Question 1

In the circular flow of money through an economy, the following is considered a leakage:

Accepted Answer

A)  Consumer expenditure
B)  Bank interest
C)  Consumer saving
D)  Wages paid to workersE) A) and B)
F) B) and C)

Question 2

What is the name for the special account that is used to make sure that the two sides of the BOP really do balance?

Accepted Answer

A)  Current account balance
B)  Net capital inflows
C)  Statistical discrepancy
D)  Capital account balanceE) None of the above
F) A) and B)

Question 3

What is the correct formula for the money multiplier?
A)(Required reserve ratio)/(total variable cost)
B)[1 (required reserve ratio)]/(marginal cost)
C)[1-(MPC)]/required reserve ratio
D)1/(required reserve ratio)

Accepted Answer

The correct formula for the money multip...

Question 4

If the MPC is 0.7, what is the marginal propensity to save?
A))5
B))1
C))3
D)None of the above

Accepted Answer

If the MPC is 0.7, the marginal propensi...

Question 5

Which of the following is the correct term for the simple act of giving one thing up for another?

Accepted Answer

A)  Opportunity cost
B)  Profit motive
C)  Trade-off
D)  CommandE) A) and B)
F) A) and C)

Question 6

What states that as the price of a product rises, people purchase less of that good, leading to a decrease in demand?

Accepted Answer

A)  Law of supply
B)  Command economy
C)  Law of demand
D)  Law of increasing opportunity costsE) None of the above
F) All of the above

Question 7

True or False:
Having a fractional reserve banking system means that the central bank holds a specific fraction of GDP on reserve at all times.

Accepted Answer

A)  True
B)  FalseC) A) and B)
D) undefined

Question 8

What is the correct term for an inflation caused by a decrease in AS and accompanied by a decrease in employment and real output?

Accepted Answer

A)  Demand pull inflation
B)  Crowding out effect
C)  Cost push inflation
D)  DepreciationE) A) and B)
F) B) and C)

Question 9

The Federal Reserve is a private institution that was authorized by the United States government in the early 20th century to regulate the quantity of money in the economy. The following are the functions of the Federal Reserve except:

Accepted Answer

A)  Lending to other banks
B)  Imposing trade tariffs
C)  Regulating private banking
D)  Controlling the supply of moneyE) B) and D)
F) None of the above

Question 10

What is the depreciation of the dollar most likely to do?

Accepted Answer

A)  Increase imports
B)  Decrease imports
C)  Increase exports
D)  Decrease exportsE) B) and D)
F) B) and C)

Question 11

One of the limitations of GDP indices is that they do not take ________ into account.

Accepted Answer

A)  Wealth distribution
B)  Gross mixed income
C)  Manufacturing base
D)  Export deficitsE) A) and B)
F) None of the above

Question 12

Julia is currently on maternity leave from her position at La Gourmande Francaise. Is Julia considered to be employed or unemployed?

Accepted Answer

A)  Employed
B)  UnemployedC) A) and B)
D) undefined

Question 13

__________ is the ease with which an asset, typically money, can be converted into spendable form.

Accepted Answer

A)  Speculation
B)  Accountability
C)  Liquidity
D)  MotiveE) All of the above
F) A) and B)

Question 14

The medium run aggregate supply (MRAS)  is affected by labor, capital availability, technological capability, and wage rate.

Accepted Answer

A)  True
B)  FalseC) A) and B)
D) undefined

Question 15

When calculating unemployment figures in a given population, economists count those:

Accepted Answer

A)  Looking for paid work
B)  Early retirees seeking extra income
C)  Discouraged after long searches
D)  Incarcerated in prisonsE) B) and D)
F) A) and B)

Question 16

If a government devises a plan to increase the amount of money that is spent on national infrastructure like bridges and roads, what is this called?

