Министерство образования и науки республики казахстан

МИНИСТЕРСТВО ОБРАЗОВАНИЯ И НАУКИ РЕСПУБЛИКИ КАЗАХСТАН

МЕЖДУНАРОДНАЯ ОБРАЗОВАТЕЛЬНАЯ КОРПОРАЦИЯ

ЕМТИХАН СҰРАҚТАРЫ ЖӘНЕ ТЕСТ ТАПСЫРМАЛАРЫ БАЗАСЫНЫҢ КУӘЛІГІ

ПАСПОРТ БАЗЫ ЭКЗАМЕНАЦИОННЫХ ВОПРОСОВ И ТЕСТОВЫХ ЗАДАНИЙ

ФЭП

Мамандық

Специальность: Экономика, Финансы, Учет и аудит

Курс: 2 Оқу жылы 2011-2012

Пән

Дисциплина: «Макроэкономика»

Кредиттің саны Сабақ түрлері бойынша

Количество: __2__ По видам занятий _1_/_1_/0

Тест иапсырмаларының саны

Количество практических вопросов: 180

Факультет деканы

Декан фaкультета: Касымова Г.М.

МК төрайымы

Председатель МС Кадиркулова Д.М.

қ.ғ.д., ассоц. профессор

д.ю.н., ассоц. профессор Айдосов Н. С.

Алматы, 2011

$$$1 The labor force includes:

$$ employed workers and persons who are officially unemployed;

$employed workers, but excludes persons who are officially unemployed;

$ full-time workers, but excludes part-time workers;

$permanent employees, but excludes temporary employees;

$ employed workers and students.

$$$2 Anne Kasperson works in her own home as a full-time caretaker and homemaker. Officially, she is:

$ unemployed;

$ employed;

$$ not in the labor force;

$ in the labor force;

$ cyclical unemployed.

$$$3 lf the unemployment rate is 9 percent and the natural rate of unemployment is 5.5 percent, then the:.

$ frictional unemployment rate is 5.5 percent.

$ cyclical unemployment rate and the frictional unemployment rate together are 5.5 percent.

$$ cyclical unemployment rate is 3.5 percent.

$ natural rate of unemployment will eventually increase.

$ frictional unemployment rate is 4.5 percent.

$$$4 During a serious recession we would expect output to fall the most in:

$ the alcoholic beverage industry;

$ the clothing industry;

$ agriculture;

$$ the machine tool industry;

$ entertainment industry.

$$$5 The phase of the business cycle where real domestic output declines is called:

$ the peak;

$ a recovery;

$$ a recession;

$ the trough;

$ the end.

$$$6 The phase of the business cycle where real domestic output is at a minimum is called:

$ the peak;

$ the trough;

$$ a recession;

$ the pits;

$ the end.

$$$7 Capitalist economies are characterized by:

$$ instability of employment and price levels;

$ uninterrupted economic growth;

$ persistent fu1l employment;

$ declining populations;

$ stability of price level.

$$$8 The production of durable goods is more variable than the production of nondurable goods because:

$ durables purchases are nonpostponable and the producers of durables are competitive;

$ durables purchases are postponable and producers of durables are competitive;

$ nondurables purchases are postponable and the producers of nondurables a competitive;

$$ durables purchases are postponable and producers of durables have monopoly power;

$ durables purchases are postponable and producers of nondurables have monopoly power.

$$$9 A recession is defmed as a period in which:

$ cost-push inflation is present;

$ nominal domestic output falls;

$ demand-pull inflation is present;

$$ real domestic output falls;

$ cost-push and demand-pull inflations are present.

$$$10 Kimberly voluntarily quit her job as an insurance agent to return to school fu11-time to earn an MBA degree. With degree in hand she is now searching for a position in management. Kimberly presently is:

$ cyclica11y unemployed;

$ structurally unemployed;

$$ frictionally unemployed;

$ not a member of the labor force;

$ employed.

$$$11 The immediate determinant of the volume of output and employment is the:

$ composition of consumer spending;

$ ratio of public goods to private goods production;

$$ level of total spending;

$ size of the labor force;

$ level of wholesale prices.

$$$12 In which of the following industries or sectors of the economy is output likely to be most strongly affected by the business cycle?

$ military goods;

$$ producer's durables (machinery, equipment, etc.);

$ textile products (clothing);

$ agricultural commodities (wheat, com, etc.);

$ service goods.

$$$1 3 In which of the fo1lowing industries or sectors of the economy is price likely to be most strongly affected by the business cycle?

$ military goods;

$ producer's durables (machinery, equipment, etc.);

$ textile products (clothing);

$$ agricultural commodities (wheat, com, etc.);

$ service goods.

$$$14 The presence of discouraged workers:

$ increases the size of the labor force, but does not affect the unemployment rate;

$ reduces the size of the labor force, but does not affect the unemployment rate;

$$ may cause the official unemployment rate to understate the amotint of unemployment;

$ may cause the official unemployment rate to overstate the amount of unemployment;

$ increases of the labor force.

$$$15 Part-time workers are counted as:

$unemployed and therefore the official unemployment rate tends to overstate the level of unemployment;

$ unemployed and therefore the official unemployment rate tends to understate the level of unemployment;

$ fully employed and therefore the official unemployment rate tends to overstate the level of unemployment;

$$ fully employed and therefore the official unemployment rate tends to understate the level of unemployment;

$ Employed.

$$$16 Assuming the total population is 100 million, the civilian labor force is 50 million, and 47 million workers are unemployed, the unemployment rate:

$ is 3 percent;

$$ is 6 percent;

$ is 7 percent;

$ is 9 percent;

$ is 11 percent.

$$$17 The natural rate of unemployment is the:

$ unemployment rate experienced at the depth of a depression;

$$ full-employment unemployment rate;

$ unemployment rate experienced by the least-skilled workers in the economy;

$ unemployment rate experienced by the most-skilled workers in the economy;

