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Econ 10A - Final

Beschreibung

Principles of Macroeconomic Theory - Final Study Guide
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Zusammenfassung der Ressource

Frage 1

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Over time the U.S. economy has had
Antworten
  • fluctuations in growth and unemployment
  • full employment without serious inflation
  • continuous growth in output per person
  • steadily increasing unemployment

Frage 2

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Economics is best defined as the study of how
Antworten
  • to clarify resources used to produce final goods and services
  • resources are apportioned to satisfy human wants
  • modern businesses have grown and prospered
  • technology can be used to change scarce resources into free resources
  • pure capitalism has become the best system for satisfying basic human wants

Frage 3

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Economists generally classify economic resources into the following three categories
Antworten
  • men, money, and machines
  • savings, spending, and investment
  • land, labor, and capital
  • physical, human, and technological
  • employed, unemployed, and free

Frage 4

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Society's pool of knowledge concerning the industrial arts is called
Antworten
  • labor
  • land
  • capital
  • opportunity cost
  • technology

Frage 5

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The purpose of an economic model is to
Antworten
  • be a complex, exact replica of reality
  • demonstrate which values and beliefs are best for the economy
  • make predictions about the real world
  • manage the economy like an automatic pilot
  • set the prices in a price system

Frage 6

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When Adam Smith described the invisible hand, he was talking about
Antworten
  • The price system
  • central planning
  • opportunity cost
  • the division of labor
  • disguised unemployment

Frage 7

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For this economy to produce 5 million units of consumer goods and 3 million units of defense goods,
Image:
ed0cc5c7-2b22-4ae4-872b-bfaba5655c32 (image/jpeg)
Antworten
  • resources must be used inefficiently
  • the production possibilities curve must be pushed outward
  • unemployment must grow
  • income inequality must increase
  • society's resources must shrink

Frage 8

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The U.S economy may be best characterized as an example of
Antworten
  • Market socialism
  • opportunistic imperialism
  • militaristic capitalism
  • pure capitalism
  • Mixed capitalism

Frage 9

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A market demand curve
Antworten
  • Shifts as the price falls
  • slopes outward from left to right
  • is unaffected by changes in consumers' tastes and incomes
  • measures the rate of growth of per-capita output
  • shows the amount buyers would like to purchase at various prices

Frage 10

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A decrease in demand
Antworten
  • Results from a decrease in supply
  • means that the demand curve has shifted to the left
  • increases the quantity sold in the market
  • reflects an increasing consumer preference for the item
  • causes the equilibrium price to rise

Frage 11

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In general, supply curves slope outward to the right because
Antworten
  • increases in the price of a commodity lead to right outward shifts of the supply curve
  • rising prices motivate producers to offer more units for sale
  • technology progresses over time, increasing the ability of firms to produce more at existing prices
  • of increases in input prices as production is increased
  • empirical studies almost always show that the is the case

Frage 12

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For a maket to exhibit excess demand
Antworten
  • supply must exceed demand
  • the equilibrium price must be too high to clear the market
  • the actual price must be below the equilibrium price
  • the demand curve must slope outward
  • the market must be growing

Frage 13

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The equilibrium price is
Image:
ce2f92b9-c5cd-4a13-935a-0c45b83c9b26 (image/jpeg)
Antworten
  • more than $12 per pound
  • $12 per pound
  • $9 per pound
  • $7 per pound
  • less than $7 per pound

Frage 14

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In a free market, actual price will
Antworten
  • remain unchanged as equilibrium price changes
  • move toward equilibrium price
  • cause demand and supply curves to shift direction
  • always exceed equilibrium price
  • be very difficult to calculate

Frage 15

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If farmers currently produce 800 bushels
Antworten
  • the actual price is $2
  • the market is in equilibrium
  • actual price is below equilibrium price and will tend to rise
  • Only increases in demand would encourage the rise above 80 units
  • The market exhibits to surplus

Frage 16

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Gross domestic product:
Antworten
  • equals the total wages paid in a year
  • is a measure of government output
  • equals the total value of final goods and services produced in a year
  • is the sum of all goods, both final and intermediate
  • is an obsolete economic indicator of inflation

Frage 17

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When measuring GDP, we double count if we include the value of:
Antworten
  • Government expenditures
  • Intermediate goods
  • Nonmarket transactions
  • nonproductive transactions
  • net exports

Frage 18

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GDP expressed in constant dollars is called:
Antworten
  • capital accumulation
  • the net national product
  • permanent income
  • real GDP
  • a price index

Frage 19

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To deflate, one must:
Antworten
  • multiply the price ratio by 100
  • divide the current dollar values by the price index
  • subtract the constant dollar values from current dollar values
  • add the price index in the current year to the price index in the base year
  • find the difference between the values of two different sets of goods in a given year

