Econ_199_Win_05_Exam__1 - Introduction to Macroeconomics...

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Introduction to Macroeconomics Allen R. Sanderson Economics 19900 Winter 2005 FIRST HOUR EXAMINATION Name (Please Print): ______________________________________ [43 Points Possible] Part I. Multiple Choice. Circle letter corresponding to your answer. One point each; 22 points total. 1. Which of the following items does not fit with the other four? a. The General Theory of Employment, Interest and Money b. The Great Depression c. emergence of modern macroeconomics d. a focus on long-term economic growth without inflation e. John Maynard Keynes 2. The presence of _________________ creates a difference in the value between the market price and the factor cost of a product. a. indirect business taxes and subsidies b. imports c. depreciation d. profits e. inflation 3. As traditionally discussed, double-counting in the determination of GDP is avoided by: a. adjusting for underlying changes in the price level (that is, netting out the effects of inflation). b. not including intermediate goods in the various stages of production. c. subtracting depreciation from a firm’s investment expenditures. d. excluding household, underground and illegal production. e. counting a country’s imports or its exports but not both. 4. The most recent recession in the United States began (or occurred) in: a. 2001; b. 1991; c. 1982; d. 1978; e. 1973. 5. Gross Domestic Product equals Net Domestic Product plus: a. exports (or imports). b. taxes and transfer payments. c. the rate of inflation. d. household production and the amount of goods and services from the underground economy. e. depreciation. 6. Which of the following is a nominal variable? a. the unemployment rate b. the standard of living c. the price level d. the hours of work needed to buy a given quantity of a good or service e. GDP measured in constant dollars 7. In percentage terms or rates, suppose the U.S. economy is currently experiencing 2% frictional unemployment, 3% cyclical unemployment, and 4% structural unemployment. What is our natural or full-employment rate of unemployment? a. 2%; b. 3%; c. 4%; d. 5%; e. 6%; f. 7%; g. 9% 1
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8. Keynes argued that the best public policy prescription for eliminating a severe recession would be: a. to convert private ownership of the means of production to the public (or government) sector. b. for the federal government to run a balanced budget. c.
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Econ_199_Win_05_Exam__1 - Introduction to Macroeconomics...

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