Accepted Answer

A)  A fiscal policy
B)  A governmental policy
C)  A federal policy
D)  A multiplierE) A) and B)
F) A) and C)

Question 17

All of the following are approaches to calculate a country's GDP except:

Accepted Answer

A)  Product
B)  Income
C)  Expenditure
D)  ImportsE) None of the above
F) All of the above

Question 18

What term refers to a general right shift in the AS curve, meaning that the supply of all services and goods is increasing?

Accepted Answer

A)  Long-run AS curve
B)  Positive supply shock
C)  Stagflation
D)  Speculative motiveE) None of the above
F) A) and D)

Question 19

Which of the following is the term for the economic indicator that measures change in price over time, using a fixed market basket of average services and goods?

Accepted Answer

A)  Phillip's Curve
B)  CPI
C)  MPC
D)  GDPE) None of the above
F) A) and B)

Question 20

Why does specialization lead to increased output of products?

Accepted Answer

A)  People have the opportunity to try many different jobs
B)  People have the opportunity to become increasingly better (and faster)  at one particular job
C)  People always enjoy their individual jobs.
D)  People receive highly specialized training by expertsE) All of the above
F) A) and C)

Exam 30: (AP) Macroeconomics: Part A

All of the following are approaches to calculate a country's GDP except:

Correct AnswerverifiedShow Answer

The medium run aggregate supply (MRAS) is affected by labor, capital availability, technological capability, and wage rate.

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What is the depreciation of the dollar most likely to do?

Correct AnswerverifiedShow Answer

Julia is currently on maternity leave from her position at La Gourmande Francaise. Is Julia considered to be employed or unemployed?

Correct AnswerverifiedShow Answer

What is the correct term for an inflation caused by a decrease in AS and accompanied by a decrease in employment and real output?

Correct AnswerverifiedShow Answer

True or False: Having a fractional reserve banking system means that the central bank holds a specific fraction of GDP on reserve at all times.

Correct AnswerverifiedShow Answer

What is the name for the special account that is used to make sure that the two sides of the BOP really do balance?

Correct AnswerverifiedShow Answer

If a government devises a plan to increase the amount of money that is spent on national infrastructure like bridges and roads, what is this called?

Correct AnswerverifiedShow Answer

Which of the following is the term for the economic indicator that measures change in price over time, using a fixed market basket of average services and goods?

Correct AnswerverifiedShow Answer

In the circular flow of money through an economy, the following is considered a leakage:

Correct AnswerverifiedShow Answer

__________ is the ease with which an asset, typically money, can be converted into spendable form.

Correct AnswerverifiedShow Answer

One of the limitations of GDP indices is that they do not take ________ into account.

Correct AnswerverifiedShow Answer

When calculating unemployment figures in a given population, economists count those:

Correct AnswerverifiedShow Answer

If the MPC is 0.7, what is the marginal propensity to save? A))5 B))1 C))3 D)None of the above

Correct AnswerverifiedIf the MPC is 0.7, the marginal propensi...View AnswerShow Answer

Which of the following is the correct term for the simple act of giving one thing up for another?

Correct AnswerverifiedShow Answer

What term refers to a general right shift in the AS curve, meaning that the supply of all services and goods is increasing?

Correct AnswerverifiedShow Answer

Why does specialization lead to increased output of products?

Correct AnswerverifiedShow Answer

What states that as the price of a product rises, people purchase less of that good, leading to a decrease in demand?

Correct AnswerverifiedShow Answer

The Federal Reserve is a private institution that was authorized by the United States government in the early 20th century to regulate the quantity of money in the economy. The following are the functions of the Federal Reserve except:

Correct AnswerverifiedShow Answer

What is the correct formula for the money multiplier? A)(Required reserve ratio)/(total variable cost) B)[1 (required reserve ratio)]/(marginal cost) C)[1-(MPC)]/required reserve ratio D)1/(required reserve ratio)

Correct AnswerverifiedThe correct formula for the money multip...View AnswerShow Answer

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If the MPC is 0.7, the marginal propensi...
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The correct formula for the money multip...
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