Econ 202 final exam wvu - Assignment Essays

question

an open economy GDP Is always given by

answer

Y=C+I+G+Nx

question

net capital outflow equals the difference between a country's

answer

Purchases of foreign assets and sales of domestic assets aboard

question

in the open economy marco model. the market for loanable funds identity can be written as

answer

S=I+NCO

question

In an open economy, the source for the demand of loanable funds come from

answer

investment + net capital outflow

question

suppose the U.S supply of loanable funds shifted Left this will

answer

Decrease U.S net capital outflow and decrease the quantity

question

if the supply of loanable funds shifted right then the equilibrium

answer

levels of net capital outflow and domestic investment increase

question

an increase in the U.S government budget deficit shifts the

answer

supply of loanable funds, left decreasing both domestic investment (I) and net capital outflow

question

a country has a private saving of $100 billion public savings of $30 billion, domestic investment of $50 billion and the net capital outflow of $20 billion what is its supply of loanable funds?

answer

$70 billion

question

a tax on imported goods is called a

answer

Tariff

question

a limit on the quantity of good produced abroad that can be purchased domestically is called

answer

import Quota

question

if the U.S imposed Quotas on cotton from china so that the U.S had less imports then

answer

the U.S real exchange rate rises but the U.S exports remain the same

question

when Mexico 1944 suffers from capital flight

answer

more mexico domestic capital were flowing towards foreign countries, cause the real exchange rate of peso depreciate

question

the most important lesson from trade policy is that if the U.S wishes to decline trade deficit and increase domestic jobs by imposing import quota on foreign products

answer

trade deficit would not be reduced, but while the domestic jobs can be saved, jobs in exporting firms in the US will be destroyed.

question

from the graph we have seen in class which part of real GDP fluctuates the most over the business cycle

answer

investment expenditures

question

the classical dichotomy refers to the separation of

answer

real & nominal variables

question

the curve that shows the total quanity of goods and services that firm product and sell in a country

answer

is called the aggrete - supply curve which is upward sloping in terms of price level in the short run

question

the aggregate demand curve

answer

shows an inverse relation between the price level and the quantity of all goods and service demanded

question

when taxes decrease consumption

answer

increase as shown by a shift on the aggregate demand curve to the right

question

according to classical marco theory, changes in the money supply affects

answer

nominal variable but not real variables

question

changes in the price level affect which components of

answer

consumption, and net exports

question

from 2001- 2005 there was a dramatic rise in the price of houses. if this rise made ppl feel wealthier then it would have shifted

answer

aggregated demand curve right

question

the long run aggregate supply curve

answer

all the above are correct

question

the long run aggregate supply curve shifts right if?

answer

all the above are correct

question

the appearance of the long run aggregate supply (LRAS) curve

answer

all the above are correct

question

the shift of the short run aggregate supply curve from SRAS1 to SRAS2

answer

could be caused by increase in technology

question

a goal of monetary policy & fiscal policy is to

answer

offset shifts in aggregate demand and there by stabilize the economy

question

the interest rate effects

answer

in the U.S is the most important reason that causes the downward slope of aggregated demand curve

question

according the the theory of liquidity preference

answer

the monetary policy affects AD through interest rate since ppl prefer to increase money demand by holding liquid assets, like cash when interest rate is low

question

as the interest rate falls, the theory of liquidity predicts that

answer

the quantity of money demand rises

question

Fiscal policy refers to the idea that aggregate demand is affected by changes in

answer

government spending (g) & taxes (t)

question

which of the following events shifts aggragted demand rightward?

answer

an increase in government expenditures but not a change in the price level

question

the government builds a new water treatment - plan, the owner of the company that builds the plant pays her workers, the workers increase there spending, firms from which the workers buy goods increase their output. this is a type of effect on spending illustrates

answer

the multiplier effect

question

the term crowding - out effect refers to

answer

the reduction in aggregate demand that results when a Fiscal expansion causes the interest rate to eventually increase thus decreasing (or crowding - out) domestic investment

question

the employment act of 1946 states that

answer

the government should promote full employment & production

question

Keynes argued that aggregate demand is

answer

unstable because waves of pessism & optimism create Fluctuations in aggregated demand

question

people who disagree with heavily using monetary policy or fiscal policy to stabilize economy in the short run claim that both polices

answer

impact on aggregate demand serval months after policy is implemented so there will be a time lag

question

suppose that businesses & consumers become much more optimistic about the Future of the economy. to stabilize output, the federal reserve could

answer

decreases money supply to raise interest rates

question

which of the following is correct

answer

in the short run, unemployment & inflation are positively related, in the long run they are largely unrelated problems

question

in the long run, which of the following depends primarily on the growth rate of the money supplies

answer

inflation but not the nation rate of unemployment

question

the short run relationship between inflation & unemployment is often called

answer

the Phillips curve

question

in the late 1960s miton Friedman & Edmund phepls argued that

answer

the trade off between inflation & unemployment did not apply in the long run. this claim is consistent with monetary neutrality in the long run

