Macroeconomics QUIZ 1 2 PDF

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MACROECONOMICS QUIZ 1

1.Unemployment implies that in the labor market…… there is an excess of labor supply

2. For a closed economy, which of the following conditions must be satisfied for equilibrium to be maintained?..... None of the above (X = IM, C = S, G = T) 3. Suppose you are provided with the following data for your country for a particular month: 180 million people are working, 20 million are not working but are looking for work, and 45 million are not working and have given up looking for work. The official unemployment rate for that month is….10 percent 4. Autonomous spending in a closed economy equals which of the following?... c0 + I + G - c1T

5. A period of real GDP growth is referred to as Expansión 6. When using the income approach to measure GDP, the largest share of GDP generally consists of labor income. 7. In relation to real GDP it increases if the nominal GDP growth is larger than the GDP deflator inflation 8. The unemployment rate is calculated as the ratio between unemployed and labor forcé 9. Inflation in year t means an increase in the general price level during year t 10. The Nominal Spanish GDP in year t is the: market value of the final goods produced in Spain in year t. 11. If the CPI in a country in 2000 was 300 and in 2001 was 330, the inflation rate in 2001 was 10 percent 12. Fill in the blank for the following: GDP is the value of all ________ produced in a given period.

final goods and services 13. Inflation rate a GDP deflator inflation rate lower than the CPI inflation rate can be explained by an increase in the price of imported goods that is higher than the average increase in prices of domestically produced goods. 14. Unemployment usually increases in recessions and decreases in expansions. 15. Use the following information to answer this question. If nominal GDP rises from $100 to $120, while the GDP deflator rises from 2.0 to 2.2, the percentage change in real GDP is approximately equal to 10 percent 16. The core (or underlying) inflation measures the inflation excluding the prices of unprocessed food and oil 17. The Nominal Spanish GDP in year t is the: market value of the final goods produced in Spain in year t.

18. Suppose nominal GDP increased in a given year. Based on this information, we know with certainty that either real output or the price level (GDP deflator), or even both, have increased. 19. Which of the following occurs when disposable income is zero? none of the answers is correct (consumption must be zero , saving must be zero, consumption is negative) 20. The labor force is formed by working age population that wants to work, and are either employed or unemployed 21. For this question, assume that 1995 is the base year. In Spain, during the period 2000-2014, we know that real GDP and nominal GDP were equal in 1995.

QUIZ 2

1.One of the reasons macroeconomists have concerns about inflation is that inflation causes none of the answers is correct (nominal GDP to fall, real GDP to exceed nominal GDP, real GDP to rise) 2. Consider an economy with consumption represented by the following function:

C=c0+c1(Y-T). c0 represents autonomous consumption, c1 the marginal propensity to consume, Y is income and T taxes net of transfers. When Income increases by 1 percent, consumption increases by c1 percent. 3. Suppose the consumption equation is represented by the following: C = 250 + 0.75YD. The multiplier in this economy is 4 4. Suppose the marginal propensity to consume equals 0.8 (i.e., c1 = 0.8). Given this information, which of the following events will cause the largest increase in output? G increases by 200 5. Choose the WRONG answer: Inflation measured by CPI does not consider luxury goods prices. CORRECT with deflation if you lend money during five years the borrower will be positively affected due to that deflation and you will loose WRONG with deflation if you lend money during five years the borrower will be negatively affected due to that deflation and you will not CORRECT Assuming the economic growth does not vary: inflation, if there in indexation of wages and rents, will imply an increase in the volume of taxes collected CORRECT 6. Which of the following occurs when disposable income is zero? QUIZ 2 100...