C11 Macroeconomics - Complete Course

C11 Lesson 1 Exam SCORE 95 PERCENT

Question 1 (5 points)

 

An arrangement that allows buyers and sellers to exchange things is called __________.

Question 1 options:

	a contract
	a market
	money
	efficient

Question 2 (5 points)

 

An unemployed individual decides to spend the day fishing. The opportunity cost of fishing is __________.

Question 2 options:

	the cost of bait and any other monetary expenses
	zero, because the person doesn't have a job
	the cost of bait, any other monetary expenses, and the value of the individual's wages while he was working
	the cost of bait, any other monetary expenses, and the value of the best alternative use of the individual's time

Question 3 (5 points)

 

Economics is best defined as the study of __________.

Question 3 options:

	financial decision-making
	how consumers make purchasing decisions
	the choices made by people faced with scarcity
	inflation, unemployment, and economic growth

Question 4 (5 points)

 

If an economy is fully utilizing its resources, it can produce more of one product only if it __________.

Question 4 options:

	doubles manufacturing of the product
	produces less of another product
	adds more people to the labor force
	reduces the prices of the most expensive products

Question 5 (5 points)

 

Another factor that was responsible for roughly one-third of hybrid vehicles purchased in 2007 was an increase in the price of gasoline. The increase in sales due to higher gasoline prices describe the economic concept of __________.

Question 5 options:

	using assumptions to simplify
	ceteris paribus
	marginal thinking
	rational self-interest

Question 6 (5 points)

 

Jerome has a "C"; average in his philosophy course and a "B" average in his economics course. He decides to study an extra hour for his philosophy exam. This is an example of __________.

Question 6 options:

	thinking at the margin
	using assumptions to simplify
	ceteris paribus
	caveat emptor

Question 7 (5 points)

 

The opportunity cost of something is __________.

Question 7 options:

	the cost of the labor used to produce it
	what you sacrifice to get it
	the price charged for it
	the search cost required to find it

Question 8 (5 points)

 

Deciding if a company will produce automobiles by robotics or manual labor answers the economic question of __________.

Question 8 options:

	who consumes the products produced
	what products will be produced
	where will the products be consumed
	how will the products be produced

Question 9 (5 points)

 

Referring to the figure above, if you increase the production of farm goods, what other area is affected?

Question 9 options:

	the price of produce
	the production of manufactured goods
	how much people can purchase
	the wages earned by farm workers

Question 10 (5 points)

 

Angelina, age 7, decides to dress up like Princess Fiona for Halloween. What is the opportunity cost of her decision?

Question 10 options:

	the cost of the costume
	the fact that she can't dress up like Dora the Explorer, her second choice
	zero, because 7 year olds don't have opportunity costs
	the cost of the Lady Gaga costume which she did not want

Question 11 (5 points)

 

You rent a DVD of The Dark Knight Rises. The rental is for seven days and you watch the movie on the first day. You tell a friend about the film and your friend asks to come over and watch the movie with you before it is due back. What is your opportunity cost if you decide to watch the movie a second time instead of going to a football game?

Question 11 options:

	the entire cost of the movie rental, since you have already watched the movie
	one half the rental cost, because you have already watched the movie one time
	The answer depends on how much you liked the movie in the first place.
	the football game you forego by watching the movie again

Question 12 (5 points)

 

The opportunity cost of going to college __________.

Question 12 options:

	is zero if your parents pay your tuition
	is equal to the cost of tuition, room and board, and other expenses
	includes wages you lose by going to school instead of working
	is the same for all students at a particular school who pay full tuition

Question 13 (5 points)

 

The 3 key economic questions include all of the following EXCEPT __________.

Question 13 options:

	"What products do we produce?"
	"How do we produce these products?" (Incorrecr)
	"Where should these products be produced?"
	"Who consumes the products?"

Question 14 (5 points)

 

Scarcity can best be defined as a situation in which __________.

Question 14 options:

	there are no buyers willing to purchase what sellers have produced
	there are not enough goods to satisfy all of the buyers' demand
	the resources we use to produce goods and services are limited
	there is more than enough money to satisfy consumers' wants

Question 15 (5 points)

 

After the implementation of the congestion tax in London, traffic volume was reduced and travel time for cars and buses was cut in half. This is an example of __________.

Question 15 options:

	responding to incentives
	the role of pricing in allocating resources
	caveat emptor
	comparative advantage

Question 16 (5 points)

 

When economists assume that people are rational and respond to incentives, they mean __________.

Question 16 options:

	people act with kindness
	people are altruistic
	people act in their own self-interest
	people are selfish

Question 17 (5 points)

 

The production possibilities curve in Figure 2.1 illustrates the notion of __________.

Question 17 options:

	increased factory goods production
	increased farm produce production
	diminishing resources
	opportunity cost

Question 18 (5 points)

 

Economic models are used to __________.

Question 18 options:

	explain every detail of an economic theory
	explore decision making by individuals, firms, and other organizations
	build physical renditions of government construction projects
	represent the complexities of economic environments

Question 19 (5 points)

 

The principle that the cost of something is equal to what is sacrificed to get it is known as the __________.

Question 19 options:

	marginal principle
	principle of opportunity cost
	principle of diminishing returns
	reality principle

Question 20 (5 points)

 

To make things simpler and focus attention on what really matters, economists would __________.

