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5 Written questions

5 Matching questions

  1. Marginal Propensity to Consume
  2. High interest rates cause
  3. Downward sloping demand curve
  4. Shifters of Long Run Aggregate Supply
  5. Unemployed person
  1. a -Change in Resource base
    -change in technology
    -Change in arrangements that affect productivity
  2. b -Consumption and investment to decrease
    -Net exports to decrease
    -Asset prices to decrease
  3. c Actively seeking employment (in last 4 weeks) or waiting to start or return to a job
  4. d -inverse relationship (negative) between the price of a good and the quantity that buyers are willing to purchase
  5. e amount of additonal income that is consumed
    -additonal consumption/additional income

5 Multiple choice questions

  1. change in money supply will cause a proportional change in the price level. PY=MV
    -Rate of Inflation + Growth rate of real output=Growth rate of money supply + growth rate of velocity
  2. only counts goods and services produced within the geographic borders of a country
    -does not count transfers (welfare, gifts of money)
  3. built in features tha automatically promote a budget deficit during a recession and a budget surplus during an expansion (without a change in policy
  4. the practice of trading votes by a politician to get the necessary support to pass desired legislation
  5. -total market value of all final goods and services produced by the citizens of a country
    -counts income that americans earn abroad
    -ignores the income foreigners earn in the U.S.

5 True/False questions

  1. Loanable funds market (Demand)-Changes in real wealth
    -Changes in real interest
    -Changes in business and household expectations
    -Changes in expected rate of inflation
    -Changes in income abroad
    -Changes in Exchange rates


  2. 3 Functions of Money-Medium of Exchange
    -Store of Value
    -Unit of account


  3. Money supply curveamount of money in the economy, determined by the Fed. It is vertical because it is determined by Fed policy and does not depend on the interest rate.


  4. Nominal Interest ratean issue that generates substantial benefits for a small group by generating minimal costs to a large group.


  5. Height of Supply curvethe minimum price that sellers are willing to accept to supply an additional unit