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Macroeconomics Fall 2019 (Hammock) - _New_ Final Material Practice Questions (2)
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Macroeconomics Fall 2019 (Hammock) - _New_ Final Material Practice Questions (2)
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Macroeconomics Fall 2019 (Hammock) - "New"Final Material Practice Questions
A country opens to trade. If the world price of a good exceeds the domestic price, the result will
be...
A) Exports
B) Imports
C) Both imports and exports
D) Neither imports nor exports - ANS-A
A country opens to trade. If the world price of a good less than the domestic price, the result will
be...
A) Exports
B) Imports
C) Both imports and exports
D) Neither imports nor exports - ANS-B
A country opens to trade, but imposes a tariff on imports. If the world price of a good is greater
than the domestic price, the result will be:
A) The gov. collects tariff revenue
B) The gov. collects no tariff revenue
C) Foreign producers benefit
D) None of the above - ANS-B
Suppose U.S. Exports are $1.42 trillion, and imports are $2.13 trillion. Capital Inflow is $1.44
trillion. What is Capital Outflow, in trillions of dollars? Enter your answer with two decimal places,
e.g., 0.79, or 1.15, or 2.59, etc. - ANS-0.73
If two countries specialize according to comparative advantage and trade, they will both
A) End up with less stuff
B) Be no better off and no worse off
C) End up with more stuff
D) None of the above - ANS-C
If %ΔM = 5%, and %ΔV = 0%, but then the growth rate of velocity rises to 2%, the Dynamic
AggregateDemand curve will...
, A) shift to the right
B) shift to the left.
C) shift to the right, and then to the left.
D) none of the above. - ANS-A
Suppose the government of North Korea decides to recognize and enforce private property
rights and allow goods and services to flow into and out of the country. What will happen to the
Solow Growth Curve?
A) It will shift to the left
B) It will shift to the right
C) It will shift to the left, then right
D) None of the above - ANS-B
30% of workers have contracts with their employer that guarantee them a 2% cost-of-living
adjustment for the next year. This means that for the next year, the economy must be in the...
A) Short run
B) Medium run
C) Long run - ANS-A
Which of the following do you think best describes the relationship between inflation and
economic growth in the short run?
A) If people spend faster, this causes the government to spend faster, pushing up inflation
B) If people spend faster, this causes firms to grow faster, and puts upward pressure on
inflation.
C) If people spend faster, the Federal Reserve quickly reduces money supply to counteract the
spending increase, so there is no effect on inflation or economic growth
D) If people spend faster, this causes economic growth to slow down, and causes inflation to
rise. - ANS-B
Suppose the economy is in a long run equilibrium, but two things happen at the same time: The
money supply growth rate rises by 2%, and the growth rate of velocity falls by 2%. What
happens?
A) Dynamic Aggregate Demand moves to the right, causing a short-run boom
B) Dynamic Aggregate Demand moves to the left, causing a short-run recession
C) The Solow Growth Curve moves to the right
D)Nothing happens - ANS-D
Which of the following are reasons why fiscal policy might be effective?
I. Crowding out
II. The Keynesian multiplier is large.
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