question

1)

answer

B

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2)

answer

A

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3)

answer

A

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4)

answer

B

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5)

answer

A

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6)

answer

A

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7)

answer

A

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8)

answer

D

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9)

answer

D

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10)

answer

A

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11)

answer

B

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12)

answer

A

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13)

answer

B

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14)

answer

D

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15)

answer

B

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16)

answer

C

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17)

answer

D

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18)

answer

D

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19)

answer

A person paid a fixed income during an inflation period

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20. When actual inflation is less than expected inflation

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B borrowers lose and gain.

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21. A good measure of the standard of living is-

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B. real GDP per capita.

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22. Countries with high rates of economic growth tend to have

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C. a labor force that is more productive

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23. Human capital refers to which of the following-

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D. the accumulated knowledge and skills workers acquire from education and training or from their life experiences

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24. Centrally-planned economies tend to grow more quickly the market economies-

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False.

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25. In a closed economy, which of the following components of GDP is not included-

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B. net exports

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26. There is a federal budget deficit when-

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B. the government spends more that it collects in taxes

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27. If net taxes fall by $80 billion, we would expect-

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C. household saving to rise by less than $80 billion.

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28. During the expansion phase of the business cycle, which of the following eventually increases

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Income, production, and employment

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29) The period between a business cycle peak and a business cycle through is called

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C. recession

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30. The period of expansion ends with a _____ and the period of recession ends with a _____

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C. business cycle peak and business cycle trough

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31. Purchases of which of the following goods would be dramatically reduced during a recession?

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A. Refrigerators

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32. During a recession, spending on ____ tends to fall more dramatically than spending on ____

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D durable and nondurable goods

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33. Inflation tends to ___ during the expansion phase of the business cycle and ___ during the recession phase of the business cycle.

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A. increase and decrease

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34. When the economy enters a recessionary phase of the business cycle, unemployment tends to

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C increase

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35. Suppose the in 2011 real GDP grew in Estonia by 3% and that the population increased by 5%. Therefore in 2011, Estonia experienced

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C economic growth, but not an increase in living standards.

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36. Growth in real GDP per capita for the world economy was greatest during

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D 20th century

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37. Small differences in economic growth rates result in small differences in living standards.

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FALSE

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38. Technological improvements are more likely to occur if

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B. entrepreneurs are compensated with higher profits for taking risks

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39. True/false technological change is the key to sustaining economic growth

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True

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40. Growth in the United States from 1800 to 1900 can be characterized as

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D. Positive and Increasing

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41. Which of the following can explain why some countries have not experienced relatively high growth rates in real GDP per capita despite relatively low initial levels of real GDP per capita?

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D) All of the above

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42. Developing countries with low saving rates and poor levels of health and education are likely to experience

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A. low rates of growth in real GDP per capital

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43. By offering more generous unemployment insurance programs, European countries can expect

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B longer periods of unemployment for their workers

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44. Enforcing property rights in an economy will

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B raise the level of investment

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45. The aggregate expenditure model focuses on the relationship between And in the short run, assuming is constant

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A total spending; real GDP; the price level

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46. The key idea of the aggregate expenditure model is that in any particular year, the level of GDP is determined mainly by

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D the level of aggregate expenditure

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47. All of the following are one of four main categories of spending identified by John Maynard Keynes

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B taxes

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48. Household spending on goods and services is known as

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C) Consumer Spending

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49.The formula for aggregate expenditure is

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C. AE=C+I+G+NX

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50. At Macroeconomics equilibrium

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C). total spending equals total production

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51. What is the largest component of aggregate expenditure

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A) Consumption expenditures

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52. Which of the following will cause a direct increase in consumption spending

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C. an increase in disposable income

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53. A stock market boom which causes stock prices to rise should cause

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A. an increase in consumption spending

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56. If the marginal propensity to save is 0.35, then a $10,000 decrease in disposable income will:

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C) decrease consumption by $7,500

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55. Given the consumption schedule in the table above, the marginal propensity to save is:

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A. .1 2100- 1200 = 900 4000-3000= 1000

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54. The marginal propensity to save is defined as

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D.) The change in saving dividing by the change in disposable income

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57. From 1983-2011, net exports for the US:

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A. were negative

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58. Suppose that investment spending increases by $10 million, shifting up the aggregate expenditure line and GDP increases from GDP1 to GDP2. If the MPC is 0.9, then what is the change in GDP?

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D. 100 million

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59. A general formula for the multiplier is:

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C I/MPS

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60. True/False The marginal propensity to consume is the slope of the consumption function

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True

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61. Suppose that government spending increases, shifting up the aggregate expenditure line. GDP increases from GDP1 to GDP2, and this amount is $400 billion. If the MPC is 0.75, then what is the distance between N and L or by how much did government spending change.

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B) 100 billion

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62) The difference between GDP and net taxes is

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D) disposable income

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63. MPC + MPS=

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C)1

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64) if disposable income increases by $100 million, and consumption increases by $90 million, then the marginal propensity to consume is

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A) 0.9

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65) According to the World Bank, Albania does one of the worst jobs as a country enforcing the rule of law. The consequence of a weak rule of law is

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A) difficulty in attracting investment and low economic growth

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66. The period of time from 1,000,000 B.C. to 1300 A.D. was a period of

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A no sustained economic growth

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67. Purchases of Huggies Diapers should

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B remain fairly constant over the business cycle

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68. In a closed economy, which of the following equations reflects investment?

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B Y-C-G

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69. Long-run economic growth requires all of the following except

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C political instability

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70. Minimum wage laws cause unemployment because the legal minimum wage is set

answer

A above the market wage causing labor demand to be less than labor supply

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