Intermediate Macroeconomics Practice Exam
Course Introduction
Intermediate Macroeconomics delves into the core theories and analytical frameworks that shape the understanding of aggregate economic phenomena. Building on introductory concepts, the course explores topics such as national income determination, economic growth, unemployment, inflation, and fiscal and monetary policies. Students critically examine models like the IS-LM, AD-AS, and Solow growth models, applying them to real-world economic scenarios and policy debates. Emphasis is placed on the dynamic interactions between households, firms, governments, and the rest of the world, as well as current issues affecting the global economy. By the end of the course, students develop a more nuanced perspective on macroeconomic challenges and the tools available to address them.
Recommended Textbook
Principles of Macroeconomics 9th Edition by John Sayre
Available Study Resources on Quizplus 13 Chapters
2035 Verified Questions
2035 Flashcards
Source URL: https://quizplus.com/study-set/3616
Page 2
Chapter 1: The Economic Problem
Available Study Resources on Quizplus for this Chatper
156 Verified Questions
156 Flashcards
Source URL: https://quizplus.com/quiz/71802
Sample Questions
Q1) Refer to the graph above to answer this question.What is indicated by the shape of both the PPI and the PPII curves?
A)Constant costs.
B)Alternative costs.
C)Increasing costs.
D)Decreasing costs.
Answer: C
Q2) Refer to the table above to answer this question.What is the total cost of producing the first 10 units of cheese?
A)6 units of wine
B)20 units of wine
C)24 units of wine
D)28 units of wine
Answer: A
Q3) Which form of efficiency stresses the production of the 'right type' of products?
Answer: Allocative efficiency.
Q4) Productivity refers to which type of efficiency?
Answer: Productive efficiency.
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Demand and Supply: an Introduction
Available Study Resources on Quizplus for this Chatper
184 Verified Questions
184 Flashcards
Source URL: https://quizplus.com/quiz/71801
Sample Questions
Q1) Refer to the above graph to answer this question.How could you describe the movement from point D to point A?
A)A decrease in supply which leads to an increase in the equilibrium price and a decrease in demand.
B)A decrease in supply which leads to an increase in the equilibrium price and a decrease in quantity demanded.
C)A decrease in demand which leads to an increase in the equilibrium price and a decrease in the quantity supplied.
D)A decrease in demand which leads to an increase in the equilibrium price and a decrease in supply.
E)A decrease in supply which leads to a decrease in the equilibrium price a decrease in demand.
Answer: B
Q2) In what way are Pepsi-Cola and Coca-Cola related?
A)They are substitute products.
B)They are complementary products.
C)They are inferior products.
D)They are unrelated products.
Answer: A
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Measuring the Economy 1: GDP and Economic Growth
Available Study Resources on Quizplus for this Chatper
209 Verified Questions
209 Flashcards
Source URL: https://quizplus.com/quiz/71800
Sample Questions
Q1) Refer to the national income statement above to answer this question.What is the value of national income?
A)$561
B)$573
C)$580
D)$530
E)$543
Answer: E
Q2) What is a transfer payment?
A)The payment made to convert one currency into another.
B)The transmission of money from one country to another.
C)The transfer of taxes from the private sector to the government.
D)A one-way transaction in which payment is made but no good or service flows back in return.
Answer: D
Q3) An injection is a spending flow.
A)True
B)False
Answer: True
Page 5
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Measuring the Economy 2: Unemployment and Inflation
Available Study Resources on Quizplus for this Chatper
184 Verified Questions
184 Flashcards
Source URL: https://quizplus.com/quiz/71799
Sample Questions
Q1) For which of the following factors of production can the concept of unemployment be applied?
A)Labour
B)Land and labour
C)Capital and labour
D)Land and capital
E)Land,labour and capital
Q2) All of the following statements,except one,are correct concerning unanticipated increases in inflation.Which is the exception?
A)It redistributes wealth and income in unpredictable ways.
B)It increases the real value of savings.
C)It decreases the purchasing power of money.
D)It benefits debtors at the expense of creditors.
E)It affects some individuals much more than others.
Q3) Distinguish between frictional and cyclical unemployment.
Q4) Explain how deflation constrains economic growth.
Q5) What is core inflation?
Q6) Distinguish between demand-pull and cost-push inflation.
Page 6
Q7) Suppose that actual GDP is $45 billion,cyclical unemployment is 5%.What is potential GDP?
