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Macro-Econ Final

Descripción

Sample questions to study for macro-econ final.
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Test por hannahdevane, actualizado hace más de 1 año
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Resumen del Recurso

Pregunta 1

Pregunta
GDP is defined as the
Respuesta
  • value of all goods and services produced within a country in a given period of time
  • value of all final goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time
  • value of all goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time
  • value of all final goods and services produced within a country in a given period of time

Pregunta 2

Pregunta
Gross domestic product measures
Respuesta
  • income but not expenditures
  • expenditures but not income
  • both income and expenditures
  • neither income nor expenditures

Pregunta 3

Pregunta
Grapes are considered intermediate goods
Respuesta
  • if the purchaser eats them, but not if the purchaser uses them to make wine to see
  • if the purchaser uses them to make wine to sell others but not if the purchaser eats them
  • whether the purchaser uses them to make wine to sell or eats them
  • None of the above is correct

Pregunta 4

Pregunta
Which of the following transactions adds to U.S. GDP for 2010?
Respuesta
  • In December 2010, Isabella eats onions that she harvested from her backyard garden in October 2010
  • In 2010, Ashley sells a car that she bought in 2006 to William for $5,000
  • An American professor teaches Economics in China during the summer of 2010 and earns the equivalent of $8000 during that time
  • In February 2010, Amanda buys a ticket for $10 to visit a zoo in Florida

Pregunta 5

Pregunta
In the economy of Ukzten in 2010, consumption was $5000, exports was $100, government purchases were $900, imports were $200, and investment was $1000. What was Ukzten's GDP in 2010?
Respuesta
  • $6800
  • $6700
  • $7200
  • $7000

Pregunta 6

Pregunta
Which of the following is NOT included in the consumption component of GDP?
Respuesta
  • Aunt Jane buys a new house
  • Bill buys a pizza for dinner
  • Bob pays his tuition and fees for college
  • You get a nice haircut

Pregunta 7

Pregunta
Darnell's employer upgrades all of its computer systems using U.S. made parts. Which component of GDP is this transaction included?
Respuesta
  • Consumption
  • Investment
  • Government Expenditure
  • Net Exports

Pregunta 8

Pregunta
If in some year real GDP was $25 billion and nominal GDP was $30 billion, what was GDP deflator?
Respuesta
  • 120
  • 83.33
  • 1.2
  • 0.833

Pregunta 9

Pregunta
Changes in nominal GDP reflect
Respuesta
  • only changes in prices
  • neither changes in prices nor changes in the amounts being produced
  • only changes in the amounts being produced
  • both changes in prices and changes in the amounts being produced

Pregunta 10

Pregunta
When studying changes in the economy over time, economists want a measure of the total quantity of goods and services the economy is producing that is not affected by changes in the prices of those goods and services. In other words, economists want to study
Respuesta
  • GNP
  • the GDP deflator
  • real GDP
  • nominal GDP

Pregunta 11

Pregunta
Which of the following statement about GDP is correct?
Respuesta
  • Nominal GDP values production at constant prices, whereas real GDP values production at current prices
  • Nominal GDP values production at the cost of the resources used in the production process, whereas real GDP values production at market prices
  • Nominal GDP values production at current prices, whereas real GDP values production at constant prices
  • Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process

Pregunta 12

Pregunta
The CPI is a measure of the overall cost of
Respuesta
  • the inputs purchased by a typical producer
  • the goods and services produced in the economy
  • the goods and services purchased by a typical consumer
  • the stocks on the New York Stock Exchange

Pregunta 13

Pregunta
The term inflation is used to describe a situation in which
Respuesta
  • stock-market prices are rising
  • the overall level of prices in the economy is increasing
  • incomes in the economy are increasing
  • the economy is growing rapidly

Pregunta 14

Pregunta
If the price of Spanish olives imported into the United States decreases, then there would be an effect on the value of
Respuesta
  • neither the GDP deflator nor the consumer price index
  • the GDP deflator but not on the value of the consumer price index
  • the consumer price index but not on the value of the GDP delator
  • both the GDP deflator and the consumer price index

Pregunta 15

Pregunta
Suppose that U.S. mining companies purchase German made ore trucks at a reduced price. By itself, what effect will this purchase have on the GDP deflator and on the consumer price index?
Respuesta
  • The consumer price index and the GDP deflator will both fall
  • The consumer price index and the GDP deflator will both be unaffected
  • The consumer price index will fall, and the GDP deflator will be unaffected
  • The consumer price index will be unaffected, and the GDP deflator will fall

