macro 2

Which of the following are residents of rich countries likely to have in greater quantities, or better quality, than residents of poor countries?

•  housing

•  healthcare

• life expectancy

• All of the above.

  According to liquidity preference theory, the money-supply curve would shift rightward

• if the money demand curve shifted right.

• if the Federal Reserve chose to increase the money supply.

• if the interest rate increased.

•  All of the above are correct.

Net capital outflow is defined as the purchase of

• foreign assets by domestic residents minus the purchase of domestic assets by foreign residents.

•  foreign assets by domestic residents minus the purchase of foreign goods and services by domestic residents.

•  domestic assets by foreign residents minus the purchase of domestic goods and services by foreign residents.

• domestic assets by foreign residents minus the purchase of foreign assets by domestic residents.

  
  

Other things the same, an increase in the price level makes the dollars people hold worth

• more, so they can buy more.

•  more, so they can buy less.

•  less, so they can buy more.

• less, so they can buy less.

People hold money primarily because it

• has a guaranteed nominal return.

•  serves as a store of value.

•  can directly be used to buy goods and services.

•  functions as a unit of account.

If national savings in a closed economy is greater than zero, which of the following must be true?

•     Either public saving or private saving must be greater than zero.

•  Investment is positive.

•  Y - C - G > 0

•  All of the above are correct.

  
  

Refer to Table 26-3. Determine the quantity of private savings.

•  $0.2 trillion

•   $1.6 trillion

•   $1.8 trillion

• $2.6 trillion

Answer explanation

Do S = (Y - C - T) + (T - G)        

(Y - T - C ): Private Saving

(T - G)        : Public Saving

If $400 is deposited into the First Bank of Mason City,

• the bank will be able to make additional loans totaling $320.

• excess reserves initially increase by $320.

•   required reserves initially increase by $80.

•  All of the above are true.

Ryan lives in an apartment where he pays $7,000 a year in rent.   Alexis lives in a house that could be rented for  $14,000 a year.  How much do these housing services contribute to GDP?

•     $21,000

•  $14,000

•   $7,000

•  $0

Spots, Inc. produces ink and sells it to Write on Target, which makes pens.  The ink produced by Spots, Inc. is called

•      an inventory good.

•   a transitory good.

• a final good.

•    an intermediate good.