Download Study questions for Macroeconomics

Final exam for Macroeconomics
Please answer the questions in order.
Answer all parts!
1.
2.
3.
4.
5.
6.
7.
8.
9.
Name:
a. Name Smith's most famous book.
b. When was it published? (6)
a. Name and define the main forms that protectionism has traditionally taken.
b. Briefly explain a new type of "protectionism" that is being debated today.
(10)
Pertaining to the classical/Mankiw model of the economy:
What determines the output level? (4)
Why is the level of investment critical? (3)
What is the effect of changing the size of the money supply? (3)
Pertaining to the Keynesian model of the economy:
What determines the output level? (4)
Why is the level of investment critical? (3)
a. Explain the Phillip's curve tradeoff. (6)
b. What is monetary policy? (4)
c. Name and define each of the Fed's three tools and explain how each is used
to reduce unemployment. (18)
d. What is fiscal policy? (4)
e. Theoretically, how can fiscal policy be used to reduce unemployment? (5)
Argue FOR unfettered trade among nations.
Pledge:
Argue AGAINST it. (30)
Macroeconomics - Test Four
Name:
Please answer the questions in order!
ANSWER ALL THE PARTS!
1.
a. What makes up M1?
b. What was the size of M1 in 1996? (6 pts.)
2.
Name and define the three tools of the Fed. (9)
3.
Why can't the Fed control the size of the money supply perfectly? (4)
4.
A bank receives a new deposit of $100.
increase in the money supply? (3)
5.
a. Graph the classical/Mankiw supply and demand for money.
b. Explain the adjustment to the equilibrium from above the equilibrium.
c. Graphically illustrate an increase in the money supply and on your
graph clearly indicate its effect. (17)
6.
a. Graph the Keynesian supply and demand for money.
b. Graphically illustrate an increase in the money supply and on your
graph clearly indicate its effect. (9)
7.
a. What is "money neutrality"?
b. Is money neutral in the classical model? Yes or no?
c. Is money neutral in the Keynesian model? Yes or no? (7)
8.
a. What are the two types of US net foreign investment?
What is the smallest possible
How would the following transactions affect US net foreign investment? Also,
state which type of US net foreign investment is involved.
b. An American car company builds a manufacturing facility in Mexico.
c. An American car company issues new stock and sells it to a German retirement
fund. (10)
10. a. Graph and explain how the labor market works as understood by the
classical economists.
b. Repeat for Keynes. (15)
11. a. Graph the "Keynesian cross" and fully label your graph.
b. Assume that output exceeds the equilibrium level. Explain how the
equilibrium is reached. (15)
Pledge:
Study guide for final exam - Wednesday at 6 PM.
Some questions may be altered as we discuss them in class.
1.
2.
Name Smith's most famous book. When was it published?
Explain the law of comparative advantage and its implications. Who developed
this law? When? What are the main forms that protectionism has traditionally
taken? What new types of "protectionism" are being debated today?
Pertaining to the LR model of the economy:
3.
What determines the output level?
4.
Why is the level of investment critical?
5.
What is the effect of changing the size of the money supply?
6.
Is the economy stable and self-correcting? Discuss.
Pertaining to the Keynesian model of the economy:
7.
What determines the output level?
8.
Why is the level of investment critical?
9.
What is the effect of changing the size of the money supply?
10. Is the economy stable and self-correcting? Discuss.
11. Explain the Phillip's curve tradeoff. What is monetary policy? Name and
define each of the Fed's three tools and explain how each is used to combat
inflation and to combat unemployment. What is fiscal policy? Theoretically,
how can it be used to reduce inflation and to reduce unemployment?
12. Argue FOR unfettered trade among nations. Argue AGAINST it. (If you get this
question, it may be a heavily weighted discussion question. Prepare a very
full answer, not to exceed three pages.)
Fourth text for Macroeconomics
Mankiw chapters 27, 28, and 29 (study questions already distributed)
Korten chapter Chap 24: In three paragraphs summarize the major elements of his
agenda for change.
 Plus the following study questions, which pertain to Keynes' model unless
otherwise indicated1. What determines the output level in the classical model? In the Keynesian
model?
