Practice+Final+ExamTV+Class+fall+2010-1 (2)

Practice+Final+ExamTV+Class+fall+2010-1 (2) - Questions for...

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Questions for Practice Final Exam TV Class 1. If the multiplier is 5 and a change in government spending leads to a cumulative $500 million decrease in aggregate spending, then initially: A) Government spending decreased by $500 million. B) Taxes increased by $500 million. C) Taxes decreased by $100 million. D) Government spending decreased by $100 million. 2. Which of the following relies on government taxes and spending to change macro outcomes? A) Fiscal policy. C) Income policy. B) Monetary policy. D) Foreign-trade policy. 3. The Classical view of the economy is characterized by: A) A laissez-faire approach. B) The inherent instability of the economy. C) The belief that demand creates it own supply. D) All of the above. 4. In the absence of trade, a country's consumption possibilities are: A) More than its domestic production possibilities. B) Equal to its domestic production possibilities. C) Less than its domestic production possibilities. D) Unlimited, since the terms of trade are not a constraint. 5. Which of the following would be counted as a member of the labor force? A) A hard-working homemaker who is not looking for work outside the home. B) A man serving ten years for armed robbery. C) A retired commander of a U.S. Navy nuclear submarine. D) The president of General Motors. 6. If the banking system has a minimum reserve ratio of 20 percent, then the money multiplier is: A) 0.2. B) 0.8. C) 1.25. D) 5.0. 7. Comparative advantage refers to: A) The ability of a country to produce a specific good with fewer resources than other countries. B) A country's monopoly power in the world market for a specific good. C) The ability of a country to sell a certain good for a higher price than other countries in the same market. D) The ability of a country to produce a specific good at a lower opportunity cost than other countries.
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8. The use of money and credit controls to change macroeconomic activity is known as: A) Fiscal policy. B) Monetary policy. C) Supply-side policy. D) Eclectic policy. 9. After quitting one job, some people find that it takes several months to find a new job. This is an example of which type of unemployment? A) Structural unemployment. C) Cyclical unemployment. B) Frictional unemployment. D) Seasonal unemployment. 10. Macroeconomic outcomes include: A) Internal market forces. C) International balances. B) Policy levers. D) All of the above. 11. Business cycles in the United States: A) Are similar in length but vary greatly in magnitude. B) Vary greatly in length, frequency, and magnitude. C) Are similar in frequency and magnitude. D) Are similar in length, frequency, and magnitude. Use the following to answer questions 12-16: The following table shows a hypothetical relationship between consumption and income. Answer the indicated question(s) on the basis of this table.
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Practice+Final+ExamTV+Class+fall+2010-1 (2) - Questions for...

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