Question 20 options:

	use assumptions
	ignore all variables
	think at the margin
	respond to incentives

 

 

C11 Lesson 2 Exam SCORE 95 PERCENT

Question 1

5 / 5 points

If a competitive market operates perfectly, it relies on __________.

Question options:

	the number of people buying goods
	the laws of supply and demand
	how many products can be produced for sale
	how much people are willing to pay for the products
Question 2		5 / 5 points

Refer to Figure 4.6, which shows David's and Celeste's individual supply curves for flower arrangements per week. Assuming David and Celeste are the only producers in the market, what is the market quantity supplied at a price of $30?

Question options:

	200
	250
	300
	350
Question 3		5 / 5 points

The big tradeoff is the tradeoff between __________.

Question options:

	quantity demanded and quantity supplied
	price and quantity demanded
	efficiency and equity
	total surplus and deadweight loss
Question 4		5 / 5 points

A change in the quantity demanded of a product is the result of a change in __________.

Question options:

	the price of the product
	the price of related goods
	consumer income
	the cost of producing the product
Question 5		5 / 5 points

What happens if the price of a product is below the equilibrium price?

Question options:

	The buyers will stop purchasing a "cheap" product.
	The producer will lower the price to sell more product.
	There will be an excess demand for the product.
	There will be a surplus of the product.
Question 6		5 / 5 points

If the equilibrium price of a good increases and the equilibrium quantity of the good decreases, we can conclude that __________.

Question options:

	demand increased
	demand decreased
	supply increased
	supply decreased
Question 7		5 / 5 points

A supply curve is defined as the relationship between __________.

Question options:

	the price of a good and the quantity that consumers are willing to buy
	the price of a good and the quantity that producers are willing to sell
	the income of consumers and the quantity of a product that consumers are willing to buy
	the income of consumers and the quantity of a product that producers are willing to sell
Question 8		5 / 5 points

Refer to Figure 4.6, which shows David's and Celeste's individual supply curves for flower arrangements per week. Assuming David and Celeste are the only producers in the market, if the market quantity supplied is 50, the price must be __________.

Question options:

	$0
	$10
	between $10 and $20
	$30
Question 9		5 / 5 points

The market demand curve __________.

Question options:

	shows the relationship between the price of a good and the quantity that all consumers together are willing to buy
	is drawn assuming that variables such as income and tastes are variable
	is drawn assuming that the number of consumers is variable
	is drawn assuming that the selling price is fixed
Question 10		5 / 5 points

When consumers are willing to buy more than producers are willing to sell, __________.

Question options:

	there is excess supply of the product in the market
	there is excess demand for the product in the market
	the market is in equilibrium
	the demand curve will shift until the quantity supplied equals the quantity demanded
Question 11		5 / 5 points

When there is a change in the quantity demanded it means that __________.

Question options:

	the hours the customer can buy products each day have increased
	the number of products in inventory have increased
	the quantity a consumer is willing to buy changes when the price changes
	the selling price of the products has not changed
Question 12		5 / 5 points

Quantity of Frozen Latte-On-A-Stick Supplied

Price	Flo's Supply	Rita's Supply
1	0	0
2	0	3
3	4	6
4	9	9
5	15	12

Table 4.1

Refer to Table 4.1, which shows Flo's and Rita's individual supply schedules for frozen latte-on-a-stick. Assuming Flo and Rita are the only suppliers in the market, what is the market quantity supplied at a price of $2?

Question options:

	0
	2
	3
	5
Question 13		5 / 5 points

Refer to Figure 4.1, which shows Molly's and Ryan's individual demand curves for compact discs per month. Assuming Molly and Ryan are the only consumers in the market, what is the market quantity demanded at a price of $3?

Question options:

	6
	9
	15
	20
Question 14		5 / 5 points

When the price of apples goes up, __________.

Question options:

	the demand for apples will decrease, ceteris paribus
	the demand for apples will increase, ceteris paribus
	the quantity of apples demanded will decrease, ceteris paribus
	the quantity of apples demanded will increase, ceteris paribus
Question 15		5 / 5 points

A demand curve is defined as the relationship between __________.

Question options:

	the price of a good and the quantity of that good that consumers are willing to buy
	the price of a good and the quantity of that good that producers are willing to sell
	the income of consumers and the quantity of a good that consumers are willing to buy
	the income of consumers and the quantity of a good that producers are willing to sell
Question 16		5 / 5 points

Figure 4.2 illustrates the supply and demand for T-shirts. If the actual price of T-shirts is $7, there is an __________.

Question options:

	excess demand of 8 T-shirts
	excess supply of 8 T-shirts
	excess demand of 10 T-shirts
	excess supply of 10 T-shirts
Question 17		5 / 5 points

Suppose that the quantity of cars supplied exceeds the quantity of cars demanded. We would expect that __________.

Question options:

	the price of cars will increase
	the price of cars will decrease
	the supply will increase (supply will shift to the right. to meet the demand
	the demand will decrease (demand will shift to the left. to meet the supply
Question 18		5 / 5 points

If there is an advancement in the technology used to produce a product, what is the likely effect it may have on the supply?

Question options:

	The company would not change its manufacturing.
	More people would be needed to produce the product.
	It would decrease the supply.
	It would increase the supply.
Question 19		0 / 5 points

When demand increases and the demand curve shifts to the right, equilibrium price __________ and equilibrium quantity __________.

