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5 Written questions

5 Matching questions

  1. Marginal Propensity to Consume
  2. Actual Inflation < Anticipated Inflation
  3. Consumer Price Index
  4. Cyclical unemployment
  5. Upward sloping supply curve
  1. a direct positive relationship between the price of a good or service and amount suppliers are willing to produce
  2. b unemployment due to recessions and inadequate labor demand
  3. c Measures the cost of purchasing a market basket of goods at a point in time relative to the cost of purchasing the identical market basket during an earlier reference period
    (cost of bundle in current year / cost of same bundle in base year)
  4. d borrowers lose, lenders gain
  5. e amount of additonal income that is consumed
    -additonal consumption/additional income

5 Multiple choice questions

  1. -increase the purchasing power of money
    -Leads to a lower real interest rate, which increases consumption and investment
    -make domestically produced goods less expensive relative to foreign goods
  2. M1 + savings deposits + time deposits(less than 100, 000) + money market mutual funds
  3. Actively seeking employment (in last 4 weeks) or waiting to start or return to a job
  4. -reduces investment
    -distorts the information delivered by prices
    -results in less productive use of resources
  5. Y= employee compensation + proprietor's income + rent + corporate profits + interest income + indirect business taxes + depreciation + net income of foreigners

5 True/False questions

  1. Medium of ExchangeMoney used to buy goods and services
    -fiat money: money that has no intrinsic value
    -More efficient to use money


  2. Nominal Interest ratenominal interest rate-inflationary premium
    -price of loanable funds
    -Interest rate adjusted for inflation


  3. Natural Unemploymentthe sum of all three types of unemployment


  4. Why will Currency Reserves not expand money supply by as much as the potential multiplier?When the fed sells bonds.


  5. GDPM1 + savings deposits + time deposits(less than 100, 000) + money market mutual funds


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