Econ 375: Intermediate
Macroeconomics
February 5, 2002
Exam 1
Part One: Circle the best
answer for 2 points.
1.
Which
of the following do NOT represent one of the three broad groupings of
macroeconomics?
a.
aggregate
output and employment
b.
money
growth and inflation
c.
the
market for health care
d.
international
trade and the U.S. exchange rate
2.
Suppose
the production of goods and services grows faster than employment. Given this information, we know that:
a.
the
typical worker has become more productive
b.
the
typical worker has become less productive
c.
the
productivity of the typical worker has not changed
d.
per-worker
production of goods and services has fallen
3.
Suppose
a country has a negative trade balance.
Given this information, we know that:
a.
merchandise
exports are greater than merchandise imports
b.
merchandise
exports are less than merchandise imports
c.
merchandise
exports are equal to merchandise imports
d.
a
trade surplus exists
4.
Which
of the following would be INCLUDED in GDP?
a.
value
of a purchase of stocks
b.
value
of auto parts purchased by an automobile company
c.
value
of capital goods purchased by businesses
d.
value
of household services
5.
Based
on the definition of GDP, we know that depreciation expense:
a.
is
excluded from GDP
b.
is
included in GDP
c.
is
excluded from GDP and included in GNP
d.
is included in GDP and excluded from GNP
6.
Which
of the following is exchanged in the product market of circular flow diagram?
a.
labor
b.
entrepreneurship
c.
land
d.
final
goods and services
7.
The
difference between national income and net national product is:
a.
net
investment
b.
indirect
business taxes
c.
depreciation
d.
inventory
investment
8.
When
current account deficit exists, we know with certainty that:
a.
the
overall balance of payments will be negative
b.
the
overall balance of payments will be zero
c.
the
overall balance of payments will be positive
d.
more
information is needed to answer this question
9.
Suppose
nominal GDP in 1982 was less than real GDP in 1982. Given this information,
we know with certainty that:
a.
the
price level in 1982 was greater than the price level in the base year
b.
the
price level in 1982 was less than the price level in the base year
c.
real
GDP in 1982 was less than real GDP in the base year
d.
real
GDP in 1982 was less than nominal GDP in the base year
10.
In
the short-run, which of the following variables can the firm change?
a.
capital
b.
labor
c.
land
d.
technology
Part Two: Answer the following
questions for 10 points each.
11.
Provide
a list of three variables that would be studied in macroeconomics course. Determine whether or not each of these
variables is stock or flow.
12.
A
reduction in tax rates has not affected the total output of goods and services
in an economy but it has increased its real GDP. How is this possible?
Explain fully.
13.
Using
the following data ($billions) for a given year and assuming that GDP is equal
to GNP, calculate GDP, national income, net national product, and indirect business
taxes. Show your work.
Consumption
spending: $5,000 Wages and salaries: $4900
Net
interest: 700 Depreciation: 70
Rental
income: 310 Government spending: 2500
Investment
spending: 1500 Net export spending 50
Profits: 1900
14.
What are the predictions regarding the state of the federal government's budget
during this year? What are some of the
causes and the effects of these predictions?