Pregunta 16

Pregunta
In 1983, one could buy a model radio-controlled airplane for $11.50 each. Those same planes are available today and the price increased at exactly the rate of inflation. If the CPI today is 220.5 and in 1983 was 105, what is the price of the airplane today?
Respuesta
  • $11.50
  • $5.48
  • $2.10
  • $24.15

Pregunta 17

Pregunta
The nominal interest rate tells you
Respuesta
  • how fast the purchasing power of your bank account rises over time
  • the number of dollars in your bank account today
  • the purchasing power of your bank account today
  • how fast the number of dollars in your bank account rises over time

Pregunta 18

Pregunta
In 2011, Sally opened an account and deposited $1000 with a nominal interest rate of 10%. A hamburger was $5 in 2011. CPI was 120 in 2011 and 129.6 in 2012. What is the purchasing power of her $1000 in 2011?
Respuesta
  • 180 hamburgers
  • 250 hamburgers
  • 200 hamburgers
  • 220 hamburgers

Pregunta 19

Pregunta
In 2011, Sally opened an account and deposited $1000 with a nominal interest rate of 10%. A hamburger was $5 in 2011. CPI was 120 in 2011 and 129.6 in 2012. What is the inflation rate?
Respuesta
  • 9.6%
  • 8%
  • 6%
  • 7.4%

Pregunta 20

Pregunta
In 2011, Sally opened an account and deposited $1000 with a nominal interest rate of 10%. A hamburger was $5 in 2011. CPI was 120 in 2011 and 129.6 in 2012. What is the real interest rate?
Respuesta
  • 4%
  • 2%
  • 8%
  • 6%

Pregunta 21

Pregunta
Who is included in the labor force by the Bureau of Labor Statistics?
Respuesta
  • Gabe, who does not have a job, but is looking for work
  • Marcus, a full-time student not looking for work
  • Chris, a retired engineer not looking for other work
  • None of the above is correct

Pregunta 22

Pregunta
In 2009, based on concepts similar to those used to estimate U.S. employment figures, the Italian adult non-institutionalized population was 51.070 million, the labor force was 24.710 million, and the number of people employed was 22.765 million. According to these numbers, the Italian labor-force participation rate and unemployment rate were about
Respuesta
  • 48.4% and 7.9%
  • 44.6% and 3.8%
  • 48.4% and 3.8%
  • 44.6% and 7.9%

Pregunta 23

Pregunta
Unemployment that is due to a recession is
Respuesta
  • Frictional unemployment
  • Structural unemployment
  • Cyclical unemployment
  • Seasonal unemployment

Pregunta 24

Pregunta
John worked in a ski resort last winter but he got laid off in May. Curtis has looked for work as an entry-level accountant for some time. While the general demand for accountants doesn't appear to be falling, there seems to be more job openings for senior-level accountants.
Respuesta
  • John and Curtis are both seasonally unemployed
  • John is structurally unemployed, and Curtis is seasonally unemployed
  • John and Curtis are both structurally unemployed
  • John is seasonally unemployed, and Curtis is structurally unemployed

Pregunta 25

Pregunta
Suppose that in a closed economy GDP is 11,000, consumption is 7,500, and taxes are 2,000. What value of government purchases would make national savings equal to 1,000 and at that value would the government have a deficit or surplus?
Respuesta
  • 2,500 deficit
  • 2,500 surplus
  • 1,000 deficit
  • 1,000 surplus

Pregunta 26

Pregunta
In a small closed economy investment is $50 billion and private saving is $55 billion. What are public saving and national saving?
Respuesta
  • $60 billion and $5 billion
  • $50 billion and -$5 billion
  • $5 billion and $60 billion
  • -$5 billion and $50 billion

Pregunta 27

Pregunta
In a closed economy, in Y is 10,000, T is 1,000, G is 3,000, and C is 5,000, then
Respuesta
  • the government as a budget deficit and investment is 1,000
  • the government has a budget surplus and investment is 1,000
  • the government has a budget surplus and investment is 2,000
  • the government has a budget deficit and investment is 2,000

Pregunta 28

Pregunta
In a closed economy, national saving is
Respuesta
  • equal to investment
  • usually greater than investment
  • usually less than investment
  • always less than investment

Pregunta 29

Pregunta
Which of the following would a macroeconomist consider as investment?
Respuesta
  • Marisa purchases a bond issued by Proctor and Gamble Corp.
  • Karlee purchases stock issued by Texas Instruments, Inc.
  • Charlie builds a new coffee shop
  • All of the above are correct

