Which of the following least accurately describes a component of gross domestic product?
A)
Net imports.
B)
Investment.
C)
Consumption.
The components of GDP are consumption, investment, government spending, and net exports, which is exports minus imports.作者: hinsafdar 时间: 2012-3-25 10:59
Which method of calculating gross domestic product requires data from each stage of production of goods?
A)
Sum of value added method.
B)
Value of final output method.
C)
Income method.
The sum-of-value-added method of calculating GDP requires data on the value added to goods at each stage of production and distribution. The value-of-final-output method only requires data on the final values of goods and services. The income approach to calculating GDP measures the total income of households and companies, rather than the value of goods and services.作者: hinsafdar 时间: 2012-3-25 11:01
The GDP deflator is the percentage difference between:
A)
nominal GDP and real GDP.
B)
GDP calculated using the income and expenditure approaches.
C)
GDP calculated using the value-of-final-output method and the sum-of-final-output method.
The GDP deflator is the percentage difference between nominal GDP and real GDP, reflecting inflation since the base period.作者: hinsafdar 时间: 2012-3-25 11:01
The difference between personal income and personal disposable income is:
A)
fixed expenses.
B)
savings.
C)
taxes.
Personal disposable income equals personal income minus taxes.作者: hinsafdar 时间: 2012-3-25 11:01
Total investment is one of the components of a country’s GDP. Which of the following is least likely to be considered a source of funds for investment?
A)
Household expenditures.
B)
National savings.
C)
Foreign borrowing.
Total investment is one of the major components of GDP (the others are consumption, government spending, and net exports). Investment is defined as expenditures allocated to fixed assets and inventory. The sources of funds for investment are national savings, foreign borrowing, and government savings.作者: hinsafdar 时间: 2012-3-25 11:01
If the government is running a budget deficit, which of the following relationships are least likely to occur in the economy at the same time?
Exports relative to imports
Savings relative to investment
A)
exports > imports
private savings < private investment
B)
exports < imports
private savings < private investment
C)
exports < imports
private savings > private investment
A government budget deficit, a trade surplus, and an excess of private investment over private savings cannot all occur at the same time. If the government runs a budget deficit, the deficit must be financed by a trade deficit (exports < imports), surplus private savings (private savings > private investment), or both.作者: hinsafdar 时间: 2012-3-25 11:02
The relationship between savings (S), investment (I), government spending (G), government tax revenue (T), exports (X), and imports (I) is:
A)
(G − T) = (S − I) + (X − M).
B)
(S − I) = (G − T) + (X − M).
C)
(X − M) = (S − I) + (G − T).
The fundamental relationship of saving to investment, the fiscal balance, and the trade balance is S = I + (G − T) + (X − M), or (S − I) = (G − T) + (X − M). This relationship can be solved for the fiscal balance, (G − T) = (S − I) − (X − M), or for the trade balance, (X − M) = (S − I) − (G − T).作者: hinsafdar 时间: 2012-3-25 11:02
If a fiscal budget deficit increases, which of the following factors must also increase if all other factors are held constant?
A)
Investment.
B)
Savings.
C)
Trade surplus.
The relationship between the fiscal balance, savings, investment, and the trade balance is (G − T) = (S − I) − (X − M). An increase in a fiscal budget deficit (G − T) must be funded by an increase in savings (S), a decrease in investment (I), or a decrease in net exports (X − M), which would decrease a trade surplus or increase a trade deficit.作者: hinsafdar 时间: 2012-3-25 11:02
An increase in real interest rates can be expected to:
A)
decrease investment and increase net exports.
B)
increase government spending and decrease consumption.
C)
decrease investment and decrease consumption.
An increase in real interest rates can be expected to decrease business investment and decrease consumption. The impact on government spending and net exports is not clear-cut.作者: hinsafdar 时间: 2012-3-25 11:03
Which of the following is least likely a reason that the aggregate demand curve slopes downward?
A)
The wealth effect causes consumers to spend less when the price level rises.
B)
Business investment declines as a rising price level increases interest rates.
