Download Quiz 1

Eco 302c
Intermediate Macro
Spring 2014
Quiz #1
Instructions: Select the best answer to each question and indicate it on the answer
sheet and on this paper.
1.
If you must miss class for a valid reason (like winning the Nobel Peace Prize)
on the day of one of the quizzes, and you inform me before the quiz takes place,
then:
a.
b.
c.
d.
e.
the weight of the quiz will be transferred to the next exam.
you get a zero on the quiz, but the lowest quiz score is dropped.
you can take a make-up quiz before the next class meeting.
you get a zero for the quiz, which drags down your grade.
I award you the average of your remaining quiz scores.
2.
Economists evaluate the usefulness of an economic theory or model
according to:
(i)
whether the assumptions are reasonable and realistic
(ii)
whether the model includes all of the details and complications that exist in
the real world
(iii)
whether the model or theory provides predictions that can be compared to
real world facts or data
(iv)
whether the predictions of the model or theory are generally consistent with
the real world facts
a.
b.
c.
d.
e.
only (i) and (iii) are true.
only (ii) and (iv) are true.
only (i), (iii) and (iv) are true.
only (ii) and (iv) are true.
(i), (ii), (iii), and (iv) are all true.
3.
Macroeconomics seeks to address all of the following issues EXCEPT:
a.
how does being part of a global economic system affect national economies?
b.
what causes unemployment?
c.
what causes a nation’s economic activity to fluctuate?
d.
why are women paid less on average than men with the same qualifications
and experience?
e.
can government policies be used successfully to manage a nation’s economic
performance?
4.
Match the statements below with either the Classical or Kenyesian approach
to macroeconomics:
(i)
Wages and prices adjust quickly enough to ensure that the signals sent
through prices coordinate the actions of everyone in the economy.
(ii)
Government purchases of output will induce firms to increase employment
in order to meet the new demand, and the income spent by newly-hired workers
will increase demand and output even more.
(iii)
Because the “invisible hand” works well, the government should have a
limited role in the economy.
a.
b.
c.
d.
e.
(i) Keynesian; (ii) Keynesian; (iii) Classical
(i) Classical; (ii) Keynesian; (iii) Classical
(i) Classical; (ii) Keynesian; (iii) Keynesian
(i) Classical; (ii) Classical; (iii) Keynesian
none of the options (a) through (d) is correct.
5.
According to economic theory, borrowers, lenders, and depositors should
make their decisions according to:
a.
b.
c.
d.
e.
the nominal interest rate.
the real interest rate.
the inflation rate.
the expected real interest rate.
the GDP deflator.
6.
There are three approaches to measuring the amount of economic activity
that occurs during a period of time. The _____ approach measures GDP by adding
wages, profits, interest received, and taxes received by the government. The _____
approach adds up the amount spent by the ultimate users of the output. The _____
approach adds up the market value of all goods and services produced (excluding
the value of goods and services used up in intermediate stages of production.)
a.
b.
c.
d.
e.
expenditure; income;
income;
product;
product;
expenditure;
expenditure; product;
none of the above.
product
expenditure
income
income