$ employment rate.

$$$18 Assume Smith is temporarily unemployed because he has voluntarily quit his job with company A and will begin a better job next week with company B. Smith will be considered as:

$ cyclically unemployed;

$$ frictionally unemployed;

$ secularly unemployed;

$ employed;

$ structurally unemployed.

$$$19 The unemployment rate is the:

$ ratio of unemployed to employed workers;

$ number of employed workers minus the number of workers who are not in the labor force.

$$ percentage of the labor force which is out of work;

$ percentage of the total population which is out of work;

$ percentage of the students.

$$$20 Although economists differ as to the level of the full-employment unemployment rate, most would agree that full employment means an unemployment rate of about:

$ 12-15 percent;

$ 10 percent;

$$ 5.5-6 percent;

$ 2-3 percent;

$ 1-2 percent.

$$$21 Suppose there are 5 million unemployed workers seeking jobs. After a period of time, 1 million of them become discouraged over their job prospects and cease to look for work. As a result of this, the official unemployment rate would:

$ increase in the short run but eventually decline;

$ increase;

$$ decline;

$ be unchanged;

$ will be changed.

$$$22 Eckstein has lost her job in a Massachusetts textile plant because of import competition. She intends to take a short course in electronics and move to California where she anticipates new jobs will be available. We can say that Eckstein is faced with:

$ secular unemployment;

$ cyclical unemployment;

$$ structural unemployment;

$ frictional unemployment;

$ natural unemployment.

$$$23 Cyclical unemployment is a consequence of:

$$ a deficiency of aggregate 'spending;

$ the decreasing relative importance of goods and the increasing relative importance of services in our economy;

$ the everyday dynamics of a free labor market;

$ technological change;

$ environmental change.

$$$24 The type of unemployment associated with recessions is called:

$ frictional unemployment;

$ structural unemployment;

$$ cyclical unemployment;

$ seasonal unemployment;

$ natural unemployment.

$$$25 Search unemployment and wait unemployment are types of:

$$ frictional unemployment;

$ structural unemployment;

$ deficient-demand unemployment;

$ cyclical unemployment;

$ deficient-supply unemployment.

$$$26 The GDP gap measures the:

$ difference between NDP and GDP;

$$ amount by which potential GDP exceeds actual GDP;

$amount by which actual GDP exceeds potential GDP;

$ amount by which nominal GDP exceeds real GDP;

$ difference between GDP and GNP.

$$$27 The natural rate of unemployment is the:

$ an excess of imports over exports;

$ a low rate of unemployment;

$$ a high rate of unemployment;

$ that the structure of consumer demand has changed from goods to services;

$ a sharply rising price level.

$$$28 The natural rate of unemployment is the:

$ the economy is in the expansion phase of the business cycle;

$$ potential GDP is in excess of actual GDP;

$ actual GDP is in excess of potential GDP;

$ actual GDP is equal to potential GDP;

$ actual GNP is equal to GDP.

$$$29 Assume the natural rate of unemployment in our economy is 5 percent and the actual rate of unemployment is 9 percent. According to Okun's law, the GDP gap:

$ is 4 percent;

$ is 8 percent;

$$ is 10 percent;

$ is 2 percent;

$ is 9 percent.

$$$30 Okun's law:

$ measures the tradeoff between the rate of inflation and the rate of unemployment;

$ indicates the number of years it will take for a constant rate of inflation to cause the price level to double;

$ quantifies the relationship between nominal and real incomes;

$$ shows the relationship between the unemployment rate and the size of the GDP gap;

$ indicates the number of monthes it will take for a constant rate of inflation to cause the price level to double.

$$$31"For every 1 percent that the actual unemployment rate exceeds the natural rate, there is generated a 2.5 percent GDP gap." This is a statement of:

$ Stratford's law;

$$ Okun's law;

$ the law of nominal incomes;

$ the rule of 70;

$ Smith′s law.

$$$32 Inflation means that:

$ all prices are rising, but at different rates;

$ all prices are rising and at the same rate;

$$ prices in the aggregate are rising, although some particular prices may be falling;

$ real incomes are rising;

$ real incomes are decreasing.

$$$33 If the consumer price index falls from 120 to 116 in a particular year, the economy has experienced:

$ inflation of 4 percent;

$ inflation of 3.33 percent;

$$ deflation 3.33 percent;

$ deflation of 4 percent;

$ inflation of 5 percent.

$$$34 The consumer price index was 140.3 in 1992 and 144.5 in 1993. Therefore, the rate of inflation in 1993 was about:

$ 6.7 percent;.

$$ 3.0 percent;

$ 1.2 percent;

$ 13.6 percent;

$$$35 If the rate of inflation is 12 percent per year, the price level will double in about:

$ 4 years;

$$ 6 years;

$ 10 years;

$ 12 years;

$$$36 Demand-pull inflation:

$ occurs when prices of resources rise, pushing up costs and the price level;

$$ occurs when total spending exceeds the economy's ability to provide output

at the existing price level;

$ occurs only when the economy has reached its absolute production capacity;

$ is also called cost-push inflation;

$$$37 Demand-pull inflation:

$$ can occur before. the economy has reached its full-employment output;

$ can occur only after the economy has reached its full-employment output;

$ can be present even during an economic depression;

$ is selflimiting;

$$$38"Too much money chasing too few goods" best describes:

$ the GDP gap;

$$ demand-pull inflation;

$ the inflation premium;

$ cost-push inflation;

$$$39 "For every 1 percent that the actual unemployment rate exceeds the natural rate, there is generated a 2.5 percent GDP gap." This is a statement of:

$$ is self-limiting;

$ drives up the price level;

$ increases nominal income;

$ increases real income;

$$$40 Inflation initiated by increases in wages or other resource prices is labeled:

$ demand-pull inflation;

$ demand-push inflation;

$$ cost-push inflation;

$ cost-pull inflation;

$$$41 Cost-push inflation:

