Economics

1.Which of the following prices are included in the GDP deflator, but not included in the Consumer Price Index?
firms’ purchases of new equipment
intermediate goods and services
imports
consumption goods and services
10.A reduction in income will cause:
a reduction in the supply of central bank money
a reduction in the demand for currency and reserves
an increase in the demand for reserves
none of the above
11.Suppose the economy is currently operating on both the LM curve and the IS curve. Given this information, we know that:
the goods market is in equilibrium
the bond market is in equilibrium
the money market is in equilibrium
financial markets are in equilibrium
all of the above
12.The CPI is determined by computing:
an average of prices of all goods and services.
the price of a basket of goods and services that changes every year, relative to the same
basket in a base year.
the price of a fixed basket of goods and services, relative to the price of the same basket in a base year.
nominal GDP relative to real GDP.
13.Suppose there is a policy mix of expansionary monetary policy and expansionary fiscal policy. This combination of policies must cause:
an increase in the interest rate (i)
a reduction in i
an increase in output (Y)
a reduction in Y
15.An increase in the price of goods bought by firms and the government will show up in:
the GDP deflator but maybe not in the CPI.
both the CPI and the GDP deflator.
neither the CPI nor the GDP deflator.
the CPI but not in the GDP deflator.
16.Which of the following events would cause a reduction in the size of the multiplier?
an increase in the marginal propensity to consume
an increase in the marginal propensity to save
a reduction in taxes
a reduction in government spending

Quiz2
Question 2
An increase in government spending will, in the medium run, cause no change in:
unemployment and price level.
the interest rate and unemployment.
the price level and the interest rate.
all of the above
none of the above
Question 4
An increase in the price of oil will tend to cause which of the following?
an increase in the natural rate of unemployment
an increase in the price level in the short run
an increase in the interest rate in the short run
all of the above
Question 6
The natural level of employment will increase when which of the following occurs?
an increase in the markup of prices over costs
an increase in unemployment benefits
an increase in the actual unemployment rate
all of the above
none of the above
Question 7
When the central bank controls the interest rate, the aggregate demand (AD) curve is downward sloping because:
a reduction in the money supply (M) will cause an increase in the interest rate, a reduction in investment, and a reduction in output.
a reduction in the aggregate price level (P) will cause the central bank to reduce the interest rate and thus increase output.
a reduction in P will cause an increase in the real wage, a reduction in employment, and a reduction in output.
as P increases, goods and services become relatively more expensive and individuals respond by reducing the quantity demanded of goods and services.
Question 10
Suppose there is a reduction in the price of oil. This change in the price of oil will cause which of the following in the short run?
an increase in output
a reduction in the price level
a reduction in the interest rate
all of the above
none of the above
Question 13
An individual is considered unemployed if he or she:
works only part-time.
works full-time in a family business, but is not paid.
is not working and is not looking for work.
all of the above
none of the above
Question 14
In the aggregate demand relation, a reduction in the price level causes output to increase because of its effect on:
government spending.
the interest rate.
the nominal wage.
firms’ markup over labour costs.
the expected price level.
Question 16
As the unemployment rate rises:
the proportion of the unemployed finding a job decreases.
the separation rate must decrease.
the young and unskilled experience larger-than-average increases in unemployment.
both a. and c. are right
all of the above are right
Question 17
Efficiency wage theory suggests that:
workers will be paid more than their reservation wage.
productivity might drop if the wage rate is too high.
the government can only set tax rates so high before people will prefer not to work.
unskilled workers will have a lower turnover rate than skilled workers.
firms will be more resistant to wage increases as the labour market tightens.
Question 18
Which of the following represents labour productivity?
the ratio of output to employment
workers per unit of capital
capital per worker
wages per hour
the reservation wage

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