Questions on Macroeconomics

Topics: Economics, Inflation, Monetary policy Pages: 6 (1350 words) Published: April 13, 2015
1) A Countrys rate of economic growth is important because an economy that grows to slowly fails to raise the living standards of its citizens

2)Related don’t let this happen to you! Use the data for the country of New Finlandia in the following table to calculate the following 2006 4,568. A] the percentage of real gap per capita between 2006 and 2010 is ____3.92_____% The average annual growth rate in real gap per capita between 2006 and 2010 is _________2_____%

3)The following table gives real gap figures for 4 years. fail the growth rate for each year, and then find the average annual growth for the period. % to rounded to 1 decimal place. 1999 140 billion. A} the average annual growth rate for this period is _______10 8_6____2____%

4)Why do economic growth rates matter? A} _D. all of the above______

5)Suppose u r discussing global trade with a friend who insists a country would be better off by restricting trade and investment with other countries? Which of the following economic responses would be most logical? ________

6)The figure to the right illustrates the relationship between weak and strong rule of law. …….. what else explains why more low income countries do not experience rapid growth as the catch up line predicts. A} __All of the above_____

7)The government policy that does not increase economic growth is ____foreign trade policy that favors imposing a high tariff on imported high-tech goods________________________________

8)Economics arrives at the conclusion that ecomic growth will always improve economic well-being. Do you agree? ________________

9)What can low income countries do in order to increase the amount of loanable funds available to firms for investment projects such as new factories or improves technology? ____. provide savings incentives______

10) What is the key idea in the aggregate expenditure macroeconomic model?______that in any particular year, the level of GDP is determined mainly by the level of aggregate expenditure.
11)What is the effect on inventories, gap, and employment when aggregate expenditure (total spending) exceeds gdp? inventories decrease, gdp increase, employment increase

12) Related to solved problem #2 Fill in the missing blanks in the following table. Assume for simplicity that taxes are 0. National income and real gdp (y) 8000 Consumption (C) 7200 Saving(s) ____________ In the above example, the marginal propensity to consume is __.9_____(round 2 . place) In above ex, the mps is .1

13) complete following table to indicate what effect a decrease in each of the components will have on consumption. A decrease in….. will (increase/ decrease) consumption Price lvl increase hushed wealth decrease expected future income decrease current diposable income decrease interest rate increase
14) If the mpc is .9, a $50 increase in disposable income will lead to a $______ increase in consumption and a $_____ increase in savings (round 2 decimal places)

15) Complete the following table. An increase in will( increase/decrease) net exports an increase will cause a decrease decrease decrease

16) At point a in the graph to the right, planned aggregate expenditure is _____ GDP. AT point B ______. AT point C___________. At point A the unchanged ______the vertical distance between point A and the 45 degree line_____

17) Consider the figure to the right. this economy is in macroenconomic equilibrium at what level of real gdp? __80__ billion What is the level of planned investment? 10 billion

18) Use the following data to answer the question: Y= 8000 C= 6200 I&G= 1500 Nx= -500 The unplanned change is ___-700___ and the real gap will __increase___.

19) The multiplayer effect is...
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