4is caused by excessive total spending;

$ shifts the nation's production possibilities curve leftward;

$$ moves the economy inward from its production possibilities curve;

$ is a mixed blessing because it has positive effects on real output and employment;

$$$42 Cost-push inflation may be caused by:

$ a decline in per unit production costs;

$ a decrease in wage rates;

$$ a negative supply shock;

$ an increase in resource availability;

$$$43 Real income can be determined by:

$ dividing the price level by nominal income;

$ dividing the annual rate of inflation into the number "70";

$ adding the rate of inflation to the rate of increase in nominal income;

$$ deflating nominal income for inflation.

$$$44 Suppose that a person's nominal income rises from $10,000 to $12,000 and the consumer price index rises from 00 to 105. The person's real income will:

$ fall by about 20 percent;

$ fall by about 2 percent;

$$ rise by about 15 percent;

$ rise by about 25 percent;

$$$45 Inflation affects:

$$ both the level and the distribution of income;

$ neither the level nor the distribution of income;

$ the distribution, but not the level, of income;

$ the level, but not the distribution, of income;

$$$46 If the nominal interest rate is 12 percent and the real interest rate is 8percent, then the inflation premium is:

$2 percent;

$$ 4 percent;

$ 20 percent;

$ 16 percent.

$$$47 If both the real interest rate and the nominal interest rate are 3 percent, then the:

$$ inflation premium is zero.

$ real GDP must exceed the nominal GDP;

$ 110minal GDP must exceed real GDP;

$ inflation premium also is 3 percent;

$$$48 Suppose the nominal annual interest rate on a two year loan is 16 percent and lenders expect inflation to be 10 percent in each of the two years. The annual real rate of interest is:

$ I 2 percent;

$ 16 percent;

$ 4 percent;

$$ 6 percent;

$$$49 For purposes of comparing changes in potential military strength and political preeminence, which measure of economic growth would be most meaningful?

$ changes in total nominal output;

$$ changes in total real output;

$ changes in per capita output;

$ changes in per family output;

$$$50 If a nation's real GDP is growing by 5 percent per year, its real GDP will double in approximately:

$ 22 years;

$ 20 years;

$$ 14 years;

$ 8 years;

$$$51 If the economy's real GDP doubles in 18 years, we can:

$ not say anything about the average annual rate of growth;

$ conclude that its average annual rate of growth is about 5.5 percent;

$ conclude that its average annual rate of growth is about 2 percent;

$$ conclude that its average annual rate of growth is about 4 percent;

$$$52 Which of the following countries has achieved the highest rate of growth of GDP in the past three decades?

$ the United Kingdom;

$ Italy;

$$ Japan;

$ Kazakhstan.

$$$53 Data on the growth of real GDP and real GDP per capita:

$ show that real GDP per capita has increased more rapidly than has real GDP;

$ understate the growth of economic well-being because they do not take into

account the effects of pollution;

$$ understate the growth of economic well-being because they fail to take into

account declines in the work week;

$ overstate the growth of economic well-being because they fail to account for

improvements in product quality;

$$$54 Labor productivity is measured by:

$ the ratio of capitlil to labor;

$$ real output per worker hour;

$ real output per capita;

$ the ratio of worker hours to real GDP;

$$$55 Which of the following would not be expected to increase labor productivity?

$ technological advance;

$ the acquisition of more education and training by the labor force;

$$ an increase in the size of the labor force;

$ the realization of economies of scale;

$$$56 Which of the following is correct?

$ total output = labor productivity/worker-hours;

$ labor productivity = worker-hours/total output;

$$ total output = worker-hours x labor productivity;

$ worker-hours = labor productivity x total output;

$$$57 Labor productivity may be defined as:

$$ total output/worker-hours;

$ nominal GDP minus real GDP;

$ the ratio ofreal capital to worker-hours;

$ "the annual increase in nominal GDP per worker;

$$$58 Which of the following is not a supply factor in economic growth?

$ the stock of capital;

$ technological advance;

$ the size and quality of the labor force;

$$ full employment;

$$$59 Data on the growth of real GDP and real GDP per capita:

$$ outward shift of the production possibilities curve;

$ inward shift of the production possibilities curve;

$ movement from a point on to a point inside a production possibilities curve;

$ movement from one point to another point on a production possibilities curve;

$$$60 Which of the following would not be expected to increase labor productivity

$ leftward shift of the long-run AS curve;

$ leftward shift of the AD curve;

$$ rightward shift of the long-run AS curve;

$ rightward shift of the short-run aggregate supply curve resulting from decline in the price level;

$$$61 The achievement of full employment through time will:

$ diminish labor productivity;

$ reduce the level of investment as a percentage of GDP;

$$ increase the rate of growth of real GDP;

$ have no impact on the rate of growth of real GDP;

$$$62 If a natural resource such as oil or lead becomes increasingly scarce:

$$ its price will rise, signaling greater conservation in its use and a more

intensive technological search for substitutes;

$ its price will rise, signaling a more intensive use of the resource and a more

intensive technological search for substitutes;

$ its price will fall, signaling greater investment in equipment used in the

exploration and extraction of that resource;

$ its price will rise, signaling a less intensive use of the resource and a less

intensive technological search for substitutes;

$$$63 The aggregate demand curve:

$ is upsloping because a higher price level is necessary to make production
profitable as production costs rise;

$ is downsloping because production costs decline as real output increases;

$ shows the amount of expenditures required to induce the production of each
possible level of real output;

$$ shows the amount of real output which will be purchased at each possible
price level;

$$$64 The aggregate demand curve is:

$ vertical if full employment exists;

$ horizontal when there is considerable unemployment in the economy;

$$ downsloping because of the interest-rate, wealth or real balances, and foreign
purchases effects;

$ downsloping because production costs decrease as real output increases;

$ horizontal if full employment exists.

$$$65 The interest-rate effect suggests that:

