Macroeconomic Principles: Quizzes 1 to 7

Test de repaso. Preguntas 1-15: Contabilidad nacional, inflación y mercado laboral

Select the correct response for questions 1 through 15:

Select the correct answer for each of the following questions regarding GDP, the GDP deflator, the CPI, and inflation:

.

Test de repaso. Preguntas 1-15: Contabilidad nacional, inflación y mercado laboral

Select the correct response for questions 1 through 15:

c.

When personal disposable income is equal to zero, which scenario arises?

i.

For a closed economic system, which condition must hold for equilibrium in the goods market?

o.

In a closed economy, autonomous expenditure is expressed as:

Test de repaso. Preguntas 1-15: Contabilidad nacional, inflación y mercado laboral

Select the correct response for questions 1 through 15:

f.

The official unemployment rate is calculated as the ratio between:

l.

Suppose an economy records 180 million employed workers, 20 million jobless individuals actively seeking work, and 45 million discouraged workers who stopped searching. The official unemployment rate is:

p.

Over the course of the business cycle, unemployment typically:

q.

The presence of involuntary unemployment in the labor market reflects:

t.

The labor force is composed of:

Test de repaso. Preguntas 1-15: Contabilidad nacional, inflación y mercado laboral

Select the correct response for questions 1 through 15:

m. Regarding the European Union (EU) and the Economic and Monetary Union (EMU):

Quiz 2. The Goods Market and Short-Run Equilibrium

Select the correct answer for each question:

b.

Income constitutes a:

h.

If an economy observes a persistent decline in its GDP deflator over several periods, we can conclude that:

i.

A manufacturing firm pays $100M for intermediate goods and$200M in labor wages, generating $800M in gross revenues. The value added by this firm is:

o.

Which item's price is accounted for in the GDP deflator but excluded from the Consumer Price Index?

q.

Why do macroeconomists express concern over high inflation rates?

u.

Economic deflation corresponds to a situation where:

v.

When an economy experiences a negative growth rate in its GDP deflator, this signifies that:

aa.

Identify the INCORRECT statement:

Quiz 2. The Goods Market and Short-Run Equilibrium

Select the correct answer for each question:

a.

In the short run, variations in aggregate output are primarily driven by shifts in:

c.

Which of the following events reduces the size of the Keynesian multiplier?

d.

Suppose the marginal propensity to consume is $c_1 = 0.8$. Which intervention leads to the largest expansion in equilibrium output?

e.

In macroeconomic analysis, the term 'investment' refers strictly to:

g.

When disposable income drops to zero:

j.

Which of the following is NOT categorized as fixed investment ($I$)?

k.

Let the consumption relation be $C = 250 + 0.75Y_D$. If government purchases increase by 100, the resulting expansion in equilibrium output is:

m.

In a closed goods market, autonomous spending equals:

n.

Goods market balance in a closed economy implies:

p.

Given the consumption function $C = c_0 + c_1(Y - T)$, where $c_1$ is the marginal propensity to consume:

s.

For a consumption equation $C = 250 + 0.75Y_D$, the goods-market multiplier is:

x.

In the baseline goods-market model, which variable is taken as exogenous?

y.

Regarding goods market equilibrium:

z.

National saving in a closed economy corresponds to:

ab.

An increase in the marginal propensity to consume ($c_1$) causes:

Quiz 2. The Goods Market and Short-Run Equilibrium

Select the correct answer for each question:

f.

Which of the following is an intrinsic feature of financial bonds?

l.

Aggregate money demand:

r.

Which of the following assets forms part of the stock of money ($M_1$)?

t.

When nominal interest rates increase in the economy:

w.

Which asset is classified as a constituent component of money?

o. Total national saving is formally defined as:

)

.

b.

Along the LM curve, which economic condition is continuously met?

g.

The IS curve displays:

m.

During the financial crisis of 2007–2008, the Federal Reserve implemented aggressive monetary easing. In the traditional IS-LM diagram, this is shown as:

p.

The IS curve shifts outward to the right when:

s.

Identify the FALSE statement regarding an economy stuck in a liquidity trap:

v.

When an economy operates at the intersection of the IS and LM curves:

Quiz 4. The Extended IS-LM Model and Risk

Select the correct answer for each question:

.

Quiz 5. Financial Risk, Open Economy and Labor Market Basics

Select the correct answer for each question:

a.

The borrowing interest rate relevant to households and non-financial businesses is determined by:

i.

The observation that investors accept lower yields on government debt than on corporate bonds reflects that investors are:

j.

If financial investors become less risk averse, private borrowers will likely face:

k.

Consider a bank with assets of $160M, liabilities of$140M, and capital of $20M. If asset values fall by$30M, the bank's leverage ratio will:

l.

Regarding unconventional monetary measures, when policy rates reached zero, the ECB implemented Quantitative Easing by:

r.

An increase in the financial risk premium:

u.

The real borrowing rate combines:

y.

If the central bank seeks to lower the real policy rate when the nominal rate is constrained by the zero lower bound ($i = 0$), the lowest real rate it can achieve is:

Quiz 5. Financial Risk, Open Economy and Labor Market Basics

Select the correct answer for each question:

b.

In the wage-setting equation $W = P^e F(u, z)$, the institutional parameter $z$ does NOT encompass:

c.

The reservation wage corresponds to:

d.

Over macroeconomic cycles, the unemployment rate generally:

e.

A non-zero unemployment rate in the labor market reveals:

f.

In an economy with a working-age population of 250 million, 100 million employed individuals, and 10 million unemployed individuals, the unemployment rate is:

g.

In the wage-setting relation, the bargained nominal wage falls whenever:

h.

