Unit 1 Mostly
In the coffee market, what would cause an increase in the price and decrease in the quantity of coffee?
Supply will decrease
Demand: no change
The long run Phillips curve indicates that there are no trade offs between:
Inflation and Unemployment
$6000
Olivia volunteers full time at an animal shelter and not receiving salary, what type of unemployment is Olivia?
Not in the labor force
With an expansionary fiscal policy, what will happen to GDP and nominal interest in the short run?
GDP Increase and IR will increase
If the PPC is concave, or bowed out, then the opportunity cost as one more of a good would?
Increase
Country A is experiencing high inflation relative to Country B, which is enjoying steady growth with a stable price level. Which of the following would occur in the foreign exchange market?
A. Increase in the demand for Country A's currency
B. An increase in the supply of Country B's currency
C. A decrease in the supply of Country's A's currency
D. A depreciation of Country A's currency
D: Depreciation of Country A's currency
Who would benefit from unexpected deflation?
Lenders
Joe has just graduated from college and is now interviewing for jobs and has not gotten a job yet, what type of unemployment is he?
Frictionally unemployed
Which of the following would cause a recession:
a. increase in price level
b. decrease in wages
c. decrease in aggregate demand
d. a decrease in interest rates
C: decrease in AD
Which of the following is the most fundamental issue that economics addresses?
A: Choice of appropriate technology
B. Reduction of unemployment
C. Reduction of budget deficit
D. Use of scarce resources
D: Use of scarce resources
If the MPC is .75, then a $100 increase in investment will result in a maximum increase in RGDP of
400.00
If the RR is 10%, what is the maximum change in he money supply from a deposit of 50,000 cash into his checking account?
450,000
An increase in inventories will increase which component of GDP?
Investment
If the per capita RGDP increases, economist would say what is occuring in the economy?
Economic Growth
An increase in which of the following will most likely increase productivity?
A: Population growth rate
B: AD
C: Capital stock
D: Consumption
E: Employment
C: Capital Stock
If the RR is 10%, actual reserves are 10 million, and currency in circulation is equal to 20 million, M1 will at most be equal to
120 million
Which of the following is the most liquid asset?
A. mutual funds
B. currency
C demand deposits
D savings deposits
B: Currency
If the real interest is 7%
the expected inflation rate is 4%
What is the nominal interest rate:
11%
If the government increases borrowing, what would happen to the prices of previously issued bonds and the price level in the short run?
Price of Bonds: Decrease
Price Level: Increase
Increases in the real per capita income of a country are most closely associated with increases in which of the following:
A. The labor force
B. The price level
C. The money supply
D. Productivity
E. Tax Rates
D. Productivity
If wages are sticky, which of the following policies will be the most effective in raising RGDP to the full employment level?
A. Do nothings, since there are automatic stabilizers
B. The sale of bonds by the FED
C. An increase in the income tax
D. An increase in government spending
E. An increase in the discount rate
An increase in government spending
If the central bank raises the required reserve ratio, how will the money multiplier and the money supply change?
Multiplier: Decrease
Money Supply: Decrease
An increase in the international value of the US dollar will most likely benefit:
A: domestic producers of premium wines sold to people in other countries
B currency traders holding large quantities of yen
C. German citizens vacationing in the US
D Retired US citizens living overseas on their social security
D:Retired US citizens living overseas on their social security
The U.S. is importing Japanese autos? What would happen in the FOREX for dollars?
The Supply of Dollars will increase