$ a decrease in the supply of money will increase interest rates and reduce
interest-sensitive consumption and investment spending;

$ an increase in the price level will increase the demand for money, reduce
interest rates, and decrease consumption and investment spending;

$$ an increase in the price level will increase the demand for money, increase
interest rates, and decrease consumption and investment spending

$ an increase in the price level will decrease the demand for money, reduce
interest rates, and increase consumption and investment spending;

$$$66 The wealth or real balances effect indicates that:

$ an increase in the price level will increase the demand for money, increase interest rates, and reduce consumption and investment spending;

$ a lower price level will decrease the real value of many financial assets and therefore reduce spending;

$ a higher price level will increase the real value of many financial assets and therefore increase spending;

$$ a higher price level will decrease the real value of many financial assets and therefore reduce spending;

$$$67 The interest-rate and real balances effects are important because they help explain:

$ rightward and leftward shifts of the aggregate demand curve;

$ why demand-management policy cannot be used effectively to curb
stagflation;

$$ the shape of the aggregate demand curve;

$ the shape of the aggregate supply curve;

$$$68 The wealth, interest rate, and foreign-purchases effects all help explain:

$$ why the aggregate demand curve is downsloping;

$ why the aggregate supply curve is upsloping;

$ shifts in the aggregate demand curve;

$ shifts in the aggregate supply curve;

$$$69 A nation's gross domestic product (GDP):

$$ is the money value of the total output produced within the borders of the nation;

$ is the dollar value of the total output produced by its citizens, regardless of where they are living;

$ can be found by summing С + ln + S+Xa;

$ is always some amount less than its GNP;

$$$70 A nation's gross national product (GNP):

$ is the money value of the total output produced within the borders of the

nation;

$$ is the money value of the total output produced by its citizens, regardless of

where they are living;

$ can be found by summing С + S + G + Xn;

$ is always some amount less than its GDP;

$$$71 The GDP may be defined as the:

$$ monetary value of all final domestic goods and services produced within a

nation in a given year.

$ national income minus all nonincome charges against output;

$ monetary value of all economic resources used in the production of a year's Output;

$ monetary value of all goods and services, final and intermediate, produced in

a given year;

$$$72 The main difference between GDP and GNP is that GDP includes:

$$ net foreign factor income earned in the Kazakhstan;

$ consumption of fixed capital;

$ transfer payments;

$ government purchases;

$$$73 Gross domestic product would equal gross national product when:

$ transfer payments are zero;

$ consumption of fixed capital is zero;

$$ net foreign factor income earned in the Kazakhstan is zero;

$ personal taxes are zero;

$$$74 Suppose Smith pays $ 100 to Jones.

$ We can say with certainty that the GDP has increased by $100.

$ We can say with certainty that the GDP has increased, but we cannot determine the amount;

$ We can say with certainty that the nominal GDP has increased, but we can't say whether real GDP has increased or decreased;

$$ We need more information to determine whether GDP has changed;

$$$75 Suppose that the total market value of all final goods and services produced in a

particular country in 1996 is $500 billion and the total market value of final

goods and services sold is $450 billion. We can conclude that:

Suppose that the total market value of all final goods and services produced in a

particular country in 1996 is $500 billion and the total market value of final

goods and services sold is $450 billion. We can conclude that:

$ NDP in 1996 is $450 billion.

$$ GDP in 1996 is $500 billion.

$ inventories in 1996 fell by $50 billion.

$ GDP in 1996 is $300 billion.

$$$76 Economic growth is defined as an increase in:

$ nominal national income;

$$ real national income;

$ real national inputs;

$ nominal national inputs;

$$$77 Economic growth is usually measured as the

$ absolute increase in real GNP or GDP;

$ nominal increase in real GNP or GDP;

$$ percentage increase in real GNP or GDP;

$ marginal increase in real GNP or GDP;

$$$78 For a country with a constant rate of growth, the time required for real national income to double can be found by using the rule of:

$ net interest;

$ 100;

$ 10;

$$ 72;

$$$80 In terms of the aggregate demand-aggregate supply model, economic growth is shown as a/an

$ rightward shift in the aggregate demand curve;

$$ rightward shift in the aggregate supply curve;

$ leftward shift in the aggregate demand curve;

$ leftward shift in the aggregate supply curve;

$$$81 An abundance of natural resources:

$ is always necessary for economic growth;

$ is necessary for economic growth only in capitalist countries;

$ is necessary for economic growth only in developing countries;

$$ can contribute to economic growth but is not necessary for growth.

$$$82 Growth in a country's capital stock is tied to:

$ increases in the amounts of natural resources available;

$$ current and future saving;

$ improvements in technology;

$ increases in the amount of labor available;

$$$83 Which of the following is not one of the determinants of economic growth?

$ the size and quality of the lab or force;

$ the amount of capital goods available;

$ technology;

$$ the shape of the aggregate demand curve.

$$$84 Total factor productivity is the ratio of:

$ a firm's marginal revenue to its marginal cost;

$ a firm's total revenues to its total costs;

$ a nation's total income divided by its total output;

$$ a nation's output to its stock of labor and capital;

$$$85 Economic growth is the sum of:

$ total factor productivity and resources;

$ total factor productivity and marginal factor productivity;

$$ growth in total factor productivity and growth in resources;

$ national income and national output;

$$$86 Which of the following affects aggregate demand only indirectly?

$ consumption;.

$ investment;

$$ taxes;

$ government spending;

$$$87 Expansionary fiscal policy refers to:

$ decreasing government spending and decreasing taxes;

$ decreasing government spending and increasing taxes;

$ increasing government spending and increasing taxes;

$$ increasing government spending and decreasing taxes;

$$$88 An increase in government spending:

$ has the same effect on aggregate demand as an increase in taxes;

$ will result in a lower level of prices if the aggregate supply curve is horizontal;

$$ shifts aggregate demand to the right;

$ is not likely to result in higher prices or a higher level of income.

$$$89 If the aggregate supply curve slopes up before reaching potential national income:

$ the effect of government spending on national income is enhanced;

$$ the government must increase its spending by more than the recessionary gap to reach potential income;

$ the government must increase its spending by the amount of the recessionary gap to reach potential income;

$ prices will remain constant as government spending increases;

$$$90 Which of the following statements is false?

