Macro Exam Two

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  1. When you specialize and trade according to comparititive advantage, you compare what you do relative to ___ & choose to produce the output that has the ___ opportunity cost
    Do other things you could do; lowest
  2. When a country allows trade and becomes an importer of a good,
    Domestic producers become worse off and domestic consumers become better off
  3. Workers by trade eventually find jobs in
    The industries in which the country has a comparative advantage
  4. When a country that imports a particular good imposes a tariff on that good
    Consumer surplus decreases and total surplus decreases in the market for that good
  5. For the saddle market, area B represents
    None of the above is correct
  6. When the country for which the figure is drawn allows international trade in crude oil
    Producer surplus changes from the area B+D+C
  7. All of the following will likely trigger increases in national output except
    Increases in interest rate
  8. If a country's GDP falls, then it must be the case that the economy's
    Income and expenditure both fall
  9. The difference between real and nominal GDP arises because of the existence of
    Differences in values of currencies
  10. In the economy of Wrexington in 2008, consumption was $1000, exports were $1100, government purchases were $450, imports were $150, and investment was $350, what was Wrexington's GDP in 2008?
  11. If a US citizen buys a TV made in Korea by a Korean firm, then:
    US net exports decrease and US GDP is uneffected
  12. A US publisher purchase four computers that were manufactured in the US. This purchase by itself makes
    A positive contribution both to investment and to GDP
  13. Consider two items that might be included in the GDP: (1) estimated rental value of owner occupies housing and (2) purchases of newly constructed homes. How are these accounted for GDP?
  14. Item (1) is consumption (2) investment
  15. In the economy of Wrexington in 2008, nominal GDP was $10 trillion and real GDP was $4 trillion. What was its GDP deflator?
  16. The US federal debt grows whenever
    All of the above
  17. Which of the following is correct?
    Some bonds have terms as short as a few months
  18. On which of these bonds is the prospect of default least likely?
    A bond issued by the federal government
  19. If M Beer runs into financial difficulty the stock holders as
    Part owners of it are paid after bond holders get paid
  20. Suppose that in a closed economy GDP is equal to 11,000 taxes are equal to 2,500, consumption equals 7,000 and government purchases equal 3,000. What are private and public saving?
    1500 and -500
  21. The source of the supply of loanable funds
    is saving and the source of demand for loanable funds is investment
  22. Which of the following events would shift the supply curve form S1 to S2?
    In response to the tax reform, tax payers are encouraged to save more
  23. If a referum of the tax laws encourages greater saving the result would be
    Lower interest rates and greater investment
  24. Which of the following is correct? (2)
    The financial system channels funds from savers to borrowers
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Macro Exam Two
macro exam two
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