76. According to the usual seasonal pattern of the U.S. economy, GDP is highest in the
quarter of the year that includes:
A) January, February, and March.
B) April, May, and June.
C) July, August, and
114. Assume that the following equations characterize a large open economy:
(1) Y = 5,000
(2) Y = C + I + G + NX
(3) C = 1/2(Y T)
(4) I = 2,000 100r
(5) NX = 500 500
(6) CF = 100r
(7) CF = NX
(8) G =
123. In the classical model with fixed income a decrease in the real interest rate could be the
result of a(n):
A) increase in government spending.
B) increase in desired investment.
C) increase in ta
108. Assume that the real wage in an economy is held above equilibrium.
a. Graphically illustrate how an increase in technology that raises the demand for labor will
change the number of unemployed wo
137. (Exhibit: Saving, Investment, and the Interest Rate 2) The economy begins in
equilibrium at Point E, representing the real interest rate, r1, at which saving, S1, equals
desired investment, I1. W
99. If consumption depends positively on the level of real balances, and real balances
depend negatively on the nominal interest rate in a neoclassical model, then:
A) the classical dichotomy still ho
93. The quantitative easing operations conducted by the Federal Reserve between 2007 and
2011 resulted in _ increases in the monetary base and _ increases in money
supply.
A) no; no
B) large; larger
C
158. Assume that the production function is given by Y = AK0.5L0.5, where Y is GDP, K is
capital stock, and L is labor. The parameter A is equal to 10. Assume also that capital is
100, labor is 400, a
26. A small open economy with perfect capital mobility is characterized by all of the
following except that:
A) its domestic interest rate always exceeds the world interest rate.
B) it engages in inte
Name: _ Date: _
1. The circular flow model shows that households use income for:
A) consumption, saving, and factor payments.
B) consumption, taxes, and factor payments.
C) taxes, saving, and factor p
149.
150.
151.
152.
153.
154.
155.
A
B
C
B
C
B
The supply of labor force increases, which forces the real wage lower and increases the
quantity of labor employed, since there is no unemployment in thi
The increase in domestic investment demand will increase the U.S. interest rate. The
higher domestic interest rate will reduce net capital outflows. The reduced supply of
dollars in the foreign exchan
49. According to the neoclassical theory of distribution, in an economy described by a
CobbDouglas production function, when average labor productivity is growing rapidly:
A) labor's share of total in
27. The value added of an item produced refers to:
A) a firm's profits on the item sold.
B) the value of the labor inputs in the production of an item.
C) the value of a firm's output less the value o
68. The money supply will decrease if the:
A) monetary base increases.
B) currencydeposit ratio increases.
C) discount rate decreases.
D) reservedeposit ratio decreases.
69. If the reservedeposit rati
52. If GDP (measured in billions of current dollars) is $5,465, consumption is $3,657,
investment is $741, and government purchases are $1,098, then net exports are:
A) $131.
B) $131.
C) $31.
D) $31.
51. If the real return on government bonds is 3 percent and the expected rate of inflation is 4
percent, then the cost of holding money is _ percent.
A) 1
B) 3
C) 4
D) 7
52. The general demand functio
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to some unforeseen circumstances that took place sinc
PURCHASE AND SALE AGREEMENT as.
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. Purchase and Sale. The undersigned buyer (Buyer) agrees to buy and the undersigned seller ("Seller") agrees to sell the Propert
171. a. Public saving equals T G. An increase in government spending, G, reduces public saving.
b. Private saving equals Y T C. An increase in government spending does not affect private
saving.
c. Na
26. Exhibit: The CapitalLabor Ratio
In this graph, starting from capitallabor ratio k1, the capitallabor ratio will:
A) decrease.
B) remain constant.
C) increase.
D) first decrease and then remain con
99. If income is 4,800, consumption is 3,500, government spending is 1,000, and taxes
minus transfers are 800, private saving is:
A) 300.
B) 500.
C) 1,000.
D) 1,300.
100. If income is 4,800, consumpti
8. The consumption function in the Solow model assumes that society saves a:
A) constant proportion of income.
B) smaller proportion of income as it becomes richer.
C) larger proportion of income as i
47. The real exchange rate:
A) measures how many Japanese yen one really gets for a U.S. dollar.
B) is equal to the nominal exchange rate multiplied by the domestic price level
divided by the foreign
27. The right of seigniorage is the right to:
A) levy taxes on the public.
B) borrow money from the public.
C) draft citizens into the armed forces.
D) print money.
28. Inflation tax means that:
A) as
Use the following to answer question 135:
135. From the following graph, find the world interest rate at which there will be equilibrium
in the capital market of small open economy?
136. What will be
2. A country's exports may be written as equal to:
A) GDP minus consumption minus investment minus government spending.
B) GDP minus consumption of domestic goods and services minus investment of
dome
74. Assume that the investment function is given by I = 1,000 30r, where r is the real rate
of interest (in percent). Assume further that the nominal rate of interest is 10 percent and
the inflation r