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Expected Real Rates of Interest for Five Countries
Source: Trading Economics, September, 2010Table 12.1Refer to Table 12.1. The
expected real rate of interest for Australia is
A) -1.4%.
B) 1.4%.
C) 6.9%.
D) cannot be determined from the information provided.
At a price of $1000, Dell Computer Co. is willing to sell 20 laptops and Compaq is
willing to sell 40 laptops. IBM will only sell laptops if the price is $1300 or higher. At
$1000, the market supply for laptops is:
A) 60.
B) 800.
C) 20.
D) 40.
According to the neoclassical theory of investment, the important determinant of
investment spending is:
A) taxes and the real interest rate.
B) government spending.
C) the business climate.
D) nominal interest rates and taxes.
Assume that compact discs and compact disc players are complements. When the price
of compact disc players decreases:
A) the demand for compact discs increases.
B) the demand for compact discs decreases.
C) the supply of compact discs increases.
D) the supply of compact discs decreases.
Workers often have ________ contracts and so their wages are ________.
A) long-term; flexible
B) long-term; sticky
C) short-term; sticky
D) short-term; flexible
Models of growth that account for technological progress are part of
A) creative destruction theory.
B) new growth theory.
C) growth accounting.
D) all of the above
Recall the Application. Assume that immediately before the housing bubble burst, you
purchased a $250,000 home and took out a $225,000 mortgage to make the purchase.
When the bubble burst, the value of your home fell by 20 percent. If you immediately
sold the home for its new, current value, you will still owe the mortgage company an
additional ________ and your total loss incurred from this entire process will be
________.
A) $50,000; $75,000
B) $25,000; $50,000
C) $18,000; $25,000
D) $50,000; $25,000
If people never withdrew money, how much money could the banking system create
given a new amount of deposits, assuming that excess reserves were zero?
A) zero
B) as much as the new deposits
C) the amount of new deposits multiplied by the reserve ratio
D) the amount of new deposits multiplied by the money multiplier
Real GDP equals nominal GDP when:
A) the current year is earlier than the base year.
B) the current year is later than the base year.
C) the current year and the base year are the same.
D) the current year and the base year are not the same.
A person who is going to college is accumulating:
A) human capital.
B) common sense.
C) street smarts.
D) technological progress.
________ unemployment arises from a mismatch of skills and jobs.
A) Cyclical
B) Frictional
C) Structural
D) Inflationary
Recall the Application about how to estimate the shifts in the natural rate of
unemployment to answer the following question(s).
Recall the Application. Under normal circumstances, the higher the unemployment rate,
the ________ job vacancies there will be. Over time, this would tend to ________ the
natural rate of unemployment.
A) more; increase
B) more; decrease
C) fewer; increase
D) fewer; decrease
When a supply curve is drawn, which of the following is not held constant?
A) taxes and subsidies
B) the state of production technology
C) prices of inputs
D) the price of the good
As the Federal Reserve ________ bonds, interest rates fall and the price of bonds
________.
A) buys; rises
B) sells; rises
C) buys; falls
D) sells; falls
All else constant, if the GDP in an economy decreases then:
A) demand for money increases.
B) demand for money decreases.
C) the quantity demanded for money increases.
D) the quantity demanded for money decreases.