2. Graph and explain how the labor market works as understood by the
classical economists. Repeat for Keynes. What is the relevance for the
macroeconomy of how this single market operates?
3. What are the simplifying assumptions of the "Keynesian cross" model? In
this model, when is the economy at an equilibrium? What is the
significance of the 45 degree line?
4. Consumption function: State algebraically and graph; name and algebraic
expression for the slope; definition of MPC.
5. Graph the planned investment function. Graph C + Ip.
6. Graph the Keynesian cross and assume that output exceeds the equilibrium
level. Explain how the equilibrium is reached. Repeat for below the
equilibrium.
7. What is the multiplier effect? Explain. Relate it to the instability of
the economy.
8. What is fiscal policy, and what role does it play in Keynes' model?
9. How is the level of planned investment determined? What makes investment
unstable? Relate that to the instability of the economy
10. What is monetary policy, and what role does it play in Keynes' model?
11. Explain the tradeoff in the Keynesian model.


Macroeconomics - Test three
Name:
Korten:
1. Explain the impact of economic concentration on the employment system
(10).
2. Briefly describe the types of firms that are in danger of being
"cannibalized" (8).
3. a. What is the "ecological revolution"?
b. Briefly explain any three of its guiding principles (12).
4. Distinguish among the "earth's three socioecological classes (10).
Mankiw:
5. a. Define government "deficit."
b. Define government "debt."
c. How, if at all, might a government deficit slow a nation's economic
growth?
d. How, if at all, might a government deficit enhance a nation's economic
growth? (10)
6. Simply list any four policies governments may undertake to enhance
productivity growth. (4)
Put your answers to the multiple choice questions on this sheet (46):
12.
47.
1.
13.
36.
58.
2.
73.
46.
5.
15.
92.
32.
6.
19.
93.
34.
7.
19.
16.
46.
11.
Pledge:
88.
Macroeconomics - First Test
Name:
Please answer the questions in order!
Turn in your exam along with your answers.
1.
2.
3.
What year did Adam Smith publish his most famous book? (3 pts.)
What was the name of the book? (3 pts.)
According to Smith, how would societal order be maintained now that people no longer simply
followed tradition? (Two or three sentences will suffice; 10 pts.)
4.
Define "productivity." (4 pts.)
5.
6.
Why is the demand curve downward sloping? (5 pts.)
Name ANY specific purchase that you have made, for example, a canned drink or a book. For
this particular purchase, did you have a large or small consumer surplus? Briefly explain, thereby
illustrating the concept of consumer surplus. (5 pts.)
7.
Briefly explain a (i.e., ONE) specific critique of the idea that voluntary exchange is always
mutually beneficial, and thereby makes society better off. (6 pts.)
8.
9.
State the law of comparative advantage. (12 pts.)
State any one of the important "assumptions" concerning how the model of comparative
advantage works. (5 pts.)
10.
Assume the following:
Output per worker per hour
Coffee
Hair clippers
Brazil
3
4
US
1
4
Very briefly indicate how you arrive at the answers to the following questions:
a.
Which country (if either) has a comparative advantage in producing coffee?
b.
Which country (if either) has a comparative advantage in producing clippers?
(7 pts.)
The Korten questions are 20 pts each.
11.
Discuss the "threefold human crisis."
12.
Discuss "the growth illusion."
Pledge!!
Macroeconomics - Second Test
Name:
Please answer the questions in order!
Turn in your exam along with your answers.
1.
2.
3.
4.
5.
6.
7.
8.
In a sentence, define/explain producer surplus. (Not in terms of a graph, but
with words; 5 pts.)
Assume that a country goes from an isolationist position of not trading to
being an exporter:
a. Who "wins" from trade?
b. On a graph, clearly/explicitly indicate what this group gains.
c. Who "looses" as this country moves from isolationism to free trade?
d. On a separate graph, clearly/explicitly indicate this group's lose.
e. Now on a third graph, show both the gain, the lose, and the net change. (25
pts.)
a. Name and define the two usual forms of protectionism that are discussed by
Mankiw and that were the object of GATT negotiations.
b. According to our discussions, with protectionism, what all is protected?
