Honda buys an automobile factory in Ohio. On the U.S. balance of payments this is recorded

As a credit on the financial account

If the demand for bowling balls increases, what could be said regarding bowling shoes?

The demand for bowling shoes will increase

If the U.S. dollar depreciates relative to the Chinese yuan, then

U.S. goods sold in China would become cheaper.

Which of the following will increase the interest rate in the market for loanable funds?

An increase in government budget deficits

An inflationary gap occurs when

Equilibrium GDP exceeds full employment GDP

Investment increases by $10 billion and the MPC is 0.8. The aggregate demand curve will shift

Rightward by $50 billion at each price level

Which of the following illustrates a contractionary fiscal policy?

An increase in taxation and a decrease in government spending

The economy is experiencing high unemployment and a low rate of economic growth. What policy should the Fed follow?

Pursue an easy money policy and buy government securities

The main tools of the Federal Reserve are

Buying/selling securities, the discount rate, and the reserve ratio

A country is said to have a comparative advantage over another country when which of the following occurs?

It can produce a good at a lower opportunity cost than another country

A shift of the money supply to the left was most likely caused by

The Federal Reserve selling government securities on the open market

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Final Exam Review - AP Macroeconomics

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Questions 20

Answers

1
If the reserve ratio is 20 percent, a $2,000 deposit at one bank can increase the money supply by as much as
$2,000
$10,000
$400
$8,000
2
Honda buys an automobile factory in Ohio. On the U.S. balance of payments this is recorded
As a debit on the financial account
In the current account
As net investment income
As a credit on the financial account
3
If the demand for bowling balls increases, what could be said regarding bowling shoes?
The price of bowling shoes will decrease
The demand for bowling shoes will decrease
The demand for bowling shoes will increase
The quantity supplied will decrease
4
If the U.S. dollar depreciates relative to the Chinese yuan, then
More yuan are needed to buy a dollar.
U.S. goods sold in China would become cheaper.
U.S. goods in China would become more expensive.
Prices would not differ for U.S. or Chinese goods.
5
The money supply in Nation X is $300 million. If residents spent $900 million on goods and services, money velocity is
27
3
9
12
6
The aggregate supply curve would shift to the left if
Worker wages increased
Government regulations decreased
Taxes decreased
Productivity increased
7
Which of the following will increase the interest rate in the market for loanable funds?
An increase in government budget deficits
An increase in the aggregate savings rate
A decrease in the expected rate of return from investment spending
A decrease in expected inflation
8
An inflationary gap occurs when
Full employment GDP is equal to equilibrium GDP
Full employment GDP exceeds equilibrium GDP
Equilibrium GDP exceeds full employment GDP
Aggregate supply exceeds aggregate demand
9
Which of the following will cause an outward shift of the production possibilities curve?
Cuts in funding in educational training for employees
A natural disaster creating extreme limitations of a vital natural resource
A decrease in a nation's birth rate, thus decreasing the labor force
An increase in skilled workers
10
Jason and Mary purchased a new house in 2012 for $300,000. This purchase would be included in the GDP as
Government spending
Gross investment
Consumer spending
Net exports
11
Investment increases by $10 billion and the MPC is 0.8. The aggregate demand curve will shift
Rightward by $5 billion at each price level
Rightward by $80 billion at each price level
Rightward by $50 billion at each price level
Leftward by $30 billion at each price level
12
Which of the following illustrates a contractionary fiscal policy?
An increase in taxation and a decrease in government spending
A decrease in taxation and a decrease in government spending
No change in taxation and an increase in government spending
An increase in taxation and an increase in government spending
13
The economy is experiencing high unemployment and a low rate of economic growth. What policy should the Fed follow?
Pursue a tight money policy and sell government securities
Pursue an easy money policy and buy government securities
Pursue a tight money policy and increase the discount rate
Pursue a tight money policy and increase the reserve ratio
14
The main tools of the Federal Reserve are
The discount rate, the reserve ratio, and changing tax rates
Buying/selling securities, the reserve ratio, and changing tax rates
Buying/selling securities, the discount rate, and changing tax rates
Buying/selling securities, the discount rate, and the reserve ratio
15
When unemployment increases, the short-run Phillips curve predicts
A decrease in inflation
A decrease in aggregate supply
No change in inflation
An increase in inflation
16
A country is said to have a comparative advantage over another country when which of the following occurs?
There is a higher degree of specialization compared to another country
When comparing each country's PPF, one is operating at maximum output
It can produce a good utilizing fewer resources per unit of output
It can produce a good at a lower opportunity cost than another country
17
A shift of the money supply to the left was most likely caused by
The Federal Reserve selling government securities on the open market
The Federal Reserve buying government securities on the open market
The Federal Reserve lowering the reserve ratio
The Federal Reserve decreasing the discount rate
18
If the Federal Reserve wanted to encourage foreign investors to invest financial capital in the United States, it could
Increase the discount rate
Decrease the reserve ratio
Decrease the discount rate
Buy government securities
19
If the nominal GDP for 2011 was $200 billion and the price index was 90, real GDP would be
Equal to $200 billion
More than $200 billion
Equal to gross imports minus gross exports
Less than $200 billion
20
Bob quit his chef job and is currently looking for a job as a truck driver. Bob is considered
Cyclically unemployed
Frictionally unemployed
Not part of the labor force
Structurally unemployed

Final Exam Review - AP Macroeconomics Flashcards | StudBud