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82 terms

Macro - Final -Baer - Part 1

STUDY
PLAY
If inflation rises in both Russia and the US,
but it rises more in Russia,
this will cause the Russian rubble to: Depreciate and the U.S. dollar to appreciate
If there is a new invention in the United
Kingdom, that US manufactures all want to
buy,
the British pound will:
Appreciate and the U.S. dollar to depreciate
The United States stock market and real
estate market is booming with substantial
returns, higher than the Canadian markets. This
will cause the
Canadian dollar to:
Depreciate and the U.S. dollar to appreciate
If tariffs and quotas are put in place in most of the European Union, then compared to the American Dollar, this will cause
the Euro to: Appreciate and the U.S. dollar to depreciate
The amount of income people in Argentina
has begins to grow while American incomes fall.
The result will cause the Argentine peso to:
Depreciate and the U.S. dollar to appreciate
which is an item that would be found in the
current account?
Equipment ordered from overseas
Remittances of Mexican workers in the U.S. to their families in Mexico are included in:
Is not included in any account.
Which is an item in the capital or financial
accounts for the US?
US Bonds sold to the European Union
Which represents a debit in the current
account section of the U.S. balance of
payments?
U.S. tourists in Great Britain buy souvenirs (exports)
Which represents a credit (+) on the financial
account of the U.S. balance of payments?
A German firm buys assets from a US firm
When a Japanese company buys a U.S.
software company, this transaction will be a:
Credit on the financial account of the U.S.
balance of payments
When a U.S. importer buys 100,000 pairs of pants from a Hong Kong company, this transaction will be a:
Debit on the current account of the U.S.
balance of payments
When a U.S. agribusiness sells 10,000 units
of cow vaccine to a company in France, this
transaction will be a:
Credit on the current account of the U.S.balance
of payments
When a U.S. company purchases a factory !n
Singapore, this will be a:
Debit on the financial account of the U.S.
balance of payments
In the Balance of Payments statement, a.
current account surplus will be matched by a:
Capital and financial accounts deficit
GOP measures
The monetary value of all final goods and
services produced by an economy
G D P stands for:
Gross Domestic Product
Real G D P and nominal G D P differ because the
real GOP:
has been adjusted for changes in the price
level {inflation).
If inflation is growing faster than GOP, we can
conclude that:
nominal G D P is rising but real G D P is
declining.
If real interest rates rise in the United
Kingdom relative to the United States, then this
event is most likely to cause
the British pound to: Appreciate and the U.S. dollar to depreciate
If the population of a country is growing faster than
the GOP, we can conclude: {note: per capita income = purchasing power parity)
The per capita income of people in that country is going down.
If Japanese autos increase in popularity in the
United States, then this event is most likely to
cause the Japanese yen to: Appreciate and the U.S. dollar to depreciate
The GDP tends to:
overstate economic well being because it
counts all production equally as positive,
such as pollution
equation C +I+ G + Xn=
G D P
C is the GDP equation is:
Consumer
I is the GDP equation is:
Investment
G is the GDP equation is:
Government purchases
Xn is the GDP equation is:
Net Exports
The following are data for a hypothetical
economy in billions of dollars: I {$300}; imports {$30}; exports {$20); C {$2,000); and, G {$500}. What is GOP in this economy?
2790 Billion (Imports - Exports)
Which of the following would be in the C
sector:
Dental Services
Which of the following would be in the
C sector:
Landscaping services
A purchase of a new computer
Money spent on a new toy by a child
Which would be considered part of the I
sector:
The construction of a new factory
Which would be in the I sector:
The purchase of a delivery truck
The building of a residential home
Changes in inventory
Which would be considered part of the G
sector:
The building of an office building
Which of the following would be in the G sector:
a) Spending on public school supplies
b) Spending on a weapons system, made in the US, but will be used the US forces overseas
c) Purchases made by local governments
Which describes how the Xn sector is
computed:
Exports minus Imports
Which would be a positive addition to the
Xn sector:
A Sony television made in the US and
sold in Japan
Which would be a negative addition to the
Xn sector:
A General Motors car made in Canada and
sold in the US
Which is following might cause demand-pull
inflation?
