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Macro Review Flashcards | StudBud
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Macro Review
Macro Review
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Mr. McKay's Macro Review
Flashcards
31 cards
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Practice quiz
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Questions
31
Answers
1
Federal and state governments share the cost of which of the following programs?
highway construction
Social Security
military defense
Veterans benefits
2
A nation that imports more goods and services than it exports is said to have a
balance of trade.
trade deficit.
positive balance of trade
trade surplus.
3
What does the Consumer Price Index (CPI) measure?
prices of necessary items a typical customer might buy
amount of money consumers spend on goods and services
prices of all goods in the economy
core inflation rate
4
What is an effect of the growth of free market and free trade?
elimination of comparative advantage
increased pace of globalization
decreased offshoring
reduction in number of multinational corporations
5
What type of policy should the Fed use to counteract high inflation?
tight money policy
money creation
easy money policy
money creation
6
A downward turn in the economy causes Jane to lose her job is an example of
frictional unemployment.
structural unemployment.
cyclical unemployment.
seasonal unemployment
7
What is “absolute advantage”?
ability to produce more of a product using the same resource
desire to produce more of a product than a trading partner
knowing a country’s resources are greater than another’s
the growth in trade between two countries over time
8
What is the major source of revenue for most state governments?
business income and licensing taxes
sales and individual income taxes
property and gasoline taxes
alcohol and tobacco taxes
9
Which of the following activities creates money?
withdrawing money from a checking account
depositing money into a checking account
paying off a loan to a friend
putting money into a safe
10
Your pay stub from your job show that money has been taken out for FICA. What does this mean?
$ is being withheld for federal, state, and city taxes.
$ is being withheld to fund Social Security and Medicare
$ is being withheld for personal exemptions and deductions
$ is being withheld for excise and estate taxes.
11
An American company hires a call center in India to handle its telemarketing is an example of?
a stabilization program
offshoring
remittance
“brain drain”
12
What is the purpose of a credit check?
to offer credit cards to first-time borrowers
to pay back the borrower’s loan in full
to inform borrowers of their legal rights
to find out a borrower’s creditworthiness
13
What are two things that usually happen when interest rates go up?
Both consumers and businesses spend more money.
Consumers spend less money, but businesses spend more money
Consumers spend more money, but businesses spend less money
Both consumers and businesses spend less money
14
What is the main advantage of buying a new car rather than a used one?
lower purchase price
lower maintenance costs at first
no need to pay a registration fee
no need for a loan to buy it
15
Why do low interest rates encourage business investment?
Lower interest rates cause the money supply to decrease.
It is cheaper to borrow money when interest rates are low.
Inflation is lower when interest rates are low.
Lower interest rates cause the money supply to stay the same
16
What is considered one cause of inflation?
Demand and supply are in equilibrium.
Producers raise prices to meet increased costs
Unemployment is increased
The money supply decreases
17
Which of the following describes an advantage of renting over owning?
no return on the rental money
less privacy
no property to use as collateral
greater mobility
18
The best way to avoid a mountain of debt is to
use a credit card for all purchases
pay off your credit balance in full each month.
use cash advances.
find a credit card with a reasonable APR.
19
When the U.S. dollar is weaker than other countries . . .
other countries hate US goods
it more expensive for foreign countries to buy US goods
Trump will use his $ to buy out the foreign countries.
it less expensive for foreign countries to buy US goods
20
Why is real GDP more accurate than nominal GDP?
It includes unrecorded business.
It is adjusted for depreciation.
It is adjusted for price changes.
It includes unpaid and paid work.
21
What do you have to pay when you borrow funds?
principal plus interest
the amount you borrowed
twice the amount of the loan
principal plus collateral
22
Which is NOT a function of the Federal Reserve (FED)?
process checks for the federal government
loan money to individuals and small businesses
clear checks
regulate the money supply
23
How can an economist compare the standard of living in two different countries?
by looking at the quality of life
by measuring physical capital
by comparing real GDP per capita
by seeing how the GDP is distributed
24
Which of the following is included in gross domestic product (GDP)?
intermediate goods
used goods
final goods
goods made in another country by an American company
25
Labor unions were formed because workers wanted to change
the practice of featherbedding in the railroad industry.
the 1938 Fair Labor Standards Act, which banned child labor.
dangerous working conditions and long hours of factory jobs.
company efforts to hire the most highly skilled workers.
26
What can the Federal Open Market Committee do to increase the money supply?
raise reserve requirements
raise the discount rate
buy government securities
sell government securities
27
Which of the following people would be considered underemployed?
Rochelle has a Ph.D., but is working in a low-skilled job.
Carlos is not earning as much money as he really needs.
Mary is looking for work in a specialized field.
Frank is unemployed, but has stopped looking for a job.
28
Why might you choose an investment with high risk instead of one with low risk?
for a higher return
for a lower return
for greater liquidity
to avoid losing money
29
Since bonds are considered among the safest investments, they usually
take a long time to mature.
have high interest rates.
have low interest rates.
never mature.
30
Which group of people usually pays the highest insurance rates?
drivers with a good safety record
people who live in a small town
young people
married women, ages 25-45
31
The New York Stock Exchange arranges . . . .
stock and bond trading of top U.S. and world companies
stock and bond trading on the Internet only
stock but not bond trading
blue chip stocks trading only