(Simply list.)
c. According to the Mankiw model, is protectionism good for the country? In a
sentence, how do we know?
d. If the world price of a good is below the no-trade price, what is the effect
of a tariff that exceeds the difference between those prices? In a sentence,
explain.
c. In a sentence, explain an additional form that protectionism might take.
(22 pts.)
Discuss/explain what Korten means by "democratic pluralism"? (15)
Briefly explain how Korten distinguishes between TNC and MNC, including what
the letters stand for. (8)
Korten asserts that corporations aim to "create insatiable desires for the
things they sell." Explain one way through which they go about that. (10)
Briefly explain what is meant by the "import-substitution" strategy. (7)
Multiple choice together are worth 8 pts.
Please put your pledge on your answer sheets.
Prepare two paragraph answers to each of the following Korten questions:
Chapter 1: Discuss the threefold human crisis, e.g., what? where?
Chapter 2: Discuss the link among consumption, population, and equalty, and why it
matters.
Chapter 3: Discuss "the growth illusion," e.g., growth of what? what's the
illusion?
Chapter 4: How did corporations become so powerful in the US?
Chapter 5: Who are the "corporate libertarians" and what are their common beliefs?
Chap 6: What is "democratic pluralism" and how did it decline?
Chap 7:
Chap 8:
Chap 9:
Chap 10:
Chap 11:
Chap 12:
Chap
Chap
Chap
Chap
13:
14:
16:
17:
Chap 18:
Chap 19:
Chap 20:
Chap 21:
Chap 22:
Chap 23:
Chap 24:
What is the point of the "glass"? What does he mean by "insulation," and
what are some examples of it? How does he distinguish between north and
south?
How does he distinguish between TNC and MNC? Should corporations attend to
national interests? Argue yes, and then no.
Who is building the elite consensus? What is it? How is it being built?
Who is buying out democracy? By what measures? Provide a specific
illustration or example of each of these measures. (Bullets are fine.)
Korten asserts that corporations aim to "create insatiable desires for the
things they sell." According to this chapter, how do they go about that
task?
Distinguish between import-substitution and export-led strategies. (These
are strategies for what?) Which is preferred by the WB and IMF. Why?
What are "structural adjustment programs"? Who imposed them? Why?
Discuss/explain the WTO.
What does he mean when he says that money has become "delinked from value"?
What types of firms are particularly in danger of being "cannibalized"?
Provide any three indicators of increased economic concentration. Devote a
short paragraph to the impact of the concentration on each of the
following: the employment system, small retailers, competition.
"Race to the bottom": Who? Why? Different forms the race takes? (e.g.,
hiring more child labor)
How does Korten describe the "pain at the top"? List the groups with
"diminished prospects."
How has development been disruptive?
Distinguish between transcendental monism and material monism. Why does he
make this distinction?
What is the "ecological revolution"? Briefly explain each of its guiding
principles.
Distinguish among the "earth's three socioecological classes." Why does he
make this distinction?
What does he have to say about automobiles?
Summarize any two examples of "an awakened civil society." What is the
common goal of your two examples?
In three paragraphs summarize the major elements of his agenda for change.
MACROECONOMICS
Study questions for first test: Let these questions direct your study energies, but don't
be narrowly focused ONLY on the questions. Let them point you to related issues.
 Write out answers to every question!
 Work with and/or compare notes with classmates.

Office hours: M&T&TH 2:45-3:45 and by appointment; on the day of and before exams office
hours are limited to ten minutes for each student.

REMEMBER YOUR KORTEN STUDY QUESTIONS THAT WERE PREVIOUSLY DISTRIBUTED!
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
What are the three economic questions that every society must answer? Explain
how these were answered under feudalism. Enclosure movement: When? What?
Where? Why? What did the serfs do?
Contrast the source of societal order during feudalism, with the one for Smith
in the emerging economic system of which he wrote. Provide an example that
supports Smith's perspective concerning the benevolence of "the invisible hand"
and one that does not.
Name Smith's most famous work. When was it published?
Define and give an example of opportunity cost.
