# pracmt3.doc - Practice MT#3 SECTION I 1 A consumer who has...

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3 .   Which of the following statements about the way the unemployment rate is calculated are true ? I . If people without a job quit looking for work , the unemployment rate decreases . II . If workers have the number of hours they work decreased from 40 / week to 20 / week and lose benefits as a result , the unemployment rate increases . III . An increase in the number of workers who retire increases the unemployment rate
a ) None of them are true
b ) Only I is true
c ) Only III is true
d ) Only I and II are true
e ) Only I and III are true
1 .   A consumer , who has been holding \$ 2000 in cash decides to put that money in a demand deposit account with a bank . Which of the following statements are true ? I . Since cash and DD are both part of M1 , this action can not have an effect on M1 II . The assets of the bank will only go up by \$ 400 if the reserve ratio is 20 % III . Since it is a demand deposit , the bank can not loan out any of the funds since the depositor can request the money back at any time .
2 .   Determine which of the follow statements are true based on the data below : 2010 2011 P Q P Q Apples \$ 2 5 \$ 2.50 4 Oranges \$ 1 10 \$ 0.75 15 Bananas \$ 0.50 8 \$ 1 6 I . If 2010 is the base year , then the inflation rate from 2010 to 2011 is greater than 10 % II . Because this data shows people substitute , the calculated inflation rate may overstate the impact of higher prices on consumers III . Someone making \$ 40,000 in 2010 is better off than someone making \$ 46,000 in 2011
6 .   The leverage ratio is calculated as
4 .   Which of the following actions could cause the loanable funds market to change as shown below ? I. Business in the US see the economy is going to be on the upswing and want to expand II . Government runs a budget surplus III . Consumers decide to save a lower percentage of their income
a ) Only I is true
b ) Only II is true
c ) Only I and II are true
d ) Only I and III are true
e ) Only II and III are true .
5 .   Which of the following statements about the money supplies impact on the economy are true ? I . Historically , hyperinflations have been associated with very large changes in the money supply II . If velocity is constant , an increase in the money supply increases nominal GDP III . For any economy , real GDP must be less than or equal to the money supply
10 .   In a given year , if government spending exceeds tax revenue , which of the following must be true ? I . There is a deficit for that year ’s budget II . The government debt has increased that year III . The money supply increased that year
7 .   A worker is laid off from his job as a plumber . He has entered a re-training program and is learning to work in facilities maintenance . Which of the following statements is true ? I . If he is not looking for a job during the retraining , then he is not unemployed . II . If he is looking for plumbing jobs , but can not find one , but there are lots of jobs for people trained in facilities maintenance , then he would be considered structurally unemployed . III . Whether he is looking for a job or not , he is still considered part of the labor force .
8 .   For a closed economy , GDP is \$ 12 trillion , consumption is \$ 7 trillion , taxes net of transfers are \$ 3 trillion and the government runs a deficit of \$ 1 trillion . What are private saving and national saving ?
a. \$ 5 trillion and \$ 3 trillion , respectively
b. \$ 5 trillion and \$ 1 trillion , respectively
c. \$ 2 trillion and \$ 3 trillion , respectively
d . \$ 2 trillion and \$ 1 trillion , respectively
Answer:  b )   \$ 2 trillion and \$ 1 trillion , respectively
9 .   Which of the following are true about the impact of inflation on an economy ? I. Inflation that is unexpectedly high increases the buying power of lenders ( creditors ) relative to borrowers ( debtors ) II . High inflation rates tend to discourage investment and saving by generating increased uncertainty about the future III . Inflation increasing costs to consumers because holding cash is more costly .
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Chapter 10 / Exercise 2a
Exploring Macroeconomics
Sexton
Expert Verified
Practice MT #3SECTION I 1. A consumer, who has been holding \$2000 in cash decides to put that money in a demand deposit account with a bank. Which of the following statements are true?I.Since cash and DD are both part of M1, this action cannot have an effect on M1II.The assets of the bank will only go up by \$400 if the reserve ratio is 20%III.Since it is a demand deposit, the bank cannot loan out any of the funds since the depositor can request the money back at any time.a)None of them are trueb)Only I is truec)Only II is trued)Only I and II are truee)Only I and III are true
2. Determine which of the follow statements are true based on the data below:20102011PQPQApples\$25\$2.504Oranges\$110\$0.7515Bananas\$0.508\$16I. If 2010 is the base year, then the inflation rate from 2010 to 2011 is greater than 10%II. Because this data shows people substitute, the calculated inflation rate may overstate the impact of higher prices on consumersIII. Someone making \$40,000 in 2010 is better off than someone making \$46,000 in 2011
3. Which of the following statements about the way the unemployment rate is calculated are true?I. If people without a job quit looking for work, the unemployment rate decreases.II. If workers have the number of hours they work decreased from 40/week to 20/week and lose benefits as a result, the unemployment rate increases.III. An increase in the number of workers who retire increases the unemployment rate
##### We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
The document you are viewing contains questions related to this textbook.
Chapter 10 / Exercise 2a
Exploring Macroeconomics
Sexton
Expert Verified
Practice MT #34. Which of the following actions could cause the loanable funds market to change as shown below?