Question options:

	increases; increases  (Incorrect)
	increases; decreases
	decreases; increases
	decreases; decreases
Question 20		5 / 5 points

A change in quantity supplied of a product is the result of a change in __________.

Question options:

	consumer income
	the state of production technology
	the cost of producing the product
	the price of the product

 

 

C11 Lesson 3 Exam SCORE 100 PERCENT

Lesson 3

Question 1

5 / 5 points

The fraction of the working-age population that is in the labor force is called the __________.

Question options:

	employment rate
	unemployment rate
	labor force participation rate
	nonresponse rate
Question 2		5 / 5 points

Economists say that the economy is at "full employment" when the __________.

Question options:

	structural unemployment rate is zero
	total unemployment rate is zero
	frictional unemployment rate is zero
	cyclical unemployment rate is zero
Question 3		5 / 5 points

The value of a dollar __________.

Question options:

	is its purchasing power
	remains constant over time
	is its face value
	is set by the government
Question 4		5 / 5 points

What does the Consumer Price Index (CPI. measure?

Question options:

	prices of durable goods
	prices of non-durable goods
	the cost of living over time
	the cost of replacing lost items
Question 5		5 / 5 points

What are the two critical measures of a nation's economic health?

Question options:

	income and spending
	sales and taxes
	wages and raises
	production and income
Question 6		5 / 5 points

The value of all final goods and services produced during a given time period measures a nation's __________.

Question options:

	gross domestic product
	net national product
	consumer price index
	net exports
Question 7		5 / 5 points

Economists define the unemployed as individuals who are __________.

Question options:

	not currently working
	not currently working but are actively looking for work
	working but looking for a different job
	working less than their desired amount of time
Question 8		5 / 5 points

Which of the following would be a macroeconomic question?

Question options:

	How have the retirement benefits in the auto industry changed over time?
	How has inflation increased over time?
	How has the price of gold increased over time?
	How has the number of commercial airline flights decreased over time?
Question 9		5 / 5 points

If Sam does not have a job and is not looking for work, he is considered __________.

Question options:

	unemployed and in the labor force
	unemployed and not in the labor force
	not in the labor force
	unemployed
Question 10		5 / 5 points

If you negotiated a salary based on an anticipated inflation rate of 4 percent, and the actual inflation rate turned out to be 6 percent, __________.

Question options:

	the purchasing power of your real wages would be more than you anticipated
	your employer would have gained at your expense
	your real wage will increase, but your nominal wage will decrease
	the purchasing power of your wages will not change, since purchasing power is based on your nominal wage
Question 11		5 / 5 points

The labor supply and demand most directly affect the level of __________ in an economy.

Question options:

	people attending colleges
	people requiring retraining
	employment
	welfare benefits
Question 12		5 / 5 points

Macroeconomics __________.

Question options:

	studies the behavior of individual consumers, firms, and markets
	studies the behavior of the economy as a whole
	involves the interaction between different countries in specific markets
	studies how computer automation has changed economics
Question 13		5 / 5 points

The Consumer Price Index (CPI. differs from a chain-weighted price index in that the CPI __________.

Question options:

	requires calculation of GDP, while the chain-weighted index does not
	measures the costs of a typical fixed basket of goods over time, while the chain-weighted index does not
	allows for the goods consumed in an economy to change over time, while the chain-weighted index does not
	compares the prices of all goods in one year to the prices of all goods in other years
Question 14		5 / 5 points

The index most widely used by the government and the private sector to measure changes in the cost of living is the __________.

Question options:

	Producer Price Index
	Consumer Price Index
	the GDP deflator
	the chain-weighted price index
Question 15		5 / 5 points

Suppose the stock of capital remains constant. By adding more labor, perhaps a second work shift, output __________.

Question options:

	decreases
	increases
	remains the same
	becomes more costly
Question 16		5 / 5 points

Suppose that nominal GDP in year 1 is 200 and nominal GDP in year 2 is 242. Assume that inflation is 10 percent per year. How fast did the economy grow between these two years?

Question options:

	10 percent
	12 percent
	21 percent
	42 percent
Question 17		5 / 5 points

The circular flow is used to make the point that __________.

Question options:

	rising prices never occur during times of unemployment
	unemployment only occurs during a recession
	production generates income
	households purchase factors of production from firms
Question 18		5 / 5 points

The unemployment rate is the number of unemployed people __________.

Question options:

	divided by the number of people who are working
	divided by the total working-age population
	divided by the sum of the number of people who are working and the number of people who are looking for work
	and the number of people working fewer than their desired number of hours, divided by the number of people who are working or looking for work
Question 19		5 / 5 points

The largest component of GDP is __________.

Question options:

	government spending
	consumption expenditures
	private investment expenditures
	net exports
Question 20		5 / 5 points

We measure gross domestic product by multiplying the quantities of goods by their prices because it allows us to __________.

Question options:

	express the values of products in a common unit of measurement
	correct for inflation
	directly compare the output of one economy to that of another
	calculate the total number of units of goods produced in an economy

 

C11 Lesson 4&  5 Exam SCORE 92.5 Percent

Lesson 4

Question 1

2.5 / 2.5 points

If government increases spending and wants to maintain a balanced budget, it should __________.

