Question 1

Distinguish between real rate of interest and nominal rate of interest.

Accepted Answer

The real rate of interest is the percent

Question 2

If an investor had a $25,000 long-term capital gain on a $100,000 investment from 1984 to 2010,her real rate of return was most likely

Accepted Answer

A)  equal to the expected rate of inflation. 
B)  equal to the nominal rate of inflation. 
C)  zero. 
D)  negative. 
A)  equal to the expected rate of inflation. 
B)  equal to the nominal rate of inflation. 
C)  zero. 
D)  negative.

Question 3

If borrowers and lenders expect a higher rate of inflation,

Accepted Answer

A)  nominal interest rates should decrease. 
B)  nominal interest rates should remain constant. 
C)  nominal interest rates should increase. 
D)  real interest rates should increase. 
A)  nominal interest rates should decrease. 
B)  nominal interest rates should remain constant. 
C)  nominal interest rates should increase. 
D)  real interest rates should increase.

Question 4

The federal government collects taxes on

Accepted Answer

A)  real capital gains. 
B)  nominal capital gains. 
C)  real capital losses. 
D)  nominal capital losses. 
A)  real capital gains. 
B)  nominal capital gains. 
C)  real capital losses. 
D)  nominal capital losses.

Question 5

Describe how the labor force,the nation's capital stock,and the rate of technical progress contribute to potential GDP growth and labor productivity.

Accepted Answer

Potential GDP growth depends on the grow

Question 6

Which of the following groups would have the lowest unemployment rates?

Accepted Answer

A)  high-school dropouts 
B)  married men 
C)  nonwhite teenagers 
D)  nonwhite women 
A)  high-school dropouts 
B)  married men 
C)  nonwhite teenagers 
D)  nonwhite women

Question 7

The most important determinant of the decisions to lend or borrow is the real rate of interest.

Accepted Answer

A) True 
 B)False

Question 8

If the capital stock increases,then the economy can produce ____ output with the ____ amount of labor.

Accepted Answer

A)  same, same 
B)  less, same 
C)  more, same 
D)  less, less 
A)  same, same 
B)  less, same 
C)  more, same 
D)  less, less

Question 9

Are there key differences between an increase in the capital stock and an improvement in the level of technology?

Accepted Answer

There is no significant difference to an

Question 10

Real wages more accurately reflect the payment to labor because they are adjusted for the effects of inflation.

Accepted Answer

A) True 
 B)False

Question 11

If you purchased shares of common stock in 1990 for $1,000 and sold them for $2,000 in 2001 you would be liable for taxes on

Accepted Answer

A)  $2,000. 
B)  $1,000 less the rate of inflation. 
C)  $1,000. 
D)  $2,000 less the rate of inflation. 
A)  $2,000. 
B)  $1,000 less the rate of inflation. 
C)  $1,000. 
D)  $2,000 less the rate of inflation.

Question 12

The growth rate of potential GDP is the sum of the growth rates of

Accepted Answer

A)  labor force and population. 
B)  labor force and labor productivity. 
C)  labor force and capital stock. 
D)  labor productivity and capital stock. 
A)  labor force and population. 
B)  labor force and labor productivity. 
C)  labor force and capital stock. 
D)  labor productivity and capital stock.

Question 13

Inflation is a serious problem because inflation causes real wages to decline.

Accepted Answer

A) True 
 B)False

Question 14

Frictional unemployment is a "necessary" cost of a dynamic economy.

Accepted Answer

A) True 
 B)False

Question 15

Full employment is defined by most economists as the minimization of

Accepted Answer

A)  cyclical unemployment. 
B)  frictional unemployment. 
C)  seasonal unemployment. 
D)  structural unemployment. 
A)  cyclical unemployment. 
B)  frictional unemployment. 
C)  seasonal unemployment. 
D)  structural unemployment.

Question 16

Economists oppose limiting economic growth possibilities because such limits would inevitably involve

Accepted Answer

A)  some expansion of private sector production. 
B)  an increase in government spending. 
C)  some form of mandatory controls on economic activity. 
D)  mandated balanced federal budgets. 
A)  some expansion of private sector production. 
B)  an increase in government spending. 
C)  some form of mandatory controls on economic activity. 
D)  mandated balanced federal budgets.

