Practice Multiple Choice

Intermediate Macroeconomics Practice Multiple Choice

Chapter 2:

1) Suppose nominal GDP increases in a given year. Based on this information, we know with certainty that:

A) the price level (GDP deflator) has increased.

B) real output has decreased and the price level has increased.

C) either real output or the price level (GDP deflator) have increased. D) real output and the price level (GDP deflator) have both increased. E) real output has increased.

2) Suppose that in a given month in the United States, 200 million people are working, 20

million are not working but are looking for work, and 40 million are not working and have given up looking for work. The official unemployment rate for that month is: A) 10%. B) 30%. C) 23%. D) 7.7%. E) 9.1%.

Questions 3 and 4 refer to the following data:

Suppose a country using the Canadian system of measuring unemployment statistics has 100 million people, of who 50 million are of working age. Of these 50 million, 20 million have jobs. Of the remainder: 10 million are actively searching for jobs; 10 million would like jobs but are not searching; and 10 million do not want jobs at all.

3) The labour force is: A) 10 million. B) 20 million. C) 30 million. D) 40 million. E) 50 million.

4) The labour force participation rate is ________. A) 0.2 B) 0.3 C) 0.4 D) 0.5 E) 0.6

5) Suppose an economy consists of just three firms: Steel Company Lobster Company Car Company Revenues from Revenues from Revenues from sales $400 sales $200 sales $1000 Expenses Expenses Expenses Wages $340 Wages $160 Wages $500 Profits $60 Profits $40 Steel purchases $400 Profits $100 According to the final goods approach, the GDP of this economy is: A) 1000. B) 1200. C) 1400. D) 1600. E) 1800.

Chapter 3:

6) In the model of the goods market presented in Chapter 3, which of the following variables is endogenous? A) investment (I) B) taxes (T)

C) disposable income (YD) D) government spending (G) E) autonomous consumption (c0)

7) In the consumption equation C = c0 + c1YD, we assume that c1 is: A) larger than one.

B) different at different levels of income. C) between zero and one. D) larger than c0. E) negative.

8) Suppose the consumption equation is represented by the following C = 100 + 0.75 YD. The multiplier in this economy is ________. A) 0.75 B) 2 C) 1.33 D) 0.25 E) 4

Use the following information to answer questions 9 and 10 below. C = 1000 + .8YD; I = 800; G = 2000; T = 1000

9) The equilibrium level of GDP for the above economy equals: A) 6000. B) 8000. C) 15000. D) 10000. E) 12000.

10) The multiplier for the above economy equals: A) 3. B) 5. C) 2. D) 4. E) 10.

Chapter 4:

11) The money demand curve will shift to the right when which of the following occurs? A) an increase in income

B) an increase in the money supply C) a reduction in the interest rate D) a decrease in income

E) an increase in the interest rate

12) The interest rate will increase as a result of which of the following events? A) an increase in income

B) an open market purchase of bonds by the central bank C) a decrease in income

D) an increase in money supply E) an increase in taxes

13) Suppose a bond offers to pay $1000 in one year and currently sells for $900. Given this information, we know that the interest rate on the bond is: A) 9.0%. B) 10.0%. C) 11.1%. D) 90.0%. E) 110.0%.

14) Suppose the central bank wishes to conduct contractionary monetary policy. Given this, we would expect which of the following to occur?

A) a rightward shift in the money demand curve and a rightward shift in the money supply curve B) a rightward shift in the money demand curve and a leftward shift in the money supply curve C) a leftward shift in the money demand curve and a leftward shift in the money supply curve D) no shift in the money demand curve and a rightward shift in the money supply curve E) no shift in the money demand curve and a leftward shift in the money supply curve

15) Which of the following events will cause the interest rate to decrease? A) an increase in income

B) an open market sale of bonds C) an open market purchase of bonds D) an increase in consumption E) a reduction in taxes

Chapter 5:

16) An open market purchase of bonds will cause which of the following to occur? A) The IS curve shifts rightward as the interest rate falls. B) The LM curve shifts up.

C) The IS curve shifts leftward as the interest rate increases. D) The LM curve shifts down.

E) The IS curve shifts rightward and the LM curve remains the same.

17) If investment spending is very sensitive to the interest rate, then: A) the IS curve should be relatively steep.

B) neither the IS nor the LM curve will be affected. C) the IS curve should be relatively flat. D) the LM curve should be relatively steep. E) the LM curve should be relatively flat.

Suppose that the following equations describe an economy: C = 170 + 0.60YD Ms = 735; P = 1 T = 200

d

I = 100 - 4i M = 0.75Y - 6i G = 350

18) The equation for equilibrium in the goods market is: A) Y = 1250 + 10i. B) Y = 980 + 8i. C) Y = 980 - 8i. D) Y = 1250 - 10i. E) Y = 1250 + 8i.

19) The equation for equilibrium in the financial markets is: A) Y = 1250 + 10i. B) Y = 980 + 8i. C) Y = 980 - 8i. D) Y = 1250 - 10i. E) Y = 1250 + 8i.

20) The equilibrium level of output (Y), the interest rate (i), investment (I) and consumption (C) are, respectively:

A) Y = 1200; i = 15; I = 40; C = 710. B) Y = 1100; i = 5; I = 40; C = 700. C) Y = 1100; i = 15; I = 40; C = 710. D) Y = 1200; i = 15; I = 20; C = 710. E) Y = 1000; i = 10; I = 40; C = 600.

Chapter 6:

21) Suppose i = 7%, i* = 10%, and that the domestic currency is expected to appreciate by 4% during the coming year. Given this information, we know that:

A) individuals will be indifferent about holding domestic or foreign bonds. B) individuals will only hold domestic bonds. C) the interest parity condition holds.

D) individuals will only hold foreign bonds.

E) the interest rate differential between the two countries should be lower than 4%.

22) Which of the following, all else fixed, will cause the real exchange rate to decrease? A) a nominal depreciation of the domestic currency B) a fall in the domestic price level C) a fall in the foreign price level

D) an increase in the foreign price level E) an increase in the real interest rate

23) When Canada has a current account surplus, we know that it is also: A) suffering from negative investment income. B) lending to the rest of the world.

C) borrowing from the rest of the world. D) running a balanced trade account. E) running a balanced capital account.

本文来源：https://www.bwwdw.com/article/uzbf.html