MACRO ECON 1250 QUESTIONS AND ANSWERS
Productivity growth. - answers - most economists believe the single largest cause of
rising material living standards over long periods of time is
The amount of output that the economy produces per unit of input. - answers - in
general, productivity is a measure of
Minus the rate of inflation - answers - the real rate of interest is equal to the nominal
interest rate
Rising employment, increasing stock of physical capital and increasing productivity. -
answers - the three main reasons that canada's real gdp has increased steadily for
many years are
5.2% - answers - suppose the city of calgary, alberta has a population of 1 million, a
labour force of 575 000, and employment is equal to 545 000. The unemployment rate
in calgary is approximately
Real national income for the two periods. - answers - to compare the economy's
aggregate output in two different time periods, economists compare the
1.33 - answers - if 0.75 u.s. dollars can be exchanged for one canadian dollar, we say
that the canadian-u.s. exchange rate is
If next year's inflation rate is 3% - answers - a worker currently earning $3000 per month
has negotiated a 4% wage increase in anticipation of a 4% inflation rate in the next
year. Under what scenario will the worker have a higher purchasing power?
The short run. - answers - in some macroeconomic analyses, it is common to treat the
level of productivity as roughly constant. This is a justifiable assumption in
9.0% - answers - suppose a country's population is 30 million and it has a labour force
of 15 million people. If there are 1.35 million people unemployed, the country's
unemployment rate is
Desired consumption that occurs out of an additional dollar of disposable income. -
answers - the "marginal propensity to consume" refers to the additional
Autonomous desired expenditures. - answers - refer to figure 21-3. Assuming ae 0 is
the prevailing aggregate expenditure function, the distance 0a is a measure of
Fall because the ae function shifts downward simultaneously - answers - consider the
simplest macro model with a constant price level and demand-determined output. In
, such a model, an upward shift of the saving function causes equilibrium national income
to
$500 - answers - refer to figure 21-2. The amount of desired consumption expenditure
that is unrelated to the level of disposable income is
The ae function shifts downward. - answers - consider the following news headline:
"canadian business leaders fear reduced world demand for commodities". Which of the
following correctly describes the likely effect in our simple macro model?
Represents a loss of output due to unemployed resources. - answers - consider an
output gap where y < y *. This output gap
De - answers - refer to figure 21-1. If disposable income is y 3, the level of desired
saving is
Marginal propensity to consume is 0.60. - answers - if the jones family's disposable
income increases from $1200 to $1700 and their desired saving increases from -$100 to
+$100, then the family's
Aggregate expenditure function. - answers - the assumed relationship between desired
total expenditures and actual national income is called the
10.0 - answers - consider a simple macro model with a constant price level and
demand-determined output. If the marginal propensity to spend is 0.9, the simple
multiplier is
Additional saving that occurs out of an additional dollar of income. - answers - the
marginal propensity to save refers to the
The ae function will shift up parallel to itself, and equilibrium national income will rise. -
answers - consider the following news headline: "china signs deal to buy more canadian
wheat." assuming that aggregate output is demand-determined, what effect will this
have, all other things equal, on the ae function and on equilibrium national income?
Are autonomous, whereas imports are induced. - answers - in a simple macro model, it
is generally assumed that a country's exports
Recessionary; increase; potential gdp - answers - refer to figure 22-5. Diagram 2
illustrates an economy that is experiencing a(n) ________ gap. The goal of stabilization
policy would be to ________ national income until it is equal to ________.
Rotate upward. - answers - in a simple macro model with a constant price level, a
decrease in the net tax rate causes the ae curve to
Productivity growth. - answers - most economists believe the single largest cause of
rising material living standards over long periods of time is
The amount of output that the economy produces per unit of input. - answers - in
general, productivity is a measure of
Minus the rate of inflation - answers - the real rate of interest is equal to the nominal
interest rate
Rising employment, increasing stock of physical capital and increasing productivity. -
answers - the three main reasons that canada's real gdp has increased steadily for
many years are
5.2% - answers - suppose the city of calgary, alberta has a population of 1 million, a
labour force of 575 000, and employment is equal to 545 000. The unemployment rate
in calgary is approximately
Real national income for the two periods. - answers - to compare the economy's
aggregate output in two different time periods, economists compare the
1.33 - answers - if 0.75 u.s. dollars can be exchanged for one canadian dollar, we say
that the canadian-u.s. exchange rate is
If next year's inflation rate is 3% - answers - a worker currently earning $3000 per month
has negotiated a 4% wage increase in anticipation of a 4% inflation rate in the next
year. Under what scenario will the worker have a higher purchasing power?
The short run. - answers - in some macroeconomic analyses, it is common to treat the
level of productivity as roughly constant. This is a justifiable assumption in
9.0% - answers - suppose a country's population is 30 million and it has a labour force
of 15 million people. If there are 1.35 million people unemployed, the country's
unemployment rate is
Desired consumption that occurs out of an additional dollar of disposable income. -
answers - the "marginal propensity to consume" refers to the additional
Autonomous desired expenditures. - answers - refer to figure 21-3. Assuming ae 0 is
the prevailing aggregate expenditure function, the distance 0a is a measure of
Fall because the ae function shifts downward simultaneously - answers - consider the
simplest macro model with a constant price level and demand-determined output. In
, such a model, an upward shift of the saving function causes equilibrium national income
to
$500 - answers - refer to figure 21-2. The amount of desired consumption expenditure
that is unrelated to the level of disposable income is
The ae function shifts downward. - answers - consider the following news headline:
"canadian business leaders fear reduced world demand for commodities". Which of the
following correctly describes the likely effect in our simple macro model?
Represents a loss of output due to unemployed resources. - answers - consider an
output gap where y < y *. This output gap
De - answers - refer to figure 21-1. If disposable income is y 3, the level of desired
saving is
Marginal propensity to consume is 0.60. - answers - if the jones family's disposable
income increases from $1200 to $1700 and their desired saving increases from -$100 to
+$100, then the family's
Aggregate expenditure function. - answers - the assumed relationship between desired
total expenditures and actual national income is called the
10.0 - answers - consider a simple macro model with a constant price level and
demand-determined output. If the marginal propensity to spend is 0.9, the simple
multiplier is
Additional saving that occurs out of an additional dollar of income. - answers - the
marginal propensity to save refers to the
The ae function will shift up parallel to itself, and equilibrium national income will rise. -
answers - consider the following news headline: "china signs deal to buy more canadian
wheat." assuming that aggregate output is demand-determined, what effect will this
have, all other things equal, on the ae function and on equilibrium national income?
Are autonomous, whereas imports are induced. - answers - in a simple macro model, it
is generally assumed that a country's exports
Recessionary; increase; potential gdp - answers - refer to figure 22-5. Diagram 2
illustrates an economy that is experiencing a(n) ________ gap. The goal of stabilization
policy would be to ________ national income until it is equal to ________.
Rotate upward. - answers - in a simple macro model with a constant price level, a
decrease in the net tax rate causes the ae curve to
