FSU HAMMOCK MACRO LATEST
FINAL EXAM
D - ANSWERS-According to the circular flow model, if the loanable
funds markets and foreign exchange markets are in equilibrium, then...
A. the trade deficit will be zero.
B. government spending will equal tax revenue.
C. capital outflow will equal capital inflow.
D. leakages will equal injections.
B - ANSWERS-The loanable funds market is in equilibrium. Due to a
change in tax law, many workers increase the amount of their income
that they devote to retirement savings (and consume less). What
happens?
A. The demand for loanable funds shifts to the right, and interest rates
rise.
B. The supply of loanable funds shifts to the right, and interest rates fall.
C. The demand for loanable funds shifts to the left, and interest rates
fall.
D. The supply of loanable funds shifts left, and interest rates fall
C - ANSWERS-Suppose the nominal interest rate on a 30-year mortgage
is 5%. If the expected inflation rate is 1%, what is the real interest rate
on this mortgage?
END OF
PAGE
1
, FSU HAMMOCK MACRO LATEST
FINAL EXAM
A. 6%
B. 5%
C. 4%
D. 1%
A - ANSWERS-Which of the following is not a cost of anticipated
inflation?
A. Goods and services get more expensive.
B. Businesses must use resources to update price lists and menus
(instead of doing other things).
C. The higher the inflation rate, the more frequently people must make
trips to the bank to deposit and withdraw money.
D. Higher inflation means that people are more likely to pay capital
gains taxes for nominal gains, rather than real ones, which may deter
investment.
B - ANSWERS-The population of Leon County is 280,000 people. Of
these, 250,000 are noninstitutionalized civilian adults. 140,000 people in
Leon County are employed, and 7,000 are unemployed. The Labor Force
Participation Rate in Leon County is...
A. 89.3%
END OF
PAGE
2
, FSU HAMMOCK MACRO LATEST
FINAL EXAM
B. 58.8%
C. 56%
D. 4.8%
B - ANSWERS-Assume that between 1999 and 2009 nominal GDP
increased from $7 trillion to $12 trillion and that the GDP deflator rose
from 100 to 150. Which of the following expresses GDP for 2009 in
terms of 1999 prices?
A. $7.5 trillion
B. $8.0 trillion
C. $9.0 trillion
D. $18.0 trillion
D - ANSWERS-Students have used printed textbooks for years, but then
e-books are invented. Many students prefer e-books, and stop buying
printed textbooks. What happens in the market for printed textbooks?
A. Supply rises, driving prices down and quantities up.
B. Supply falls, driving prices down and quantities up.
C. Demand rises, driving prices up and quantities up.
D. Demand falls, driving prices down and quantities down.
END OF
PAGE
3
, FSU HAMMOCK MACRO LATEST
FINAL EXAM
D - ANSWERS-Last year, 1,000 cases of bottled water were sold at $5;
this year, 1,200 cases were sold at $7. These data could be explained by
the
A. supply and demand curves shifting to the right.
B. supply and demand curves shifting to the left.
C. supply curve shifting to the left, with no change in demand.
D.demand curve shifting to the right, with no change in supply.
A - ANSWERS-The market for computer printers is in equilibrium. Two
things happen at the same time: The price of ink cartridges (sold
separately) for the printers goes down, and there is an increase in the
cost of the materials used to make printers. What happens to the price
and quantity of printers?
A. Price rises, quantity is indeterminate.
B. Price rises, quantity falls.
C. Price is indeterminate, quantity rises.
D. Price falls, quantity is indeterminate.
END OF
PAGE
4
FINAL EXAM
D - ANSWERS-According to the circular flow model, if the loanable
funds markets and foreign exchange markets are in equilibrium, then...
A. the trade deficit will be zero.
B. government spending will equal tax revenue.
C. capital outflow will equal capital inflow.
D. leakages will equal injections.
B - ANSWERS-The loanable funds market is in equilibrium. Due to a
change in tax law, many workers increase the amount of their income
that they devote to retirement savings (and consume less). What
happens?
A. The demand for loanable funds shifts to the right, and interest rates
rise.
B. The supply of loanable funds shifts to the right, and interest rates fall.
C. The demand for loanable funds shifts to the left, and interest rates
fall.
D. The supply of loanable funds shifts left, and interest rates fall
C - ANSWERS-Suppose the nominal interest rate on a 30-year mortgage
is 5%. If the expected inflation rate is 1%, what is the real interest rate
on this mortgage?
END OF
PAGE
1
, FSU HAMMOCK MACRO LATEST
FINAL EXAM
A. 6%
B. 5%
C. 4%
D. 1%
A - ANSWERS-Which of the following is not a cost of anticipated
inflation?
A. Goods and services get more expensive.
B. Businesses must use resources to update price lists and menus
(instead of doing other things).
C. The higher the inflation rate, the more frequently people must make
trips to the bank to deposit and withdraw money.
D. Higher inflation means that people are more likely to pay capital
gains taxes for nominal gains, rather than real ones, which may deter
investment.
B - ANSWERS-The population of Leon County is 280,000 people. Of
these, 250,000 are noninstitutionalized civilian adults. 140,000 people in
Leon County are employed, and 7,000 are unemployed. The Labor Force
Participation Rate in Leon County is...
A. 89.3%
END OF
PAGE
2
, FSU HAMMOCK MACRO LATEST
FINAL EXAM
B. 58.8%
C. 56%
D. 4.8%
B - ANSWERS-Assume that between 1999 and 2009 nominal GDP
increased from $7 trillion to $12 trillion and that the GDP deflator rose
from 100 to 150. Which of the following expresses GDP for 2009 in
terms of 1999 prices?
A. $7.5 trillion
B. $8.0 trillion
C. $9.0 trillion
D. $18.0 trillion
D - ANSWERS-Students have used printed textbooks for years, but then
e-books are invented. Many students prefer e-books, and stop buying
printed textbooks. What happens in the market for printed textbooks?
A. Supply rises, driving prices down and quantities up.
B. Supply falls, driving prices down and quantities up.
C. Demand rises, driving prices up and quantities up.
D. Demand falls, driving prices down and quantities down.
END OF
PAGE
3
, FSU HAMMOCK MACRO LATEST
FINAL EXAM
D - ANSWERS-Last year, 1,000 cases of bottled water were sold at $5;
this year, 1,200 cases were sold at $7. These data could be explained by
the
A. supply and demand curves shifting to the right.
B. supply and demand curves shifting to the left.
C. supply curve shifting to the left, with no change in demand.
D.demand curve shifting to the right, with no change in supply.
A - ANSWERS-The market for computer printers is in equilibrium. Two
things happen at the same time: The price of ink cartridges (sold
separately) for the printers goes down, and there is an increase in the
cost of the materials used to make printers. What happens to the price
and quantity of printers?
A. Price rises, quantity is indeterminate.
B. Price rises, quantity falls.
C. Price is indeterminate, quantity rises.
D. Price falls, quantity is indeterminate.
END OF
PAGE
4
