Intermediate Macroeconomics Final Exam
UPDATED ACTUAL Exam Questions and
CORRECT Answers
in the context of the AD-SRAS-LRAS model, in the 1970 out price shocks would cause the
_____ function to move to the ______ - CORRECT ANSWER✔✔- SRAS
up
In the Solow growth model with population growth and technological change, if n the steady
state the marginal product of capital stock is 0.10 the depreciation rate equals 0.05, the rate of
technological progress is 0.02 - CORRECT ANSWER✔✔- MPK=n+g+delta
0.1=0.03+0.05+0.02
equal to
economic growth theorists believe that a key reason for the differences in income per capita
between north and South Korea is differences in _____ between the 2 countries - CORRECT
ANSWER✔✔- institutions
a key way that quantitative easing differs from standard expansionary monetary policy Is that
- CORRECT ANSWER✔✔- lowers long-term interest rates
if the MPC is 0.65 and taxes are increased by 3 million, output will - CORRECT
ANSWER✔✔- falls by 5.57 million
Paul Volcker was the _____ responsible for increasing _____ during _____ - CORRECT
ANSWER✔✔- federal reserve chairperson
interest rates
1980s
The spending hypothesis suggests that the Great Depression was caused by a: - CORRECT
ANSWER✔✔- leftward shift in the IS curve
, a liquidity trap occurs when - CORRECT ANSWER✔✔- interest rates fall so low that
monetary policy is no longer effective.
according to the Keynesian-cross analysis if the MPC. is 0.6 and government expenditures
and autonomous taxes are both increased by 100, equilibrium will rise by - CORRECT
ANSWER✔✔- ∆y=∆G/(1-mpc)
∆y=y=-mpc ∆t/(1-mpc)
∆G=∆t=$100; Mac =0.6
∆y=100/0.4
=$250
∆y=-0.6 (100)/0.4
=-150
=$100
Over the business cycle, investment spending ______ consumption spending. - CORRECT
ANSWER✔✔- is more volatile than
some of the biggest increases in government debt in Canada since the 1900s have been
caused by - CORRECT ANSWER✔✔- wars, causing large increases in government
spending
in times of inflation, the governments budget deficit is ______ because government
expenditure includes the _____ interest payments on government debt - CORRECT
ANSWER✔✔- overstated
nominal
according to the traditional view of government debt, a debt-financed cut - CORRECT
ANSWER✔✔- increases output in the short run but decreases it in the long run
UPDATED ACTUAL Exam Questions and
CORRECT Answers
in the context of the AD-SRAS-LRAS model, in the 1970 out price shocks would cause the
_____ function to move to the ______ - CORRECT ANSWER✔✔- SRAS
up
In the Solow growth model with population growth and technological change, if n the steady
state the marginal product of capital stock is 0.10 the depreciation rate equals 0.05, the rate of
technological progress is 0.02 - CORRECT ANSWER✔✔- MPK=n+g+delta
0.1=0.03+0.05+0.02
equal to
economic growth theorists believe that a key reason for the differences in income per capita
between north and South Korea is differences in _____ between the 2 countries - CORRECT
ANSWER✔✔- institutions
a key way that quantitative easing differs from standard expansionary monetary policy Is that
- CORRECT ANSWER✔✔- lowers long-term interest rates
if the MPC is 0.65 and taxes are increased by 3 million, output will - CORRECT
ANSWER✔✔- falls by 5.57 million
Paul Volcker was the _____ responsible for increasing _____ during _____ - CORRECT
ANSWER✔✔- federal reserve chairperson
interest rates
1980s
The spending hypothesis suggests that the Great Depression was caused by a: - CORRECT
ANSWER✔✔- leftward shift in the IS curve
, a liquidity trap occurs when - CORRECT ANSWER✔✔- interest rates fall so low that
monetary policy is no longer effective.
according to the Keynesian-cross analysis if the MPC. is 0.6 and government expenditures
and autonomous taxes are both increased by 100, equilibrium will rise by - CORRECT
ANSWER✔✔- ∆y=∆G/(1-mpc)
∆y=y=-mpc ∆t/(1-mpc)
∆G=∆t=$100; Mac =0.6
∆y=100/0.4
=$250
∆y=-0.6 (100)/0.4
=-150
=$100
Over the business cycle, investment spending ______ consumption spending. - CORRECT
ANSWER✔✔- is more volatile than
some of the biggest increases in government debt in Canada since the 1900s have been
caused by - CORRECT ANSWER✔✔- wars, causing large increases in government
spending
in times of inflation, the governments budget deficit is ______ because government
expenditure includes the _____ interest payments on government debt - CORRECT
ANSWER✔✔- overstated
nominal
according to the traditional view of government debt, a debt-financed cut - CORRECT
ANSWER✔✔- increases output in the short run but decreases it in the long run