Question options:

	decrease taxes by an equal amount
	increase taxes by an equal amount
	decrease taxes by an amount equal to the increase in spending multiplied by the tax multiplier
	increase taxes by an amount equal to the increase in spending multiplied by the tax multiplier
Question 2		2.5 / 2.5 points

Higher real interest rates resulting from a government budget deficit will __________ the amount of loanable funds a firm demands for their investments.

Question options:

	stabilize
	decrease
	not affect
	increase
Question 3		0 / 2.5 points

Which of the following is NOT a key financial institution?

Question options:

	insurance companies
	stock markets
	commercial banks
	government-sponsored mortgage lenders
Question 4		2.5 / 2.5 points

What was one of the biggest contributing factors that led to the failure of financial institutions during the recent economic crisis?

Question options:

	low interest rates
	high employment rates
	rising home prices
	strong corporate management
Question 5		2.5 / 2.5 points

If a firm increases its capital stock per person while holding constant the number of workers employed, the firm is said to experience __________.

Question options:

	capital augmentation
	investment deepening
	labor intensity
	capital deepening
Question 6		2.5 / 2.5 points

Nations that borrow from abroad to support current investment will __________.

Question options:

	always be better off in the future
	always sacrifice future consumption
	be better off in the future if the investments are profitable
	sacrifice future consumption only if the investments are profitable
Question 7		2.5 / 2.5 points

According to the text, __________ is perhaps the most critical aspect of a country's economic performance.

Question options:

	growth in GDP
	the inflation rate
	the unemployment rate
	the living standard
Question 8		2.5 / 2.5 points

In developing countries, the highest returns are from investing in __________.

Question options:

	transportation systems
	sanitation systems
	education
	defense
Question 9		2.5 / 2.5 points

Nations with low levels of GDP per capita may converge to richer nations if __________.

Question options:

	nations with high levels of income experience a continuously increasing growth rate
	nations with lower levels of income grow more quickly than those with higher levels of income
	nations with lower levels of income spend less on investment
	nations with lower levels of income grow more slowly than those with higher levels of income
Question 10		2.5 / 2.5 points

An increase in the capital stock will __________.

Question options:

	shift the production function downward
	shift the production function upward
	flatten the production function
	steepen the production function
Question 11		2.5 / 2.5 points

What happens to U.S. GDP when foreign countries experience prosperity?

Question options:

	It increases because the United States will export more product to those countries.
	It decreases because the foreign countries will now buy more of their own products.
	It decreases because the foreign countries will be able to export more at a lower cost.
	It does not change because U.S. GDP is not affected by other countries' prosperity.
Question 12		2.5 / 2.5 points

The multiplier that arises from equal increases in government spending and taxes is called the __________.

Question options:

	simple multiplier
	tax multiplier
	balanced budget multiplier
	government spending multiplier
Question 13		2.5 / 2.5 points

Convergence refers to closing the gap in __________ between poorer countries and richer countries.

Question options:

	real GDP
	real GDP per capita
	the growth rate in real GDP
	the growth rate in real GDP per capita
Question 14		2.5 / 2.5 points

Which of the following uses of tax revenues collected by the government leads to increased capital deepening?

Question options:

	building roads
	increased foreign aid
	Medicare payments
	Social Security payments
Question 15		2.5 / 2.5 points

The fraction of additional income spent on imports is called the __________.

Question options:

	import function
	marginal propensity to import
	marginal propensity to export
	trade balance
Question 16		2.5 / 2.5 points

Economic growth is severely impeded in economies __________.

Question options:

	with a lack of clear property rights
	with a strong market system
	with high rates of convergence
	which encourage induced innovation
Question 17		2.5 / 2.5 points

According to the method of growth accounting, which of the following contribute to economic growth?

Question options:

	capital growth
	labor growth
	technological progress
	all of the above
Question 18		0 / 2.5 points

Fluctuations in the demand and supply of loanable funds will in turn bring changes to the __________ of lent and borrowed funds.

Question options:

	product recipient
	mortgage-backed securities
	equilibrium quantity
	equilibrium quality
Question 19		2.5 / 2.5 points

Suppose that for a given firm, the increase in output resulting from the last worker hired is less than the increase in output of the previous worker hired. This is an example of __________.

Question options:

	diminishing returns
	constant returns
	increasing return
	capital deepening
Question 20		2.5 / 2.5 points

If the government __________ taxes to pay for spending on infrastructure, the result will most likely be a(n. __________ in capital deepening.

Question options:

	increases; increase
	decreases; increase
	increases; decrease
	eliminates; elimination
Lesson 5

Question 21

2.5 / 2.5 points

Equilibrium in the money market occurs when __________.

Question options:

	the quantity of money demanded equals the quantity of money supplied
	the quantity of money demanded is less than the quantity of money supplied
	the quantity of money demanded is more than the quantity of money supplied
	the interest rate equals the money supply
Question 22		2.5 / 2.5 points

The Federal Reserve System was created by the __________.

Question options:

	U.S. Treasury
	President
	Congress
	Supreme Court
Question 23		2.5 / 2.5 points

What impact does the Fed's raising the interest rate have on the money supply and on the price level?

Question options:

	An increase in interest rates raises the money supply and eventually reduces prices.
	An increase in interest rates reduces the money demand which will slow the growth in prices.
	An increase in interest rates lowers the money supply and raises the money demand, which will neutralize price increases.
	An increase in interest rates will increase investment spending and GDP, which will lower prices.
Question 24		2.5 / 2.5 points

Loans are examples of a bank's __________.

