Question 3 . Macroeconomic models ar used to explain how ______ variables influence ______ variables. exercise Selected adjudicate exogenous endogenous square up Answer exogenous endogenous . Question 4 . The total income of everyone in the rescue adjusted for the level of prices is called Answer Selected Answer real gross domestic product. Correct Answer real GDP. . Question 5 . A period of falling prices is called Answer Selected Answer a recession. Correct Answer deflation. . Questio n 6 . The inflation rate is a measure of how fast Answer Selected Answer prices in the economy ar rising. Correct Answer prices in the economy are rising. . Question 7 . Exogenous variables areAnswer Selected Answer fixed at the moment they come out the model. Correct Answer fixed at the moment they enter the model. . Question 8 . In the relationship expressed in federal agencyal form, Y = G(K, L), Y stands for real GDP, K stands for the amount of capital in the economy, and L stands for the amount of labor in the economy. In this case G( ) Answer Selected Answer is the function cogent how the variables in the parenthesis determine real GDP. Correct Answer is the function telling how the variables in the parenthesis determine real GDP. . Question 9 .The inflation rate in the United States averaged about Answer Selected Answer zero between 1900 and 1950. Correct Answer zero between 1900 and 1950. . Question 10 . endogenous variables are Answer Selected Answer determined within t he model. Correct Answer determined within the model. . Question 11 . The best measure of the economic happiness of the members of a society is Answer Selected Answer real GDP. Correct Answer real GDP. . Question 12 . In 2010 in the United States, the approximate lot of GDP that was spent on usance was Answer Selected Answer 7 percent. Correct Answer 67 percent. . Question 13 . The national income accounts identity, for an open economy, is Answer Selected Answer Y = C + I + G + NX. Correct Answer Y = C + I + G + NX. . Question 14 . If nominal GDP grew by 5 percent and real GDP grew by 3 percent, then the GDP deflator grew by approximately ______ percent. Answer Selected Answer 2 Correct Answer 2 . Question 15 . If the number employed increases while the number unemployed does not change, the unemployment rate Answer Selected Answer will not change. Correct Answer will decrease. . Question 16 .As a percentage of GNP, depreciation (also called the consumption of fixed capital) amou nts to approximately Answer Selected Answer 10 percent. Correct Answer 10 percent. . Question 17 . Prices of items included in the CPI are Answer Selected Answer weighted according to quantity of the item purchased by the typical household. Correct Answer weighted according to quantity of the item purchased by the typical household. . Question 18 . Real GDP means the determine of goods and services is measured in ______ prices. Answer Selected Answer constant Correct Answer constant . Question 19 .If nominal GDP increased by 5 percent and the GDP deflator increased by 3 percent, then real GDP ______ by ______ percent. Answer Selected Answer increased 2 Correct Answer increased 2 . Question 20 . Nominal GDP is measured in _____ dollars _____ time. Answer Selected Answer current per unit of Correct Answer current per unit of . Question 21 . Exhibit Saving, Investment, and the Interest Rate 2 Reference Ref 3-2 (Exhibit Saving, Investment, and the Interest Rate 2) The economy begins in equipoise at Point E, representing the real interest rate, r1, at which saving, S1, equals desired investment, I1.What will be the new equilibrium combination of real interest rate, saving, and investment if on that point is a tax law change that makes investment projects less profitable and decreases the demand for investment goods (but does not change the amount of taxes collected in the economy)? Answer Selected Answer Point C Correct Answer Point A . Question 22 . National saving refers to Answer Selected Answer income minus consumption minus government using up. Correct Answer income minus consumption minus government spending. . Question 23 . concord to the neoclassical theory of distribution, if firms are competitive and field of battle to constant returns to scale, total income in the economy is distributed Answer Selected Answer between the labor and capital used in production, according to their marginal productivities. Correct Answer between the labor and capital use d in production, according to their marginal productivities. . Question 24 . According to the model developed in Chapter 3, when government spending increases but taxes are not raised, interest rates Answer Selected Answer increase. Correct Answer increase. . Question 25 .When there is a fixed provide of loanable funds, an increase in investment demand results in a(n) Answer Selected Answer higher interest rate. Correct Answer higher interest rate. . Question 26 . get in that the production function is CobbDouglas with parameter ? = 0. 3. In the neoclassical model, if the labor force increases by 10 percent, then output Answer Selected Answer increases by about 7 percent. Correct Answer increases by about 7 percent. . Question 27 . In the classical model with fixed income, if households want to merely more than firms want to invest, then Answer Selected Answer he interest rate falls. Correct Answer the interest rate falls. . Question 28 . Assume that equilibrium GDP (Y) is 5,000. Consumption is given by the equation C = 500 + 0. 6Y. Investment (I) is given by the equation I = 2,000 100r, where r is the real interest rate in percent. No government exists. In this case, the equilibrium real interest rate is Answer Selected Answer 5 percent. Correct Answer 5 percent. . Question 29 . In the classical model with fixed income, if the demand for goods and services is greater than the supply, the interest rate will Answer Selected Answer increase.Correct Answer increase. . Question 30 . Exhibit Saving, Investment, and the Interest Rate 1 Reference Ref 3-1 (Exhibit Saving, Investment, and the Interest Rate 1) The economy begins in equilibrium at Point E, representing the real interest rate, r1, at which saving, S1, equals desired investment, I1. What will be the new equilibrium combination of real interest rate, saving, and investment if the government raises taxes, memory other factors constant? Answer Selected Answer Point B Correct Answer Point B . Question 31 . Assume that the consumption function is given by C = 200 + 0. (Y T), the tax function is given by T = 100 + t1Y, and Y = 50K0. 5L0. 5, where K = 100 and L = 100. If t1 increases from 0. 2 to 0. 25, then consumption decreases by Answer Selected Answer 175. Correct Answer 175. . Question 32 . Assume that the investment function is given by I = 1,000 30r, where r is the real rate of interest (in percent). Assume further that the nominal rate of interest is 10 percent and the inflation rate is 2 percent. According to the investment function, investment will be Answer Selected Answer 760. Correct Answer 760. .Saturday, November 10, 2012 120736 PM EST .