Question 17

If the price of pizzas has risen from $4 to $5 at the same time that the price of an hour of spinning class has risen from $20 to $30,then

Accepted Answer

A)  pizzas have become relatively more expensive. 
B)  spinning classes have become relatively more expensive. 
C)  the relative prices of pizzas and spinning classes have remained constant. 
D)  workers' real income must have decreased. 
A)  pizzas have become relatively more expensive. 
B)  spinning classes have become relatively more expensive. 
C)  the relative prices of pizzas and spinning classes have remained constant. 
D)  workers' real income must have decreased.

Question 18

One basic way to boost the nation's growth rate is to

Accepted Answer

A)  increase wages paid to labor. 
B)  slow the rate of technical progress. 
C)  reduce the population growth rate. 
D)  accumulate more capital 
A)  increase wages paid to labor. 
B)  slow the rate of technical progress. 
C)  reduce the population growth rate. 
D)  accumulate more capital

Question 19

GDP equals hours of work times

Accepted Answer

A)  labor force. 
B)  output per hour. 
C)  population. 
D)  capital stock. 
A)  labor force. 
B)  output per hour. 
C)  population. 
D)  capital stock.

Question 20

Over long periods of time,the growth rates of actual and potential GDP have been

Accepted Answer

A)  diverging. 
B)  similar. 
C)  declining together. 
D)  usually far apart. 
A)  diverging. 
B)  similar. 
C)  declining together. 
D)  usually far apart.

Distinguish between real rate of interest and nominal rate of interest.

If an investor had a $25,000 long-term capital gain on a $100,000 investment from 1984 to 2010,her real rate of return was most likely

If borrowers and lenders expect a higher rate of inflation,

The federal government collects taxes on

Describe how the labor force,the nation's capital stock,and the rate of technical progress contribute to potential GDP growth and labor productivity.

Which of the following groups would have the lowest unemployment rates?

The most important determinant of the decisions to lend or borrow is the real rate of interest.

If the capital stock increases,then the economy can produce output with the amount of labor.

Are there key differences between an increase in the capital stock and an improvement in the level of technology?

Real wages more accurately reflect the payment to labor because they are adjusted for the effects of inflation.

If you purchased shares of common stock in 1990 for $1,000 and sold them for $2,000 in 2001 you would be liable for taxes on

The growth rate of potential GDP is the sum of the growth rates of

Inflation is a serious problem because inflation causes real wages to decline.

Frictional unemployment is a "necessary" cost of a dynamic economy.

Full employment is defined by most economists as the minimization of

Economists oppose limiting economic growth possibilities because such limits would inevitably involve

If the price of pizzas has risen from $4 to $5 at the same time that the price of an hour of spinning class has risen from $20 to $30,then

One basic way to boost the nation's growth rate is to

GDP equals hours of work times

Over long periods of time,the growth rates of actual and potential GDP have been

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

An Introduction to Macroeconomics

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

Filters

Exam 6: The Goals of Macroeconomic Policy

Distinguish between real rate of interest and nominal rate of interest.

If an investor had a $25,000 long-term capital gain on a $100,000 investment from 1984 to 2010,her real rate of return was most likely

If borrowers and lenders expect a higher rate of inflation,

The federal government collects taxes on

Describe how the labor force,the nation's capital stock,and the rate of technical progress contribute to potential GDP growth and labor productivity.

Which of the following groups would have the lowest unemployment rates?

The most important determinant of the decisions to lend or borrow is the real rate of interest.

If the capital stock increases,then the economy can produce ____ output with the ____ amount of labor.

Are there key differences between an increase in the capital stock and an improvement in the level of technology?

Real wages more accurately reflect the payment to labor because they are adjusted for the effects of inflation.

If you purchased shares of common stock in 1990 for $1,000 and sold them for $2,000 in 2001 you would be liable for taxes on

The growth rate of potential GDP is the sum of the growth rates of

Inflation is a serious problem because inflation causes real wages to decline.

Frictional unemployment is a "necessary" cost of a dynamic economy.

Full employment is defined by most economists as the minimization of

Economists oppose limiting economic growth possibilities because such limits would inevitably involve

If the price of pizzas has risen from $4 to $5 at the same time that the price of an hour of spinning class has risen from $20 to $30,then

One basic way to boost the nation's growth rate is to

GDP equals hours of work times

Over long periods of time,the growth rates of actual and potential GDP have been

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

An Introduction to Macroeconomics

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

Filters

If the capital stock increases,then the economy can produce output with the amount of labor.