Frage 20

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(Data) According to the data in the table, from 2002 to 2003, GDP in constant dollars rose by:
Antworten
  • 6.5 percent
  • 5.7 percent
  • 4.8 percent
  • 3.1 percent
  • 1.7 percent

Frage 21

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The best example of consumer nondurable counted in this year's GDP is a:
Antworten
  • Hair cut
  • Refrigerator
  • Pizza
  • Concert
  • Used car

Frage 22

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(Data) GDP is:
Antworten
  • A. $1240 billion
  • $1250 billion
  • $1340 billion
  • $1640 billion
  • $2590 billion

Frage 23

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In this economy
Antworten
  • the stock of capital goods fell during the year
  • the government balanced its budget
  • value-added exceeded the income
  • output exceeded GDP
  • imports exceeded exports

Frage 24

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The level of real national output purchased at each price level is called:
Antworten
  • A market basket
  • A market demand curve
  • An aggregate demand curve
  • A derived demand curve
  • A consumption of possibilities curve

Frage 25

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If the money supply is fixed, increases in the price level reduce:
Antworten
  • Interest rate
  • Imports
  • The rate of inflation
  • Total real output purchased
  • The average money cost of each transaction

Frage 26

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When the economy is at equilibrium in the horizontal range of the short run aggregate supply curve,:
Antworten
  • There is little upward pressure on prices because of widespread unemployment
  • The aggregate demand curve must be horizontal as well
  • Economic conditions similar to those experienced during world war II prevail
  • Real output is equal to potential output
  • A change in aggregate demand causes price levels to fall

Frage 27

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People temporarily out of work because they are changing jobs or looking for their first jobs are examples of
Antworten
  • frictional unemployment
  • structural unemployment
  • cyclical unemployment
  • inflationary unemployment
  • residual unemployment

Frage 28

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People actively looking for work who cannot find jobs because of an insufficiency of aggregate demand are examples of:
Antworten
  • Frictional unemployment
  • Structural unemployment
  • Cyclical unemployment
  • Inflationary unemployment
  • Residual unemployment

Frage 29

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During a period when total spending is too high relative to potential output, the economy experiences:
Antworten
  • Excessive unemployment
  • Failing average prices
  • A glut
  • A great crash
  • Inflation

Frage 30

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The phase of the business cycle in which output is highest relative to its potential level is the:
Antworten
  • Peak
  • Trough
  • Recession
  • Expansion
  • Trend

Frage 31

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In general, a business cycle goes through its phases in the following sequence:
Antworten
  • Trough, peak, expansion, recession
  • Recession, trough, expansion, peak
  • Trough, recession, expansion, peak
  • Trough, expansion, recession, peak
  • Expansion, recession, trough, peak

Frage 32

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If Carolyn's consumption rises by $5,000 as her income from $26,000 to $32,000 per year, her marginal propensity to consume is
Antworten
  • 0.16
  • 19
  • 0.83
  • 1.20
  • impossible to determine from the data

Frage 33

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The average propensity to consume equals the
Antworten
  • Change in personal consumption expenditures divided by the current level of consumption expenditures
  • amount spent on consumption divided by the amount of disposable income
  • change in personal consumption expenditures divided by the amount of disposable income
  • personal consumption expenditures divided by personal saving
  • sum of personal consumption expenditures and disposable income divided by two

Frage 34

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An MPS of .32 implies that the MPC is
Antworten
  • 1.32
  • 0.74
  • 0.68
  • 0.36
  • impossible to calculate unless the change in income is specified

Frage 35

Frage
If the interest rate is 7%, the number of projects undertaken would be
Antworten
  • 1
  • 2
  • 3
  • 4
  • 5

Frage 36

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The relationship between household spending and disposable income is known as the
Antworten
  • investment function
  • multiplier
  • gross domestic product
  • consumption function
  • saving function

Frage 37

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If disposable income raises by $100 billion and personal consumption expenditure rises by $60 billion, what is the marginal propensity to consume?
Antworten
  • 0.60
  • 0.40
  • 1.60
  • 1.66
  • 2.50

Frage 38

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If disposable income is $1,800 billion, the average propensity to consume is
Antworten
  • .8
  • .84
  • .92
  • 1.0
  • 1.08

Frage 39

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If disposable income is $1,900 billion, saving is
Antworten
  • $16 billion
  • $20 billion
  • $144 billion
  • $160 billion
  • $180 billion

Frage 40

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If the multiplier is 3, a $1 billion decrease in government spending will
Antworten
  • lower equilibrium GDP by 1/3
  • Lower equilibrium GDP by 3
  • Raise equilibrium GDP by 1/3
  • raise equilibrium GDP by 3
  • leave equilibrium GDP unchanged but change intended spending by 1/3

