Download Macroeconomics – Exam Requirements 1. Theory of economic

Macroeconomics – Exam Requirements
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Theory of economic growth
Inflation, deflation and hyperinflation
Banking
Monetary policy
Fiscal policy
Business cycle
Inequality and Poverty
Sample Questions
1.
What is economic growth
2.
What are the drivers of economic growth
3.
What is inflation, deflation, hyperinflation?
4.
How can we measure inflation?
5.
What are the causes of inflation, deflation, hyperinflation?
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What are the consequences of inflation, deflation, hyperinflation?
7.
Why are inflation and deflation considered to be economic problems?
8.
What are banks and how do they work?
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What are the functions of banks? Two models of banking.
10.
How do banks create money?
11.
Should we introduce the 100-hundred percent reserve banking? Please justify your
opinion.
12.
What are the functions of the central bank?
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What are the goals of monetary policy?
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What are the standard tools of monetary policy?
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Assess the effectiveness of monetary policy in controlling inflation.
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What are the unconventional tools of monetary policy?
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What are the goals of fiscal policy?
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What are the tools of fiscal policy?
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What are the effects of fiscal policy?
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Pros and cons of expansionary fiscal policy?
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What is the business cycle?
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What are the main theories of business cycles?
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Please describe one theory of business cycle.
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What are the consequences of business cycle?
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What is the economic inequality and poverty?
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How can we measure inequality and poverty?
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What are the causes of inequality and poverty?
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What are the consequences of inequality and poverty?
29.
During the business cycle, an economic expansion occurs:
a. At the peak of the business cycle.
b. At the trough of a business cycle.
c. In between the peak and trough.
d. In between the trough and peak.
30.
Which of the following statements is FALSE?
a.
Whether you gain or lose during a period of inflation depends on whether your income
rises faster or slower than the prices of the things you buy.
b.
Inflation that is higher than expected benefits borrowers, and inflation that is lower than
expected benefits lenders.
c.
There are no costs or losses associated with expected inflation.
d.
When unanticipated inflation occurs regularly, the degree of risk associated with
investments in the economy increases.
31.
If the consumer price index (CPI) at the end of 1990 was 125 and the CPI at the end of
2000 was 133, then the rate of inflation over the time period was:
a. zero (prices were stable during this period).
b. 4.8 percent.
c. 6.4 percent.
d. 8 percent.
32.
If GDP is declining and the unemployment rate is rising, what actions would Monetary
Policy and Fiscal Policy take to try to fix this economic situation?
Federal Reserve
Fiscal Policy
a. raise the Discount rate
lower taxes
b. lower the Federal Funds rate
lower taxes
c. lower the Discount rate
decrease spending
d. raise the Federal Funds rate
decrease spending
33.
If Fiscal Policy is trying to promote stability and economic growth through tax cuts,
what type of policy is Fiscal policy using?
a)
Expansionary Fiscal Policy
b)
Restrictive Fiscal Policy
c)
Easy Money Policy
d)
Tight Money Policy
34.
Which of the following statements are true or false.
a)
The most frequently used tool to change the money supply is to change the reserve
requirements.
b)
When the Federal Reserves Open Market Committee sells T-Bills, it is adding reserves
to the system.
c)
The real rate of interest is the nominal rate paid by the borrower minus the inflation
rate.
Suggested Literature and Webpages
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N. Gregory Mankiw, Macroeconomics
D. Begg, S. Fischer, R. Dornbusch, Economics
https://www.khanacademy.org/economics-finance-domain