question

in the long run an increase in the money supply

answer

raises prices but leave unemployment unchanged

question

according to Friedman & phelps, policymakers face a trade off between inflation & unemployment

answer

only in the short run

question

an event that directly affects firms cost of production and thus the price they change is called

answer

a supply shock

question

what is measured along the horizontal axis of the right handed graph

answer

the unemployment rate

question

the shift of aggregated demand curve from AS1 to AS2

answer

represents an adverse shock to aggregated supply, this moves the point from C to D representing Higher inflation and unemployment

question

which of the following events could explain the shift of the aggregated - supply curve from AS1 to AS2

answer

an increase in the world price of oil

question

Disinflation is reduction in

answer

the inflation rate

question

the Volcker disinflation

answer

caused inflation to fall but with high unemployment rate

question

in development economics we in general ask the central question of

answer

all the above

question

over the past century in the united states, real GDP per person has grown on average by about

answer

2% per year

question

the curve becomes flatter as the amount of capital per worker increase because of

answer

diminishing returns to capital

question

measuring unemployment is the job of

answer

Bureau of Labor statistics

question

suppose you $100 into a bank account. interest rate is paid ann. and the annual rate is 5 percent, the future value of your $100 after 2 years is

answer

$110.25

question

the economy two most important financial markets are

answer

banks and the stock market

question

institution that help to match one person saving with another person investment are collectively called the

answer

financial system

question

in a called economy (Y-T-C) means

answer

private savings

question

the major factors the potentially affect productivity in a classical production function includes

answer

all the above are correct

question

from a classical point of view in development economics we know that policies that may increase productive include

answer

all the above apply

question

if the interest rate is 7% then what is the present value of $1000 to be received after 3 years

answer

$816.30

question

From the rule of 70 we saw last week, at an annual interest rate of 2 percent, about how many years will it take
$500 to double in value?

answer

question

If the inflation rate increases but the nominal rate of interest remains the same, the real interest rate on a
bank's savings account will

answer

Fall, because the real interest rate indicates how fast the true purchasing power of the account rises over time.

question

Which of the following would increase productivity?

answer

all the above are correct

question

Suppose the economy begins in long run
equilibrium at point A. If private investment spending increases due to an increase in business optimism,

answer

E in the short run and C in the long run

question

If the economy is currently booming excessively, so that actual GDP is greater than potential GDP and
bubbles are starting to appear in real estate and stock markets, Keynesian economists would recommend
which of the following as the most effective policy to stabilize the economy?

answer

Raise taxes and decrease government spending.

1 of 65

question

an open economy GDP Is always given by

answer

Y=C+I+G+Nx

question

net capital outflow equals the difference between a country's

answer

Purchases of foreign assets and sales of domestic assets aboard

question

in the open economy marco model. the market for loanable funds identity can be written as

answer

S=I+NCO

question

In an open economy, the source for the demand of loanable funds come from

answer

investment + net capital outflow

question

suppose the U.S supply of loanable funds shifted Left this will

answer

Decrease U.S net capital outflow and decrease the quantity

question

if the supply of loanable funds shifted right then the equilibrium

answer

levels of net capital outflow and domestic investment increase

question

an increase in the U.S government budget deficit shifts the

answer

supply of loanable funds, left decreasing both domestic investment (I) and net capital outflow

question

a country has a private saving of $100 billion public savings of $30 billion, domestic investment of $50 billion and the net capital outflow of $20 billion what is its supply of loanable funds?

answer

$70 billion

question

a tax on imported goods is called a

answer

Tariff

question

a limit on the quantity of good produced abroad that can be purchased domestically is called

answer

import Quota

question

if the U.S imposed Quotas on cotton from china so that the U.S had less imports then

answer

the U.S real exchange rate rises but the U.S exports remain the same

question

when Mexico 1944 suffers from capital flight

answer

more mexico domestic capital were flowing towards foreign countries, cause the real exchange rate of peso depreciate

question

the most important lesson from trade policy is that if the U.S wishes to decline trade deficit and increase domestic jobs by imposing import quota on foreign products

answer

trade deficit would not be reduced, but while the domestic jobs can be saved, jobs in exporting firms in the US will be destroyed.

question

from the graph we have seen in class which part of real GDP fluctuates the most over the business cycle

answer

investment expenditures

question

the classical dichotomy refers to the separation of

answer

real & nominal variables

question

the curve that shows the total quanity of goods and services that firm product and sell in a country

answer

is called the aggrete - supply curve which is upward sloping in terms of price level in the short run

question

the aggregate demand curve

answer

shows an inverse relation between the price level and the quantity of all goods and service demanded

question

when taxes decrease consumption

answer

increase as shown by a shift on the aggregate demand curve to the right

question

according to classical marco theory, changes in the money supply affects

answer

nominal variable but not real variables

question

changes in the price level affect which components of

answer

consumption, and net exports

question

from 2001- 2005 there was a dramatic rise in the price of houses. if this rise made ppl feel wealthier then it would have shifted

answer

aggregated demand curve right

question

the long run aggregate supply curve

answer

all the above are correct

question

the long run aggregate supply curve shifts right if?