Question options:

	assets
	liabilities
	net worth
	balance sheet
Question 25		2.5 / 2.5 points

One of the essential functions that a bank performs is __________.

Question options:

	purchasing government bonds
	creating deposits by lending required reserves
	transferring money from savers to lenders
	owning assets like real estate
Question 26		0 / 2.5 points

By law, banks are required to __________.

Question options:

	hold 100 percent of customer deposits as reserves
	hold a fraction of their reserves at the Federal Reserve bank
	hold a fraction of demand deposits as reserves
	lend out no more than the amount of their required reserves
Question 27		2.5 / 2.5 points

When checks are exchanged between banks, the Fed oversees the banks to ensure the appropriate funds have been transferred. This is known as __________.

Question options:

	check kiting
	check clearing
	check floating
	check balancing
Question 28		2.5 / 2.5 points

The supply of money in the U.S. economy is determined primarily by __________.

Question options:

		decisions made by the Federal Reserve and the U.S. Treasury
		the actions of the Federal Reserve and the banking system
		consumers and the banking system
		the demand for money in the economy
Question 29		2.5 / 2.5 points

Consider how the value of the U.S. dollar affects the worldwide increase in commodity prices to answer the following two question(s.. Starting in the summer of 2010, there was a rise in prices of commodities such as oil and food worldwide. Some economists suggested that monetary policy in the United States was the cause of the worldwide commodity boom. Some economists noticed that the change in the value of the U.S. dollar was largely due to the change in interest rates, and the change in interest rates occurred because of the Fed's use of __________ to further stimulate the economy.

Question options:

		open market sales
		quantitative easing
		discount operations
		open market purchases
Question 30		2.5 / 2.5 points

M1 __________.

Question options:

		is the sum of currency plus traveler's checks
		is the narrowest definition of the money supply
		includes small time deposits
		includes credit cards
Question 31		2.5 / 2.5 points

All of the following statements are true of the Federal Reserve EXCEPT __________.

Question options:

		it acts as the central bank for all countries in the world
		along with the Board of Governors, the chairperson of the Federal Reserve determines monetary policies and strategies based on the state of economy
		it supplies currency to the economy
		it holds reserves from banks and regulates banks
Question 32		2.5 / 2.5 points

An open market __________ by the Fed decreases the money supply, which leads to __________ interest rates and a fall in investment spending.

Question options:

		sale; increased
		sale; decreased
		purchase; increased
		purchase; decreased
Question 33		2.5 / 2.5 points

In the __________ , increases in the supply of money will __________.

Question options:

		short run; raise total demand and output
		long run; raise total demand and output
		long run; lead to lower prices
		short run; decrease total demand and output
Question 34		2.5 / 2.5 points

The group responsible for deciding on monetary policy is the __________.

Question options:

		Federal Open Market Committee
		Board of Governors only
		Federal Advisory Council
		group of 12 Federal Reserve Bank presidents only
Question 35		2.5 / 2.5 points

An increase in the reserve requirement __________.

Question options:

		increases the money supply, which leads to increased interest rates and a decrease in GDP
		increases the money supply, which leads to decreased interest rates and a decrease in GDP
		decreases the money supply, which leads to increased interest rates and a decrease in GDP
		decreases the money supply, which leads to decreased interest rates and a decrease in GDP
Question 36		2.5 / 2.5 points

Good news for the economy is bad news for bond prices, because __________.

Question options:

		the increased demand for money will increase interest rates
		when real GDP increases, demand for money will decrease
		bond prices move in the same direction as interest rates
		when interest rates increase during growing GDP, bond prices will increase
Question 37		2.5 / 2.5 points

A bank may make loans until its __________.

Question options:

		required reserves are exhausted
		excess reserves are exhausted
		total assets are exhausted
		total liabilities are exhausted
Question 38		2.5 / 2.5 points

Based on the model of the money market, if prices in the economy decrease, the equilibrium interest rate should __________.

Question options:

		stay the same
		increase
		decrease
		increase to the same extent that the supply of money increases
Question 39		2.5 / 2.5 points

The Federal Reserve influences the level of interest rates in the short run by changing the __________.

Question options:

		demand for money through open market operations
		demand for money through changes in reserve requirements
		supply of money through open market operations
		supply of money through changes in stock market operations
Question 40		2.5 / 2.5 points

If money is used as a mechanism to hold purchasing power for a period of time, it is functioning as a __________.

Question options:

	standard of value
	store of value
	medium of exchange
	unit of account

 

C11 Lesson 6 & 7 Exam SCORE 92.5 PERCENT

Question 1

2.5 / 2.5 points

The __________ is the amount by which a change in autonomous expenditures is multiplied in order to determine the change in equilibrium expenditure that it generates.

Question options:

	marginal tax rate
	marginal multiplier
	expenditure reducer
	expenditure multiplier
Question 2			2.5 / 2.5 points

When the Federal Reserve changes the quantity of money and the interest rate, it influences aggregate demand by using __________.

Question options:

	the world economy
	consumer expectations
	monetary policy
	fiscal policy
Question 3			2.5 / 2.5 points

The change in equilibrium expenditure also equals the change in __________.

Question options:

	the potential GDP
	the real GDP
	income taxes
	interest rates
Question 4			0 / 2.5 points

What represents the relationship between the quantity of real GDP supplied and the price level when all other influences on production plans remain the same?