Pregunta 30

Pregunta
Which list ranks assets form most to least liquid?
Respuesta
  • $10 bills, cars, houses, bonds
  • $10 bills, bonds, cars, houses
  • bonds, $10 bills, cars, houses
  • bonds, cars, $10 bills, houses

Pregunta 31

Pregunta
Which of the following is included in M2 but not in M1?
Respuesta
  • savings deposits
  • currency
  • demand deposits
  • All of the above are included in both M1 and M2

Pregunta 32

Pregunta
You receive money as payment for babysitting your neighbors' children. This best illustrates which function of money?
Respuesta
  • Unit of account
  • Liquidity
  • Store of Value
  • Medium of Exchange

Pregunta 33

Pregunta
If the reserve ratio is 5 percent and banks keep no excess reserves, then $1,000 of additional deposits can create up to (hint: get the money multiplier first)
Respuesta
  • $200 of new money
  • $2,000 of new money
  • $20,000 of new money
  • None of the above is correct

Pregunta 34

Pregunta
If the money multiplier is 2 and the Fed buys $50,000 worth of bonds, what happens to the money supply?
Respuesta
  • It increases by $100,000
  • It increases by $150,000
  • It decreases by $100,000
  • It decreases by $150,000

Pregunta 35

Pregunta
To explain the long-run determinants of the price level and the inflation rate, most economists rely on the
Respuesta
  • Quantity theory of money
  • Price-index theory of money
  • Fisher effects
  • Theory of hyperinflation

Pregunta 36

Pregunta
When the money market is drawn with the value of money on the vertical axis, if the Federal Reserve sells bonds, then the money supply curve (hint: how selling bonds changes the money supply)
Respuesta
  • Shifts right, causing the price level to rise
  • Shifts right, causing the price level to fall
  • Shifts left, causing the price level to rise
  • Shifts left, causing the price level to fall

Pregunta 37

Pregunta
When the money market is drawn with the value of money on the vertical axis,
Respuesta
  • money demand slopes upward and money supply is horizontal
  • money demand slopes downward and money supply is horizontal
  • money demand slopes upward and money supply is vertical
  • money demand slopes downward and money supply is vertical

Pregunta 38

Pregunta
As the price level decreases, the value of money
Respuesta
  • increases, so people want to hold more of it
  • increases, so people want to hold less of it
  • decreases, so people want to hold more of it
  • decreases, so people want to hold less of it

Pregunta 39

Pregunta
On a given morning, Franco sold 40 pairs of shoes for a total of $80 at his shoe store.
Respuesta
  • The $80 is a real variable and the quantity of shoes is a nominal variable
  • The $80 is a nominal variable and the quantity of shoes is a real variable
  • Both the $80 and the quantity of shoes are nominal variables
  • Both the $80 and the quantity of shoes are real variables

Pregunta 40

Pregunta
Your boss gives you an increase in the number of dollars you earn per hour. This increase in pay makes
Respuesta
  • your nominal wage increase. If your nominal wage rose by a greater percentage than the price level, then your real wage also increased
  • your nominal wage increase. If your nominal wage rose by a greater percentage than the price level, then your real wage decreased.
  • your real wage increase. If your real wage rose by a greater percentage than the price level, then your nominal wage also increased.
  • your real wage decrease. If your real wage rose by a greater percentage than the price level, then your nominal wage decreased.

Pregunta 41

Pregunta
According to the principle of monetary neutrality, a decrease in the money supply will not change
Respuesta
  • nominal GDP
  • the price level
  • unemployment
  • all of the above are correct

Pregunta 42

Pregunta
Suppose the money supply tripled, but at the same time velocity fell by half and real GDP was unchanged. According to the quantity equation the price level
Respuesta
  • is 1.5 times its old value
  • is 3 times its old value
  • is 6 times its old value
  • is the same as its old value

Pregunta 43

Pregunta
Under the assumptions of the Fisher effect and monetary neutrality, if the money supply growth rate rises, then
Respuesta
  • both the nominal and the real interest rate rise
  • neither the nominal nor the real interest rate rise
  • the nominal interest rate rises, but the real interest rate does not
  • the real interest rate rises, but the nominal interest rate does not

