Economics homework help

/in /by

Economics homework help.                         NEU Macroeconomics                                                               
                
Chapter 12   Short-Run Fluctuations
 
1) A short-run change in ________ is referred to as a business cycle.

  1. A) the growth rate of real GDP
  2. B) the aggregate price level
  3. C) the currency exchange rate
  4. D) the expenditure incurred by the government

 
2) In the United States, recessions are informally defined as ________ in real GDP.

  1. A) two consecutive quarters of negative growth
  2. B) three consecutive quarters of negative growth
  3. C) two consecutive quarters of positive growth
  4. D) three consecutive quarters of positive growth

 
3) Which of the following is true of economic expansions?

  1. A) Governments can correctly predict the duration of economic expansions.
  2. B) Economic expansions are defined as the periods between recessions.
  3. C) Output grows and unemployment is high during periods of economic expansion.
  4. D) Consumption increases but investment falls during periods of economic expansion.

 
4) Which of the following is true of growth in developed and developing countries?

  1. A) Growth is completely steady in both developed and developing countries.
  2. B) Growth is completely steady in developed countries but fluctuates in developing countries.
  3. C) Growth fluctuates in developed countries but is completely steady in developing countries.
  4. D) Growth fluctuates in both developed and developing countries.

 
5) What can government policies do about the business cycle?

  1. A) Government policies can completely negate the business cycle.
  2. B) Government policies can eliminate expansions but not recessions.
  3. C) Government policies can reduce the severity of the business cycle.
  4. D) Government policies cannot affect the business cycle at all.

 
6) The Great Depression and World War II both caused major deviations from trend GDP. The Great Depression resulted in real GDP moving significantly ________ trend GDP; World War II resulted in real GDP moving significantly ________ trend GDP.

  1. A) above; above
  2. B) above; below
  3. C) below; above
  4. D) below; below

 
 
 
 
7) Which of the following falls during an economic boom?

  1. A) Unemployment
  2. B) GDP
  3. C) Consumption
  4. D) Investment

 
8) Which of the following rises during a recession?

  1. A) Consumption
  2. B) Investment
  3. C) GDP
  4. D) Unemployment

 
9) During a recession, real GDP falls. Which of the following also tends to fall?

  1. A) Real consumption
  2. B) Real investment
  3. C) Employment
  4. D) All of the above

 
10) During an expansion, real GDP rises. Which of the following also tends to rise?

  1. A) Real consumption
  2. B) Real investment
  3. C) Employment
  4. D) All of the above

 
11) How do consumption and investment tend to move during the business cycle?

  1. A) Consumption and investment both tend to rise or fall together
  2. B) Consumption tends to rise when investment falls, and vice versa
  3. C) Consumption always rises, even while investment rises and falls with the business cycle
  4. D) Investment always rises, even while consumption rises and falls with the business cycle

 
 
 
 Chapter 13          Countercyclical Policy
 
1) If the central bank of a country responds to economic contractions by adopting an expansionary monetary policy, ________.

  1. A) interest rates will increase
  2. B) access to credit will increase
  3. C) government spending will fall
  4. D) tax rates will increase

 
2) If the central bank wants to reduce the effects of a recession, it would adopt a(n) ________.

  1. A) expansionary fiscal policy
  2. B) contractionary monetary policy
  3. C) contractionary fiscal policy
  4. D) expansionary monetary policy

 
 
3) The economy is in a recession. The Fed could take direct action to stimulate economic activity by ________.

  1. A) lowering short-term interest rates
  2. B) lowering long-term interest rates
  3. C) increasing short-term interest rates
  4. D) increasing long-term interest rates

 
4) An expansionary monetary policy ________ in an economy.

  1. A) lowers interest rates
  2. B) increases interest rates
  3. C) lowers tax rates
  4. D) increases tax rates

 
5) The federal funds rate is the interest rate that ________.

  1. A) banks use to make loans to one another
  2. B) the Fed uses to lend money to households
  3. C) the Fed uses to lend money to business firms
  4. D) banks use to lend money to the Fed

 
6) If the Fed wants to stimulate an economy, it will ________.

  1. A) sell Treasury bonds
  2. B) lower short-term interest rates
  3. C) increase the quantity of required reserves
  4. D) reduce money supply

 
7) The ultimate goal of an expansionary monetary policy is to ________.

  1. A) lower short-term interest rates
  2. B) lower long-term interest rates
  3. C) shift the labor demand curve to the right
  4. D) shift the labor demand curve to the left

 
8) A ________ in long-term interest rates ________ households’ demand for durable goods.

