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Exam 1 Questions on Macroeconomic Principles with Answers Key | ECON 104, Exams of Introduction to Macroeconomics

Material Type: Exam; Professor: Meyer; Class: Macroeconomic Principles; Subject: Economics; University: George Mason University; Term: Fall 2006;

Typology: Exams

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Download Exam 1 Questions on Macroeconomic Principles with Answers Key | ECON 104 and more Exams Introduction to Macroeconomics in PDF only on Docsity!

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c. d. e. ,/, {TheUnited States^ produces^ _ of what^ it^ consumes,^ and^ consumes'^ of.what^ it^ firoduces.

. (^) a. little,liftle . b.^ little,^ most^ '^ ,

  • g^{nost,little' ,/dJ Jnost. mbst ' (^) ,-$'Y ' '

ffil*nof the^ following^ is^ thebest definiticin^ of^ openness? ll (^) a. The average of imports expressed as a share of GDP.

Per cafita GDP can be defined as

a. GDP per working^ person. )- \ GDP^ per^ uhit^ of^ capital. (rct (^) ) GDP per person. W GDP per^ unit of^ unemployment.

L--^ )',1'.^ Arecession^ can best be^ defined^ as^ a^ pbriod of time in,which,

'/. (^) fta;Dtotal output of the economy falls. (^) - \Y (^) totul output ofthe economyrises very slowly.' c. total unemployment falls.

. d.^ total international^ trade^ fails^ to^ rise.^ * r e. Both a and c

r ,/ ,//

l21 Most American workers

I a. are employed in the goods-producing^ sectof. ,\are employed^ by^ government. f - c/are^ employed^ in^ the^ service-pioducing^ sector. q (^) are emfloyed in the agricultural sector. i

The average of goods traded^ ih markets^ expresied^ as^ a share^ of^ GDP.

[Ihb average of imports^ and^ exports expressed^ as^ a share^ of^ GDP.^ , The average hade balance expressed as a^ share^ of^ GDP.^ "" 6p fne^ average^ ofexports^

expressed as a share ofGDP.

lA

t0.

-rl // !/.Vnl" their^ respective subject matters^ differ'greatly,^ both microeconomists^ and^ rnacroeconomists I rely^ on the^ same^ basic tools; that is,^ both^ rely^ on . -a--government

contraits to promote research^ and^ pgblications. ( (^) U. (^) iEmand-and-supply analysis. qf (^) the ec<inomic theory cif John Maynard Keynes. d. consumer protectiori laws and^ antitrust legislation; q

t"

1t 't (^) ,/"

151 Nominal GDP is

(^1) a. also called real GDP. b. a more accurat'e m6usute than real^ GDP. c. redl GDP adjusted for changes in the price level. @coP measuied^ in^ current^ pii.... w 'z? /--K A^ good^ prtiduced^ in^2000 and^ held in inventory^ until^ it^ is^ sold^ in 2001,would^ be^ included in which { (^) measure (^) of GDP?.. a. Half the value in 2000 and half thb value in 2001 60 kt2ool^ cDP^. .'

.kr both 2000 and^2001 GDP^ r

h 2000 GDP '^ :

I General M<itors Corporation (a^ U.S.-based firm) produces^ a^ Saab vehicle^ in^ Sweden, and sells^ it^ in' " (^) the United States. In which country's GDP is it included? a. Sweden and the United Sta'tes .F Th.^ United^ States^ because'it was sold there

The United States because GM is a U.S. company

Sweden because it was produced there

/ l8'1fiie definition of^ Gross^ Domestic^ Product^ ii (^7) a. the total value of all sales in the economy (^) ",- b. the total value of production in the domestic economy plus^ the^ production of domestic

firms in foreign couritries.

, (^) ' c. the total value of all sales cif final aihd intermediate goods (^) in the dome'Stic economy., ( (^) ,a;-]tre total,of the mbney values of all final goods and services produced in (^) the domestic Vecoiromy (^) within a specific time period.

yl6in""***", (^) differ in the amount of economic activity that is transacted in (^) organized markets, -./

-^4 some countries^ are^ more^ productive^ than^ others. !(persons live^ better^ in^ some^ countries than^ others.

(c. )nternational comparisons of per capita GDP are often misleading.

Pcompaisons between countries^ are^ totally^ impossible.

,,d{;7"Pffijf3J.arstheU.S.economyhasprimarity.*p".i.n,"o

b. unemployment.

inflation.

depresdion. I

Zf Oinngthe^ Great Depression of^ the t: (^) ,a\ 5 percent ,kfr lopercent *".

20iercent

{E :e. 30 percent 50 percent

.t

1930s, how^ much^ tlid^ output^ fall^ between^ 1929 and^ 1933?

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. 301 If^ the^ labor'fo?ie grows^ faster than^ the^ number^ employed,^ the / a.^ unemployment^ rate^ will^ fall. p unemPloYment'rate will rise. . (^) Y Labor force rate will rise. d. employment rate will risd.

3'f Wrictr^ of^ the^ folloding^ groups woirld^ have the highest^ unemployment^ rates? f (^) a. married men' '^ I b. white workers, F\college graduates /d.'l""nas"ts "^ :

.v

y' (^) Un (^) rnof the following scenarios best (^) illustrates the concept of cyclical une?nployment? E Grace loses her job^ because of new autorirated machinery. b. Sean quits^ his job^ to look for work that is more fun. (^) ' c. Ellen^ quits^ looking for^ wori<^ because^ she doesn't^ think^ she^ can^ find^ a suitable^ job. @yuaun v1 lor", heriib^ becausd^ of^ a^ recession

t{An unemployment^ rate that^ mbny^ economists believe represents^ full^ employment^ is 11.{ (^) a. o pitcent. y\0-4 percent. (.".,/4-6 percent. , (^) Y:' 6-8 percent. e. 8-10 percent (^) t

"Y

7{ rcp;""s^ rise, then persons^ living^ on^ fixed^ incomes^ will ^.

see their real incomes falling.

b. 'see the purchasingpower^ of their savings fall. c. need to sirend more to maint'ain their standard of living. ,6),en of^ the above^ are^ true.

v

3fi,^ '/'j lf ac[nl^inflation is less than the expdcted rate of inflation, then probably ' (^62) the (^) borrotver gains at the (^) expense of the lender. ' (^) b. neither thd (^) borrower nor the lender gains. ftlthe lender^ gaifrs at^ the^ expense^ of^ the^ borrower. V thepurchasing power^ of the borrower is increased.

,/ )il. Sharonbuys^ some^ cornmon stock^ in^1990 for^ $10,000 and sells^ it^ in^2000 for^ $15,000.^ During^ the

same period,^ prices have risen by 75 percent. The net result of Sharon's stock purchases^ is^ that

" she^ will ay rio taxes because'she eamed negative real capital gains. /ose (^) purchasing power'and have to pay (^) taxes anyway.

earn a real capital gain of$5,000 plus 7f percent.

earn a real capital gain.of $15,000 minus 75 percent.