100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
Previously searched by you
ECON 1951 - Principles of Macroeconomics final exam questions and answers complete Thompson Rivers University What are the four macroeconomic markets? What do they determine? - ANSW..Good and Services Market - Determines price level/inflation rate, amount$17.99
Add to cart
ECON 1951 - Principles of Macroeconomics final exam questions and answers complete Thompson Rivers University What are the four macroeconomic markets? What do they determine? - ANSW..Good and Services Market - Determines price level/inflation rate, amount
0 view 0 purchase
Course
ECON 1951 - Principles of Macroeconomics
Institution
ECON 1951 - Principles Of Macroeconomics
ECON 1951 - Principles of Macroeconomics final exam
questions and answers complete Thompson Rivers
University
What are the four macroeconomic markets? What do they determine? -
ANSW..Good and Services Market - Determines price level/inflation rate, amount
of output produced by economy
Labor M...
ECON 1951 - Principles of Macroeconomics final exam
questions and answers complete Thompson Rivers
University
What are the four macroeconomic markets? What do they determine? -
✔✔ANSW✔✔..Good and Services Market - Determines price level/inflation rate, amount
of output produced by economy
Labor Market - Determines wage rate, unemployment
Money Market - Determines interest rate, price of bonds
Exchange Market - Balance of payments, exchange rate
What is GDP? - ✔✔ANSW✔✔..Total dollar value of all final goods and services
produced in a country during a year.
Are intermediate or final goods calculated in a country's GDP? - ✔✔ANSW✔✔..Final
What accounts for a negative number in inventories in the measure of GDP? -
✔✔ANSW✔✔..If people buy more than what was produced in a given year.
How does a balance of payments deficit even itself out? Surplus? -
✔✔ANSW✔✔..Surplus - Imports become cheaper, so we import more. Exports become
more expensive, so we export less. This balances everything out.
Deficit - Imports become more expensive, so we import less. Exports become cheaper,
so we export more.
If a country's income rises, what are the two effects that can happen on its exchange
rate? - ✔✔ANSW✔✔..1. Higher level income means more imports. Our supply of dollars
on the foreign exchange increases, creating a balance of payments deficit and bids the
exchange rate downward.
2. Higher income makes it seem like we're enjoying prosperity, business is profitable
here. Foreign demand for our dollars goes up, creates balance of payments surplus,
exchange rate goes up.
What happens in the foreign exchange market when a country's interest rate goes up?
What does it create? - ✔✔ANSW✔✔..Demand goes up for our financial assets (higher
,interest, higher takeaway), creates capital inflows, balance of payments surplus, upward
pressure on the exchange rate.
What happens on the foreign exchange market when there's a rise in a country's price
level? - ✔✔ANSW✔✔..Exports become more expensive - exports fall and imports rise,
supply of our dollar increases and demand for our dollar decreases, creating a balance
of payments deficit and downward pressure on the exchange rate.
What are speculative funds on the foreign exchange market? What is significant about
these transactions relative to other international transactions? - ✔✔ANSW✔✔..If
foreigners expect the value of the dollar to rise, they gain capital by buying our bonds
and selling them after the exchange rate has risen. Primary determinant of exchange
rates in the short run.
What are the international accounts/balance of payments accounts? -
✔✔ANSW✔✔..Combination of all the subsidiary measures of the balance of payments.
What is the current account? What does it comprise of? - ✔✔ANSW✔✔..Measures
transacations of trades and goods.
Comprises of:
1. Trade Balance
2. Net investment income from abroad
3. Net transfers from abroad
What is the trade balance? What is it apart of? What does it comprise of? What is
significant about it? - ✔✔ANSW✔✔..The difference between exports and imports of G &
S.
Apart of current account.
Sum of merchandise trade balance (difference of X and M of goods) and services trade
balance (difference of X and M of services)
Primary determinant of current account?
What is the capital account? What is a net capital inflow, outflow? -
✔✔ANSW✔✔..Difference between the demand and supply of dolalrs arising from
sales/purchases of financial assets from foreigners.
Inflow - Capital account surplus
Outflow - Capital account deficit
Are used item purchases accounted for in GDP calculations? - ✔✔ANSW✔✔..No
In calculating GDP, what solves the issue of purchasing imported goods and services? -
✔✔ANSW✔✔..Imports are substracted from GDP calculations.
, What are the four general categories of calculating GDP? - ✔✔ANSW✔✔..Consumption
(C)
Investment (I)
Government (G)
Foreign/Net Exports (X-M)
How can GDP measure be deceptive? (6) - ✔✔ANSW✔✔..1. Some things are produced
but never sold, so not included in GDP (ex: work of homeowners)
2. Some expenditures are hidden from data gatherers (ex: illegal activities, black
market)
3. Some items included in GDP do not reflect net benefits to society (ex: Exxon oil spill)
4. Gov spending valued at cost, even though people might think its a waste etc.
5. GDP does not account for nonrenewable resources
6. Hard to compare cross-country.
What is the formula to calculate real GDP? - ✔✔ANSW✔✔..Nominal GDP/GDP deflator
(P)
What is inflation? - ✔✔ANSW✔✔..Persistent rise in the general price level.
How is the consumer price index (CPI) calculated? - ✔✔ANSW✔✔..Current cost of
bundle/Base year cost of bundle x 100
What does the CPI reflect? - ✔✔ANSW✔✔..Growth in prices of consumer goods and
services.
Why does the CPI have a high profile? - ✔✔ANSW✔✔..Main measure of inflation.
What are two main problems with CPI? - ✔✔ANSW✔✔..1. Changes in relative prices
(changes in prices of bundles, overestimate and underestimate)
2. Quality changes (improvements in quality vs. rise in price, purchasing power of dollar
for certain items ex: computer)
What is the labor force? - ✔✔ANSW✔✔..People that want a job.
What is the formula for unemployment? - ✔✔ANSW✔✔..Unemployed/Labor force
How can workers become discouraged? Why is this bad for the measure of the
unemployment rate? - ✔✔ANSW✔✔..People looking for work have looked for so long
that they become convinced there is no job out there for them.
They aren't part of the labor force anymore, unemployment drops, causing an
underestimation
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller docwayne5. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $17.99. You're not tied to anything after your purchase.
