wu-ap-macroeco

1. Which of the following correctly describes the components of aggregate Demand?

Consumption expenditure + investment expenditures +
Government expenditures + Exports + imports

Consumption expenditures + Investment expenditures +
Government expenditures + Exports-lmports

Consumption expenditures + lnvestment expenditures +
Government expenditures-Exports-lmports

Consumption expenditures + lnvestment expenditures +
Government expenditures + Savings + Exports-lmports

Consumption expenditures + lnvestment expenditures +
Government expenditures + Business expenditures +
Savings + Exports + lmports

2. Which of the following formulas is correctly stated?

Real interest rate=nominal interest rate + anticipated
inflation.

Nominal interest rate=real interest rate十anticipated
inflation.

Real interest rate=nominal interest rate + actual inflation.

Nominal interest rate=real interest rate + actual inflation.

Nominal interest rate=real interest rate-actual inflation.

3. Which of the following would not affect the size of real GDP?

Consumer purchase 0f a new car for personal use.

Government purchase 0f a new car for the military.

Business purchase 0f a new car for a delivery vehicle.

Consumer purchase Of a rare renaissance painting.

Consumer purchase 0f a haircut.

4. If an autonomous increase in spending in an economy 0f 100 leads to an increase in real GDP of 500 then for that economy the marginal propensity to consume must have been:

4/5

5

100

400

500

5. If the government increased spending by 10 and increased taxes by 10 to pay for the increased spending then which of the following combinations would correctly explain the effect on the budget and GDP?

Budget GDP

Unchanged decrease

Surplus decrease

unchanged no change

surplus increase

unchanged increase

6. If a 100 deposit in a bank leads to a 1000 increase in the money supply, the reserve requirement must have been.

.10%

10%

100%

1000%

E. Can not be determined from the information

7. Long run economic growth in a country would be encouraged through which of the following combinations 0f events?

investment interest rates savings rate

high high high

high high low

high low low

low low low

high low high

8. Which of the following people would be considered structurally unemployed?

Unemployed auto assembly line factory worker during a recession.

Unemployed auto assembly line factory worker who was replaced with a robot.

An auto assembly line worker who quit her job to go back to School full-time to improve her job skills，

A high school student who mows lawns during the summer，But is out of work because it is winter.

A high school economics teacher who is not working during the summer，but plans to go back and teach in the fall.

9. Which combination of events described below would be the most expansionary for an economy, assuming that they all happened at the same time?

Taxes Government spending Net exports reserve requirement

decrease increase increase decrease

increase increase increase decrease

decrease increase decrease decrease

decrease decrease decrease decrease

increase decrease decrease increase

10. If an economy is suffering from inflation，what fiscal policy measure could be taken to help alleviate the problem?

Increase money supply

Increase government spending

Increase taxes

Increase the reserve requirement

Increase deficit spending

11. Which of the following would be an appropriate monetary policy measure to combat inflation.

Increase taxes

decrease taxes

sell bonds

buy bonds

lower the reserve requirement

12.

Based on Figure1 a movement from C0 to C2，in both diagrams，would be consistent with which of the following?

Fixed tax cut and cut in tax rate

Fixed tax increase and increase in tax rate

Fixed tax cut and increase in tax rate

Fixed tax increase and decrease in tax rate

None of the above correctly describe the movement from C0 to C2

13. Over the long run, the rate of growth of real wages is approximately equal to the rate of:

inflation

unemployment

growth of labor productivity plus the rate of inflation.

growth of labor productivity minus the rate of inflation.

growth of labor productivity.

14.

Based on Figure2 the size of the simple multiplier is:

one

two

three

four

five

15. Based on Figure2 the economy shown is experiencing a/an.

inflationary gap

recessionary gap

unemployment gap

stagflation

disinflation

16. Based on Figure2 the MPC is：

0%

25%

50%

75%

100%

17. A production possibility curve is most closely related to which of the following?

short run aggregate supply curve

long run aggregate supply curve

aggregate

aggregate expenditure diagram

Keynesian cross diagram

18. Which of the following combinations of policy moves would be recommended for an economy experiencing an annual increase in the inflation rate of 6％ and an unemployment rate of 5％？

Increase government spending and increase the discount rate

decrease government spending and decrease the reserve requirement

increase income tax rates and sell bonds

decrease income tax rates and buy bonds

increase government transfer payments and increase the Reserve requirement

19. The Keynesian monetary policy transmission mechanism would correctly be described in which of the following?

Money supply interest rate investment GDP

Increase increase increase increase

Increase increase increase decrease

Increase decrease increase increase

Increase decrease decrease decrease

decrease decrease decrease decrease

20. Crowding out describes a relationship among deficits，interest rates，and private spending. Which of the following describe that relationship?

Deficit interest rate private spending

increase increase increase

decrease decrease decrease

increase increase decrease

increase decrease increase

increase decrease decrease

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