Macroeconomics Answers

8. The increase in business taxes would tend to:
A. increase aggregate demand and decrease aggregate supply
B. increase aggregate demand and increase aggregate supply
C. decrease aggregate demand and increase aggregate supply
D. decrease aggregate demand and decrease aggregate supply

6. Which of the following does NOT increase labour productivity?
Select one:
A. an increase in capital
B. a discovery of new technologies
C. an increase in aggregate hours
D. an investment in human capital

7. Which theory of economic growth concludes that growth can continue indefinitely?
A. The classical growth theory
B. The neoclassical growth theory
C. The new growth theory
D. All of the theorie

5. The commodity substitution bias reflects the point that
Select one:
A. consumers often substitute high-quality goods for low-quality goods.
B. prices of goods and services sold by some retailers are higher than the prices of the same
goods and services when sold by other retailers.
C. consumers decrease the quantity they buy of goods whose relative prices rise and increase the
quantity of goods whose relative price falls.
D. government expenditure is a good substitute for investment expenditure.

4. Who of the following is structurally unemployed?
Select one:
A. Eugene, a steelworker who was laid off but has stopped looking for a new job because the
economy is in a recession and he thinks he won’t be able to find a job.
B. Omar, a fishery worker who left his job to search for a better job closer to home.
C. Cara, who lost her job because of foreign competition and is unemployed until retrained.
D. Amanda, an office worker who lost her job because of a slowdown in economic activity.

1. Which of the following question is an illustration of a macroeconomic question?
A. Is the quantity of wine purchased in one year dependent upon the price of wine?
B. Is the level of employment in the economy sensitive to the quantity of consumer spending?
C. Is a consumer boycott an effective means of reducing product prices?
D. Are oil companies engaging in a rip-off of the consumer by charging exorbitantly high prices
for gasoline?

2. Which of the following is NOT part of the definition of GDP?
A. GDP includes intermediate goods
B. GDP uses the market value
C. GDP includes production within a country
D. GDP is measured over a given time period

3. Nominal GDP differs from real GDP because:
A. Nominal GDP is based on constant prices
B. Real GDP is based on current prices
C. Nominal GDP is adjusted for changes in the price level
D. Real GDP is adjusted for the changes in the price level

Compare and contrast the three approaches to calculate GDP

What were the Keynesian's attack on the quantity theory of money

Using the money multiplier 16.66, how much will the money supply change if checkable deposits increase by $300 million?

2. Suppose that MPC = 0.9 and MP to import = 0.10 and an autonomous increase in Exports = $10 . Calculate :
a. The level of the multiplier
b. The change in the level of imports
( Hint : k = 1 / 1- MPC + MPM )

Suppose that a proposal for tax reductions associated with the purchase of capital is up for debate. Suppose too that union leaders are called upon to comment on the proposal from the perspective of how it will affect the welfare of their members as workers (not consumers). Will they all agree on the effects of the proposal? Explain your answer.