Economics - Macroeconomics. Helping Quiz 8

1

In an open economy, this country will ________ million bushels of corn.<img src="https://sciemce.com/files/4/ppg__1390822191445__f1q276g1.jpg" alt="" style="vertical-align: 0.0px;" height="270" width="337" />

2

A person who purchased a house with a small down payment just before an unanticipated inflation hits has ________ from the decision to be in debt, and has ________ by having an asset in the form of a house

3

Suppose we are working with the simplest possible Keynesian-cross multiplier, but with the permanent-income hypothesis figured in. If k = 0.88,

4

Consider the market for iPods. What happens if a fantastic new alternative MP3 player is developed and at the same time a boat carrying a large shipment of iPods is attacked by pirates and sunk?

5

Typically, consumers respond to an increase in (expected) future income by ________

6

To promote an economic expansion and an exit from the deflationary environment that the Japanese had been experiencing for the past fifteen years, the "Abenomics" aims at

7

Which of the following would increase the gap in wages between skilled and unskilled workers?

8

When there is positive inflation

9

Suppose labor productivity differences are the only determinants of comparative advantage, and Brazil and Chile both produce only coffee and sugar. In Chile, either 5 units of coffee or 2 units of sugar can be produced in one day. In Brazil, a day of labor produces either 2 units of coffee or 1 unit of sugar. Which of the following statements is true?

10

So-called fallen angels differ from junk bonds in that

11

By the start of the 21st century, the developed economies with the largest national debt relative to GDP were

12

Small-denomination time deposits refer to certificates of deposit with a denomination of less than

13

During the colonial period, "enumerated goods" included

14

If a minimum wage is set above the equilibrium market wage,

15

In the Keynesian-cross model, if government purchases increase by 100, then planned expenditures ______ for any given level of income.

16

The natural rate of unemployment is likely to fall if:

17

High rates of unemployment are undesirable because: a. they cause increased levels of societal tension

18

A country can benefit by indulging in international trade when:

19

Which function of money allows for specialization to take place?

20

According to the Gordon-Growth model, what is the value of a stock with a dividend of $2, required return on equity of 8% and expected growth rate of dividends of 4%?

21

Over the course of the business cycle

22

Life-cycle saving is saving:

23

Innovation and new ideas are rewarded in a nation with a traditional economy.

24

Which of the following statements is true?

25

During Britain's brief alignment with the ERM from 1990-1992, the trilemma tells us that monetary policy authority no longer existed in Britain. Why?

26

Most economies in the world are

27

An appreciation of the Norwegian kroner in relation to the U.S. dollar is most likely to cause:

28

Which will not, ceteris paribus, cause the demand curve for good A to shift?

29

Which of these variables remains exogenous throughout Chapter 3?

30

The _______ model lays out the _______ available to the economy.

31

Whenever there is a deficit in the current account, the capital account: a. will be negative

32

Shifts in the IS curve ________ the AD curve, and changes to the reaction function ________ the AD curve

33

A special interest issue is one that:

34

When stock prices fall

35

Stocks appear to present risk, yet many people have substantial parts of their wealth invested in them. This behavior could be explained by:

36

The process of economic growth is

37

A news story states that "Videotapes lose their appeal as consumers switch to DVDs for movies." In a competitive market for the purchase of videotapes of movies, this situation would lead to a(n):

38

At the current steady state capital-labor ratio, assume that the steady state level of per capita consumption, (C/N)*, is greater than the golden rule level of steady state per capita consumption. Given this information, we can be certain that

39

Larry has a comparative advantage over his classmates in writing term papers if he:

40

The Coase theorem implies that an efficient solution is possible only if property rights are well-defined and transactions costs are low

41

The mix of stocks and bonds a firm uses to raise funds is called:

42

Higher per capita GNP always means higher quality of life

43

The equilibrium effects of a prospective future increase in total factor productivity include

44

Explain the difference between the unemployment rate and the participation rate

45

Newly-privatized firms in Eastern Europe require __________ investor monitoring, which suggests the relative desirability of a __________-oriented financial system

46

The argument that an increase in aggregate demand, as a result of an increase in government purchases, will be offset by increases in savings (less current consumer spending) for future taxes is called:

47

The basic premise behind worker trade-offs in a market economy is that:

48

Lending abroad represents:

49

Fiscal policy may not be effective because it takes time for a policy change to affect the economy, known as the ________ lag.

50

If firms are more optimistic that future profits will rise and remain strong for the next few years, then

51

There are two ways in which the Fed can provide additional reserves to the banking system: it can ________ government bonds or it can ________ discount loans to commercial banks

52

Why is simply asking people how much they value a highway not a reliable way of measuring the benefits and costs?

53

Calculate the user cost of capital of a machine that costs $5000 and depreciates at a 25% rate, when the nominal interest rate is 5% and the expected inflation rate is 10%.

54

The U.S. dollar is a composite currency

55

In the Keynesian model, the difference between no intervention by the government during a recession and intervention using expansionary monetary or fiscal policy is that no intervention will return the economy to its equilibrium level of output

56

Countries import some goods and export other goods primarily because of:

57

In the context of a production function, the remote order takers in the fast food industry would be classified as:

58

Luke has lent his friend Mitch some money. However he underestimated the rate of inflation when they agreed to a repayment and interest schedule. Mitch will benefit from the inflation

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Economics - Macroeconomics. Helping Quiz 8

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