Anouncements:

The Exam is Thursday,

Lecture 1  January 17

1. Voluntary trade:

A. creates value.

B. channels goods to those who value them most.

C. helps both sides.

D. does all of the above

 

January 22  Lecture 2

2. In 1988, total known reserves of oil in the world was one trillion barrels, and annual consumption was 25 billion barrels. What is your estimate of the current quantity of known oil reserves in the world today, compared with 1988?

Note: 1 trillion/25 billion = 40.

A. less than half

B. about half

C. no significant change

D. more

 

Lecture 3  January 24

1. A report was released yesterday that indicated oil inventories in the U.S. are growing. All else equal, this should cause the price of oil to _______, and the price of gasoline to _______.

A. rise, rise

B. fall, rise

C. fall, fall

D. rise, fall

 

2. Today's Trick Question:

A stock broker sells $10,000 worth of stock and charges a 5% commission. From this action alone, GDP increases by:

A. Zero

B. $10,000

C. $500

D. $10,500

 

Lecture 4  January 29, 2008

1. Dr. Evil's original ransom amount was $1 million. The price level (P) was 23.89 in 1967, and 95.41 in 1997. If Dr. Evil adjusted the ransom amount appropriately, he'd:

A. Increase it to about $4 million

B. Increase it to about $4 billion

C. Increase it to... $100 billion!!!

D. Decrease it to about $250,000

 

2. Over the past 50 years in the U.S., the growth rate of real GDP in percentage terms was: ________

 

Lecture 5  January 31, 2008

1. What was the growth rate of real GDP for the 4th quarter of 2007?

A. ©\2 percent

B. 0 percent

C. 0.6 percent

D. 2.0 percent

E. 3.3 percent

 

2. What is the long run (last 50 years) average rate of unemployment in the

United States?

5.9

 

Lecture 5  February 5, 2008

1. What was the (seasonally adjusted) U.S. unemployment rate in January?

________

 

Lecture 7  February 7

1. The long run average inflation rate in the United States is about:

A. 4.1

B. 1.5

C. 5.9

D. 14.8

 

2. In macroeconomics, investment spending primarily signifies:

A. Buying stocks and bonds.

B. Buying tools and equipment used to produce future output.

C. Buying durable goods like cars and boats.

D. Buying gifts for Mr. Murtaugh to supplement test scores.

 

No graded questions for Lecture #8

 

Lecture 9  February 14

1. Dollar prices on bonds and bond interest rates:

A. Often move up and down together

B. Always move up and down together

C. Often move in opposite directions

D. Always move in opposite directions

 

2. If the price of a one year $10,000 bond is $9,600 (assume no coupons), the rate of return on this bond when held until maturity is:

A. $9,600

B. about 4%

C. about 9.6%

D. about 6%

 

No questions for Lecture 10.

 

Lecture 11  February 26

1. An increase in U.S. dollars necessary to buy a unit of foreign currency indicates:

A. A depreciation of the dollar.

B. An increase in the exchange rate.

C. A decrease in the value of the dollar.

D. All of the above.

E. None of the above.

 

2. Which of the following is a possible reason for the recent decline in the value of the U.S. dollar?

A. An increase in the U.S. money supply.

B. An increase in the supply of foreign currency.

C. A decrease in demand for foreign goods and services.

D. A decrease in demand for foreign assets.

E. None of the above.

 

Lecture 12  February 28

1. The term economic growth refers to:

A. changes in GDP.

B. percentage changes in real GDP.

C. percentage changes in real GDP per capita.

D. increases is personal fulfillment and satisfaction.

 

2. If a nation experiences economic growth of 2 percent per year for 105 years, how much will per capita real GDP increase?

A. approximately 50 times

B. approximately 2 times (double)

C. approximately the same (no significant change)

D. approximately 4 times

E. approximately 8 times

F. 100 billion dollars!!!

 

3. What is the long run average rate of real GDP growth in the United States?

A. 3.3 percent

B. 3.3%

C. both of the above

D. all of the above

 

No questions for Lecture 13.

 

Lecture 14  March 13

1. An important theoretical contribution of Solow's first growth model is:

A. endogenous growth factors

B. changes in technology

C. changes in weather

D. diminishing marginal productivity of capital

 

2. In the evolution of growth theory, one error was the focus on __________, without recognizing the importance of other factors like __________.