Question options:

	aggregate demand
	aggregate supply
	the money wage rate
	the money price index
Question 5			2.5 / 2.5 points

When the real GDP increases, disposable income and consumption expenditure __________.

Question options:

	do not change
	become inverted
	decrease
	increase
Question 6			2.5 / 2.5 points

All other things remaining the same, the lower the price level, the __________ the quantity of real GDP demanded.

Question options:

	smaller
	greater
	more constant
	less constant
Question 7			2.5 / 2.5 points

When the price level increases, the real interest rate __________.

Question options:

	is not affected
	falls
	rises
	will rise or fall depending on demand
Question 8			2.5 / 2.5 points

If the price level from the GDP price index falls, what happens to the quantity of real GDP supplied?

Question options:

	it remains constant
	it increases
	it decreases
	it barely changes
Question 9			2.5 / 2.5 points

What represents the relationship between the quantity of real GDP demanded and the price level when all other influences on expenditure plans remain the same?

Question options:

	aggregate demand
	aggregate supply
	the money wage rate
	the money price index
Question 10			2.5 / 2.5 points

All other things remaining the same, the higher the price level, the __________ the quantity of real GDP supplied.

Question options:

	smaller
	greater
	more constant
	less constant
Question 11			2.5 / 2.5 points

What are the two main influences that the world economy has on aggregate demand?

Question options:

	foreign exchange rate and foreign income
	foreign investments and foreign profit
	revenues from overseas and foreign exchange rate
	foreign expenditures and international trade
Question 12			2.5 / 2.5 points

Which of the following would cause an increase in aggregate demand in the short run?

Question options:

	an increase in the supply of money
	a decrease in the price level
	an increase in taxes
	a crop failure
Question 13			2.5 / 2.5 points

The marginal __________ is the fraction of a change in real GDP that is paid in income tax.

Question options:

	tax rate
	income
	GDP
	tax revenue
Question 14			2.5 / 2.5 points

__________ occurs when aggregate planned expenditure equals real GDP.

Question options:

	Price-fixing
	Stable economic leveling
	Unplanned inventory change
	Equilibrium expenditure
Question 15			2.5 / 2.5 points

Which of the following does NOT decrease aggregate demand in the United States?

Question options:

	a decrease in the price of oil
	a decrease in GDP in Germany
	a decrease in government spending
	a decrease in the supply of money
Question 16			2.5 / 2.5 points

How does an increase in potential GDP affect aggregate supply?

Question options:

	It decreases aggregate supply.
	It increases aggregate supply.
	It barely has any effect.
	Since it applies to an "imaginary" market, it does not affect aggregate supply.
Question 17			2.5 / 2.5 points

To determine the equilibrium price level and equilibrium level of real GDP, the aggregate demand and aggregate supply must __________.

Question options:

	be considered separately
	intersect
	be disregarded
	be considered as a multiplier
Question 18			2.5 / 2.5 points

The __________ curve summarizes the relationship between aggregate planned expenditure and the real GDP.

Question options:

	AES
	AE
	AD
	APE
Question 19			2.5 / 2.5 points

A rise in the price level __________ the buying power of money.

Question options:

	does not affect
	increases
	decreases
	inverts
Question 20			2.5 / 2.5 points

What is the total amount of final goods and service produced in a country that people, businesses, governments, and foreigners plan to buy?

Question options:

	the supply-demand model
	the quantity of real GDP supplied
	the quantity of potential GDP
	the quantity of real GDP demanded
Lesson 7

Question 21

0 / 2.5 points

Since the long-run Phillips curve is vertical at the natural unemployment rate, what type of trade-off is there between employment and inflation?

Question options:

	There is no trade-off between employment and inflation.
	There is a constant trade-off between employment and inflation.
	There is a linear trade-off between employment and inflation.
	Employment and inflation are indirectly proportional (the one goes up, the other goes down..
Question 22			2.5 / 2.5 points

In the short run, increases in the money supply increase the level of output because __________.

Question options:

	prices and wages are sticky
	prices and wages are flexible
	interest rates are sticky
	demand is fixed
Question 23			2.5 / 2.5 points

Say's law from a classical economic perspective __________.

Question options:

	states that supply creates its own demand
	explains the classical idea that the value of GDP will equal the demand for goods and services
	supports economists belief that neither surplus nor shortage would ever exist when production and demand are equal for goods and services
	all of the above
Question 24			2.5 / 2.5 points

What policy action by the Fed describes an unexpected rise in interest rates and deceleration in money growth in order to slow inflation at the cost of recession?

Question options:

	rational reduction
	surprise inflation reduction
	credible announced inflation reduction
	statistical model of reduction
Question 25			2.5 / 2.5 points

Classical economics refers to a body of work initially developed by __________.

Question options:

	Keynes
	Malthus
	Say
	Smith
Question 26			2.5 / 2.5 points

To lower the expected inflation rate, the Fed must take actions that will __________ the actual inflation rate.

Question options:

	decelerate
	accelerate
	increase
	decrease
Question 27			2.5 / 2.5 points

In __________, monetary policy can change the level of output.

Question options:

	the long run only
	both the short run and the long run
	neither the short run nor the long run
	the short run only
Question 28			2.5 / 2.5 points

What is the difference between how GDP is determined in the short run and how it is determined in the long run?