$ Historically, government spending has played an increasingly larger role over time in industrial countries;

$ Government plays a larger role in investment spending in developing countries;

$$ Developed countries rely more on their governments to provide the infrastructure of the economy than do developing countries;

$ State-owned enterprises account for a larger percentage of economic activity in developing countries than in developed countries;

$$$91 Which of the following statements is true?

$ Developing countries rely more heavily on direct taxes than do developed countries;

$$ Developing countries rely more heavily on indirect taxes than do developed countries;

$ Developing countries rely more heavily on personal income taxes than do developed countries;

$ Developing countries rely more heavily on social security taxes than do developed countries;

$$$92 The ultimate goal of monetary policy is:

$$ economic growth with stable prices;

$ stable exchange rates;

$ stable interest rates;

$ a low federal funds rate;

$$$93 According to the equation of exchange:

$ if the money supply increases and velocity is constant, real GDP must rise;

$$ if the money supply increases and velocity is constant, nominal GDP must rise;

$ an increase in the money supply causes an increase in the price level;

$ an increase in the money supply causes an increase in real GDP and higher prices;

$$$94 A student who cashes a check at the student union in order to go shopping is an example of the:

$$ transactions demand for money;

$ speculative demand for money;

$ precautionary demand for money;

$ income effect;

$$$95 The supply of money is:

$ a positive function of interest rates;

$ a negative function of interest rates;

$ a positive function of income;

$$ independent of income and interest rates.

$$$96 Currency appreciation is:

$ a decrease in the value of a currency under floating exchange rates;

$$ an increase in the value of a currency under floating exchange rates;

$ a decrease in the value of a currency under fixed exchange rates;

$ an increase in the value of a currency under fixed exchange rates;

$$$97 Currency depreciation is:

$$a decrease in the value of a currency under floating exchange rates;

$ an increase in the value of a currency under floating exchange rates;

$ a decrease in the value of a currency under fixed exchange rates;

$ an increase in the value of a currency under fixed exchange rates;

$$$98 Which of the following statements about fixed and floating exchange rates is false?

$ Fixed exchange rates put pressure on a nation to manage its macroeconomic policy in concert with other nations;

$$ Floating exchange rates put pressure on a nation to manage its macroeconomic policy in concert with other nations;

$ Speculators are more likely to be a problem under fixed exchange rates than under floating exchange rates;

$ Fixed exchange rates can force a devaluation in the event of fundamental disequilibrium;

$$$99 Economically, an open economy is one in which:

$ no trade with other countries take place;

$ there are no trade restraints;

$$ a large fraction of the country's GNP is devoted to internationally traded goods;

$ exchange rates are freely floating, with no government intervention in foreign-exchange markets;

$$$100 Multiple exchange rates:

$ are impossible;

$ eventually lead to fixed exchange rates;

$ eventually lead to a gold standard;

$$ have the same effects as taxes and subsidies;

$ are easier to administer than a single exchange rate.

$$$101 Which of the following statements is false?

$ Historically, government spending has played an increasingly larger role over time in industrial countries;

$ Government plays a larger role in investment spending in developing countries;

$$ Developed countries rely more on their governments to provide the infrastructure of the economy than do developing countries;

$ State-owned enterprises account for a larger percentage of economic activity in developing countries than in developed countries;

$$$101 Which of the following statements is true?

$ Developing countries rely more heavily on direct taxes than do developed countries;

$$ Developing countries rely more heavily on indirect taxes than do developed countries;

$ Developing countries rely more heavily on personal income taxes than do developed countries;

$ Developing countries rely more heavily on social security taxes than do developed countries;

$$$102 The ultimate goal of monetary policy is:

$$ economic growth with stable prices;

$ stable exchange rates;

$ stable interest rates;

$ a low federal funds rate;

$$$103 According to the equation of exchange:

$ if the money supply increases and velocity is constant, real GDP must rise;

$$ if the money supply increases and velocity is constant, nominal GDP must rise;

$ an increase in the money supply causes an increase in the price level;

$ an increase in the money supply causes an increase in real GDP and higher prices;

$$$104 A student who cashes a check at the student union in order to go shopping is an example of the:

$$ transactions demand for money;

$ speculative demand for money;

$ precautionary demand for money;

$ income effect;

$$$105 The phase of the business cycle where real domestic output declines is called:

$ the peak;

$ a recovery;

$$ a recession;

$ the trough;

$$$106 The phase of the business cycle where real domestic output is at a minimum is called:

$ the peak;

$ the trough;

$$ a recession;

$ the pits;

$$$107 Capitalist economies are characterized by:

$$ instability of employment and price levels;

$ uninterrupted economic growth;

$ persistent fu1l employment;

$ declining populations;

$$$108 The production of durable goods is more variable than the production of nondurable goods because:

$ durables purchases are nonpostponable and the producers of durables are competitive;

$ durables purchases are postponable and producers of durables are competitive;

$ nondurables purchases are postponable and the producers of nondurables a competitive;

$$ durables purchases are postponable and producers of durables have monopoly power;

$$$109 A recession is defmed as a period in which:

$ cost-push inflation is present;

$ nominal domestic output falls;

$ demand-pull inflation is present;

$$ real domestic output falls;

$$$110 Kimberly voluntarily quit her job as an insurance agent to return to school fu11-time to earn an MBA degree. With degree in hand she is now searching for a position in management. Kimberly presently is:

$ cyclica11y unemployed;

$ structurally unemployed;

$$ frictionally unemployed;

$ not a member of the labor force;

$$$ 111 The labor force includes:

$$ employed workers and persons who are officially unemployed;

$employed workers, but excludes persons who are officially unemployed;

$ full-time workers, but excludes part-time workers;

$permanent employees, but excludes temporary employees;

$$$112 Anne Kasperson works in her own home as a full-time caretaker and homemaker. Officially, she is:

$ unemployed;

$ employed;

$$ not in the labor force;

$ in the labor force;

$$$113 lf the unemployment rate is 9 percent and the natural rate of unemployment is 5.5 percent, then the:.

