Question Homework 40 questions Date of Assignment:

05 Jun Question Homework 40 questions Date of Assignment:

Question
Homework 40 questions Date of Assignment: August 25, Subject: Macroeconomics Due Date: August 26, 2014

1. The real value of money;

a. Is another word for the face value

b. Reflects the purchasing power of money

c. Matters less to people than its nominal value

d. Is the same as its nominal value

2. In considering the relationship between price and quantity demanded, ceteris paribus directs the economist to assume that;

a. Price increases affect quantity

b. Quantity increases affect prices

c. Either price nor quantity affect demand

d. All other variables remain unchanged

3. Gross domestic products calculations count only final goods and services because;

a. These are the only good and services that are purchased in an economy.

b. Counting all goods and services would lead to double- counting of many activities.

c. It is difficult to measure the price of intermediate goods produced.

d. One cannot calculate the quantities of intermediate goods produced.

4. Firms consider the____wage when considering whether to hire additional units of labor.

a. Nominal b. Real c. Minimum d. Normal

5. The marginal benefit of a worker to a firm is the value of the extra out put that results when;

a. Some workers are laid off and the remaining workers become more productive.

b. An additional worker is hired

c. Workers get paid for working overtime

d. Work is outsourced to a foreign country

6. An increase in the demand for labor wills ____ wages and ____ employment.

a. Increase; increase b. increase; decrease c. decrease; increase d. decrease; decrease

7. A comparison of the average growth rates across time for developed nations indicates that;

a. Nations with lower levels of income grow more slowly than those with higher levels of income.

b. Nations with lower levels of income will never be as rich as nations with high levels of income.

c. Nations with high levels of income experience a continuously increasing growth rate.

d. Nations with lower levels of income grow more quickly than those with higher levels of income.

8. In a simple economy ( without government or foreign trade ) where output can be purchased only by consumers or by firms, saving must equal;

a. Investment b. depreciation c. consumption d. income

9. An increase in the income tax rate ___ the value of the tax multiplier.

a. Has no effect on b. may increase or decrease c. increases d. decreases

10. What would be a way for the Federal Reserve to slow down the economy when it is growing too quickly or is inflationary?

a. Print more money

b. Buy back government bonds on the open market

c. Sell more government bonds

d. Encourage the stock market

11. What impact would the Fed’s raising the interest rate have on any inflationary pressure in the economy?

a. An increase in interest rates decreases the money demand, which could slow increases in the price level.

b. An increase in interest rates increases the one supply, which could cause the price level to increase.

c. An increase in interest rates decreases the exchange rate, which causes net exports to rise, generating inflation.

d. An increase in interest to rates increases real GDP, which creates inflation in an economy.

12. Which of the following does not shift the U.S. aggregate demand curve?

a. An increase in the supply of money

b. An increase in GDP in Japan

c. A decrease in taxes

d. A decrease in the price level

13. How does an increase in the money wage rate aggregate supply?

a. It decreases aggregate supply

b. It increases aggregate supply

c. It barely has any effect

d. Since it applies to a firm’s costs, it does not affect aggregate supply.

14. A decrease in the money supply causes_____.

a. A long – run decease in the level of output

b. Both a long-run and short-run decrease in the level of output

c. A short-run decrease in the level of output

d. No changes in the level of output

15. Why is the as curve inadequate for describing the short-run trade-off between inflation and unemployment?

a. The AS curve is less stable than Phillips curve because the money wages rate or potential GDP shifts every day.

b. The AS curve focuses directly on two policy targets: the inflation rate change and unemployment rate.

c. The AS curve shifts only when the natural unemployment rate changes.

d. The AS curve shifts only when the expected future inflation rate changes.

16. Deciding if a company will produce automobiles by robotics or manual labor answers the economic question of____.