And increase in demand at full employment
Which is the following might cause cost push
inflation?
A sharp increase in the price of a resource
If Switzerland has a much lower inflation rate
than the United States, then this event is most
likely to cause the
Swiss franc to: Appreciate and the U.S. dollar to depreciate
Which of the following might cause a
recession?
A decrease in labor productivity
Which of the following might cause a
recession?
An unexpected decline in productivity
Why would the government enact an
expansionary fiscal policy?
To combat a recession
Why would government enact
contractionary fiscal policy?
To combat demand pull inflation
If currency speculators decide to buy up
South Korean currency, then this event is most
likely to cause the
South Korean won to: Appreciate and the U.S. dollar to depreciate
What is the main mechanism of
monetary policy?
Manipulation of the money supply
Which of the following is an example of
expansionary fiscal policy?
Congress passes a large transportation
bill to build new highways
Which of the following is an example of
expansionary fiscal policy?
Congress lowers income tax rates
Which of the following is an example of
contractionarv fiscal policy?
Congress reduces money spent on a
wide variety of Federal programs
Which of the following is an example of
contractionarv fiscal policy?
Sales taxes are increased
Which of the following is an example of
expansionary monetary policy?
The Federal Reserve lowers the discount
rate
Which of the following is an example of
expansionary monetary policy?
The Federal Reserve lowers the reserve
ratio
Which of the following is an example of
restrictive monetary policy?
The Federal Reserve sells bonds
Which of the following is an example of
restrictive monetary policy?
The Federal Reserve increases the discount
rate
One problem with fiscal policy is:
It has several lag times, that reduce its
effectiveness
One problem with monetary policy is:
seems better at slowing inflation than
pushing the economy out of recession
Frictional unemployment represents:
Those that are in between jobs
Cyclical unemployment is:
People who lost their jobs due to a recession
Full employment is:
Also called the natural rate of unemployment.
The aggregate supply curve for the
immediate short run is?
horizontal
The aggregate supply curve over the long
run is?
vertical
Graph showing the aggregate demand Curve crossing the normal (not immediate) aggregate short run supply curve. AD1
Recession
Graph showing the aggregate demand Curve crossing the normal (not immediate) aggregate short run supply curve. AD2
Expansion
Graph showing the aggregate demand Curve crossing the normal (not immediate) aggregate short run supply curve. AD3
Inflation
the four phases of the business cycle on the graph below: A
Peak
the four phases of the business cycle on the graph below: B
Expansion
the four phases of the business cycle on the graph below: C
Recession
the four phases of the business cycle on the graph below: D
Trough
Explanation economists have for the business cycle occurring
Fluctuations are driven by shocks. The economy is forced to respond to chocks through changes in output and employment rather that through changes in prices.
Which of the following are included in the labor force:
A 17 year old in high school
A part time worker
A person who is seeking work
People who are unemployed because of a change in the type of skills, or downturn in economics of the area they live, are part-of ____ unemployment
Structural
Unemployment,due to a recession and where people are expected to be rehired when the economy improves is _____ unemployment.
Cyclical
When workers are just "between jobs", it is called ____ unemployment.
Frictional
What are some problems with the current method of figuring the unemployment rate (circle two)
It doesn't count discouraged people who have given up seeking work.
Involuntary part time works are counted the same as full time workers.
The natural rate of unemployment is (circle three):
The full employment level of unemployment
Can vary over time, and between countries
Is mostly made up of frictional unemployment
Inflation is:
Represented by the Consumer price Index
Results in the devaluation of currency
An increase in the price level
Cost push Inflation is
A sharp increase in resource and production costs
Growth is
An increase in productivity
Recession is
Declining productivity for two consecutive quarters.
Demand-pull inflation
Too much spending chasing too few goods.
Who/Which of the following are hurt by unanticipated inflation?
Fixed income receivers
People with long term bonds purchased last year.
Consumers considering whether to make major purchases.