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macroeconomics final exam questions & answers

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  • Macroeconomics

macroeconomics final exam questions & answers Total income households have after paying taxes and receiving government transfers - ANSWERSdisposable income Market failure may occur because - ANSWERSindividual actions have side effects that are not properly taken into account by the market ...

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  • March 25, 2025
  • 9
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • Macroeconomics
  • Macroeconomics
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macroeconomics final exam questions &
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Total income households have after paying taxes and receiving government transfers -
ANSWERSdisposable income



Market failure may occur because - ANSWERSindividual actions have side effects that are not
properly taken into account by the market



A graphical representation of the relationship between the total quantity of goods and services
demanded and the price level - ANSWERSaggregate demand curve



If banks were required to keep 100% of deposits in reserves, they could - ANSWERSmake no
loans



The point on a business cycle when real GDP stops falling and begins rising - ANSWERSbusiness
cycle trough



In the long run, changes in the money supply - ANSWERSaffect only the price level but they do
not change aggregate output



The double coincidence of wants problem can be solved by - ANSWERSmoney



An inflationary gap can be closed with - ANSWERSa decrease in government purchases



Monetary policy affects GDP and the price level by - ANSWERSchanging aggregate demand

, The short-run aggregate supply curve is positively sloped because - ANSWERSwages are sticky or
don't readily adjust to changes in economic conditions in the short run



nominal GDP - ANSWERSthat year's output times same year price



real GDP - ANSWERSbase year price times that year's output



The money spent on domestically produced final goods and services - ANSWERSis the GDP,
appears as income to someone, and appears in the circular flow model



Diminishing returns to physical capital means that as more and more physical capital is
combined with a fixed amount of human capital with a fixed technology, eventually -
ANSWERSadditions to aggregate output or real GDP declines



The most important factor affecting a household's consumer spending is - ANSWERScurrent
disposable income



A contractionary fiscal policy is a policy that - ANSWERSreduces aggregate demand by
decreasing government purchases



The CPI is used for calculating payments from the U.S. government to individuals. To the extent
it is biased upward, this index - ANSWERSraises government expenditures



Physical capital would include - ANSWERSthe tools a worker has to work with



In the "paradox of thrift" - ANSWERSincreased saving by individuals increases their chances of
becoming unemployed

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