Econ 1a Foldvary 2016 Final exam study guide
1. When you withdraw currency from a bank at an ATM machine, from your account, what happens to the money supply and the reserves of the bank?
2. If the real interest rate is X percent and there is a deflation rate of Y percent, what is the nominal interest rate?
3. The short run aggregate supply curve is:
4. To calculate the velocity of MZM, the money measure many economists use,
5. If the price level is 1 (one), then velocity equals
6. The M in MV=PT is
7. The Fed usually creates money by
8. I bought a used car for $X, new shoes for $Y, paid $Z in taxes, and paid $W for a haircut.
To calculate the velocity of the circulation of my money, my transactions total
9. Running Bear lives in his own house in Arizona. How does this affect GDP?
10. Which of the following is NOT a nonsensical headline?
11. Why would a person be unemployed for several years?
12. The economist Phillips found that in the United Kingdom,
13. Which of the following is included in the government’s measure of U.S. GDP?
14. At one time, the country of Aquilonia had no banks, but had currency of $X million. Then a banking system was established with a reserve requirement of Y percent. The people of Aquilonia deposited half of their currency into the banking system. If banks do not hold excess reserves, what is Aquilonia's money supply now?
15. The economy of Lower Slobovia experienced deflation in 2001, with a decrease in the price level of X percent. If the GDP deflator was set to Y in January 1, 2001, the index at the end of 2001 is
16. When the Federal Reserve system wishes to increase interest rates,
17. When a bank loans out $1,000, the money supply
18. An economy’s rate of growth can be maximized in the long run by
19. In the Solow growth model, if the savings rate is X; the per-worker GDP equals the per-worker stock of capital goods, the depreciation rate of capital goods is Y, and capital goods per worker in year 1 equals Z, then what will be the amount of capital goods in year 2?
20.Which of the following statements is true regarding pure interest:
21. Which of the following, leaving other variables constant, causes a shift in aggregate demand:
22. What implication does the slope of the aggregate production function have?
23. In the long run,
24. The most effective ways to prevent the boom-bust business cycle are:
25. In the equation of exchange MV = PT
26. Mireille Mathieu had an income of $100,000, and from that she spent $40,000 to build a garage. The wood and other materials for the garage were produced locally. What part of GDP is the garage?
27. When you pay taxes to government, that tax payment
28. Inflation can affect wages in which of the following scenarios:
29. Suppose that an apartment complex built years ago converts to a condominium, where the renters are now owners of their former apartments. Are the rental and purchase in GDP?
30. In the Solow growth model, if the savings rate is W; the production function is Z, the depreciation rate of capital goods is X, and capital goods per worker in year 1 equals Y, then what will be the amount of capital goods in year 2?
31. Aunt Colleen says, “it will be better for this year’s GDP if you spend your income for consumption, rather than save it.” Is she right?
32. A dentist exchanges dental work for carpentry work. What is the effect on GDP?
33.The money supply in Tazland is $W billion. Transactions equal GDP. Nominal GDP is $X billion and real GDP is $Y billion. What are the price level and velocity in Tazland?
34. If inflation is expected, then the short-run aggregate supply curve is
35. Which of the following causes a shift in aggregate demand:
36. Which policy would most effectively generate less unemployment?
37. If an economist were to treat a college dorm room like a country, the tuition
the two roommates pay to the university for their education would be considered as:
38. In the country of Prachkt, a million tractors were produced in 2005, but they are now sitting idle because they are broken. The effect on GDP in 2005 was:
39. Why would anyone propose free-market banking as a replacement for central banking?
40. A major cause of recessions is
41. The vertical long-run Phillips curve has what relationship to the vertical long-run AS curve?
42 What is the result of the Keynesian spending multiplier if investment comes from savings?
43. Technological progress has what effect on aggregate supply and the aggregate production function?
44. Supply-side economic policy does what, with what effects?
45. The closed-economy macroeconomic equation Y - C - G = I, where Y is national output, C is consumption, I is economic investment, and G is the purchase of goods by government (treated as collective consumption, not included in investment I), tells us what?
46. General equilibrium means
47. In a closed market economy, the most important function of the rate of interest is to
48. A government budget deficit’s effect on the economy.
49. Price inflation is related to monetary inflation (excessive increases in the money supply), as
50. What determines the price level?