VEE MACROECONOMICS.FINAL TEST 2026\2027.
Orange is a small, new country which produces only one item, personal computers. Output for the
past few years (20X1-20X3) has been 1,000 @ $500, 2,000 @ $550, and 1,500 @ $600. Assume
that there are no technological improvements. The GDP deflator for 20X3, with 20X1 as a base
year, is closest to:
120
The neoclassical growth model is based on a two-factor production function, according to which
an economy's aggregate level of output is most likely determined using which combination of
variables?
Labor, capital, and total factor productivity
The IS and LM curves are most likely plotted along which axes?
Income and real interest rates
The very short-run aggregate supply curve is most accurately described as:
horizontal
Before being purchased by a consumer, an item passes through the following stages in the value
chain: Receipt of raw materials supplier from manufacturer ($100), Receipt of manufacturer from
retailer ($400), Receipt of retailer from final consumer ($600). After a 10% increase in the cost
of raw materials, the manufacturer's price rises by 15%. If half of the increase in manufacturer's
price can be passed along to the final consumer, the decrease in the amount of value added by the
retailer is closest to:
$30
A central bank seeking to moderate an overheating economy would most likely:
sell government bonds
Which of the following is most likely to shift the aggregate demand curve to the right?
Increase in capacity utilization
Confirmation of an increase in a country's standard of living is most likely provided by an
increase in its:
per capital real GDP
Before being purchased by a consumer, an item passes through the following stages: Raw
materials supplier (value added = $4), Manufacturer (value added = $5), Retailer (value added =
$6). The price paid by the retailer to the manufacturer is closest to:
$9
, VEE MACROECONOMICS.FINAL TEST 2026\2027.
If government spending on final goods and services increases while private investment, net
exports, and total expenditures on domestically produced output remain constant, consumer
spending will most likely:
decrease
All else equal, if 1 percent of discouraged workers in an economy are reclassified as voluntarily
unemployed, the activity ratio will most likely:
be unaffected
An inflation index's failure to capture the impact of greater processing power in each new version
of a particular computer included in the underlying basket of goods is most accurately described
as:
quality bias
Which of the following statements is most accurate? According to the Austrian school of thought,
an economic crisis on the scale of the Great Depression:
should be addressed with minimal government intervention
Which of the following most likely to be interpreted as an indicator of a future economic
expansion?
Higher weekly manufacturing hours
The relative strength of an economic trend, as measured by the proportion of economic
indicators moving in the same direction, is most likely provided by a:
diffusion index
In response to a severe recession, the Keynesian school of economic thought most likely
advocates for:
deficit spending
Hyperinflation is most likely to occur when:
there is a shortage of supply due to political instability
During the peak phase of a typical business cycle, capital spending by businesses most likely:
continues to grow, but at a slower rate
In order to avoid severe economic fluctuations, the monetarist school of economic thought most
likely emphasizes:
maintaining control of the money supply
Which of the following statements is most accurate? Once the economy moves into the recession
phase of a typical business cycle, inflation:
eventually decelerates, but with a lag
In implementing monetary policy, the primary objective of central banks is most likely to:
maintain price stability
Orange is a small, new country which produces only one item, personal computers. Output for the
past few years (20X1-20X3) has been 1,000 @ $500, 2,000 @ $550, and 1,500 @ $600. Assume
that there are no technological improvements. The GDP deflator for 20X3, with 20X1 as a base
year, is closest to:
120
The neoclassical growth model is based on a two-factor production function, according to which
an economy's aggregate level of output is most likely determined using which combination of
variables?
Labor, capital, and total factor productivity
The IS and LM curves are most likely plotted along which axes?
Income and real interest rates
The very short-run aggregate supply curve is most accurately described as:
horizontal
Before being purchased by a consumer, an item passes through the following stages in the value
chain: Receipt of raw materials supplier from manufacturer ($100), Receipt of manufacturer from
retailer ($400), Receipt of retailer from final consumer ($600). After a 10% increase in the cost
of raw materials, the manufacturer's price rises by 15%. If half of the increase in manufacturer's
price can be passed along to the final consumer, the decrease in the amount of value added by the
retailer is closest to:
$30
A central bank seeking to moderate an overheating economy would most likely:
sell government bonds
Which of the following is most likely to shift the aggregate demand curve to the right?
Increase in capacity utilization
Confirmation of an increase in a country's standard of living is most likely provided by an
increase in its:
per capital real GDP
Before being purchased by a consumer, an item passes through the following stages: Raw
materials supplier (value added = $4), Manufacturer (value added = $5), Retailer (value added =
$6). The price paid by the retailer to the manufacturer is closest to:
$9
, VEE MACROECONOMICS.FINAL TEST 2026\2027.
If government spending on final goods and services increases while private investment, net
exports, and total expenditures on domestically produced output remain constant, consumer
spending will most likely:
decrease
All else equal, if 1 percent of discouraged workers in an economy are reclassified as voluntarily
unemployed, the activity ratio will most likely:
be unaffected
An inflation index's failure to capture the impact of greater processing power in each new version
of a particular computer included in the underlying basket of goods is most accurately described
as:
quality bias
Which of the following statements is most accurate? According to the Austrian school of thought,
an economic crisis on the scale of the Great Depression:
should be addressed with minimal government intervention
Which of the following most likely to be interpreted as an indicator of a future economic
expansion?
Higher weekly manufacturing hours
The relative strength of an economic trend, as measured by the proportion of economic
indicators moving in the same direction, is most likely provided by a:
diffusion index
In response to a severe recession, the Keynesian school of economic thought most likely
advocates for:
deficit spending
Hyperinflation is most likely to occur when:
there is a shortage of supply due to political instability
During the peak phase of a typical business cycle, capital spending by businesses most likely:
continues to grow, but at a slower rate
In order to avoid severe economic fluctuations, the monetarist school of economic thought most
likely emphasizes:
maintaining control of the money supply
Which of the following statements is most accurate? Once the economy moves into the recession
phase of a typical business cycle, inflation:
eventually decelerates, but with a lag
In implementing monetary policy, the primary objective of central banks is most likely to:
maintain price stability