Distinguish between microeconomics and macroeconomics.
Distinguish between "standard of living" and "quality of life." Define
"productivity." According to Mankiw, why is productivity so important?
For what fundamental reason do economists tend to favor markets? Critique, as
we did in class, the idea that voluntary exchange always is mutually
beneficial, and thereby makes society better off.
According to Mankiw, "[international] trade can make everyone better off."
What does he mean by "better off"? What must happen for everyONE to become
"better off" through trade? Who is sometimes NOT better off?
Distinguish between the positions that economists are "objective" and "valuefree" in their work, and that they are not. Discuss.
Distinguish between absolute advantage and comparative advantage. State the
law of comparative advantage. In what way are nations "better off"? In what
ways might they be worse off?
Page 56: Pages 56-7: Problems 3 (except b),7,8a-c,9. Also, review the
U.S./Japan problem from your notes.
What are the "assumptions" concerning how the model of comparative advantage
works? Name three countries that became considerably "better off" by not
engaging in free trade, but rather behind protectionist tariff walls. In the
case of each, when? What was the aim of their protectionist tariffs?
State the law of demand and graph the demand curve. Distinguish between
"change in demand" (a shift of the demand curve) and "change in quantity
demanded" (movement along a demand curve). Relate the demand curve to marginal
utility and “willingness to pay.” Graph a person’s demand for food, assuming
that the individual has no money.
State the supply relationship and graph the supply curve. Distinguish between
"change in supply" (shift of the supply curve) and "change in quantity
supplied" (movement along a supply curve). What does the upward slope of the
supply curve indicate about the marginal cost of producing the good?
MACROECONOMICS
Study questions for second Macro test: Let these questions direct your study energies, but
don't be narrowly focused ONLY on the questions. Let them point you to related issues.
 Write out answers to every question!
 Work with and/or compare notes with classmates.


Office hours: M&T&TH 2:45-3:45 and by appointment.
REMEMBER YOUR KORTEN STUDY QUESTIONS THAT WERE PREVIOUSLY DISTRIBUTED!
1.
2.
7.
Explain and graph the concepts of consumer surplus and producer surplus.
Put D and S on the same graph and explain the process of reaching the
equilibrium. In terms of your graph, explain how the market allocates
resources among alternative uses and how it allocates goods among alternative
people. Does the market guarantee that all people’s basic needs will be met?
Explain.
Page 86: 3 (omit d), 7.
On one large graph, clearly illustrate the gain, loss, and net gain to an
importing country if it allows free trade. Repeat for the exporting country.
Do both nations gain? Do all individuals within both nations gain? COULD all
individuals in both nations gain?
With protectionism, what is protected? What are the main forms that
protections may take? Why is there protectionism?
Illustrate graphically that a tariff imposes a net cost on the importing
country.
Page 193: Problems and Applications 1,2,4.
1.
2.
3.
4.
5.
CONTINUATION OF MACROECONOMICS STUDY QUESTIONS FOR SECOND TEST
End of chapter 22: Questions 1,2,4,5,6; Problems/Applications 1,6,10.
What is a price index? Distinguish among the GDP deflator, CPI, and PPI.
End of chapter 23: Questions for review 1,3.
Define inflation. How is it measured?
Controversy over CPI: Explain what was debated; who cared? why?
3.
4.
5.
6.
Macroeconomics study questions for third test
You already have your Korten study questions for chapters 14-24, except 15.
In addition, provide Mankiw's answers to the following questions, unless
otherwise indicated.
Chapter 24
1.
Why does the long-run level and growth of GDP matter? How much did the
US GDP grow between 1960 and 1991? In recent years has it grown by more
or less?
2.
What is "productivity" and why does it matter? Identify the ("big four")
determinants of a country's productivity level.
3.
Identify seven policies governments may undertake to enhance their
productivity growth. How does each enhance productivity?
4.
T or F? Productivity declined in the US from 1973 to 1994. (False!)
Concerning productivity, what did diminish and why?
5.
End of chapter 24: Questions for review: 3,4,7,8; Problems and
applications: 1,2,6,8,9,10(describe two),11,12
Chapter 25
6.