$ frictional unemployment rate is 5.5 percent.

$ cyclical unemployment rate and the frictional unemployment rate together are 5.5 percent.

$$ cyclical unemployment rate is 3.5 percent.

$ natural rate of unemployment will eventually increase.

$$$114 The presence of discouraged workers:

$ increases the size of the labor force, but does not affect the unemployment rate;

$ reduces the size of the labor force, but does not affect the unemployment rate;

$$ may cause the official unemployment rate to understate the amotint of unemployment;

$ may cause the official unemployment rate to overstate the amount of unemployment;

$$$115 Part-time workers are counted as:

$unemployed and therefore the official unemployment rate tends to overstate the level of unemployment;

$ unemployed and therefore the official unemployment rate tends to understate the level of unemployment;

$ fully employed and therefore the official unemployment rate tends to overstate the level of unemployment;

$$ fully employed and therefore the official unemployment rate tends to understate the level of unemployment;

$$$116 Assuming the total population is 100 million, the civilian labor force is 50 million, and 47 million workers are unemployed, the unemployment rate:

$ is 3 percent;

$$ is 6 percent;

$ is 7 percent;

$ is 9 percent;

$$$117 The natural rate of unemployment is the:

$ unemployment rate experienced at the depth of a depression;

$$ full-employment unemployment rate;

$ unemployment rate experienced by the least-skilled workers in the economy;

$ unemployment rate experienced by the most-skilled workers in the economy;

$$$118 Assume Smith is temporarily unemployed because he has voluntarily quit his job with company A and will begin a better job next week with company B. Smith will be considered as:

$ cyclically unemployed;

$$ frictionally unemployed;

$ secularly unemployed;

$ employed;

$$$119 The unemployment rate is the:

$ ratio of unemployed to employed workers;

$ number of employed workers minus the number of workers who are not in the labor force.

$$ percentage of the labor force which is out of work;

$ percentage of the total population which is out of work;

$$$120 Although economists differ as to the level of the full-employment unemployment rate, most would agree that full employment means an unemployment rate of about:

$ 12-15 percent;

$ 10 percent;

$$ 5.5-6 percent;

$ 2-3 percent;

$$$121 Suppose there are 5 million unemployed workers seeking jobs. After a period of time, 1 million of them become discouraged over their job prospects and cease to look for work. As a result of this, the official unemployment rate would:

$ increase in the short run but eventually decline;

$ increase;

$$ decline;

$ be unchanged;

$$$122 Eckstein has lost her job in a Massachusetts textile plant because of import competition. She intends to take a short course in electronics and move to California where she anticipates new jobs will be available. We can say that Eckstein is faced with:

$ secular unemployment;

$ cyclical unemployment;

$$ structural unemployment;

$ frictional unemployment;

$$$123 Cyclical unemployment is a consequence of:

$$ a deficiency of aggregate 'spending;

$ the decreasing relative importance of goods and the increasing relative importance of services in our economy;

$ the everyday dynamics of a free labor market;

$ technological change;

$$$124 The type of unemployment associated with recessions is called:

$ frictional unemployment;

$ structural unemployment;

$$ cyclical unemployment;

$ seasonal unemployment;

$$$125 Search unemployment and wait unemployment are types of:

$$ frictional unemployment;

$ structural unemployment;

$ deficient-demand unemployment;

$ cyclical unemployment;

$$$126 The GDP gap measures the:

$ difference between NDP and GDP;

$$ amount by which potential GDP exceeds actual GDP;

$amount by which actual GDP exceeds potential GDP;

$ amount by which nominal GDP exceeds real GDP;

$$$127 The natural rate of unemployment is the:

$ an excess of imports over exports;

$ a low rate of unemployment;

$$ a high rate of unemployment;

$ that the structure of consumer demand has changed from goods to services;

$$$128 The natural rate of unemployment is the:

$ the economy is in the expansion phase of the business cycle;

$$ potential GDP is in excess of actual GDP;

$ actual GDP is in excess of potential GDP;

$ actual GDP is equal to potential GDP;

$$$129 Assume the natural rate of unemployment in our economy is 5 percent and the actual rate of unemployment is 9 percent. According to Okun's law, the GDP gap:

$ is 4 percent;

$ is 8 percent;

$$ is 10 percent;

$ is 2 percent;

$$$130 Okun's law:

$ measures the tradeoff between the rate of inflation and the rate of unemployment;

$ indicates the number of years it will take for a constant rate of inflation to cause the price level to double;

$ quantifies the relationship between nominal and real incomes;

$$ shows the relationship between the unemployment rate and the size of the GDP gap;

$$$131"For every 1 percent that the actual unemployment rate exceeds the natural rate, there is generated a 2.5 percent GDP gap." This is a statement of:

$ Stratford's law;

$$ Okun's law;

$ the law of nominal incomes;

$ the rule of 70;

$$$132 Inflation means that:

$ all prices are rising, but at different rates;

$ all prices are rising and at the same rate;

$$ prices in the aggregate are rising, although some particular prices may be falling;

$ real incomes are rising;

$$$133 If the consumer price index falls from 120 to 116 in a particular year, the economy has experienced:

$ inflation of 4 percent;

$ inflation of 3.33 percent;

$$ deflation 3.33 percent;

$ deflation of 4 percent;

$$$134 The consumer price index was 140.3 in 1992 and 144.5 in 1993. Therefore, the rate of inflation in 1993 was about:

