Macroeconomics Question Preview (ID: 27889)


Macroeconomics Review. TEACHERS: click here for quick copy question ID numbers.

Diffrence between Real and Nominal GDP is
a) Measured by excluding some of the sectors
b) That real GDP is always smaller than Nominal GDP
c) Change in price level from base year to current year
d) None of the above.

GDP is market value of all the final goods
a) Produced domestically
b) Produced by domestic factors of production
c) Produced by all factors of production
d) All of the above

When comparing nation's economic position with other one should see its
a) GDP
b) Per Capita GDP
c) Currency in circulation
d) None of the above

Verticle intercept of consumption function indicates
a) Average propensity to consume
b) Consumption at zero level of income
c) Al included
d) None of the above

In the consumption function c=a+by
a) y is intercept
b) Slope of the function
c) MPC
d) none of the above

In Keynesian Framework Income is measured along
a) 45 degree line
b) Verticle axis
c) Horizontal axis
d) All are correct

If investment is exogenous to the Income determination model it can be shown as
a) Verticle line
b) Horizontal line
c) All of the above
d) None of the above

In a closed economy GDP equals
a) C+I+X+N
b) C+I
c) C+I+G
d) All of the above

Which of the following is a central issue in macroeconomics?
a) the effect of excise taxes on consumers' buying patterns
b) the deregulation of the banking industry
c) inflation of prescription drug prices
d) none of the above

Which of the following is NOT an issue in macroeconomics?
a) issues relating to the balance of payment
b) the determination of prices in the agricultural sector
c) the relationship between inflation and unemployment
d) the possible effect of budget deficit increases on the level of investment

In studying growth theory
a) we focus on the very long run
b) we ignore recessions and booms
c) we assume that all inputs are fully employed
d) all of the above

In the very long run
a) the position of the AD-curve depends on the productive capacity of the economy
b) the position of the AS-curve depends on the degree of consumer confidence
c) the position of the AS-curve essentially determines the level of output
d) the position of the AD-curve is affected by changes in efficiency improvements

The position of the long-run AS-curve is determined by
a) the full-employment level of output
b) consumer confidence
c) fiscal policy
d) monetary policy

Potential GDP is
a) always greater than actual GDP
b) the level of GDP if unemployment is zero
c) equal to nominal GDP adjusted for inflation
d) none of the above

Increases in the rate of inflation
a) generally are inversely related to the output gap
b) are more pronounced in periods of recession
c) always coincide with a decrease in the unemployment rate
d) generally do not occur in periods of high growth in money supply

What is the difference between GDP and GNP?
a) GNP does not account for depreciation (capital consumption allowances)
b) GNP includes payments to domestically owned factors of production abroad
c) GNP includes indirect taxes but GDP does not
d) GNP does not include government transfer payments but GDP does

Which of the following transactions has no direct effect on this year's GDP?
a) you sell your holdings of Microsoft stocks
b) an unemployed worker gets his unemployment benefits
c) you buy a two year old car from your neighbor
d) none of the above directly affects GDP

Assume a German tourist buys a Mexican beer in a pub in Houston. How will the U.S. GDP be affected?
a) U.S. GDP will be unaffected, since a foreigner buys a foreign product
b) U.S. GDP will decrease since the beer has to be imported from Mexico
c) U.S. GDP will increase by the value added at the Houston pub
d) U.S. GDP will increase, but only by the sales tax assessed on the beer

Real GDP per capita is defined as
a) nominal GDP per capita minus depreciation
b) real GDP minus capital consumption allowances
c) real GDP divided by the population
d) the fraction of real GDP devoted to capital investment

Depreciation is
a) the difference between private domestic saving and private domestic investment
b) the difference between real and nominal GDP
c) the difference between GNP and GDP
d) another word for capital consumption allowances

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