Quiz 1 - EC-140-A-B-C - Intro To Macroeconomics - Wilfrid Laurier University PDF

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4/21/2021

Quizzes - EC-140-A-B-C - Intro To Macroeconomics - Wilfrid Laurier University

Quiz Submissions - Copy of Test 1 Darren Ibrahim (username: dibrahim3) Attempt 1

Written: Apr 20, 2021 11:20 PM - Apr 21, 2021 12:33 AM Submission View

Your quiz has been submitted successfully. Question 1

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This slide is from the lectures. The LC notation is irrelevant. This is quarterly data on nominal and real interest rates. Identify the correct statement a) In 2020, real interest rates fell to their lowest level since 2017

b) Inflation or expected inflation was negative at some point in 2020

c) Real interest rates cannot be negative

d) Although Canada always has positive nominal interest rates, there are no countries in the world with negative nominal interest rates

e) In 2020, the nominal rate of interest fell and inflation or expected inflation increased compared to 2019

Question 2

0 / 1 point

Consider the general form of the consumption function in a simple macro model. Once government and taxes are included in the model with a taxes net of transfers function equal to T = T 0+ t Y and a consumption function equal to C = a + b Y D Then one of the expressions below correctly expresses consumption as a function of output (also called income) a) C = a + (1 - t)YD

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b) C = a – b T 0+ b (1-t) Y

c) C = a + - b T0+ b ∙ t ∙YD d) C = a + b(1 - t)Y D

e) C = a + b Y

Question 3

0 / 1 point

Suppose aggregate output is demand determined. If the marginal propensity to spend is 0.71, and the marginal propensity to consume is 0.20, and there is a recessionary gap of $40 billion dollars, calculate the increase in real government spending on goods and service required to close the recessionary gap expressed in billions of dollars rounded to the nearest decimal point Answer: 32

(11.6)

Question 4

0 / 1 point

Consider the following model with government and foreign trade. The notation is standard. All numbers are expressed in billions of dollars C = 40 + 0.78 YD   T = 15 + 0.37 Y   G = 30  I = 50  X = 60   IM = 0.28 Y The slope of the aggregate expenditure line is, expressed to the nearest two decimal places is https://mylearningspace.wlu.ca/d2l/lms/quizzing/user/attempt/quiz_start_frame_auto.d2l?ou=373973&isprv=&drc=0&qi=116334&cfql=0&dnb=0&fromQB=0

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Answer: 0.78

(0.21)

Question 5

1 / 1 point

The Labour Force Survey, describing Canadian labour markets in December 2020, was released on January 8, 2021. It reported the following data measured in thousands of persons: Population over 31,297.7 Full-time employment 15,188.3 Part-time employment 3,364.7 Unemployment 1,755.8 The unemployment rate in December 2020 was a) 5.6 percent

b) 8.6 percent

c) 10.3 percent

d) 0.06

e) .086 percent

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Question 6

1 / 1 point

Which item is not used to measure GDP when measured from the income side a) transfer payments from the government to persons

b) wages and salaries

c) subsidies for producing from the government to businesses

d) depreciation

e) business profits

Question 7

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THIS IS A 2 POINT QUESTION Consider the following model with government and foreign trade. The notation is standard All numbers are expressed in billions of dollars C = 40 + 0.7 YD   T = 25 + 0.1Y      G = 30     I = 60     X = 60     IM = 0.20 Y Calculate equilibrium income expressed in billions and rounded to one decimal place, Answer: 185.71

(302.6)

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Question 8

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In the figure above real GDP per person is on the horizontal axis and a measure of life expectancy in years lived is on the vertical axis. Observations are from countries. The most correct statement is: a) We should use life expectancy and not real GDP as the best measure of welfare

b) Life expectancy, on average, falls as real GDP per person rises

c) At the same level of real GDP per person, life expectancy varies across countries 

d) Real GDP is a much better measure of the welfare of society than is life expectancy

e) Life expectancy is unrelated to the level of real GDP per person https://mylearningspace.wlu.ca/d2l/lms/quizzing/user/attempt/quiz_start_frame_auto.d2l?ou=373973&isprv=&drc=0&qi=116334&cfql=0&dnb=0&fromQB=0

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Question 9

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THIS IS A TWO POINT QUESTION Consider the following information describing a closed economy with no government and where aggregate output is demand determined. All dollar figures are in billions.