$ 6.7 percent;.

$$ 3.0 percent;

$ 1.2 percent;

$ 13.6 percent;

$$$135 If the rate of inflation is 12 percent per year, the price level will double in about:

$ 4 years;

$$ 6 years;

$ 10 years;

$ 12 years;

$$$136 Demand-pull inflation:

$ occurs when prices of resources rise, pushing up costs and the price level;

$$ occurs when total spending exceeds the economy's ability to provide output

at the existing price level;

$ occurs only when the economy has reached its absolute production capacity;

$ is also called cost-push inflation;

$$$137 Demand-pull inflation:

$$ can occur before. the economy has reached its full-employment output;

$ can occur only after the economy has reached its full-employment output;

$ can be present even during an economic depression;

$ is selflimiting;

$$$138"Too much money chasing too few goods" best describes:

$ the GDP gap;

$$ demand-pull inflation;

$ the inflation premium;

$ cost-push inflation;

$$$139 "For every 1 percent that the actual unemployment rate exceeds the natural rate, there is generated a 2.5 percent GDP gap." This is a statement of:

$$ is self-limiting;

$ drives up the price level;

$ increases nominal income;

$ increases real income;

$$$140 Inflation initiated by increases in wages or other resource prices is labeled:

$ demand-pull inflation;

$ demand-push inflation;

$$ cost-push inflation;

$ cost-pull inflation;

$$$141 Cost-push inflation:

4is caused by excessive total spending;

$ shifts the nation's production possibilities curve leftward;

$$ moves the economy inward from its production possibilities curve;

$ is a mixed blessing because it has positive effects on real output and employment;

$$$142 Cost-push inflation may be caused by:

$ a decline in per unit production costs;

$ a decrease in wage rates;

$$ a negative supply shock;

$ an increase in resource availability;

$$$143 Real income can be determined by:

$ dividing the price level by nominal income;

$ dividing the annual rate of inflation into the number "70";

$ adding the rate of inflation to the rate of increase in nominal income;

$$ deflating nominal income for inflation.

$$$144 Suppose that a person's nominal income rises from $10,000 to $12,000 and the consumer price index rises from 00 to 105. The person's real income will:

$ fall by about 20 percent;

$ fall by about 2 percent;

$$ rise by about 15 percent;

$ rise by about 25 percent;

$$$145 Inflation affects:

$$ both the level and the distribution of income;

$ neither the level nor the distribution of income;

$ the distribution, but not the level, of income;

$ the level, but not the distribution, of income;

$$$146 If the nominal interest rate is 12 percent and the real interest rate is 8percent, then the inflation premium is:

$2 percent;

$$ 4 percent;

$ 20 percent;

$ 16 percent.

$$$147 If both the real interest rate and the nominal interest rate are 3 percent, then the:

$$ inflation premium is zero.

$ real GDP must exceed the nominal GDP;

$ 110minal GDP must exceed real GDP;

$ inflation premium also is 3 percent;

$$$148 Suppose the nominal annual interest rate on a two year loan is 16 percent and lenders expect inflation to be 10 percent in each of the two years. The annual real rate of interest is:

$ I 2 percent;

$ 16 percent;

$ 4 percent;

$$ 6 percent;

$$$149 For purposes of comparing changes in potential military strength and political preeminence, which measure of economic growth would be most meaningful?

$ changes in total nominal output;

$$ changes in total real output;

$ changes in per capita output;

$ changes in per family output;

$$$150 If a nation's real GDP is growing by 5 percent per year, its real GDP will double in approximately:

$ 22 years;

$ 20 years;

$$ 14 years;

$ 8 years;

$$$151 If the economy's real GDP doubles in 18 years, we can:

$ not say anything about the average annual rate of growth;

$ conclude that its average annual rate of growth is about 5.5 percent;

$ conclude that its average annual rate of growth is about 2 percent;

$$ conclude that its average annual rate of growth is about 4 percent;

$$$152 Which of the following countries has achieved the highest rate of growth of GDP in the past three decades?

$ the United Kingdom;

$ Italy;

$$ Japan;

$ Kazakhstan.

$$$153 Data on the growth of real GDP and real GDP per capita:

$ show that real GDP per capita has increased more rapidly than has real GDP;

$ understate the growth of economic well-being because they do not take into

account the effects of pollution;

$$ understate the growth of economic well-being because they fail to take into

account declines in the work week;

$ overstate the growth of economic well-being because they fail to account for

improvements in product quality;

$$$154 Labor productivity is measured by:

$ the ratio of capitlil to labor;

$$ real output per worker hour;

$ real output per capita;

$ the ratio of worker hours to real GDP;

$$$155 Which of the following would not be expected to increase labor productivity?

$ technological advance;

$ the acquisition of more education and training by the labor force;

$$ an increase in the size of the labor force;

$ the realization of economies of scale;

$$$156 Which of the following is correct?

$ total output = labor productivity/worker-hours;

$ labor productivity = worker-hours/total output;

$$ total output = worker-hours x labor productivity;

$ worker-hours = labor productivity x total output;

$$$157 Labor productivity may be defined as:

$$ total output/worker-hours;

$ nominal GDP minus real GDP;

$ the ratio ofreal capital to worker-hours;

$ "the annual increase in nominal GDP per worker;

$$$158 Which of the following is not a supply factor in economic growth?