  1. A) fall; decreases
  2. B) fall; increases
  3. C) rise; increases
  4. D) rise; does not affect

 
9) A fall in long-term interest rates leads to a ________.

  1. A) leftward shift of the labor demand curve
  2. B) rightward shift of the labor demand curve
  3. C) leftward shift of the labor supply curve
  4. D) rightward shift of the labor supply curve

 
 
 
 
10) If long-term interest rates fall, ________.

  1. A) unemployment increases
  2. B) the demand for loans decreases
  3. C) investment by firms decreases
  4. D) investment by firms increases

 
11) Which of the following happens if long-term real interest rates fall?

  1. A) The prices of long-term bonds fall.
  2. B) Imports increase.
  3. C) Employment opportunities increase.
  4. D) The demand for loans falls.

 
                              Chapter 14 International Trade
1) International trade is driven by ________.

  1. A) absolute advantage in the consumption of goods and services
  2. B) absolute advantage in the production of goods and services
  3. C) comparative advantage in the production of goods and services
  4. D) comparative advantage in the consumption of goods and services

 
2) Comparative advantage and international trade are driven by ________.

  1. A) low average costs in the production of goods and services
  2. B) high average costs in the production of goods and services
  3. C) low opportunity costs in the production of goods and services
  4. D) high opportunity costs in the production of goods and services

 
3) If the price of swords in Winterfell is lower than it is in Kings’ Landing before these two regions start trading, we can conclude with certainty that ________.

  1. A) Winterfell has absolute advantage in producing swords
  2. B) Winterfell has comparative advantage in producing swords
  3. C) King’s Landing has absolute advantage in producing swords
  4. D) King’s Landing has comparative advantage in producing swords

 
4) When international trade is based on the concept of comparative advantage, then a country will specialize in producing goods that the country can produce ________.

  1. A) at a lower cost than other countries in the same time span
  2. B) at a higher price than other countries in the same time span
  3. C) more of than other countries in the same time span
  4. D) faster than other countries in the same time span

 
5) Once engaged in international trade, Asgard decides to specialize in producing armor, according to its comparative advantage. What can we conclude about what happens next?

  1. A) There will be no change in the price of armor in Asgard.
  2. B) The world price of armor will increase.
  3. C) More armor will be demanded in Asgard.
  4. D) More armor will be produced in Asgard.

 
 
 
Scenario: A shoe manufacturer has factories in two countries, Country X and Country Y. Shoe manufacturing involves two main tasks–designing the shoe and stitching it. The value added per hour in each activity by workers in the two countries is shown in the table below.
 
 
6) Refer to the scenario above. Which of the following statements is true in this case?

  1. A) The opportunity cost of designing shoes is lower in Country X.
  2. B) The opportunity cost of stitching shoes is lower in Country X.
  3. C) Country Y has an absolute advantage in stitching shoes.
  4. D) Country Y has an absolute advantage in designing shoes.

 
7) Which of the following is true of international trade?

  1. A) International trade in services is not allowed.
  2. B) International trade benefits all trading nations equally.
  3. C) International trade increases overall economic efficiency.
  4. D) International trade reduces total surplus in an economy.

 
8) Identify the correct statement.

  1. A) Transfer payments refer to the payments made to foreign firms.
  2. B) Net exports are the value of a country’s exports minus the value of its transfer payments.
  3. C) Imports refer to the goods and services that are produced abroad and sold domestically.
  4. D) Exports refer to the goods and services that are produced abroad and consumed domestically.

 
9) Which of the following statements is correct?

  1. A) Transfer payments from foreigners represent the payments that domestic residents receive from assets owned in foreign countries.
  2. B) Imports refer to the goods and services that are produced domestically and consumed abroad.
  3. C) Exports refer to the goods and services that are produced domestically and sold abroad.
  4. D) Factor payments from foreigners represent the “gifts” received from individuals who reside abroad or from foreign governments.

 
10) Technical support provided by an Indian firm to a multinational company headquartered in New York is an example of a(n) ________.

  1. A) import of services by India
  2. B) export of services by India
  3. C) capital account transaction
  4. D) transfer payment to the United States

 
11) Which of the following is likely to happen if the government imposes a tariff on steel imports?

  1. A) The domestic producers of steel will face more foreign competition.
  2. B) The domestic producers of steel will face less foreign competition.
  3. C) The domestic producers of steel will be worse off.
  4. D) The domestic consumers of steel will be better off.

 
 
 

Economics homework help