Practice Test #1b

Practice Test #1b - ECO 3202 Applied Macroeconomics...

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ECO 3202 Applied Macroeconomics – Practice Test #1b – September 2010 1. The inflation rate is a measure of how fast: A) the total income of the economy is growing. B) unemployment in the economy is increasing. C) prices in the economy are rising. D) the number of jobs in the economy is expanding. 2. When a firm sells a product out of inventory, GDP: A) increases. B) decreases. C) is not changed. D) increases or decreases, depending on the year the product was produced. 3. The factor that makes national saving equal investment, in equilibrium, is: A) the interest rate. B) private saving. C) public saving. D) fiscal policy. 4. Real GDP means the value of goods and services is measured in ______ prices. A) current B) actual C) constant D) average Page 1
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5. The investment function slopes ______ because there are ______ investment projects that are profitable as the interest rate decreases. A) upward; fewer B) upward; more C) downward; fewer D) downward; more 6. All of the following actions are investments in the sense of the term used by macroeconomists except : A) IBM's building a new factory. B) corner candy store's buying a new computer. C) John Smith's buying a newly constructed home. D) Sandra Santiago's buying 100 shares of IBM stock. 7. The income velocity of money: A) is defined in the identity MV = PY . B) is defined in the identity MV = PT . C) is the same thing as the transactions velocity of money. D) will be smaller than the transactions velocity of money if the quantity of transactions is greater than income.
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8. The assumption of continuous market clearing means that: A) sellers can sell all that they want at the going price. B)
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This note was uploaded on 12/31/2011 for the course ECO 3032 taught by Professor Danielomurgo during the Fall '11 term at FIU.

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Practice Test #1b - ECO 3202 Applied Macroeconomics...

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