macroeconomics final exam questions &
answers
Total income households have after paying taxes and receiving government transfers -
ANSWERSdisposable income
Market failure may occur because - ANSWERSindividual actions have side effects that are not
properly taken into account by the market
A graphical representation of the relationship between the total quantity of goods and services
demanded and the price level - ANSWERSaggregate demand curve
If banks were required to keep 100% of deposits in reserves, they could - ANSWERSmake no
loans
The point on a business cycle when real GDP stops falling and begins rising - ANSWERSbusiness
cycle trough
In the long run, changes in the money supply - ANSWERSaffect only the price level but they do
not change aggregate output
The double coincidence of wants problem can be solved by - ANSWERSmoney
An inflationary gap can be closed with - ANSWERSa decrease in government purchases
Monetary policy affects GDP and the price level by - ANSWERSchanging aggregate demand
, The short-run aggregate supply curve is positively sloped because - ANSWERSwages are sticky or
don't readily adjust to changes in economic conditions in the short run
nominal GDP - ANSWERSthat year's output times same year price
real GDP - ANSWERSbase year price times that year's output
The money spent on domestically produced final goods and services - ANSWERSis the GDP,
appears as income to someone, and appears in the circular flow model
Diminishing returns to physical capital means that as more and more physical capital is
combined with a fixed amount of human capital with a fixed technology, eventually -
ANSWERSadditions to aggregate output or real GDP declines
The most important factor affecting a household's consumer spending is - ANSWERScurrent
disposable income
A contractionary fiscal policy is a policy that - ANSWERSreduces aggregate demand by
decreasing government purchases
The CPI is used for calculating payments from the U.S. government to individuals. To the extent
it is biased upward, this index - ANSWERSraises government expenditures
Physical capital would include - ANSWERSthe tools a worker has to work with
In the "paradox of thrift" - ANSWERSincreased saving by individuals increases their chances of
becoming unemployed
answers
Total income households have after paying taxes and receiving government transfers -
ANSWERSdisposable income
Market failure may occur because - ANSWERSindividual actions have side effects that are not
properly taken into account by the market
A graphical representation of the relationship between the total quantity of goods and services
demanded and the price level - ANSWERSaggregate demand curve
If banks were required to keep 100% of deposits in reserves, they could - ANSWERSmake no
loans
The point on a business cycle when real GDP stops falling and begins rising - ANSWERSbusiness
cycle trough
In the long run, changes in the money supply - ANSWERSaffect only the price level but they do
not change aggregate output
The double coincidence of wants problem can be solved by - ANSWERSmoney
An inflationary gap can be closed with - ANSWERSa decrease in government purchases
Monetary policy affects GDP and the price level by - ANSWERSchanging aggregate demand
, The short-run aggregate supply curve is positively sloped because - ANSWERSwages are sticky or
don't readily adjust to changes in economic conditions in the short run
nominal GDP - ANSWERSthat year's output times same year price
real GDP - ANSWERSbase year price times that year's output
The money spent on domestically produced final goods and services - ANSWERSis the GDP,
appears as income to someone, and appears in the circular flow model
Diminishing returns to physical capital means that as more and more physical capital is
combined with a fixed amount of human capital with a fixed technology, eventually -
ANSWERSadditions to aggregate output or real GDP declines
The most important factor affecting a household's consumer spending is - ANSWERScurrent
disposable income
A contractionary fiscal policy is a policy that - ANSWERSreduces aggregate demand by
decreasing government purchases
The CPI is used for calculating payments from the U.S. government to individuals. To the extent
it is biased upward, this index - ANSWERSraises government expenditures
Physical capital would include - ANSWERSthe tools a worker has to work with
In the "paradox of thrift" - ANSWERSincreased saving by individuals increases their chances of
becoming unemployed