Pregunta 44

Pregunta
In which case below is the real interest rate the highest? (hints: use fisher effect equation)
Respuesta
  • the nominal interest rate= 4% and inflation= 3%
  • the nominal interest rate= 3% and inflation= 1%
  • the nominal interest rate= 2% and inflation= -2%
  • the nominal interest rate= 1% and inflation= -4%

Pregunta 45

Pregunta
Which of the following is one of the long-run economic goals?
Respuesta
  • a zero unemployment rate
  • a stable interest rate
  • high economic growth
  • a stable exchange rate

Pregunta 46

Pregunta
Which of the following is correct?
Respuesta
  • Economic fluctuations are easily predicted by competent economists
  • Recessions have never occurred very close together
  • Spending, income, and production do not fluctuate closely with real GDP
  • None of the above is correct

Pregunta 47

Pregunta
During recessions
Respuesta
  • sales and profits fall
  • sales and profits rise
  • sales rise, profits fall
  • profits rise, sales fall

Pregunta 48

Pregunta
The long-run aggregate supply curve shifts right if
Respuesta
  • either immigration from abroad increases or more people get college degrees
  • immigration from abroad increases, but not if more people get college degrees
  • more people get college degrees, but not if immigration from abroad increases
  • none of the above are correct

Pregunta 49

Pregunta
According to Sticky-wage theory, the wage contract was determined in advance based on the expected price level. The wage was fixed in the short run. If the actual price level was higher than the expected price level, the firm would have
Respuesta
  • lower labor costs and lower profits. So the firm would decrease the production
  • lower labor costs and higher profits. So the firm would increase the production
  • higher labor costs and lower profits. So the firm would decrease the production
  • higher labor costs and higher profits. So the firm would decrease the production

Pregunta 50

Pregunta
A decrease in the expected price level shifts
Respuesta
  • only the short-run aggregate supply curve left
  • only the short-run aggregate supply curve right
  • both the short-run and the long-run aggregate supply curve left
  • both the short-run and the long-run aggregate supply cure right

Pregunta 51

Pregunta
Which of the following is NOT included in aggregate demand? (hint: AD = C + I + G + NX)
Respuesta
  • purchases of stock and bonds
  • purchases of services such as visits to the doctor
  • purchases of capital goods such as equipment in a factory
  • purchases by foreigners of consumer goods produced in the United States

Pregunta 52

Pregunta
If marginal propensity to consume (MPC) is 0.60, how much money will the household spend to buy goods and services with $50 extra income?
Respuesta
  • $20, the multiplier is 2.5
  • $20, the multiplier is 1.67
  • $30, the multiplier is 2.5
  • $30, the multiplier is 1.67

Pregunta 53

Pregunta
If marginal propensity to consume (MPC) is 0.60 and there is no crowding out, how much should Congress increase government spending to end the recession?
Respuesta
  • $50 billion
  • $160 billion
  • $240 billion
  • $300 billion

Pregunta 54

Pregunta
Suppose a computer virus disables all ATM machines, making withdrawals from bank accounts less convenient. As a result, people want to keep more cash on hand. (Draw MS & MD graph and AS & AD graph) Assume policymakers do nothing, according to the theory of liquidity preference, what happens to money market?
Respuesta
  • Money demand shifts right and interest rate rises
  • Money demand shifts left and interest rate drops
  • Money supply shifts right and interest rate drops
  • Money supply shifts left and interest rate rises

Pregunta 55

Pregunta
Suppose a computer virus disables all ATM machines, making withdrawals from bank accounts less convenient. As a result, people want to keep more cash on hand. (Draw MS & MD graph and AS & AD graph) IN AD-AS diagram, which curve shifts and in which direction?
Respuesta
  • Aggregate supply shifts right
  • Aggregate supply shifts left
  • Aggregate demand shifts right
  • Aggregate demand shifts left

Pregunta 56

Pregunta
Suppose a computer virus disables all ATM machines, making withdrawals from bank accounts less convenient. As a result, people want to keep more cash on hand. (Draw MS & MD graph and AS & AD graph) In the short run what happens to the price level and real GDP?
Respuesta
  • both the price level and real GDP rise
  • both the price level and real GDP fall
  • the price level rises and real GDP falls
  • the price level falls and real GDP rises

Pregunta 57

Pregunta
Suppose a computer virus disables all ATM machines, making withdrawals from bank accounts less convenient. As a result, people want to keep more cash on hand. (Draw MS & MD graph and AS & AD graph) If the Fed wants to stabilize this economic fluctuation, it should
Respuesta
  • buy bonds. So interest rate rises to make the curve in AD-AS diagram shift back
  • buy bonds. So interest rate drops to make the curve in AD-AS diagram shift back
  • sell bonds. So interest rate rises to make the curve in AD-AS diagram shift back
  • sell bonds. So interest rate drops to make the curve in AD-AS diagram shift back

