Finance multichoice questions
Unplanned inventory investment represents the difference between….
Potential GDP and Actual GDP
Actual GDP and Planned AE
Real GDP and Nominal GDP
GDP and Net Domestic Product
3 points Save Answer
Question 2
_____________ unemployment is the result of an economic downturn that drives actual GDP below potential GDP.
frictional
structural
natural
cyclical
seasonal
3 points Save Answer
Question 3
Cyclical unemployment will only exist when….
Potential GDP exceeds Actual GDP
Actual GDP exceeds Planned AE
Nominal GDP exceeds Real GDP
Actual GDP exceeds Potential GDP
3 points Save Answer
Question 4
Due ot ever-accelerating technological growth, _________________ unemployment is on the rise worldwide.
frictional
cyclical
seasonal
structural
3 points Save Answer
Question 5
In order for the macroeconomic goal of stable prices to be achieved….[choose two responses]
Potential GDP must equal Actual GDP
Actual GDP must equal Planned AE
Unplanned Inventory Investment must = 0
Potential GDP must equal Planned AE
3 points Save Answer
Question 6
Every dollar of spending in our economy generates a dollar of …. [choose two responses]
profit
income earned
revenue
investment
3 points Save Answer
Question 7
All else remaining constant, _________________ is related directly to changes in economic output and inversely to changes in the population.
potential GDP
the labor force
per-capita real GDP
nominal GDP
3 points Save Answer
Question 8
An economy that is in equilibrium will be producing at a level of output equal to ___________.
actual GDP
potential GDP
real GDP
planned AE
3 points Save Answer
Question 9
Real GDP increases only when ___________ grows faster than the price level.
actual GDP
potential GDP
per-capita real GDP
nominal GDP
planned AE
3 points Save Answer
Question 10
GDP is always greater than NDP (net domestic product) due to ___________. [choose two responses]
negative net investment
unplanned inventory investment
consumption of fixed capital
depreciation of the capital stock
3 points Save Answer
Question 11
Price instability (usually inflation) represents the difference between….
Potential GDP and Actual GDP
Actual GDP and Planned AE
Real GDP and Nominal GDP
GDP and Net Domestic Product
3 points Save Answer
Question 12
C+I+G+(X-M) = __________
Potential GDP
Per-capita GDP
Planned Aggregate Expenditures
Actual GDP
3 points Save Answer
Question 13
During a particular period of time when the CPI increased from 100 to 130, suppose the price of housing has increased by 32%, the price of medical care has increased by 38%, the price of food has increased by 25%, the price of gasoline has increased by 28%, and the price of a computer has decreased by 33%. Which of these goods LED inflation and are now likely to be purchased in smaller quantities by the average American? [check ALL responses that apply]
housing
medical care
food
gasoline
computers
3 points Save Answer
Question 14
If prices remain constant over time, what must happen for NOMINAL GDP to rise?
inflation
real per-capita GDP must rise
economic growth must occur
the unemployment rate must fall
3 points Save Answer
Question 15
The annual inflation rate is the yearly percent change in the ….
real GDP
CPI
unemployment rate
interest rate
3 points Save Answer
Question 16
The difference between Real GDP and Nominal GDP reflects the degree to which we are acheiving the macroeconomic goal of ….
stable prices
full employment
economic growth
equitable distribution of income
3 points Save Answer
Question 17
The Nissan Murano that you bought in 2004 is sold in year 2010 for the same nominal amount. But the cpi has increased from 150 to 200 in that same period. How does the value of the money you get from the sale of the car in 2010 compare to the value of money that you paid back in 2004? This car has ….
appreciated by over 34%
appreciated by 30-34%
appreciated by 25%
not changed in value
depreciated by 25%
depreciated by 30-34%
depreciated by over 34%
3 points Save Answer
Question 18
According to the hypothetical CPI and Nominal GDP data presented below, What is happening to real output in the 2010-2015 period?
macrodata.jpg
increase
decrease
no change
4 points Save Answer
Question 19
According to the hypothetical CPI, GDP, and population data presented above, what is happening to PER-CAPITA real output in the 2000-2015 period?
increase
decrease
no change
3 points Save Answer
Question 20
According to the hypothetical CPI, GDP, and population data presented above, what is happening to real output in the 2005-2010 period?
increase
decrease
no change
3 points Save Answer
Question 21
According to the hypothetical CPI, GDP, and population data presented above, what is happening to PER CAPITA real output in the 2000-2005 period?
increase
decrease
no change
3 points Save Answer
Question 22
If taxation were the only leakage from an economy and the marginal tax rate = .10 , what fraction of any change in gross income will become a change in disposable income?
10
.10
.90
9
none of the above
3 points Save Answer
Question 23
If import spending were the ONLY leakage from an economy and the marginal propensity to import is one-third, what fraction of any change in income will survive the leakage and go on to start the next round of spending?
one third
two thirds
3/2 or one and one half
3/1 or three
none of the above
3 points Save Answer
Question 24
The existence of financial markets implies that there will be the injection of ____ and the leakage of ____ .
I , G
G , T
X , M
S , I
I , S
I(unplanned) , S
3 points Save Answer
Question 25
In the full (“real world”) model of the economy there are three leakages and three injections.
The first leakage to have it’s effect is the leakage of _________.
X
S
M
T
G
C(domestic)
Yd
3 points Save Answer
Question 26
Associate the symbols in the equation below with the descriptions.
I(net)
G
X
M
C
X(net)
I(gross)
A.
spending by US businesses on capital goods or inventory
B.
spending on public goods and services
C.
spending by Americans on foreign goods and services
D.
spending on US output from foreign sources
E.
the largest single source of spending in the US economy
F.
negative value during trade deficits
G.
positive when the nation’s capital stock expands
3 points Save Answer
Question 27
Businesses respond in a typical way to widespread positive unplanned inventory investment (+Iu)
All else remaining constant, which of the following occurs?
AD rises
AD falls
AS rises
AS falls
3 points Save Answer
Question 28
Businesses respond to widespread negative unplanned inventory investment (-Iu)
All else remaining constant, which of the following occurs?
AD rises
AD falls
AS rises
AS falls
3 points Save Answer
Question 29
Households and businesses sense that the business cycle has reached a trough, and respond typically.
All else remaining constant, which of the following occurs?
AD rises
AD falls
AS rises
AS falls
3 points Save Answer
Question 30
Renewable resources are harvested at a rate that exceeds their maximum sustainable yield. In the short run, this will make things bountiful and cheaper, but in the long-run which of the following occurs?
AD rises
AD falls
AS rises
AS falls
3 points Save Answer
Question 31
United States labor productivity rises, thereby boosting aggregate supply.
All else remaining constant, what will be the long-run impact on the price level and GDP output?
inflation & economic growth
inflation & no growth
inflation & recession
deflation & recession
deflation & economic growth
3 points Save Answer
Question 32
Businesses respond to widespread negative unplanned inventory investment when there exists some cyclical unemployment, or idle resources. This results in a jump in business investment spending and higher aggregate demand.
All else remaining constant, what will be the long-run impact on the price level and GDP output?
inflation & economic growth
inflation & no growth
inflation & recession
deflation & recession
deflation & growth
3 points Save Answer
Question 33
Unionization adds to the cost of hiring labor, thereby decreasing aggregate supply.
All else remaining constant, what will be the long-run impact on the price level and GDP output?
inflation & economic growth
inflation & no growth
inflation & recession
deflation & recession
deflation & economic growth
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