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Home  arrow Student Resources  arrow Chapter 19: Policies and Prospects for Global Economic Growth  arrow Quizzes  arrow Macro Final

Macro Final

This exam includes questions from Chapters 10 through 19.

This activity contains 60 questions.

Question 1.
The real balance effect, which is also known as the wealth effect:

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Question 2.
Which of the following would lead to an increase in aggregate demand (outward shift)?

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Question 3.
The long-run aggregate supply curve is determined by:

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Question 4.
If we have economic growth with inflation, then we can say that:

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Question 5.
The long-run and short-run aggregate supply curves will both shift outward in response to:

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Question 6.
Cost-push inflation can be caused by:

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Question 7.
If we assume that prices are inflexible in the downward direction and that there is excess capacity, then the equilibrium level of real GDP is completely:

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Question 8.
Which of the following statements is/are correct?
I. The classical model assumes that people are not fooled by money illusion.
II. The Keynesian model argues that capitalism is not necessarily a self-regulating system sustaining full employment.

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Question 9.
If an increase in aggregate demand generates increases in real GDP, but does not cause prices to rise, then the aggregate supply curve is consistent with the:

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Question 10.
The average propensity to consume is:

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Question 11.
The primary determinant of a person's saving and consumption, according to Keynes, is:

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Question 12.
Autonomous consumption:

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Question 13.
Graph of C+I+G+X line

In the graph you are given the 45-degree line and the C+I+G+X line and three different levels of real GDP. Match the economic situation to the level of real GDP.

A matching question presents 3 answer choices and 3 items. The answer choices are lettered A through C. The items are numbered 13.1 through 13.3. Screen readers will read the answer choices first. Then each item will be presented along with a select menu for choosing an answer choice. Using the pull-down menus, match each item in the left column to the corresponding item in the right column.
A Real GDP of $12 trillion.
B Real GDP of $4 trillion.
C Real GDP of $16 trillion.
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Question 14.
In the diagrams the consumption function and the 45-degree line have been represented. Which of the panels represent the situation when the investment function is included?

Graph of consumption function

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Question 15.
If the marginal propensity to consume is .9, what is the value of the multiplier?

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Question 16.
If the government increased spending, and neither aggregate demand nor the level of real GDP increased as a result, you would conclude that:

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Question 17.
The length of time it takes for a fiscal policy to have an impact on the economy is known as:

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Question 18.
Which of the following statements is true concerning the economy depicted in the graph?

Graph of price level and real GDP per year

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Question 19.
Which of the following are considered automatic stabilizers?

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Question 20.
The "crowding-out effect" refers to:

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Question 21.
If the economy is in equilibrium on the long-run aggregate supply curve, what is the long run effect of an increase in government spending?

Open Hint for Question 21 in a new window.
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Question 22.
Identify a possible holder of the public debt that is the difference between the gross public debt and the net public debt.

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Question 23.
The long-run effect of budget deficits is to

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Question 24.
Which of the following is a possible burden of the public debt?

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Question 25.
Assume that last year the federal government spent $1.8 trillion and that it collected $2.2 trillion in revenues. What can be said about the government deficit and the public debt?

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Question 26.
The gross public debt will equal the net public debt when

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Question 27.
Which of the following is not a function of the Federal Reserve System?

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Question 28.
Match the following items to the appropriate function of money.

A matching question presents 4 answer choices and 4 items. The answer choices are lettered A through D. The items are numbered 28.1 through 28.4. Screen readers will read the answer choices first. Then each item will be presented along with a select menu for choosing an answer choice. Using the pull-down menus, match each item in the left column to the corresponding item in the right column.
A Medium of exchange
B Unit of accounting
C Store of value
D Standard of deferred payment
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Question 29.
When the interest rate on alternative non-money assets increases:

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Question 30.
Which of the following statements is true?

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Question 31.
Which of the following statements is/are true?
I. Near monies have a high degree of liquidity and can be easily converted into cash without loss of value.
II. The definition of the M1 money supply contains more near money assets than the definition of the M2 money supply.

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Question 32.
Which of the following reduces the size of the money multiplier?

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Question 33.
The interest rate that banks pay to other banks for short-term loans is:

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Question 34.
The Federal Reserve can add excess reserves to the banking system by:

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Question 35.
After a transaction has taken place, if asymmetric information leads to one party having an incentive to engage in behavior that will be undesirable from the other party's point of view, this is known as:

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Question 36.
One of the major differences between an open market operation purchase and a decrease in the reserve requirement percentage is:

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Question 37.
Which of the following statements in not true about sweep accounts?

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Question 38.
Interest rate targeting is the most appropriate monetary policy when:

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Question 39.
The income velocity of money is:

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Question 40.
If a contractionary monetary policy increases the real after-tax U.S. interest rate, then:

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Question 41.
If an increase in the supply of money does not lead to a proportional increase in the price level, then:

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Question 42.
If there is a recessionary gap in the economy, expansionary monetary policy can:

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Question 43.
Small menu costs:

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Question 44.
If cyclical unemployment is positive, then:

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Question 45.
The idea that anticipated monetary policy cannot alter the rate of unemployment or the level of real GDP is known as the:

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Question 46.
Graph of inflation and unemployment

The economy is currently operating at point A above. U* represents the natural rate of unemployment. Which of the following statements about the Phillips curve is not true?

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Question 47.
The Phillips curve shows that unanticipated changes in aggregate demand generate a:

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Question 48.
How can an increase in population lead to an increase in economic growth?

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Question 49.
What is the international unit of accounting used by the International Monetary Fund?

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Question 50.
Which institution specializes in extending relatively long-term loans for capital investment projects that might not receive private financial support?

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Question 51.
Which institution specializes in fostering financial stability?

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Question 52.
What is meant by dead capital?

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Question 53.
Why has there been a shift away from providing loans to foreign firms towards ownership of firms in developing countries?

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Question 54.
An outward shift of the production possibilities curve and of the long-run aggregate supply curve both signify economic growth.

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Question 55.
Say's law states that "demand creates its own supply."

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Question 56.
Appropriate fiscal policy in a recessionary gap is a reduction of tax rates and/or an increase in government spending.

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Question 57.
Coins and paper currency are the only true form that money can take and still be considered "money."

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Question 58.
The Federal Open Market Committee has the authority to decide on open market operations.

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Question 59.
John takes the paycheck he just received from his job at Starbucks and deposited in his checking account. John has increased the money supply.

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Question 60.
The equation of exchange says that the money supply times velocity equals nominal GDP.

End of Question 60

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