C)
Because entitlements are adjusted for inflation, a rising price level forces government spending to increase.
The aggregate demand curve plots real GDP against the price level. Rising entitlement payments that result from an increasing price level affect nominal GDP, but not real GDP. Both remaining choices describe reasons why the consumption and investment components of real GDP decrease when the price level increases.作者: hinsafdar 时间: 2012-3-25 11:03
Which of the following statements concerning aggregate demand is most accurate?
A)
When price levels rise, real wealth increases, and individuals will spend more.
B)
When price levels rise, real wealth decreases, and individuals will spend less.
C)
When price levels fall, real wealth increases, and individuals will spend less.
When price levels rise, real wealth decreases, and we would expect individuals to spend less. If the converse were also true—if price levels were to fall—real wealth should increase, and we would expect individuals to spend more, all else being equal.作者: hinsafdar 时间: 2012-3-25 11:03
The long-run aggregate supply curve is best described as:
A)
elastic because most input prices are variable in the long run.
B)
perfectly elastic because input prices are sticky in the long run.
C)
perfectly inelastic because input prices change proportionately with the price level in the long run.
The long-run aggregate supply curve is perfectly inelastic because in the long run, wages and other input prices adjust to changes in the overall price level. Long-run aggregate supply equals potential GDP.作者: hinsafdar 时间: 2012-3-25 11:03
Which of the following events is least likely to cause a decrease in short-run aggregate supply?
A)
Inflation increases from 4% to 7%.
B)
A labor stoppage causes the price of steel to rise.
C)
Oil exporting countries reduce their production levels.
Changes in the price level represent movement along the short-run aggregate supply curve. The other items listed are events that are likely to shift the short-run aggregate supply curve to the left (decrease SRAS).作者: hinsafdar 时间: 2012-3-25 11:04
Which of the following factors is most likely to increase long-run aggregate supply?
A)
The average rate of labor productivity increases.
B)
Wage rates increase.
C)
Aggregate demand decreases.
Factors that shift the long-run aggregate supply curve (LAS) to the right include improvements in technology and productivity, increases in the supply of resources, and institutional changes that increase the efficiency of resource use. An increase in the productivity of the average worker is likely to shift the LAS curve to the right. Wage rate changes shift the short-run aggregate supply curve (SAS) but not the LAS curve. A decline in consumer demand would represent a move down the LAS curve but not a shift in LAS.作者: hinsafdar 时间: 2012-3-25 11:04
Which of the following factors is most likely to increase aggregate demand?
A)
Increasing real interest rates.
B)
An increase in real wealth.
C)
An expected decrease in future prices.
While an increase in real wealth will shift the AD curve to the right, an increase in the real rate of interest will shift the AD curve to the left as consumers and businesses reduce their borrowing and spending. An expected decrease in prices will shift the AD curve to the left as households and businesses postpone their consumption in anticipation of lower prices in the future.作者: hinsafdar 时间: 2012-3-25 11:04
When incomes in foreign countries increase, aggregate demand in the U.S. is most likely to:
A)
increase because foreign consumers will tend to buy more U.S. export goods.
B)
decrease because U.S. interest rates will tend to increase.
C)
decrease because foreign consumers will tend to buy fewer U.S. export goods.
When incomes in foreign countries increase, it is unlikely to have a direct effect on interest rates in the U.S. However, increased foreign income is likely to result in greater foreign purchases of U.S. exports. Thus, aggregate demand in the U.S. is likely to increase.作者: hinsafdar 时间: 2012-3-25 11:05
The sustainable growth rate of real GDP is most likely to be increased by:
A)
an increase in government spending.
B)
an increase in the propensity to consume by households.
C)
the discovery of untapped oil fields.
Sustainable growth in real GDP is defined as the growth rate in real GDP that is sustainable over the long term. The sustainable growth rate is positively affected by increases in the supply of natural resources, the supply of physical capital, or the supply or productivity of labor. An increase in government spending does not increase an economy’s sustainable growth rate.作者: hinsafdar 时间: 2012-3-25 11:05
Which of the following is most likely to occur in the short run aggregate demand decreases due to a reduction in business and consumer optimism?