Pregunta 58

Pregunta
Suppose a computer virus disables all ATM machines, making withdrawals from bank accounts less convenient. As a result, people want to keep more cash on hand. (Draw MS & MD graph and AS & AD graph) If the Fed does nothing, what might Congress do to stabilize the economic fluctuation?
Respuesta
  • decrease government spending or raise taxes
  • increase government spending or raise taxes
  • decrease government spending or cut taxes
  • increase government spending or cut taxes

Pregunta 59

Pregunta
Suppose a computer virus disables all ATM machines, making withdrawals from bank accounts less convenient. As a result, people want to keep more cash on hand. (Draw MS & MD graph and AS & AD graph) If policymakers do nothing, the economy is able to correct the short-run fluctuation by itself. To reach the new long-run equilibrium, the change in price expectations created by this event shifts
Respuesta
  • long-run aggregate supply right
  • long-run aggregate supply left
  • short-run aggregate supply right
  • short-run aggregate supply left

Pregunta 60

Pregunta
Hurricane Sandy destroyed many factories in Eastern areas and caused a rise of the oil prices. How does this event affect the U.S. economy? Assume the government did not respond to this event at the beginning. (Draw AS & AD diagram) Which curve shifts and in which direction?
Respuesta
  • aggregate demand shifts right
  • aggregate demand shifts left
  • aggregate supply shifts right
  • aggregate supply shifts left

Pregunta 61

Pregunta
Hurricane Sandy destroyed many factories in Eastern areas and caused a rise of the oil prices. How does this event affect the U.S. economy? Assume the government did not respond to this event at the beginning. (Draw AS & AD diagram) If the policymakers do nothing at first, in the short-run what happens to the price level and real GDP?
Respuesta
  • both the price level and real GDP rise
  • both the price level and real GDP fall
  • the price level rises and real GDP falls
  • the price level falls and real GDP rises

Pregunta 62

Pregunta
Hurricane Sandy destroyed many factories in Eastern areas and caused a rise of the oil prices. How does this event affect the U.S. economy? Assume the government did not respond to this event at the beginning. (Draw AS & AD diagram) If policymakers want to stabilize the economic fluctuation caused by hurricane Sandy, which curve shifts and in which direction?
Respuesta
  • aggregate demand shifts right
  • aggregate demand shifts left
  • aggregate supply shifts right
  • aggregate supply shifts left

Pregunta 63

Pregunta
Hurricane Sandy destroyed many factories in Eastern areas and caused a rise of the oil prices. How does this event affect the U.S. economy? Assume the government did not respond to this event at the beginning. (Draw AS & AD diagram) How is the new long-run equilibrium different from the original one?
Respuesta
  • both price and real GDP are higher
  • both price and real GDP are lower
  • the price level is the same and GDP is higher
  • the price level is higher and real GDP is the same

Pregunta 64

Pregunta
Suppose the economy is in long-run equilibrium. A survey measure of consumer confidence indicate a wave of optimism about the economic conditions. As a result, consumers are purchasing more goods and services. Firms are expanding their business. (Draw AS & AD diagram) In the short-run what happens to the price level and unemployment rate?
Respuesta
  • both the price level and unemployment rate rise
  • both the price level and unemployment rate fall
  • the price level rises and unemployment rate falls
  • the price level falls and unemployment rate rises

Pregunta 65

Pregunta
Suppose the economy is in long-run equilibrium. A survey measure of consumer confidence indicate a wave of optimism about the economic conditions. As a result, consumers are purchasing more goods and services. Firms are expanding their business. (Draw AS & AD diagram) In the short-run, this event causes
Respuesta
  • inflation
  • recession
  • stagflation
  • none of the above

Pregunta 66

Pregunta
Suppose the economy is in long-run equilibrium. A survey measure of consumer confidence indicate a wave of optimism about the economic conditions. As a result, consumers are purchasing more goods and services. Firms are expanding their business. (Draw AS & AD diagram) What happens to the expected price level and what impact does this have on wage bargaining?
Respuesta
  • The expected price level falls. Bargains are struck for higher wages
  • The expected price level falls. Bargains are struck for lower wages
  • The expected price level rises. Bargains are struck for higher wages
  • The expected price level rises. Bargains are stuck for lower wages