Contrast "financial markets" with "financial intermediaries" and provide
examples of each. Contrast the meanings of "stock" and "bond."
7.
Graph the market for loanable funds. Whose activities are represented in
your D and S curves? Explain the process of adjusting to the equilibrium
from an initial interest rate above the equilibrium, and repeat for below
the equilibrium.
8.
Explain Mankiw's three policies for increasing savings and investment.
Graph each.
9.
How big is the government's debt in historic context? Why measure it as
a percentage of GDP?
10. At the end of the chapter: Key concepts: second and third columns;
Questions for review: 2,5 (add: what is the effect on growth if the
deficit results from government spending on infrastructure, education,
and R&D?); Problems and applications: 1,3,5,6,8
11. Fully discuss and explain the position that current and predicted
government budget surpluses can be used to "save social security,"
including the basis for the concern that social security needs "saving."
What is the alternative view that we need not worry about the program
meeting its future obligations?
Chapter 26
12. On pages 565-6 Mankiw distinguishes between "the long-run and the shortrun problem" of unemployment. What name does he give to each?
13. What is the labor force participation rate of all adults, of all
teenagers, of all men, and of all women? Does any of these surprise you?
14. Graph the supply and demand for labor and indicate the existence of
unemployment. In terms of your graph, what causes this excess supply of
labor?
15. Mankiw presents "four explanations for the economy's natural rate of
unemployment." According to each, who is responsible for the
unemployment, what are they doing to cause it, and what is the basis for
their action? Where applicable, relate the explanation to your graph of
your previous answer.
16. Critique the criticism of the minimum wage as a source of unemployment.
17. What is Keynes' explanation for unemployment? Briefly, what is Korten's
18. How did Henry Ford fit into this chapter?
19. What is the current rate of unemployment? What is the natural rate of
unemployment? Does this imply that Mankiw has overstated the natural
rate? Explain.
20. Who is, and is not, eligible for unemployment insurance? How might
eliminating this program make the nation better off? Worse off?
21. Key concepts: all; Questions for review: 1,3; Problems and applications:
1,2,3,4
Exam 4 study questions - New exam date:
Wednesday, April 26
Chapter 27
Explain the three functions of money. What makes up M1? How much U.S.
currency was outstanding in 1996? Who may be holding large portions of
this currency?
2.
What was the size of M1 in 1996? So, about what percentage of M1 was
currency?
3.
Define/explain/identify: liquidity, demand deposits, Federal Reserve,
central bank, Board of Governors, Alan Greenspan, FOMC, reserves,
required reserves, excess reserves, reserve ratio, how the money supply
increases, how the money multiplier works, three tools of Fed and how
each is used to affect size of money supply.
Question for review: 7
Problems and applications: 3,8
1.
Chapter 28
Graph the supply and demand for money and explain the slope of each. Who
supplies? Who demands? Explain the adjustment to the equilibrium from
above and below the equilibrium. (What crucial assumption is made
concerning the economy's ability to increase production to meet the extra
demand for goods and services?)
5.
Graphically illustrate an increase in the money supply and its effect.
Repeat for decrease.
6.
What is "money neutrality"? Is money neutral?
7.
Explain the costs of inflation.
Questions for review: 1
Problems and applications: 6,9
4.
Chapter 29
Meaning of NX>0 and NX<0; meaning of NFI>0 and NFI<0; illustrate that NX
must equal NFI; why does NFI matter in our model?
9.
According to Mankiw, is our large trade deficit a problem? Explain his
argument. What alternative perspective was presented in class?
10. Define nominal exchange rate, appreciation, depreciation, real exchange
rate.
11. How will trade work to equate the price of jeans in Iowa and Texas?
Explain the purchasing power parity theory of exchange rate
determination, including the role that trade plays. (You need not go
into further detail than we did in class, but do understand our numeric
example.)
12. Why does the purchasing power parity theory not always hold?
13. The principle lesson from the theory is to predict the effect of a large
increase in a nation's money supply. What is the prediction?
Question for review #3.
Chapter 30 - Worksheet
8.
