ECON 212 Final, Fall 2014

moodie.aub.edu.|b Cc Practice Final MyMoodle ECON212 - Element.Macroeconomics Theory - Sect.1-20 (C. M. Montero Kuscevic) Started on Sunday, 14 December 2014, 2:50 PM = QUIZ State Finished NAVIGATION Completed on Sunday, 14 December 2014, 2:55 PM Time taken 5 mins 7 secs | | | Marks 45/45 SEMEL Grade 100 out of 100 re || | | menial Which of the following instruments is used by the Federal [2] [22] [23] [24] [25] Complete Reserve to change the money supply? Mark 1 out of 1 Select one: SII Gy a. the discount rate [22] [4] b. the required reserve ratio Finish review c. open market operations d. all of the choices tion 2 The presence of automatic stabilizers means that the federal Complets deficit is than it otherwise would be in a recession Mark 4 out of 1 and than it otherwise would be in an expansion. QF Select one: a, larger; smaller | b. smaller; larger (_) c. smaller; smaller ) d. larger; larger The aggregate demand curve slopes downward because at moodle.aub.edu.|b Cc Practice Final MyMoodle n4 Refer to Figure 13.3. This economy is most likely experiencing Not yet arewered excess capacity at aggregate output levels: Marked out of t A AS | v Flag question | $ 2 oy é , i | > 600 800 1,200 Aggregate output ($ billion) Select one: © a. above $1,200 billion. © b. between $800 billion and $1,200 billion. © c. between $600 billion and $800 billion. © 4. below $600 billion. son 5 Not yet answered price of pork price of corn $20 $20 $20 $30 Marked out of 1 e Flag question Suppose that the basket of goods in the CPI consisted of 3 units of pork and 2 units of corn. What is the consumer price index for 2004 if the base yearis: 2003? Select one: © a. 100 Ob 105 © c. 115 O 4.120 moodle.aub.edu.|b Cc Practice Final MyMoodle if the unemployment rate is below the NAIRU, which of the Not yet answered following is most correct: Marked out of f Select one: Flag question \f : a © a. The price level will increase © b. The change in the inflation rate will be negative O «<. The price level will accelerate © d. The price level will decelerate Question 7 The deviation of unemployment from its natural rate is: Not yet answered Select one: Marked out of T © a. cyclical unemployment 1B Flag question O b. structural unemployment O «. frictional unemployment © d. none of the above von 8 You are given the balance sheet of the Central Bank below. Mocs) nelaclnthehed Assume that the banking system does not hold excess Marked out of + reserves, and the required reserve ratio is 20%. What is the money supply? bg Fig question Liabilities & Net Worth Government Securities $200 [Reserves $100 Currency 100 Select one: @_ a. 100 © b. 200 © c. 500 © d.600 MyMoodle Not yet answered Marked out of t 1B Fag question Queston 10 Not yot answered Marked out of f 4 Fiag question Gulai, 11 Not yet answered Marked out of 1 ¥ Flag question moodle.aub.edu.|b Cc Practice Final In country A, all wage contracts are fully indexed to inflation. In country B, wages are not indexed to inflation but are negotiated in 3-year contracts. Select one: © a. In country B, the AS curve is vertical. O b. In country A, expansionary monetary policy has a bigger effect on output than in country B. O «. In country B, expansionary monetary policy has a bigger effect on output than in country A. © d. Wages in tend to be more sticky in country A than in country B. if firms don't know what the market-clearing wage is, they may simply set wages wrong. Which explanation of unemployment refers to this argument? Select one: © a. The efficiency wage theory. ©». Social, or implicit, contracts. © & The relative-wage explanation. © 4 Imperfect information. Given below the equations for the demand and supply curves in the labor market: QD = 220 - 15W QS 10W- 20 Where W is the wage in $/hour and Q is the number of workers. Ata wane of $11/ howe which af the fnlinwinn ic enrract MyMoodle on 11 Not yet answered Marked out of 1 Flag question ¥ tion 12 Not yet answered Marked out of t 4 Flag question moodle.aub.edu.|b Cc Practice Final Given below the equations for the demand and supply curves in the labor market: QD = 220 - 15W QS = 10W- 20 Where W is the wage in $/hour and Q is the number of workers. At a wage of $11/ hour, which of the following is correct: Select one: © a. There is full-employment © b. The unemployment rate is 39% © c. The size of the labor force is 55 workers © 4d. None of the above Refer to Figure 13.7. Suppose the equilibrium price level is 110. An increase in wages and an increase in government spending will, for sure, increase: 4 AS 3 110 . & AD + > 0 600 Aggregate output ($ billion) Select one: © a. both the equilibrium output and the price level. © b. the price level. © c. equilibrium output. 