1. the equilibrium condition is Y = C + I 2. the marginal propensity to consume is 0.8 3. the autonomous part of C is $320 4. investment is autonomous and is $110 Using the equations above, at the equilibrium level of national income, desired saving in billions (rounded to one decimal points) is Answer: 537.5

(110)

Question 10

2 / 2 points

THIS IS A TWO POINT QUESTION The table below shows total output for an economy over 2 years. 2015

Price

Quantity

Good A

$1.00

100 units

Good B

$2.00

200 units

Good C

$5.00

100 units

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2016

Price

Quantity

Good A

$ 1.90

120 units

Good B

$3.00

200 units

Good C

$10.00

98 units

TABLE 20-5 The value of the GDP deflator in 2015 when the base value is 100 in 2016 is (rounded to one decimal point) Answer: 55.9 Question 11

1 / 1 point

In a simple macro model, it is generally assumed that a country's exports a) are induced whereas imports are autonomous.

b) are always equal to investment.

c) and imports are autonomous.

d) and imports are induced.

e) are autonomous whereas imports are induced.

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Question 12

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Suppose aggregate output is demand determined. If the marginal propensity to spend is 0.69, and the Marginal Propensity to Consume is 0.80, a $14 billion reduction in government purchases will cause equilibrium national income (rounded to one decimal point and expressed in billions) to decrease by Answer: 3.2

(45.2)

Question 13

1 / 1 point

In general, productivity is a measure of a) potential output.

b) the total amount of output that the economy is capable of producing

c) the amount of output that the economy produces per unit of input.

d) the economy's ability to increase real GDP per capita.

e) real GDP as a function of total employment.

Question 14

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In the diagram above, the value of D is 2400. The value of A is 600. The slope of the aggregate expenditure line is, expressed a decimal to the nearest two digits is Answer: 0.25

(0.75)

Question 15

1 / 1 point

Like Canada, Mexico trades extensively with the United States. The graph below shows the exchange rate for Mexico from the Federal Reserve Economic Database (FRED), expressed as the number of New Pesos (the Mexican currency) per US dollar. Identify the statement that best describes this graph:

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a) The Mexican currency has appreciated since 2011, the beginning of the graph

b) During the covid period in 2020, there was a sharp depreciation for the Mexican currency followed by an appreciation

c) During the covid period in 2020, there was a sharp appreciation of the Mexican currency followed by a depreciation

d) None of the other statements are correct

e) The exchange rate has been very stable since 2012 https://mylearningspace.wlu.ca/d2l/lms/quizzing/user/attempt/quiz_start_frame_auto.d2l?ou=373973&isprv=&drc=0&qi=116334&cfql=0&dnb=0&fromQB=0

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Question 16

1 / 1 point

FIGURE 22-1 Refer to Figure 22-1. The function for desired imports for this economy can be expressed as

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a) IM = 70 - 0.2 Y

b) IM = 0.2 Y

c) IM = - 0.2 Y

d) NX = 70 - Y

e) NX = 70 - 0.2 Y

Question 17

1 / 1 point

The table below shows the activities of Max’s carpenter shop. Max’s shop generates revenue of $13000 in the year shown. The other expenditures of Max’s shop are listed in the table. Item

Expenditure (in dollars)

Wood

6000

Nails and Screws

1000

Paint

500

Wages of Co-op student

3000

The value of annual output contributed to GDP by Max’s shop, using the value-added method and rounded to the nearest dollar is Answer: 5500 https://mylearningspace.wlu.ca/d2l/lms/quizzing/user/attempt/quiz_start_frame_auto.d2l?ou=373973&isprv=&drc=0&qi=116334&cfql=0&dnb=0&fromQB=0

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Question 18

1 / 1 point

CMHC predicts house prices could drop up to 18 per cent RACHELLE YOUNGLAI GLOBE MAY 20, 2020 Late on Tuesday, Canada Mortgage and Housing Corp. chief executive Evan Siddall said average home prices could drop between 9 per cent and 18 per cent over the coming 12 months. If house prices in Canada were to fall by 18 percentage points, we would predict the following change in household behaviour: a) The marginal propensity to consume would increase

b) There would be no effect on household behaviour because consumptin decisions depend only on disposable income, not house prices.