BEFORE PROCEEDING TO SHORT-RUN ECONOMIC FLUCTUATIONS, REVIEW THE LONG RUN MODEL BY
ANSWERING THESE QUESTIONS PERTAINING TO THE LR:
 What determines the output level?
 Why is the level of investment critical?
 What determines the level of unemployment, and why is this important?
 Why is money neutral?
 What IS the effect of changing the size of the money supply?
Chapter 31
 Graph aggregate demand. What are the categories of spending represented by the
curve? Explain two reasons for its downward slope. Provide reasons that could
cause it to shift.
 Graph LRAS and explain its slope. What causes it to shift rightward? What are
the various names sometimes given to the long-run output level?
 Use Keynes's thoughts on sticky wages to explain how the output level may deviate
from its "natural" level. What does this imply for the slope of the SRAS?
Continue with the sticky wage story and explain how the economy is expected to
end up back on the LRAS curve.
 Explain how the expectation of a lower price level can shift the SRAS.
 Assume the economy is at a LR and SR equilibrium and that then AD declines.
Illustrate graphically where the economy was and what consequences result. What
policies can move the economy back to the equilibrium?
 According to our model, the decline in AD will "self-correct in the long run."
What is the process of this self-correction? What was Keynes's response to the
practice of waiting for the self-correction, and what was his point? The belief
in waiting on the economy to fix itself is consistent with which early economist?
 Begin at a point of LR and SR equilibrium. Graph the impact of a rise in oil
prices. What problem results? Explain and graphically illustrate the
consequences of expansionary fiscal policy, expansionary monetary policy, and
waiting for the economy to self correct.
 Define: recession, depression; Problems and applications #1,3
 Summarize the conclusion to the chapter.
Chapter 32
 Why does the level of AD matter?
 Why is MD a downward sloping function of the interest rate? How do MS and MD
interact to determine the interest rate, i.e., if the interest rate is above (or
below) the equilibrium rate, what is the adjustment process? Graph.
 Graph an increase in the MS and show the effect on the interest rate. How does
the interest rate affect the level of AD?
 What is meant by "expansionary monetary policy" and "tight monetary policy"?
 How do increases in taxes and government spending affect AD? What is meant by
"expansionary fiscal policy" and "tight fiscal policy"?
 Explain the multiplier effect.
 How does Mankiw present the cases for and against economic stabilization?
 Contrast the MD in Figure 32-3 with MD in Figure 28.1 What variable is being
determined in each graph?
Chapter 33
1. Explain the Phillip's curve tradeoff. What's the implication for policy?
2. How well does this theoretical tradeoff mess with recent US levels of
unemployment and inflation?
NOW ANSWER THE FOLLOWING QUESTIONS BASED ON OUR SHORT-RUN MODEL, AND CONTRAST TO
YOUR PREVIOUS ANSWERS THAT PERTAINED TO THE LONG-RUN MODEL:
 What determines the output level?
 Why is the level of investment critical? (See page 684.)
 What determines the level of unemployment, and why is this important?


Why is money NOT neutral?
What is the effect of changing the size of the money supply?
Finally, what is the LR effect of changes in the level of AD?
Final exam
Name:
Be sure to answer all parts!
Please answer questions in order.
1.
2.
3.
4.
5.
6.
7.
8.
a. Name Smith's most famous book.
b. When was it published?
a. Explain the law of comparative advantage and its implication.
b. Who developed this law?
c. When?
a. What are the main forms that protectionism has traditionally taken?
b. What new types of "protectionism" are being debated today?
Graphically illustrate the gains, losses, and net gain to an importing country if it
allows free trade. Label everything very clearly and completely.
Explain the Phillip's curve tradeoff.
a. In what ways is the Mankiw text a classical text?
b. How did Keynes disagree with the classical economists?
What are the problems addressed by Korten?
For the article on the back of this sheet: In what ways, if any, does it support
Korten's perspective? In what ways, if any, does it contradict Korten?
Pledge
Happy Holidays!
Exam 3
Please answer the questions in order.
Name:
1. Name and define the three tools of the Fed and simply state how each is
used to increase the size of money supply. (No explanation is needed; 18
pts.)
