Macro_Chapter_9_study_guide_questions_13e - Macro Chapter 9...

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Macro Chapter 9 study guide questions Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Within the aggregate demand/aggregate supply framework, the quantity on the horizontal axis in the aggregate goods and services market represents the a. total amount of government spending. b. total real output (real GDP) of the economy. c. total unemployment of the economy. d. price level of the economy. ____ 2. In the loanable funds market, the true burden of borrowers and the true yield to lenders is the a. real (inflation adjusted) interest rate. b. nominal (money) interest rate. c. inflation rate. d. inflation premium rate (in money terms). ____ 3. When AD is equal to SRAS at an output level equal to the LRAS curve, a. we are at long-run macroeconomic equilibrium. b. we are at the natural rate of unemployment. c. both a and b are true. d. neither a nor b is true. ____ 4. If the expected rate of inflation is zero, the a. real interest rate must also equal zero. b. money (nominal) interest rate must also equal zero. c. real interest rate must equal the money interest rate. d. economy is likely to experience high inflation in the near future. ____ 5. Which of the following is the primary factor that coordinates the actions of borrowers and lenders in the loanable funds market? a. inflation rate b. unemployment rate c. the government d. interest rate ____ 6. Which of the following statements about the circular flow diagram is not correct? a. Households receive income from the resource market; they save some of it and spend the rest of it on domestic or foreign goods and services. b. The loanable funds market takes net household savings and channels it in part to the government and in part to businesses for investment. c. Expenditures on GDP are equal to consumption plus government purchases plus investment plus net exports (exports minus imports). d. The net inflow of capital from foreign economies must always be positive and equal to the amount of business investment.
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____ 7. The circular flow of income is coordinated by the a. goods and services market, resources market, foreign exchange market, and loanable funds
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This document was uploaded on 11/01/2011 for the course ECO ECO2013 at FSU.

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Macro_Chapter_9_study_guide_questions_13e - Macro Chapter 9...

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