Pregunta 67

Pregunta
Suppose the economy is in long-run equilibrium. A survey measure of consumer confidence indicate a wave of optimism about the economic conditions. As a result, consumers are purchasing more goods and services. Firms are expanding their business. (Draw AS & AD diagram) In the long run, the change in price expectations created by this event shifts
Respuesta
  • long-run aggregate supply right
  • long-run aggregate supply left
  • short-run aggregate supply right
  • short-run aggregate supply left

Pregunta 68

Pregunta
Suppose the economy is in long-run equilibrium. A survey measure of consumer confidence indicate a wave of optimism about the economic conditions. As a result, consumers are purchasing more goods and services. Firms are expanding their business. (Draw AS & AD diagram) How is the new long-run equilibrium different from the original one?
Respuesta
  • the price level and real GDP are higher
  • the price level and real GDP are lower
  • the price level is higher and real GDP is the same
  • the price level is higher and real GDP is lower

Pregunta 69

Pregunta
An economy if which the typical consumer's basket consists of 5 books and 10 calculators. 2006: price of a book $24 / price of a calculator $8 2007: price of a book $30/ price of a calculator $12 2008: price of a book $32/ price of a calculator $15 The cost of a basket in 2006 was
Respuesta
  • $32
  • $480
  • $200
  • $280

Pregunta 70

Pregunta
An economy if which the typical consumer's basket consists of 5 books and 10 calculators. 2006: price of a book $24 / price of a calculator $8 2007: price of a book $30/ price of a calculator $12 2008: price of a book $32/ price of a calculator $15 If 2006 is the base year, then the consumer price index was
Respuesta
  • 100 in 2006, 270 in 2007, and 310 in 2008
  • 200 in 2006, 135 in 2007, and 155 in 2008
  • 200 in 2006, 270 in 2007, and 310 in 2008
  • 100 in 2006, 135 in 2007, 155 in 2008

Pregunta 71

Pregunta
An economy if which the typical consumer's basket consists of 5 books and 10 calculators. 2006: price of a book $24 / price of a calculator $8 2007: price of a book $30/ price of a calculator $12 2008: price of a book $32/ price of a calculator $15 The inflation rate was
Respuesta
  • 25.9% in 2007 and 14.8% in 2008
  • 35% in 2007 and 20% in 2008
  • 35% in 2007 and 14.8% in 2008
  • 22.6% in 2007 and 12.9% in 2008

Pregunta 72

Pregunta
Assets Liabilities Reserves $2,000 Deposits $10,000 Loans $8,000 The reserve ratio for this bank is
Respuesta
  • 0%
  • 20%
  • 80%
  • 100%

Pregunta 73

Pregunta
Assets Liabilities Reserves $2,000 Deposits $10,000 Loans $8,000 If $1,000 is deposited into the First Bank of Fairfield, and the bank takes no other actions its (hint: "takes no other actions" means the bank hasn't loaned out the new deposits yet, and keeps all new deposits as reserves)
Respuesta
  • reserves will increase by $200
  • liabilities will decrease by $1,000
  • assets will increase by $1,000
  • reserves will increase by $800

Pregunta 74

Pregunta
Assets Liabilities Reserves $2,000 Deposits $10,000 Loans $8,000 Starting from the situation as depicted by the T-account, if someone deposits $500 into the First Bank of Fairfield, and if the bank makes new loans so as to keep its reserve ratio unchanged, then the amount of new loans that it makes will be
Respuesta
  • $320
  • $400
  • $680
  • $750

Pregunta 75

Pregunta
Draw a MS-MD diagram and shift MD to the right. What is the quantity measured along the horizontal axis?
Respuesta
  • the price level
  • the real interest rate
  • the value of money
  • the quantity of money

Pregunta 76

Pregunta
Draw a MS-MD diagram and shift MD to the right. Which of the following events could explain a shift of the money-demand curve from MD1 to MD2?
Respuesta
  • an increase in the value of money
  • a decrease in the price level
  • an open-market purchase of bonds by the Federal Reserve
  • it is the holiday season and people want to purchase more goods and services

Pregunta 77

Pregunta
Draw a MS-MD diagram and shift MD to the right. Suppose the relevant money-demand curve is the one on the left; also suppose the velocity of money is 3. If the money market is in equilibrium, then the economy's real GDP amounts to
Respuesta
  • 5,000
  • 7,500
  • 10,000
  • 15,000
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