2. a. Graph the supply and demand for money.
b. Explain the slope of the demand curve.
c. Explain the adjustment to the equilibrium from above the equilibrium.
(20)
3. Explain two costs of inflation. (7 pts.)
4. According to Korten, who are the "corporate libertarians" and what are their
common beliefs? (25 pts.)
Please write the answers to your MC questions ON THIS SHEET.
1.
24.
39.
7.
25.
44.
8.
26.
74.
11.
29.
78.
12.
34.
95.
96.
106.
Pledge:
(30)
Prepare two paragraph answers to each of the following Korten questions:
Chapter 1: Discuss the threefold human crisis, e.g., what? where?
Chapter 2: Discuss the link among consumption, population, and equity, and why it
matters.
Chapter 3: Discuss "the growth illusion," e.g., growth of what? what's the
illusion?
Chapter 4: How did corporations become so powerful in the US?
Chapter 5: Who are the "corporate libertarians" and what are their common beliefs?
Chapter 6: What is "democratic pluralism" and how did it decline?
First Korten quiz
Prologue:
Name:
Provide ANY specific detail from Korten's story of his life.
In chapter 1, "From Hope to Crisis":
Korten discusses "a threefold human crisis." Name any one of the three crises.
OR
Fill in the blank below with the appropriate amount of money:
"
approximately 1 billion of the world's people struggle in desperation to live
on _______________."
Chapter 2:
What is the spaceship that is discussed?
Chapter 3:
spill?
What point did Korten make with the cleaning up of the Exxon Valdez oil
Chapter 4: How was it that corporations came to be considered a person under the US
Constitution, even though the Constitution makes no mention of corporations?
Pledge:
Macroeconomics - Test Two
Name:
Please answer the questions in order.
BE SURE TO ANSWER ALL PARTS!!
1.
a. Define "productivity."
b. Simply list the four determinants of a society's productivity.
2.
a. Provide either of Mankiw's definitions for the "natural rate of
unemployment."
b. Briefly summarize each of his four explanations for this unemployment in the
economy, and indicate who is responsible for each.
c. Pick any one of the previous explanations and illustrate with the appropriate
graph.
3.
a. Define "government deficit."
b. Explain two possible effects of the deficit on economic growth.
4.
a. Why do macroeconomists care about the level of savings?
b. How does Mankiw recommend that we increase the savings of our households?
c. Represent your previous answer with a fully labeled graph. Indicate on your
graph with arrows the consequences of Mankiw's recommended policy.
d. What do economists say about the effectiveness of this policy? That is, how
well will it work?
e. What does "equity" mean? What is the equity issue concerning this policy?
Macroeconomics - Test One
Name:
Please answer the questions in order.
Use the backs of your answer sheets.
BE SURE TO ANSWER ALL PARTS!!
1. a.
b.
c.
(9
How was society's order maintained under feudalism?
How was society's order maintained under mercantilism?
According to Smith how would order be maintained in the emerging economy?
points total)
2. a. What is the name of Smith's major book?
b. When was it published?
(6 points total)
3. a. What were the four practices that Smith criticized?
b. For each, how was the policy intended to advance the overarching goal of the
mercantilists?
(20 points total)
4. a. Explain why the demand curve is downward sloping.
b. Explain why the supply curve is upward sloping.
(10 points total)
5. a. To follow the law of comparative advantage, means to do what?
b. What is the assumed positive consequence?
c. Even if things work out according to how the theory assumes, in what two ways
can the outcome still be criticized?
d. Name the economist who came up with it.
(19 points total)
6. a. Graphically illustrate the gains, losses, and net change to an importing
country if it allows free. Please draw a BIG and FULLY LABELED graph.
b. Now, assume the nation establishes a tariff on this good. Who gains? Who
loses? (No graph is needed.)
c. Moving from free trade to a tariff, could all individuals in the nation gain?
If so, how?
d. If the world price of a good is above the no-trade price in a country, what is
the effect of a tariff on that good?
(32 points total)
7. What is the opportunity cost of George W. running for president?
(4 points total)
Pledge: