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Macro: Final Exam
Macro: Final Exam
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Principles of Macro Review for Final Exam
Flashcards
46 cards
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Practice quiz
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Questions
46
Answers
1
Which of these is NOT a reason why spending or demand drives the macro economy?
Excess capacity
For-profit system
On demand output
Innovation creates demand
2
Type of unemployment: Lost job in mass layoffs across the economy.
Cyclical
Frictional
Structural
3
What economic system dominated Europe from the Dark Ages to the Industrial Age?
Feudalism
Socialism
Capitalism
Communism
4
Which of these is an example of predistribution?
Mandated schooling
Taxing the rich
Transfers to the poor
Food stamps
5
If price of Z, a substitute of X goes up, what happens in the market for X?
Demand for X increases
Demand for X decreases
6
Which of these would increase investment spending?
Unexpected decrease in inventories
Increase in real interest rates
Increase in operating costs
Low capacity utilization rates
7
Which of these is NOT a sub category of consumer spending?
Services
Construction
Durable goods
Nondurable goods
8
GDP or Not GDP: Toyota produces Corollas in Texas and sells them in Mexico.
GDP
Not GDP
9
Which of the following is true?
Banks lend out reserves to customers
The Fed controls the money supply
Banks create new money when they lend to customers
Banks lends out your deposits to other borrowers
10
What is the concern of the gov't running too large of a deficit?
Inflation
Reduced savings
Higher interest payments
Bankruptcy
11
Which of the following are NOT one of the two goals of the Fed?
Full employment
Price Stability
High economic growth
12
Which of these counts in the labor force?
Stay at home parent
Retiree
Unemployed
Children under 16
13
Which of these is NOT a reason why most supply curves are horizontal?
More profit can be made at higher prices
Costs of production are not increasing
Markets aren't perfectly competitive
Businesses have pricing power
14
The US gov't is in danger of going bankrupt. True or False?
True
False
15
Which type of business tends to be larger and pays corporate income tax?
S Corporations
C Corporations
Pass-through Corporations
16
Which of the following is expansionary monetary policy?
Lower interest rates
Increasing gov't deficit
Higher interest rates
Increasing gov't surplus
17
Which of the following is expansionary fiscal policy?
Increasing gov't deficit
Higher interest rates
Increasing gov't surplus
Lower interest rates
18
Which type of business hired the majority of all employees in the US?
Large businesses
Small businesses
19
Which of these is NOT a definition of inflation?
Increase in price level
Goods and services become more expensive
Increase in money supply
Decrease in value of dollar relative to goods
20
What is the meaning of the root word for economics?
Art of money making
Art of surviving and thriving
Art of maximizing utility under scarcity
Art of maintaining the household
21
Which of these measures of unemployment accounts for underemployment?
U5
U3
U6
22
Which of these problems does the US tend to encounter more often?
Not enough spending
Not enough productive capacity
23
What has happened to the poverty rate in the US over the last few decades?
Decreased
Increased
Stayed about the same
24
Which of these is better for the macro economy?
Spending
Saving
25
North Korea is probably best labelled what economic system?
Autocratic Communism
Democratic Socialism
Capitalism
Fascism
26
Which of these has been the most common cause of a recession in the US?
Drop in population
Financial crisis
War
Declining innovation
27
Which of the following is a 'short' against an asset?
CDO
TARP
MBS
CDX
28
GDP or Not GDP: Your dad sells you his old guitar for $100.
Not GDP
GDP
29
What is the negative multiplier effect called?
Inconsistency of abstemiousness
Paradox of thrift
Incongruity of frugality
Contradiction of hoarding
30
What measurement do we use that best captures economic growth?
Real GDP per capita
Real GDP
GNP
Nominal GDP
31
If demand increases for X, what would likely happen to price of X?
Decreases
Increases
32
Costs of production for Y go up, what likely happens to price of Y in a noncompetitive market?
Increases
Decreases
33
Who has the higher MPC?
Poorer person
Wealthier person
34
Which of these was NOT a feature of early Capitalism?
Wild swings in economic activity
Huge economic growth
Long hours and low pay for working class
Large, well-off middle class
35
GDP or Not GDP: You purchase stock in a startup company.
GDP
Not GDP
36
What has happened to fertility rate in the US over the last few decades?
Leveled off
Increased above replacement level
Dropped below replacement level
37
Which banks was allowed to fail in the 2008 crisis because of the bad CDOs they owned?
Lehman Brothers
Bear Stearns
AIG
Goldman Sachs
38
Which of these cause net exports to increase?
Appreciation of the currency
Depreciation of the currency
39
Which of these is NOT a reason why demand curves slope downward?
Diminishing returns
Substitution effect
Scarcity effect
Income effect
40
What has happened to household size in the US over the last few decades?
Increased
Decreased
41
Which of these is the primary determinant of consumer spending?
Borrowing
Income
Real Interest Rates
Wealth
42
What constrains the money supply?
Banks' lending decisions
The Fed
Reserve requirement
Monetary base
43
What has happened to wealth and income inequality in the US over the last few decades?
Stayed about the same
Increased
Decreased
44
Which of these types of spending is marked by smoothing adding to its stability?
Consumer spending
Government spending
Investment spending
45
GDP or Not GDP: You grow and sell vegetables to your neighbors out of your backyard.
GDP
Not GDP
46
Which expenditure component of GDP is often negative in the US?
Government spending
Net Exports
Investment spending
Consumer spending
