Macro Quizzes Exam #2 PDF

Quiz 5 1. The expenditure approach to deriving Gross Domestic Product sums the following: a. consumption, investment, government spending, and net exports. 2. All of the following are included in the Gross Domestic Income (GDI) EXCEPT a. Consumption spending. 3. U.S. Gross Domestic P...

Quiz 5 1. The expenditure approach to deriving Gross Domestic Product sums the following: a. consumption, investment, government spending, and net exports. 2. All of the following are included in the Gross Domestic Income (GDI) EXCEPT a. Consumption spending. 3. U.S. Gross Domestic Product (GDP) does NOT include which of the following? a. The value of goods produced in Canada by US owned firms 4. Which of the following transactions is included in Gross Domestic Product? a. Tips received by a waitress who reports them to the IRS 5. The amount of income households receive after personal income taxes have been paid is known as a. Disposable personal income 6. Which of the following statements is true? a. GDP = GDI 7. Durable consumer goods include all of the following EXCEPT a. Google Stock 8. Which of the following are examples of the gross private domestic investment component of Gross Domestic Product (GDP)? a. The purchase of production machinery and An increase in finished goods inventory 9. Which of the following is NOT included in GDP? a. Intermediate goods, gifts to relatives, black market transactions 10. Nondurable consumer goods and services include all of the following EXCEPT a. Houses Quiz 6 1. Which of the following is NOT a reason why the LRAS shifts to the right (real GDP increases/grows) a. Increases in the general price level 2. All of the following would shift LRAS curve to the right except  a. A decrease in the overall price level 3. Reduction in quantity of money shifts AD to the left a. TRUE 4. Demand-side inflation occurs when a. Increases in aggregate demand are not matched by increases in aggregate supply 5. Which of the following explains why the aggregate demand curve is downward sloping? a. The real-balance effect 6. If the economy grows steadily over several years and the aggregate demand curve remains unchanged, then will the economy experience which of the following? a. SECULAR DEFLATION 7. Over the last twenty years, real GDP in the U.S. economy has increased and there has been inflation. This indicates that a. Aggregate demand has increased more than aggregate supply. 8. An increase in the amount of money circulation would cause a a. Shift of the aggregate demand curve to the right 9. The long run aggregate supply curve (LRAS) represents a. Maximum possible level of output b. full employment level output c. Full adjustment level of output 10. A decrease in the amount of physical capital (e.g. the effects of hurricanes/tornadoes) shifts the LRAS curve to the left. Assuming that everything else remains the same, a. Real GDP decreases and the price level increases 11. Europe and Asia both fall into deep economic recessions. What impact will this have on U.S. aggregate demand? a. U.S. aggregate demand will decrease.  12. A decrease in the value of the home currency may increase demand from abroad. Therefore, there is an increase in AD. a. TRUE 13. Supply chain inflation is caused by a. An decrease in aggregate supply and no change in aggregate demand Quiz 7 1. Assume equilibrium real GDP per year is equal to full-employment real GDP. Which of the following will cause a recessionary gap? a. A reduction in aggregate demand 2. If the U.S. dollar becomes weaker in international markets, the net effects will include a. A decrease in short-run aggregate supply (SRAS) and an increase in aggregate demand. 3. Which of the following is NOT a reason why real GDP can be expanded beyond a level consistent with its long-run growth path (or why SRAS is upward-sloping) in modern Keynesian analysis? a. Prices and wages are flexible, allowing for needed adjustments 4. Which of the following is an example of money illusion? a. An individual feels better off when the nominal wage rises by 5% and the overall price level rises by 7 percent. 5. According to Keynes, wages may be sticky or inflexible/not fully adjustable and is a result of a. Long-term labor contracts and the existence of labor unions. 6. A major hurricane causes production problems (not long term) in Gulf Coast region of the United States. This would cause a. The short-run aggregate supply curve shifts to the left, but there would be no effect on the long-run aggregate supply curve. Quiz 8 1. The Keynesian multiplier shows that a. The total spending in an economy can be a multiple of some initial spending. 2. All of the following are flow variables EXCEPT a. Total value of real estate in a country. 3. Disposable income is used for a. Consumption, saving, and investment 4. According to the Permanent Income Hypothesis, a temporary increase in income that does not affect average lifetime income (lifetime earnings divided by number of years) would a. Cause no change in consumption. 5. The Permanent Income Hypothesis is a specific example of a. A life-cycle theory of consumption. 6. According to the Permanent Income Hypothesis, a person's consumption decreases only when a. The person's average lifetime income decreases 7. According to the Permanent Income Hypothesis, a college student's consumption a. Is higher than his/her current income but equal to his/her permanent income.