c) The savings function would shift down as a function of disposable income

d) The decline in wealth would reduce the value of autonomous consumption spending

e) the marginal propensity to save would decrease

Question 19

1 / 1 point

A parallel upward shift in the net export (NX) function can be caused by a) an increase in domestic prices. https://mylearningspace.wlu.ca/d2l/lms/quizzing/user/attempt/quiz_start_frame_auto.d2l?ou=373973&isprv=&drc=0&qi=116334&cfql=0&dnb=0&fromQB=0

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b) an increase in foreign national income.

c) an increase in domestic national income.

d) a decrease in foreign prices.

e) a decrease in the Canadian-dollar price of foreign currency.

Question 20

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Disposable Income YD

Consumption

0

100

500

500

1000

900

1500

1300

2000

1700

From the data above identify the correct function below. S denotes savings. a) S = 100 + 0.2 Y D b) C=500 + 0.8 YD

c) C = 100 + 0.2 Y D

d) S = -100 + 0.2 YD https://mylearningspace.wlu.ca/d2l/lms/quizzing/user/attempt/quiz_start_frame_auto.d2l?ou=373973&isprv=&drc=0&qi=116334&cfql=0&dnb=0&fromQB=0

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e) S = 100 + 0.8 YD

Question 21

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In the economy above, there are no exports or imports. The equilibrium level of income is 1200 The marginal propensity to spend (z) in this economy, expressed to 2 decimal places, is Answer: 1722.22

(0.79)

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Question 22

0 / 1 point

FIGURE 21−3 Refer to Figure 21-3. What does each point along the 45 degree line represent? a) the equilibrium condition that desired aggregate expenditure equals actual national income

b) the combinations of desired aggregate expenditure and actual national income where consumption expenditure equals saving

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c) the levels of actual national income that occur when autonomous expenditure is increasing at a constant (linear) rate

d) the levels of actual national income where desired saving is equal to zero

e) the levels of actual national income where desired AE is equal to the sum of desired consumption and desired investment

Question 23

0 / 2 points

This is a two point question The table below shows consumer purchases and the prices of goods purchased in years A, B and C. Pizza Year

Price (dollars)

Beer Quantity

Price (dollars)

Quantity

A

14.25

4

19.00

2

B

15.50

5

21.00

3

C

18.00

5

24.00

3

Calculate the level of the consumer price index in year A, when the level of the consumer price index in year B (the base year) is 100, expressed to one decimal point. Answer: 91.9

(91.3)

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Question 24

0 / 1 point

The table below shows production of beer and pizza in an economy in years A, B and C. Year

Pizza

Beer

Price (dollars)

Quantity

Price (dollars)

Quantity

A

14.25

3

18.50

2

B

15.00

5

22.00

3

C

18.00

5

24.00

3

Calculate the level of real GDP in Year A when measured in Year B dollars. Express the answer in dollars and cents (two decimal points). Answer: (89.00) Question 25

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A graph showing the movement of the exchange rate, Canadian dollars per US dollar appears above. Choose the correct statement a) None of the other statements are correct

b) At the same level of output Y, the graph above would predict a decrease in exports and an increase in imports from 1990 to 2001 https://mylearningspace.wlu.ca/d2l/lms/quizzing/user/attempt/quiz_start_frame_auto.d2l?ou=373973&isprv=&drc=0&qi=116334&cfql=0&dnb=0&fromQB=0

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c) At the same level of output Y, the graph above would predict an increase in exports and an increase in imports from 1990 to 2001

d) At the same level of output Y, the graph above would predict a decrease in exports and a decrease in imports from 1990 to 2001

e) At the same level of output Y, the graph above would predict an increase in exports and a decrease in imports from 1990 to 2001

Question 26

0 / 1 point

The table below provides macroeconomic data for a hypothetical economy. Dollar amounts are all in constant−dollar terms. Actual Year

Output (billions of $)

Potential Output (billions of $)

Unemployment Rate (% of labour force)

2012

402

404

7.1

2013

408

411

7.2
...