Question options:

	In the short run, GDP is determined by current demand for goods and services in the economy. In the long run, GDP is determined by supply of labor, the stock of capital and technological progress.
	In the short run, GDP is determined by future demand for goods and services in the economy. In the long run, GDP is determined by supply of labor, the stock of capital and technological progress.
	In the long run, GDP is determined by current demand for goods and services in the economy. In the short run, GDP is determined by supply of labor, the stock of capital and technological progress.
	In the long run, GDP is determined by future demand for goods and services in the economy. In the short run, GDP is determined by supply of labor, the stock of capital and technological progress.
Question 29			2.5 / 2.5 points

If the natural unemployment rate increases, the short-term Phillips curve __________ and the long-run Phillips curve __________.

Question options:

	shifts rightward; shifts rightward
	shifts leftward; shifts leftward
	shifts rightward; remains the same
	shifts leftward; remains the same
Question 30			2.5 / 2.5 points

A decrease in aggregate demand that brings a movement down along the aggregate supply curve lowers the price level and __________ real GDP.

Question options:

	does not affect
	decreases
	increases
	varies with
Question 31			2.5 / 2.5 points

What policy action by the Fed describes when people believe that the Fed will lower the inflation rate, and the expected inflation rate falls in order to slow the inflation rate without any accompanying loss of output or increase in unemployment?

Question options:

	rational reduction
	surprise inflation reduction
	credible announced inflation reduction
	statistical model of reduction
Question 32			2.5 / 2.5 points

What is the proposition that when the inflation rate changes, the unemployment rate changes temporarily and then turns to the natural unemployment rate?

Question options:

	the trade-off theory
	the natural rate hypothesis
	Okun's law
	Phillip's monetary policy
Question 33			2.5 / 2.5 points

The doctrine that states that "supply creates its own demand" is called __________ law.

Question options:

	Keynes's
	Smith's
	Say's
	Malthus's
Question 34			0 / 2.5 points

How does change in the expected inflation rate affect the short-run tradeoff between inflation and unemployment?

Question options:

	Immediately, because the money wage rate is sensitive to change in the expected inflation rate.
	Immediately, because unemployment and job production respond quickly to change in the expected inflation rate.
	Gradually, because the money wage rate responds only gradually to change in the expected inflation rate.
	Gradually, because the natural unemployment rate rarely changes.
Question 35			2.5 / 2.5 points

Suppose that the unemployment rate is __________ the natural rate. We would expect prices to fall, money demand to fall, interest rates to fall, and total demand to __________.

Question options:

	above; rise
	above; fall
	below; rise
	below; fall
Question 36			2.5 / 2.5 points

In the long run, a decrease in the money supply __________.

Question options:

	has no effect on real interest rates, investment, or output
	increases real interest rates, decreases investment, and decreases output
	increases real interest rates, increases investment, and decreases output
	decreases real interest rates, decreases investment, and decreases output
Question 37			2.5 / 2.5 points

The Keynesian view that demand could fall short of production is more likely to hold true if __________.

Question options:

	wages and prices are fully flexible
	prices, but not wages, are fully flexible
	wages and prices are not fully flexible
	wages, but not prices, are fully flexible
Question 38			2.5 / 2.5 points

The trade-off between inflation and unemployment occurs when a lower unemployment rate brings a __________.

Question options:

	lower inflation rate
	higher inflation rate
	lower aggregate supply
	higher aggregate supply
Question 39			2.5 / 2.5 points

The short-run Phillips curve is another way at looking at the __________.

Question options:

	equilibrium expenditure
	AD curve
	aggregate supply (AS. curve
	potential GDP
Question 40			2.5 / 2.5 points

Keynes expressed doubts that that the economy would __________.

Question options:

	ever return to full-employment
	ever move away from full-employment
	recover from a major recession without active policy
	recover from the effects of higher prices

 

 

C11 Lesson 8 Exam SCORE 95 PERCENT

Question 1

5 / 5 points

Income taxes create a difference between the interest rate paid by companies and received by lenders. These taxes __________ saving, investment, and the growth rate of real GDP.

Question options:

	do not affect
	lower
	encourage, but may not change
	increase
Question 2		5 / 5 points

The U.S. fiscal year runs from __________.

Question options:

	July 1 to June 30
	August 1 to July 31
	September 1 to August 31
	October 1 to September 30
Question 3		5 / 5 points

Being a side effect of fiscal policy on the supply side, the provision of public goods and services __________ productivity and potential GDP.

Question options:

	does not affect
	decreases
	increases
	can hinder or stimulate
Question 4		5 / 5 points

What type of stabilizing fiscal policy is an increase in the health care budget for citizens without coverage?

Question options:

	automatic fiscal policy
	discretionary fiscal policy
	contractionary fiscal policy
	long run fiscal policy
Question 5		5 / 5 points

According to the government expenditure multiplier, when government expenditure increases, aggregate demand increases. Other things remaining the same, what happens to the real GDP?

Question options:

	real GDP remains stable
	real GDP increases
	real GDP decreases
	real GDP induces a decrease in consumption expenditure
Question 6		5 / 5 points

A government budget deficit __________ the real interest rate and "crowds out" some private investment, which slows real GDP growth.

Question options:

	distorts
	decreases
	increases
	does not affect
Question 7		5 / 5 points

A variable that the Fed can directly control or closely target, and which influences the economy in desirable ways, is known as a(n. __________.