Frage 41

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One reason not to wait for wage rates and other input prices to fall and shift the short-run aggregate supply curve to the right in an economy experiencing a recessionary gap is that
Antworten
  • such attention will result in inflation
  • unemployment would fall too fast for a complex adjustment
  • a government budget deficit would be created
  • it would take too long because wages and prices tend to be sticky
  • falling prices would reduce exports

Frage 42

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Aggregate demand shifts to the right when
Antworten
  • government spending is reduced
  • tax rates are reduced
  • equilibrium GDP is reduced
  • total intended spending is reduced
  • the inflator gap is reduced

Frage 43

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When the equilibrium level of out put in an economy is above its potential output
Antworten
  • the government should raise its spending
  • there is an inflationary gap
  • the long-run aggregate supply curve is horizontal
  • unemployment rates are high
  • wages and prices must rapidly falling

Frage 44

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In an economy experiencing a high unemployment rate, appropriate fiscal policy would attempt to
Antworten
  • wait for wages and other input prices to fall
  • discourage firms from investing
  • increase personal tax rates
  • reduce welfare payments to households
  • shift the aggregate demand curve to the right

Frage 45

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When inflation constitutes a major economic problem, government policy may attempt to
Antworten
  • shift the aggregate demand curve to the left
  • shift the aggregate supply curve to the ;eft
  • encourage and augment spending
  • raise the equilibrium price level
  • raise the minimum wage to reduce the effective price level

Frage 46

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Government anti-inflationary fiscal policy
Antworten
  • is intended to shift the short-run aggregate supply curve to the left
  • typically leads to an increase in total real output and a rise in the price level
  • leads to reduction in total real output when the short-run aggregate supply curve is positively sloped
  • shifts the aggregate demand curve to the right
  • is undertaken when the economy is in the horizontal

Frage 47

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the value of money
Antworten
  • rises during periods of inflation
  • is inversely related to the price level
  • is unaffected by creeping inflation
  • has remained relatively constant in the United States over the past 25 years
  • falls as real income rises

Frage 48

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Inflation
Antworten
  • means demand is falling and supply is rising
  • increases the value of the money supply
  • rarely affects the distribution of income or wealth
  • is generally highest when there is plenty of excess capacity and unemployed resources
  • is a general upward movement in the average level of prices

Frage 49

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In the base year, a price index has a value of
Antworten
  • -1
  • zero
  • 1/100
  • 100x100
  • 100

Frage 50

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Inflation
Antworten
  • hurts people living on fixed incomes
  • inevitably tends to die out
  • has been the experience of this country since its founding
  • does not tend to redistribute income
  • inevitably leads to deflation

Frage 51

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During periods of high inflation, investors tend to buy real estate, art, and commodities like gold because
Antworten
  • during inflation there are the only items that are not in short supply
  • such items tend to grow in value at a rate higher than the inflation rate
  • real estate and commodities are very cheap during periods of inflation
  • banks and other lenders are very eager to support such investments
  • the purchasing power of money trises during inflationary periods

Frage 52

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Demand-side inflation is most likely to occur when the economy
Antworten
  • has substantial excess capacity
  • is approaching or operating at full employment
  • has an aggregate demand curve shifting to the left
  • has a horizontal aggregate supply curve
  • has labor productivity rising faster than wages

Frage 53

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Demand-side and supply-side inflations differ in that, in one case,
Antworten
  • total real output rises, and in other, it falls
  • the price level rises, and in other, it falls
  • borrowers benefit and, in other, savers benefit
  • businesses benefit, and in other, householders benefit,
  • inflation is temporary, and in other, inflation is permanent

Frage 54

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In part, supply-side inflation
Antworten
  • is at the heart of demand-side inflation
  • is an example of too little money chasing too may goods
  • is an outgrow of a perfectly competitive market structure
  • results from significant price increases of important resources
  • occurs when labor productivity rises faster than wage rates

Frage 55

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Currency in the United States is
Antworten
  • convertible into gold at fixed rates
  • fiat money
  • issued by commercial banks based on their deposits
  • another name for checking deposits and NOW accounts
  • any interest bearing government note
  • bruh
  • All of them

Frage 56

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Fiat money is any money that
Antworten
  • exist in the form of coin or currency
  • is issued by the Federal Reserve
  • has a greater face value than its purchasing power
  • is money because the government says so and the people accept it
  • earns interest when deposited in banks

Frage 57

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Assets a government says are money and are accepted by the public as money are called
Antworten
  • near money
  • funny money
  • sophisticated money
  • nominal money
  • fiat money
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