$ the stock of capital;

$ technological advance;

$ the size and quality of the labor force;

$$ full employment;

$$$159 Data on the growth of real GDP and real GDP per capita:

$$ outward shift of the production possibilities curve;

$ inward shift of the production possibilities curve;

$ movement from a point on to a point inside a production possibilities curve;

$ movement from one point to another point on a production possibilities curve;

$$$160 Which of the following would not be expected to increase labor productivity

$ leftward shift of the long-run AS curve;

$ leftward shift of the AD curve;

$$ rightward shift of the long-run AS curve;

$ rightward shift of the short-run aggregate supply curve resulting from decline in the price level;

$$$161 The achievement of full employment through time will:

$ diminish labor productivity;

$ reduce the level of investment as a percentage of GDP;

$$ increase the rate of growth of real GDP;

$ have no impact on the rate of growth of real GDP;

$$$162 If a natural resource such as oil or lead becomes increasingly scarce:

$$ its price will rise, signaling greater conservation in its use and a more

intensive technological search for substitutes;

$ its price will rise, signaling a more intensive use of the resource and a more

intensive technological search for substitutes;

$ its price will fall, signaling greater investment in equipment used in the

exploration and extraction of that resource;

$ its price will rise, signaling a less intensive use of the resource and a less

intensive technological search for substitutes;

$$$163 The aggregate demand curve:

$ is upsloping because a higher price level is necessary to make production
profitable as production costs rise;

$ is downsloping because production costs decline as real output increases;

$ shows the amount of expenditures required to induce the production of each
possible level of real output;

$$ shows the amount of real output which will be purchased at each possible
price level;

$$$164 The aggregate demand curve is:

$ vertical if full employment exists;

$ horizontal when there is considerable unemployment in the economy;

$$ downsloping because of the interest-rate, wealth or real balances, and foreign
purchases effects;

$ downsloping because production costs decrease as real output increases;

$$$165 The interest-rate effect suggests that:

$ a decrease in the supply of money will increase interest rates and reduce
interest-sensitive consumption and investment spending;

$ an increase in the price level will increase the demand for money, reduce
interest rates, and decrease consumption and investment spending;

$$ an increase in the price level will increase the demand for money, increase
interest rates, and decrease consumption and investment spending

$ an increase in the price level will decrease the demand for money, reduce
interest rates, and increase consumption and investment spending;

$$$166 The wealth or real balances effect indicates that:

$ an increase in the price level will increase the demand for money, increase interest rates, and reduce consumption and investment spending;

$ a lower price level will decrease the real value of many financial assets and therefore reduce spending;

$ a higher price level will increase the real value of many financial assets and therefore increase spending;

$$ a higher price level will decrease the real value of many financial assets and therefore reduce spending;

$$$167 The interest-rate and real balances effects are important because they help explain:

$ rightward and leftward shifts of the aggregate demand curve;

$ why demand-management policy cannot be used effectively to curb
stagflation;

$$ the shape of the aggregate demand curve;

$ the shape of the aggregate supply curve;

$$$168 The wealth, interest rate, and foreign-purchases effects all help explain:

$$ why the aggregate demand curve is downsloping;

$ why the aggregate supply curve is upsloping;

$ shifts in the aggregate demand curve;

$ shifts in the aggregate supply curve;

$$$169 A nation's gross domestic product (GDP):

$$ is the money value of the total output produced within the borders of the nation;

$ is the dollar value of the total output produced by its citizens, regardless of where they are living;

$ can be found by summing С + ln + S+Xa;

$ is always some amount less than its GNP;

$$$170 A nation's gross national product (GNP):

$ is the money value of the total output produced within the borders of the

nation;

$$ is the money value of the total output produced by its citizens, regardless of

where they are living;

$ can be found by summing С + S + G + Xn;

$ is always some amount less than its GDP;

$$$171 The GDP may be defined as the:

$$ monetary value of all final domestic goods and services produced within a

nation in a given year.

$ national income minus all nonincome charges against output;

$ monetary value of all economic resources used in the production of a year's Output;

$ monetary value of all goods and services, final and intermediate, produced in

a given year;

$$$172 The main difference between GDP and GNP is that GDP includes:

$$ net foreign factor income earned in the Kazakhstan;

$ consumption of fixed capital;

$ transfer payments;

$ government purchases;

$$$173 Gross domestic product would equal gross national product when:

$ transfer payments are zero;

$ consumption of fixed capital is zero;

$$ net foreign factor income earned in the Kazakhstan is zero;

$ personal taxes are zero;

$$$174 Suppose Smith pays $ 100 to Jones.

$ We can say with certainty that the GDP has increased by $100.

$ We can say with certainty that the GDP has increased, but we cannot determine the amount;

$ We can say with certainty that the nominal GDP has increased, but we can't say whether real GDP has increased or decreased;

$$ We need more information to determine whether GDP has changed;

$$$175 Suppose that the total market value of all final goods and services produced in a

particular country in 1996 is $500 billion and the total market value of final

goods and services sold is $450 billion. We can conclude that:

Suppose that the total market value of all final goods and services produced in a

particular country in 1996 is $500 billion and the total market value of final

goods and services sold is $450 billion. We can conclude that:

$ GDP in 1996 is $450 billion.

$ NDP in 1996 is $450 billion.

$$ GDP in 1996 is $500 billion.

$ inventories in 1996 fell by $50 billion.

$$$176 Economic growth is defined as an increase in:

$ nominal national income;

$$ real national income;

$ real national inputs;

$ nominal national inputs;

$$$177 Economic growth is usually measured as the

$ absolute increase in real GNP or GDP;

$ nominal increase in real GNP or GDP;

$$ percentage increase in real GNP or GDP;

$ marginal increase in real GNP or GDP;

$$$178 For a country with a constant rate of growth, the time required for real national income to double can be found by using the rule of:

$ net interest;

$ 100;

$ 10;

$$ 72;

$$$179 Per capita real national income is real national income divided by:

$$$80 In terms of the aggregate demand-aggregate supply model, economic growth is shown as a/an

$ rightward shift in the aggregate demand curve;

$$ rightward shift in the aggregate supply curve;

$ leftward shift in the aggregate demand curve;

$ leftward shift in the aggregate supply curve;

$$$180 "For every 1 percent that the actual unemployment rate exceeds the natural rate, there is generated a 2.5 percent GDP gap." This is a statement of:

$$ is self-limiting;

$ drives up the price level;

$ increases nominal income;

$ increases real income;

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