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CLEP Principles of Macroeconomics: Study Guide & Test Prep Final Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. If the real interest rate on a loan is 3% and the expected inflation rate is 1% what is the nominal rate on the loan?

Question 2 2. If the exchange rate changes from 1 US dollar = 50 Brazilian Real to 1 US dollar = 60 Real, which of the following will happen?

Question 3 3. What should the Federal Reserve do to slow down an economy that is growing too fast?

Question 4 4. A decrease in tax rates while holding government spending constant results in which of these?

Question 5 5. When income rises from $1,000 to $1500 and consumption rises from $800 to $1,150 what is the marginal propensity to consume?

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Question 6 6. How would the United States Department of Labor classify a person who worked 10 hours last week?

Question 7 7. If both the demand and the supply for peanut butter declines, what will happen to the equilibrium price and quantity?

Question 8 8. Economists recognize that the economy doesn't grow smoothly, but in regular patterns. Which of these terms best describes this?

Question 9 9. Your economics professor states that the definition of a depression is double the time frame of economic contraction used to identify a recession. What is wrong with this statement?

Question 10 10. If Anytown, USA has a high unemployment rate but also has a large number of unfilled computer programming jobs, what type of unemployment are they suffering from?

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Question 11 11. Under one formulation of Okun's law, a _____ increase in unemployment results in a _____ percent drop in GDP.

Question 12 12. Why is the GDP deflator considered superior to the consumer price index?

Question 13 13. What does the GDP deflator represent?

Question 14 14. The New York branch of the Federal Reserve:

Question 15 15. What will the purchase of government bonds from the public in the open market by the central bank do?

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Question 16 16. Which is the greatest factor in the shift of an upwards sloping supply curve?

Question 17 17. In which direction will the market supply curve slope when suppliers want to sell more goods at higher prices?

Question 18 18. If the United States had $5,000,000 in exports, $10,000,000 in GDP, $3,000,000 in imports and $1,000,000 in national savings, what would the net exports be?

Question 19 19. How do tariffs and quotas benefit a country?

Question 20 20. Economists call the equipment and structures used to produce goods and services:

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Question 21 21. Which of the following would be considered physical capital in agriculture?

Question 22 22. Which of the following would NOT lead to a shift of the short-run Phillips curve?

Question 23 23. In the short run, there tends to be a tradeoff between _____ and _____.

Question 24 24. Which of the following is NOT associated with foreign trade?

Question 25 25. What is the rate at which one currency is converted in another called?

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Question 26 26. A young professional is proud that she has reached her goal of being able to set aside funds monthly to buy investment tools like stocks and bonds. What motive for money demand does her situation BEST represent?

Question 27 27. Under fractional banking, when a bank lends to a customer, which of the following happens?

Question 28 28. The United States can produce 20 strawberries or 80 apples, while Canada can produce 15 strawberries or 5 apples. Which of the following describes what will happen if these two countries trade with each other?

Question 29 29. Country A's opportunity cost of producing 1 ton of corn is 5 tons of wheat, while Country B's opportunity cost of producing 1 ton of corn is 1/3 of a ton of wheat. Which of the following statements is true?

Question 30 30. Labor supply is the total hours that workers or employees are willing to work at a given _____.

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Question 31 31. Assume that consumption spending is $16,000. For every $200 increase in disposable income, saving goes up by $20. Which of the following statements is true?

Question 32 32. Why are all resources essentially scarce?

Question 33 33. With the same amount of resources, Country A can produce 25 tons of chicken or 50 tons of wheat. What is Country A's opportunity cost of producing 1 ton of wheat?

Question 34 34. When calculating GDP, transfer payments are:

Question 35 35. Why would the revenue of a singer from the United States that held a concert abroad not included in the U.S. GDP?

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Question 36 36. The expansionary monetary policy is designed to:

Question 37 37. According to Keynesian economists, if policymakers thought the economy was headed into a recession, what action would be most appropriate?

Question 38 38. Your favorite television pundit starts a comment with, 'Findings suggest that the economy has been in contraction for two, straight quarters.' What can you MOST likely predict based on this information?

Question 39 39. Which of the following individuals would be counted as unemployed?

Question 40 40. Nominal GDP in year one was $16,000, while nominal GDP in year two was $19,320. Real GDP was $16,000 in year one and $15,500 in year two. What does this indicate about the economy?

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Question 41 41. Which of the following is an inaccurate description of The Federal Reserve?

Question 42 42. What is quantity supplied?

Question 43 43. One of the biggest capital markets is the stock market which is associated with all of the following except

Question 44 44. Which of the following is MOST likely to produce higher economic growth in the long run?

Question 45 45. During the 1960's, what was the relationship between inflation and employment?

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Question 46 46. The U.S. is attempting to bolster trade with several Asian countries. Our incoming goods appear to be less expensive, suggesting that the local currency _____.

Question 47 47. Which of the following statements is true regarding the money supply?

Question 48 48. Which of the following quotes is attributed to Adam Smith?

Question 49 49. Which of the following will cause aggregate supply to decrease?

Question 50 50. Josie decided to go to college full-time instead of working. Which of the following is the opportunity cost of going to college for Josie?

CLEP Principles of Macroeconomics: Study Guide & Test Prep Final Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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