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 5: Aggregate Demand and Supply
Available Study Resources on Quizplus for this Chatper
183 Verified Questions
183 Flashcards
Source URL: https://quizplus.com/quiz/71798
Sample Questions
Q1) Refer to the above graph to answer this question.What will happen in the long run if the price level is currently P1?
A)The price level will decrease but the nominal wage will increase.
B)The price level will increase but the nominal wage will decrease.
C)Both the price level and the nominal wage will decrease.
D)Both the price level and the nominal wage will increase.
Q2) What is true of a movement up the aggregate supply curve?
A)The nominal wage remains constant but the real wage declines.
B)The real wage remains constant but the nominal wage declines.
C)The real wage remains constant but the nominal wage increases.
D)Both the nominal and real wages decline.
Q3) What is the slope of the AS curve?
A)Horizontal.
B)Upward-sloping.
C)Vertical.
D)Downward-sloping.
E)The same slope as the LAS curve.
Q4) The aggregate supply curve is upward-sloping.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 6: Aggregate Expenditures
Available Study Resources on Quizplus for this Chatper
196 Verified Questions
196 Flashcards
Source URL: https://quizplus.com/quiz/71797
Sample Questions
Q1) Autonomous spending depends on the level of income,whereas induced spending does not.
A)True
B)False
Q2) Assume that the parameters of a particular economy are as follows: MPC = 0.6,MPM = 0.1.What is the value of the multiplier?
A)0.4.
B)0.5.
C)1.67.
D)2.
E)2.5.
Q3) Refer to the above graph to answer this question.What is the value of the marginal leakage rate?
A)0.2.
B)0.5.
C)2.
D)2.5.
Q4) Explain the uses of an individual's income.
Y = C + S + T
Q5) What four factors will cause a change in net exports?
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 7: Fiscal Policy
Available Study Resources on Quizplus for this Chatper
147 Verified Questions
147 Flashcards
Source URL: https://quizplus.com/quiz/71796
Sample Questions
Q1) What has been the main purpose of fiscal policy,as used by most governments,since WWII?
A)To achieve the goal of full employment.
B)To achieve the goal of stable prices.
C)To achieve the twin goals of full employment and a viable balance of payments.
D)To achieve the twin goals of stable prices and a viable balance of payments.
E)To achieve the twin goals of full employment and stable prices.
Q2) What determines the state of the government's budget?
A)The level of its spending.
B)Its tax rates.
C)Its tax rates and the exchange rate.
D)Both the level of GDP in the economy as well as tax rates and its own spending.
E)Both the level of GDP in the economy as well as tax rates and the exchange rate.
Q3) A decrease in autonomous taxes would pivot the NTR line down.
A)True
B)False
Q4) "The level of real GDP does not change when the government decreases government spending and taxes by the same amount." Evaluate this statement.
To view all questions and flashcards with answers, click on the resource link above.
Page 10
Chapter 8: Money and Banking
Available Study Resources on Quizplus for this Chatper
159 Verified Questions
159 Flashcards
Source URL: https://quizplus.com/quiz/71795
Sample Questions
Q1) When would we expect the value of the money multiplier to be smaller?
A)If some part of new loans are permanently held as cash.
B)If the economy was very strong and unemployment rates low.
C)If banks increased the amount of their excess reserves.
D)If some part of new loans are permanently held as cash,if the economy was very strong and unemployment rates low,and If banks increased the amount of their excess reserves.
E)If some part of new loans are permanently held as cash and if banks increased the amount of their excess reserves.
Q2) Refer to the information above to answer this question.Assume the target reserve ratio is 8 percent.If the original balance sheet was for the commercial banking system rather than a single bank,what is the maximum amount by which loans and deposits can be expanded?
A)$4,800.
B)$19,200.
C)$240,000.
D)$60,000.
E)$35,000.
Q3) Explain why bank reserves are not a part of money supply.
Q4) Explain why a bank would not like to hold excess reserves.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 9: The Money Market and Monetary Policy
Available Study Resources on Quizplus for this Chatper
156 Verified Questions
156 Flashcards
Source URL: https://quizplus.com/quiz/71794
Sample Questions
Q1) In Canada,who controls the supply of money?
A)The Department of Finance.
B)The Bank of Canada.
C)The market.
D)The Canadian Mint.
Q2) All of the following except one are functions of the Bank of Canada.Which is the exception?
A)It is the sole issuer of currency.
B)It ensures that the commercial banks remain profitable.
C)It is auditor and inspector of the commercial banks.
D)It is the regulator of the money supply.
Q3) What does the Keynesian transmission process involve?
