MACROECONOMICS FINAL EXAM
QUESTIONS & ACTUAL CORRECT
ANSWERS PASSED ALREADY
GRADED A+
Total income households have after paying taxes and receiving government transfers -
CORRECT ANSWER disposable income
Market failure may occur because - CORRECT ANSWER individual 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 - CORRECT ANSWER aggregate demand
curve
If banks were required to keep 100% of deposits in reserves, they could - CORRECT
ANSWER make no loans
The point on a business cycle when real GDP stops falling and begins rising -
CORRECT ANSWER business cycle trough
In the long run, changes in the money supply - CORRECT ANSWER affect only the
price level but they do not change aggregate output
The double coincidence of wants problem can be solved by - CORRECT ANSWER
money
An inflationary gap can be closed with - CORRECT ANSWER a decrease in
government purchases
Monetary policy affects GDP and the price level by - CORRECT ANSWER changing
aggregate demand
The short-run aggregate supply curve is positively sloped because - CORRECT
ANSWER wages are sticky or don't readily adjust to changes in economic conditions in
the short run
nominal GDP - CORRECT ANSWER that year's output times same year price
real GDP - CORRECT ANSWER base year price times that year's output
, The money spent on domestically produced final goods and services - CORRECT
ANSWER is 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 -
CORRECT ANSWER additions to aggregate output or real GDP declines
The most important factor affecting a household's consumer spending is - CORRECT
ANSWER current disposable income
A contractionary fiscal policy is a policy that - CORRECT ANSWER reduces 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 - CORRECT ANSWER raises government
expenditures
Physical capital would include - CORRECT ANSWER the tools a worker has to work
with
In the "paradox of thrift" - CORRECT ANSWER increased saving by individuals
increases their chances of becoming unemployed
Long-run growth is the sustained upward trend in - CORRECT ANSWER aggregate
output per person over several decades
When the value of a nation's imports exceeds the value of that nation's exports, the
nation is said to have - CORRECT ANSWER a trade deficit
Deflation - CORRECT ANSWER can cause decreases in output
Among the assets of a bank are - CORRECT ANSWER loans
The marginal propensity to save is - CORRECT ANSWER the fraction of an additional
dollar of disposable income that is saved
The process of bringing down inflation that has been embedded into expectations is
called - CORRECT ANSWER disinflation
Technological improvements will - CORRECT ANSWER shift the production possibility
frontier outward
Which of the following is included in GDP - CORRECT ANSWER the purchase of a
ticket to a Rolling Stones concert
QUESTIONS & ACTUAL CORRECT
ANSWERS PASSED ALREADY
GRADED A+
Total income households have after paying taxes and receiving government transfers -
CORRECT ANSWER disposable income
Market failure may occur because - CORRECT ANSWER individual 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 - CORRECT ANSWER aggregate demand
curve
If banks were required to keep 100% of deposits in reserves, they could - CORRECT
ANSWER make no loans
The point on a business cycle when real GDP stops falling and begins rising -
CORRECT ANSWER business cycle trough
In the long run, changes in the money supply - CORRECT ANSWER affect only the
price level but they do not change aggregate output
The double coincidence of wants problem can be solved by - CORRECT ANSWER
money
An inflationary gap can be closed with - CORRECT ANSWER a decrease in
government purchases
Monetary policy affects GDP and the price level by - CORRECT ANSWER changing
aggregate demand
The short-run aggregate supply curve is positively sloped because - CORRECT
ANSWER wages are sticky or don't readily adjust to changes in economic conditions in
the short run
nominal GDP - CORRECT ANSWER that year's output times same year price
real GDP - CORRECT ANSWER base year price times that year's output
, The money spent on domestically produced final goods and services - CORRECT
ANSWER is 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 -
CORRECT ANSWER additions to aggregate output or real GDP declines
The most important factor affecting a household's consumer spending is - CORRECT
ANSWER current disposable income
A contractionary fiscal policy is a policy that - CORRECT ANSWER reduces 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 - CORRECT ANSWER raises government
expenditures
Physical capital would include - CORRECT ANSWER the tools a worker has to work
with
In the "paradox of thrift" - CORRECT ANSWER increased saving by individuals
increases their chances of becoming unemployed
Long-run growth is the sustained upward trend in - CORRECT ANSWER aggregate
output per person over several decades
When the value of a nation's imports exceeds the value of that nation's exports, the
nation is said to have - CORRECT ANSWER a trade deficit
Deflation - CORRECT ANSWER can cause decreases in output
Among the assets of a bank are - CORRECT ANSWER loans
The marginal propensity to save is - CORRECT ANSWER the fraction of an additional
dollar of disposable income that is saved
The process of bringing down inflation that has been embedded into expectations is
called - CORRECT ANSWER disinflation
Technological improvements will - CORRECT ANSWER shift the production possibility
frontier outward
Which of the following is included in GDP - CORRECT ANSWER the purchase of a
ticket to a Rolling Stones concert