A. capital stock and natural resources; property rights and regulations

B. natural resources; unemployment

C. resources, technology and institutions; recessions

D. monetary and price stability; population control

 

Lecture 15  March 18

1. According to the real balance effect, decreases in the general price level:

A. decrease real money balances

B. decrease aggregate demand (AD)

C. decrease interest rates

D. increase interest rates

E. increase real money balances

 

2. The factors that shift LRAS are:

A. unemployment, inflation, and trade deficits

B. resources, institutions, and technology

C. real balance, interest rate, and relative price level effects

D. tax rates and consumer confidence

E. often related to the NCAA basketball tournament

 

3. Assume a spring frost occurs and damages U.S. citrus crops. How does this affect the general price level and unemployment rate?

A. prices rise and unemployment rate falls below natural rate

B. prices rise and unemployment rate rises above the natural rate

C. prices rise and natural rate of unemployment falls

D. prices fall and unemployment rate stay the same

 

Lecture 16  March 20

1. A decrease in short run aggregate supply

A. increases real GDP

B. increases the unemployment rate

C. decreases the unemployment rate

D. does not affect the unemployment rate

E. lowers prices of real goods and services

 

2. Who is harmed when most prices rise while others do not adjust?

A. buyers of the goods with sticky prices

B. sellers of the goods with sticky prices

 

3. If wages and loan prices are less flexible (stickier) than other prices, who is harmed when other prices rise?

A. firms (employers) and borrowers

B. workers and lenders

 

Lecture 17 March 25

1. What specific adjustments are made in moving from the short run to the long run after a decline in AD?

A. output prices rise

B. output prices fall

C. input prices rise

D. input prices fall

E. unemployment rises

F. real GDP falls

 

2. How can the AS/AD model explain the conditions of the Great Depression: lower P, lower Y, and higher u?

A. decreasing SRAS

B. increasing SRAS

C. decreasing AD

D. increasing AD

 

Lecture 18  March 27

1. The percentage of the U.S. government budget allocated to national defense is:

A. less than 5

B. 5-15

C. 16-25

D. 26-35

E. 36-45

F. 46-55

G. 56 or more

 

2. The percentage of the U.S. government budget allocated to income assistance (welfare) is:

A. less than 5

B. 5-15

C. 16-25

D. 26-35

E. 36-45

F. 46-55

G. 56 or more

 

3. The percentage of the U.S. government budget allocated to foreign aid is:

A. less than 5

B. 5-15

C. 16-25

D. 26-35

E. 36-45

F. 46-55

G. 56 or more

 

4. The percentage of the U.S. government budget allocated to Social Security is:

A. less than 5

B. 5-15

C. 16-25

D. 26-35

E. 36-45

F. 46-55

G. 56 or more

 

5. The percentage of the U.S. government budget allocated to Medicare is:

A. less than 5

B. 5-15

C. 16-25

D. 26-35

E. 36-45

F. 46-55

G. 56 or more

 

6. The US government budget is currently in

A. Deficit

B. Surplus

 

7. The last U.S. government budget surplus was in the year:

2001

 

Lecture 19  April 3

1. What is the likely outcome when government expenditures rise and tax revenues fall?

A. budget deficit

B. budget surplus

C. balanced budget

 

2. If total savings is $275 billion and the government borrows $50 billion, how much is left for private investment?

A. $325 billion

B. $225 billion

C. $50 billion

D. cannot be determined

 

 

Lecture 20  April 8

1. The US government lowers everybody's 2008 taxes by $1000.

A. The goal of this policy is to shift AD.

B. The goal of this policy is to shift AS.

 

2. The US government subsidizes college education.

A. The goal of this policy is to shift AD.

B. The goal of this policy is to shift AS.

 

3. The US government lowers everybody's 2008 taxes by $1000.

A. The goal of this policy is to shift AD.

B. The goal of this policy is to shift AS.

 

4. The US government lowers everybody's 2008 average tax rate by 5%.

A. The goal of this policy is to shift AD.

B. The goal of this policy is to shift AS.

 

No questions for Lecture 21.

 

Lecture 22  April 15

1. If Mrs. Coppock prefers to purchase goods using the part of M2 that is not also M1, this implies that she:

A. prefers to use a credit card

B. prefers to write checks from the checking account

C. prefers to use a debit card tied to the savings account

D. prefers to use currency

E. is a confident consumer