A)
A higher rate of inflation.
B)
An increase in real GDP.
C)
An increase in the rate of unemployment.
If business and consumer optimism wanes, consumers will spend less and defer current consumption and save more of their disposable income. With reduced product demand, businesses will reduce their capital expenditures and investments. These actions will lead businesses to reduce their number of employees, thereby increasing the rate of unemployment. Moreover, current output will decrease and the price level will fall.作者: hinsafdar 时间: 2012-3-25 11:05
Which of the following choices best describes the effects on consumption, investment, and net exports that would result from an increase in the price level, other factors held constant?
Consumption
Investment
Net exports
A)
Decrease
Decrease
Decrease
B)
Decrease
Increase
Increase
C)
Increase
Increase
Increase
At higher price levels, consumption, investment, and net exports all decrease. A rising price level decreases consumers’ real wealth, so they consume less. The higher price level will increase interest rates, which causes business investment to decrease. Rising domestic prices will also reduce foreign purchases of the country’s goods, decreasing net exports.作者: hinsafdar 时间: 2012-3-25 11:05
If the economy is in short-run disequilibrium below full employment, the most likely explanation is that:
A)
money wage rates have decreased.
B)
long-run aggregate supply has decreased.
C)
aggregate demand has decreased.
A decrease in aggregate demand can reduce output below its full-employment level. A decline in long-run aggregate supply would mean the full-employment output level itself has decreased. Wage rates are assumed to be fixed in the short run, but the long-run effect of decreases in wage rates would be to increase (shift) short-run aggregate supply, leading to an increase in output.作者: prashantsahni 时间: 2012-3-25 11:06
When potential real GDP is less than actual real GDP, the economy is most likely experiencing:
A)
recession.
B)
underemployment.
C)
inflation.
The economy is in an inflationary phase if actual real GDP is greater than potential real GDP. When actual real GDP equals potential real GDP, the economy is said to be at full employment. The economy is in a recessionary phase if real GDP is less than potential GDP.作者: prashantsahni 时间: 2012-3-25 11:07
Which of the following is most likely to cause an increase in aggregate demand?
A)
Relative appreciation in the country’s currency.
B)
An increase in the general price level.
C)
High capacity utilization rates.
As capacity utilization rates increase to high levels (typically 80% to 85%), business investment in plant and equipment increases, shifting the AD curve to the right. A change in the price level represents a movement along the demand curve, not a shift in it. Appreciation of the country’s currency increases the cost of exports and reduces the cost of imports, which shifts the aggregate demand curve to the left (net exports decrease).作者: prashantsahni 时间: 2012-3-25 11:07
Sources of long-run economic growth most likely include increases in:
A)
labor supply, physical capital, and technology.
B)
human capital, money supply, and natural resources.
C)
government spending, labor supply, and physical capital.
Sources of sustainable long-run economic growth (increases in long-run aggregate supply) include increases in the labor force, human capital (the education and skill level of the labor force), the stock of physical capital, the supply of natural resources, and the level of technology. Increases in the money supply or government spending increase aggregate demand but do not increase long-run aggregate supply.作者: prashantsahni 时间: 2012-3-25 11:07
An economist wanting to determine the sources of an increase in a country’s GDP using the production function approach would most likely investigate:
A)
growth in productivity, the labor force, and the capital stock.
B)
shifts in the aggregate supply curve.
C)
increases in industrial production.
The production function approach relates a country’s economic output to its inputs of capital and labor and its levels of productivity.作者: prashantsahni 时间: 2012-3-25 11:08
Growth in total factor productivity is best described as driven by growth in:
A)
technology.
B)
capital.
C)
labor.
Total factor productivity represents the productivity that cannot be directly accounted for by increases in either capital or labor, and is generally considered to be driven by changes in technology.作者: terpsichorefan 时间: 2013-3-8 22:16