Question options:

	fiscal policy instrument
	monetary policy instrument
	operational instrument
	economic instrument
Question 8		5 / 5 points

The percentage deviation of real gross domestic product (GDP. from potential GDP is __________.

Question options:

	marginal GDP
	input gap
	output gap
	deadweight loss
Question 9		5 / 5 points

If real GDP is greater than potential GDP with inflation being a problem, the Fed will __________ the federal funds rate using a(n. __________.

Question options:

	lower; open market sale
	raise; closed market sale
	raise; open market sale
	lower; closed market sale
Question 10		5 / 5 points

What type of stabilizing fiscal policies arise because tax revenues and outlays fluctuate with the real GDP?

Question options:

	automatic fiscal policies
	discretionary fiscal policies
	contractionary fiscal policies
	long run fiscal policies
Question 11		5 / 5 points

Income taxes create a difference between the wage rate paid by companies and received by workers. These taxes __________ both employment and potential GDP.

Question options:

	do not affect
	lower
	encourage, but may not change
	increase
Question 12		5 / 5 points

What is the gap created by a tax between what a buyer pays and what a seller receives or between the before-tax and after-tax wage rates?

Question options:

	net taxes
	tax wedge
	induced tax
	expenditure tax
Question 13		0 / 5 points

A situation in which financial markets and institutions function normally to allocate capital resources and risk is __________.

Question options:

	financial stability
	financial instability
	fiscal stability
	fiscal instability
Question 14		5 / 5 points

A __________ gap leads to inflation and a __________ gap leads to unemployment.

Question options:

	negative; positive
	positive; negative
	negative; near zero
	near zero; positive
Question 15		5 / 5 points

If real GDP is below potential GDP, the government might decrease its expenditure on goods and service, decrease transfer payments, raise taxes, or do some combination of all three. This is called a(n. __________.

Question options:

	automatic fiscal policy
	discretionary fiscal policy
	contractionary fiscal policy
	fiscal stimulus
Question 16		5 / 5 points

What is the largest source of revenue for the federal government?

Question options:

	personal income taxes
	social security taxes
	corporate income taxes
	indirect taxes
Question 17		5 / 5 points

In the long run, an increase in the supply of bank loans is matched by a __________ in the price level and the quantity of real loans is __________.

Question options:

	rise; unchanged
	rise; increased
	fall; unchanged
	fall; decrease
Question 18		5 / 5 points

On the outlays side of the budget, how are Social Security benefits, Medicare and Medicaid benefits, unemployment benefits, and other cash benefits to individuals and businesses labeled?

Question options:

	expenditure on goods and services
	transfer payments
	debt interest
	indirect taxes
Question 19		5 / 5 points

Who first submits a budget proposal in February?

Question options:

	Congress
	the House of Representative Budget Committee
	the Senate Budget Committee
	the President
Question 20		5 / 5 points

If tax revenues equal outlays on the federal budget, what does the government have?

Question options:

	a budget surplus
	a budget deficit
	a balanced budget
	the national debt

 

ASSIGNMENT 04

C11E Macroeconomics

Directions:  Be sure to save an electronic copy of your answer before submitting it to Ashworth College for grading. Unless otherwise stated, answer in complete sentences, and be sure to use correct English, spelling and grammar. Sources must be cited in APA format. Your response should be four (4) double-spaced pages; refer to the "Assignment Format" page located on the Course Home page for specific format requirements.

 

Part A

 

1.      Describe three (3) ways we can use macroeconomic analysis, with one (1) original example for each way.

2.      You are running a small yard maintenance business for the summer. What do you expect to happen to the number of yards you can maintain in a day as you add workers if you don't purchase more capital equipment (like mowers and leaf blowers)? Provide at least two (2) supporting facts to support your response.

 

Part B

 

1.      Using the real business cycle theory, explain two (2) effects of an adverse technological shock on the labor market and on the output market.

2.      Suppose you were interested in increasing technological progress in your country. Suggest two (2) ways to do this.

 

ASSIGNMENT 08

C11E Macroeconomics

Directions:  Be sure to save an electronic copy of your answer before submitting it to Ashworth College for grading. Unless otherwise stated, answer in complete sentences, and be sure to use correct English, spelling and grammar. Sources must be cited in APA format. Your response should be four (4) double-spaced pages; refer to the "Assignment Format" page located on the Course Home page for specific format requirements.

 

Part A

 

1.      Why is the money multiplier in the United States smaller than the inverse of the required reserve ratio? Provide one (1) reason.

2.      Explain why depositing cash into a checking account does not change the money supply. Provide one (1) supporting fact.

3.      Explain why the money supply does not change when one individual writes a check to another. Provide one (1) supporting fact.

 

Part B

 

1.      Describe one (1) reason why the flexibility of wages and prices tend to favor the Keynesian economic view in the short run and one (1) reason why the flexibility of wages and prices tend to favor the classical economic view in the long run.

 

2.      Refer the figure below and explain what happens in each graph (A, B, and C) when an economy is moving from a recession (point a) back to full employment.

 

 

 

 

C11 Week 3 Threaded Discussion

Describe the terms, CPI and GDP. Why are they important?

 

C11 Week 5 Discussion

Explain the role of the Federal Reserve System. Why do you believe the Federal Reserve System is in place?

 

C11 Week 6 Threaded Discussion

Describe the aggregate demand curve. Discuss how the aggregate demand (AD) curve works and how it is calculated.