4d. equilibrium output and decrease the price level. moodle.aub.edu.Ib Cc aa Practice Final MyMoodle on 13 Refer to Figure 11.2. An increase in income could be Not yet snewered represented by a movement from Point to Point Marked out of t Flag question ¥ ry £7% 4 2 2 & §5% | ec eP J 3 MS My . : > 100 150 200 300 Money ($ million) Select one: © a.A;Cc Ob.AB QOc.B A © d.B;D Quesiaon 14 The theory of efficiency wages explains why Not yet answered Select-one: Marked out of 1 © 4A. itis efficient for firms to set wages at the equilibrium Flag question ¥ level. © b. it may be in the best interest of firms to offer wages that are above the equilibrium level. © c. the most efficient way to pay workers is to pay them according to their skills. O @ None of the above Queston 15 Given full-employment output = $2,800, equilibrium output = moodle.aub.edu.Ib io aa Practice Final MyMoodle 015 Given full-employment output = $2,800, equilibrium output = wok yet Enewrorae $2,500, and MPS = 0.25, which of the following changes would Marked out of 1 most likely bring the economy to a full-employment level of national output? 1p Flag question Select one: © a. $300 decrease in taxes. © b. $75 increase in government spending. © c. $75 decrease in taxes. © d. $300 increase in government spending. Duestion 16 Thomas transfers $4,500 from his checking account to his Tee yO arwwaies savings account. This transaction will: Marked out of 1 Select one: P Fas avestion © a. not change M1 and decrease M2. © b. decrease M1 and not change M2. © c. increase both M1 and M2. ©. 4..decrease both M1.and M2. weston 17 Refer to Figure 13.2. Suppose the economy is at Point A. A Natya enawered decrease in money demand could cause a movement to Point: Marked out of 1 A \ id Flag question ' E 3 ° Cc B| eC” 2B 3 3 1 ayy _ = : , oP AD ~~ AD° AD? a moodle.aub.edu.Ib Cc Practice Final MyMoodle uaeton 17 Refer to Figure 13.2. Suppose the economy is at Point A. A Not yet answered decrease in money demand could cause a movement to Point: Marked out of T A v Flag question v > 2 ef Pa) B 2 be 1 =) = oP AD AD° AD* > Aggregate output (Y’) Select one: 0 as. © b.D. © c.C. © 4. ton 18 Refer to Figure 13.1. If the money demand curve shifts from dit yet anewores Md1t to Mdo: Marked out of 1 ra M* 4 Flag question 2 £ 3 8 = 6 " — Mi > Money M Select one: © @ planned investment will decrease and aggregate output will decrease. © b. planned investment will decrease and aggregate a cbs ob soll Ln nen MyMoodle tion 19 Not yet answered Marked out of 1 1P Fag question on 20 Not yet answered Marked out of 1 ¥ Flag question Question 21 Not yet answered Marked out of r Flag question moodle.aub.edu.lb CG Practice Final The money supply has decreased from $1.5 trillion to $1 trillion. Which of the following could have caused this decrease? Select one: © a. The Fed purchased government securities from the public. © b. Consumers who were holding money within the banking system withdraw this money. © c. The Fed decreased the discount rate. © d. Commercial banks decide to hold fewer excess reserves. A decrease in government purchases shifts the curve to the Select one: © a. aggregate demand; left © b. aggregate supply; left © c. aggregate demand; right © d. aggregate supply; right The level of output determined by the intersection of the short- run aggregate supply curve and the aggregate demand curve: Select one: © avis always below full-employment output. © b.is always above full-employment output. O c. always corresponds to full-employment output. © d. may be above, below, or equal to full-employment output. moodle.aub.edu.|b Cc Practice Final MyMoodle © c. always corresponds to full-employment output. © 4. may be above, below, or equal to full-employment output. Question 22 Refer to Figure 12.4. Planned investment could decrease from re $18 million to $10 million if: Marked out of t r4 Fla tion 9 | v 1g questios 2 g ao ; 2 £ 3 4 \ } i : > 10 15 18 I Planned investment (in billions) Select one: © a. the government reduces government purchases. © b. the government increases net taxes. © «. the government increases government purchases. © d. the Fed increases the money supply. Queston 23 Refer to Figure 12.6. The initial aggregate expenditure function a is given by C +1 + G’. An increase in government spending Marked out oft shifts the aggregate expenditure function to C +1 +G. If — investment does not depend on the interest rate, the MPC is: L 4 question cAsbe C+1+G(r=r®) ‘ad C+rP4G(r=r) C+1+G(r=r°)