answer

all the above are correct

question

the appearance of the long run aggregate supply (LRAS) curve

answer

all the above are correct

question

the shift of the short run aggregate supply curve from SRAS1 to SRAS2

answer

could be caused by increase in technology

question

a goal of monetary policy & fiscal policy is to

answer

offset shifts in aggregate demand and there by stabilize the economy

question

the interest rate effects

answer

in the U.S is the most important reason that causes the downward slope of aggregated demand curve

question

according the the theory of liquidity preference

answer

the monetary policy affects AD through interest rate since ppl prefer to increase money demand by holding liquid assets, like cash when interest rate is low

question

as the interest rate falls, the theory of liquidity predicts that

answer

the quantity of money demand rises

question

Fiscal policy refers to the idea that aggregate demand is affected by changes in

answer

government spending (g) & taxes (t)

question

which of the following events shifts aggragted demand rightward?

answer

an increase in government expenditures but not a change in the price level

question

answer

the multiplier effect

question

the term crowding - out effect refers to

answer

the reduction in aggregate demand that results when a Fiscal expansion causes the interest rate to eventually increase thus decreasing (or crowding - out) domestic investment

question

the employment act of 1946 states that

answer

the government should promote full employment & production

question

Keynes argued that aggregate demand is

answer

unstable because waves of pessism & optimism create Fluctuations in aggregated demand

question

people who disagree with heavily using monetary policy or fiscal policy to stabilize economy in the short run claim that both polices

answer

impact on aggregate demand serval months after policy is implemented so there will be a time lag

question

suppose that businesses & consumers become much more optimistic about the Future of the economy. to stabilize output, the federal reserve could

answer

decreases money supply to raise interest rates

question

which of the following is correct

answer

in the short run, unemployment & inflation are positively related, in the long run they are largely unrelated problems

question

in the long run, which of the following depends primarily on the growth rate of the money supplies

answer

inflation but not the nation rate of unemployment

question

the short run relationship between inflation & unemployment is often called

answer

the Phillips curve

question

in the late 1960s miton Friedman & Edmund phepls argued that

answer

the trade off between inflation & unemployment did not apply in the long run. this claim is consistent with monetary neutrality in the long run

question

in the long run an increase in the money supply

answer

raises prices but leave unemployment unchanged

question

according to Friedman & phelps, policymakers face a trade off between inflation & unemployment

answer

only in the short run

question

an event that directly affects firms cost of production and thus the price they change is called

answer

a supply shock

question

what is measured along the horizontal axis of the right handed graph

answer

the unemployment rate

question

the shift of aggregated demand curve from AS1 to AS2

answer

represents an adverse shock to aggregated supply, this moves the point from C to D representing Higher inflation and unemployment

question

which of the following events could explain the shift of the aggregated - supply curve from AS1 to AS2

answer

an increase in the world price of oil

question

Disinflation is reduction in

answer

the inflation rate

question

the Volcker disinflation

answer

caused inflation to fall but with high unemployment rate

question

in development economics we in general ask the central question of

answer

all the above

question

over the past century in the united states, real GDP per person has grown on average by about

answer

2% per year

question

the curve becomes flatter as the amount of capital per worker increase because of

answer

diminishing returns to capital

question

measuring unemployment is the job of

answer

Bureau of Labor statistics

question

suppose you $100 into a bank account. interest rate is paid ann. and the annual rate is 5 percent, the future value of your $100 after 2 years is

answer

$110.25

question

the economy two most important financial markets are

answer

banks and the stock market

question

institution that help to match one person saving with another person investment are collectively called the

answer

financial system

question

in a called economy (Y-T-C) means

answer

private savings

question

the major factors the potentially affect productivity in a classical production function includes

answer

all the above are correct

question

from a classical point of view in development economics we know that policies that may increase productive include

answer

all the above apply

question

if the interest rate is 7% then what is the present value of $1000 to be received after 3 years

answer

$816.30

question

From the rule of 70 we saw last week, at an annual interest rate of 2 percent, about how many years will it take
$500 to double in value?

answer

question

If the inflation rate increases but the nominal rate of interest remains the same, the real interest rate on a
bank's savings account will

answer

Fall, because the real interest rate indicates how fast the true purchasing power of the account rises over time.

question

Which of the following would increase productivity?

answer

all the above are correct

question

Suppose the economy begins in long run
equilibrium at point A. If private investment spending increases due to an increase in business optimism,

answer

E in the short run and C in the long run

question

answer

Raise taxes and decrease government spending.

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