GENERAL MACRO
Question: In what year were Tenzing Norgay and Sir Edmund Hillary the first to summit Mt. Everest?
1948
1951
1953
1956
Answer: c) 1953
Question: In the Cobb-Douglas production function, what does the α parameter represent under the assumption of perfect competition?
The total factor productivity (TFP) growth rate
The elasticity of output with respect to labor
The share of national income that accrues to capital
The rate of net capital accumulation over time
Answer: c) The share of national income that accrues to capital
Question: According to the Phillips Curve, which three factors are the primary determinants of current inflation?
Money supply growth, velocity of money, and total output
Past inflation, expected future inflation, and real marginal costs (economic slack)
Unemployment rates, interest rates, and trade balances
Exchange rate movements, commodity prices, and fiscal dominance
Answer: b) Past inflation, expected future inflation, and real marginal costs (economic slack)
Question: If an economy is characterized by a negative output gap, weak labor market conditions, and inflation concentrated in energy and food sectors, it is most likely experiencing:
Cost-push inflation driven by external supply shocks
Demand-pull inflation resulting from an overheated domestic economy
A wage-price spiral anchored by high inflation expectations
Monetarist inflation caused by excessive growth in the money supply
Answer: a) Cost-push inflation driven by external supply shocks
Question: What could explain the difference between the Consumer Price Index (CPI) and the GDP Deflator?
CPI includes only domestically produced goods, while the GDP deflator includes imports
CPI and the GDP deflator use identical baskets but different base years
CPI includes imported goods and uses a fixed basket, while the GDP deflator reflects prices of all domestically produced goods and services with a changing basket
The GDP deflator only measures services, while CPI only measures goods
Answer: c) CPI includes imported goods and uses a fixed basket, while the GDP deflator reflects prices of all domestically produced goods and services with a changing basket