A)Money demand,the exchange rate,investment and GDP.
B)Money supply,the interest rate,investment and GDP.
C)The interest rate,GDP and the asset demand for money.
D)Only the interest rate and GDP.
E)Only the level of investment and GDP.
Q4) What do economists mean when they say "inflation is a monetary phenomenon"?
Q5) Why is the money supply curve a vertical line?
Q6) How and why is the asset demand for money related to the interest rate?
Page 12
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: International Trade
Available Study Resources on Quizplus for this Chatper
167 Verified Questions
167 Flashcards
Source URL: https://quizplus.com/quiz/71793
Sample Questions
Q1) Refer to the graph above to answer this question.Assuming free trade,what is the opportunity cost of 1 more railcar?
A)0.00835 aircraft.
B)0.033 aircraft.
C)3.33 aircraft.
D)8.33 aircraft.
E)10 aircraft.
Q2) Members of NAFTA include:
A)Canada and Mexico.
B)Canada and United States.
C)Canada,United States,and Mexico.
D)Canada,United States,and Brazil.
E)Canada,Brazil,and Argentina.
Q3) What term describes the average price of a country's exports compared with the price of its imports?
A)The trade deficit.
B)The gains from trade.
C)The terms of trade.
D)The factor endowment.
Q4) List four arguments against free trade.
Page 13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 11: Exchange Rates and the Balance of Payments
Available Study Resources on Quizplus for this Chatper
146 Verified Questions
146 Flashcards
Source URL: https://quizplus.com/quiz/71792
Sample Questions
Q1) A fixed exchange rate above the market value will lead to an outflow of foreign currencies.
A)True
B)False
Q2) Consider the economies of Canada and Japan.Under a system of flexible exchange rates,what would be the result of an increase in Canadian interest rates?
A)The Japanese government would ration dollars to Japanese investors.
B)Japanese interest rates would fall.
C)The price of dollars would increase.
D)The price of yen would increase.
E)The yen would appreciate.
Q3) What does it mean for a country that is on a fixed exchange-rate system to have a balance of payments surplus?
A)The quantity supplied of its currency on the international money market will exceed the quantity demanded.
B)The exchange rate is overvalued.
C)There is an inflow of foreign currencies into the country.
D)The balance of payments surplus is matched by a balance of trade deficit.
E)There is an outflow of foreign currencies from the country.
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 12: Macroeconomic Policy Revisited
Available Study Resources on Quizplus for this Chatper
63 Verified Questions
63 Flashcards
Source URL: https://quizplus.com/quiz/71791
Sample Questions
Q1) Deflation is:
A)a fall in overall prices.
B)the same thing as a devaluation of the Hong Kong dollar.
C)the same thing as a depreciation of the Hong Kong dollar.
D)a change in the price structure.
Q2) The crowding-out effect of expansionary fiscal policy suggests that:
A)government spending increases at the expense of private investment.
B)imports replace domestic production.
C)private investment increases at the expense of government spending.
D)saving increases at the expense of investment.
Q3) The rise of supply-side economics is rooted in the stagflation of the 1970s.
A)True
B)False
Q4) Select the answer that correctly completes this sentence: "The Phillips curve shows the relationship between:
A)the rate of change in the price level and the unemployment rate."
B)the rate of change in the price level and the level of real output produced."
C)the unemployment rate and real income."
D)the price level and the level of unemployment."
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 13: A Walk Through the Twentieth Century and Beyond
Available Study Resources on Quizplus for this Chatper
85 Verified Questions
85 Flashcards
Source URL: https://quizplus.com/quiz/71790
Sample Questions
Q1) Explain the role of credit-rating agencies in the assessing the value of the new forms of financial securities
Q2) The response of the US and Canada to budget deficits that had arisen from stimulative policies were different from those of European countries.Explain the differences.
Q3) By June 2010,the effects of stimulative policies showed countries were coming out of recession.However,there were other concerns regarding the impact of the policies.What was the major concern?
Q4) According to neoclassical theory,an increase in the level of saving will cause the rate of interest to fall.
A)True
B)False
Q5) What was the conclusion of the 19<sup>th</sup> century-neoclassical economists in regards to changing demand patterns and temporary shortages of specific goods?
Q6) Explain why Canada had mainly budget deficits between 1970s and 1990s.
Q7) Explain the link between the credit-rating of derivatives and the demand for traditional mortgages.
Page 16
Q8) Why is unemployment voluntary,according to neoclassical theory?
To view all questions and flashcards with answers, click on the resource link above.