The active labor force is defined as:

m.

Henry Ford's introduction of the five-dollar day (an efficiency wage) resulted historically in:

n.

The existence of unemployment indicates that in the labor market:

o.

Labor productivity is defined analytically as:

p.

With 250 million working-age people, 100 million employed, and 10 million unemployed, the labor force participation rate is:

q.

Which individual is classified as OUT of the labor force?

s.

Efficiency wage models posit that:

t.

Which category is excluded from the active labor force?

Quiz 5. Financial Risk, Open Economy and Labor Market Basics

Select the correct answer for each question:

v.

If the price level is 1.0 in Japan and 2.0 in the US, and the nominal exchange rate is 100 Yen per US dollar, the real exchange rate between the US and Japan is:

w.

From the US perspective, an increase in the nominal exchange rate (appreciation of the dollar) means:

x.

Suppose US inflation is lower than Eurozone inflation over a decade while the dollar depreciates nominally against the euro. The real exchange rate of the US dollar:

z.

When the nominal exchange rate E appreciates by 5%:

aa.

The real exchange rate is best defined as:

Quiz 6. Wage-Setting, Price-Setting and the Phillips Curve

Select the correct answer for each question:

.

Quiz 6. Wage-Setting, Price-Setting and the Phillips Curve

Select the correct answer for each question:

c.

According to the modern Phillips curve relation:

n.

Following the oil price shocks of the 1970s, inflation expectations changed such that individuals assumed:

r.

When inflation is non-persistent (as observed in the US prior to the mid-1960s):

y.

When inflation lacks persistence over time:

b.

Okun's law indicates that whenever the actual unemployment rate is below the natural rate:

c.

According to Okun's law, labor hoarding behavior implies that:

t.

According to Okun's law, if output growth exceeds the normal growth rate by 1 percentage point:

g. Over the past fifty years, which developed country recorded the highest average growth rate in output per capita?

c.

Under the expectations-augmented Phillips curve, whenever real output surpasses its natural benchmark:

d.

Which expectation hypothesis best captures how agents projected inflation after the 1970s commodity supply shocks?

a.

Starting from natural production, suppose the government implements an expansionary budgetary spending bill. In the short run, this budgetary expansion stimulates:

b.

An economy rests in medium-run equilibrium with output at potential ($Y = Y_n$). If public expenditure $G$ expands, what monetary adjustment must the central bank execute to preserve output at its potential level?

e.

Within the textbook IS-LM-PC framework, which intervention permanently lowers the medium-run natural level of aggregate output?

Quiz 8. Preguntas 1-12: Modelo de crecimiento de Solow y rendimientos

Evaluate each question regarding economic growth and short-run dynamics:

a.

Following a medium-run baseline in year $t$, consumer sentiment experiences a positive shock in year $t+1$. Relative to period $t$, how does the short-run equilibrium change?

j.

In an economy operating at potential output $Y_n$, government purchases rise. To keep output from deviating from $Y_n$, the central bank must:

Quiz 8. Preguntas 1-12: Modelo de crecimiento de Solow y rendimientos

Evaluate each question regarding economic growth and short-run dynamics:

b.

Economic convergence documented among OECD member states occurs because:

c.

Without technological innovation, an economy operating in its steady state exhibits:

d.

In the Solow growth framework, sustained long-term expansion of living standards originates from:

e.

Which relationship describing physical capital accumulation holds universally?

f.

Given the aggregate production structure $Y = F(K, AN)$ with population growth and technological progress, which variable stays constant along the balanced growth path?

g.

Under constant returns to scale, if employment increases by 3% while all other inputs remain unchanged, production will:

h.

Diminishing marginal returns to capital imply that a 4% increase in the physical capital stock will lead to:

i.

Consider two countries identical in technology, depreciation, and population growth, but where country A saves a larger fraction of income than country B. In the long-run steady state:

k.

Along a balanced growth path with labor-augmenting technology, which statement is always verified?

l.

If the steady-state capital per worker lies strictly above the Golden Rule level, raising the national saving rate will:

Quiz 8. Preguntas 1-12: Modelo de crecimiento de Solow y rendimientos

Evaluate each question regarding economic growth and short-run dynamics:

b)

In period $t + 1$, output exceeds potential and inflation exceeds expected inflation. To keep the real policy rate unchanged, what action must the central bank take?

)

e)

During the Great Recession, European countries enacted fiscal consolidation (tax hikes and expenditure cuts). Why was it harder for monetary policy to mitigate the contraction in Europe compared to the US in the 1990s?

)

Quiz 8. Preguntas 1-12: Modelo de crecimiento de Solow y rendimientos

Evaluate each question regarding economic growth and short-run dynamics:

a)

Suppose capital depreciates at 10% annually, population expands by 2% per year, and labor efficiency improves by 3% per year. What is the steady-state growth rate of output per worker?

c)

Under constant returns to scale, if both labor $N$ and capital $K$ expand by 2%, output will:

d)

Due to diminishing returns to capital, a 4% increase in the capital stock causes aggregate production to:

f)

In the Solow model, what is the consequence of a permanent increase in the saving rate?

g)

Assuming two countries are identical except that economy A has saving rate $s_A > s_B$, what is true regarding their long-run per capita growth?

h)

With annual depreciation of 10%, labor force growth of 2%, and productivity growth of 3%, the steady-state rate of growth of output per worker is:

i)

If economy A possesses a larger stock of human capital than economy B but is otherwise identical, in steady state:

j)

What occurs in period $t$ immediately after the saving rate increases in period $t$?

k)

If the capital-labor ratio $K/N$ in the current period exceeds that of the previous period, we can conclude that:

l)

When an economy functions at steady state in the absence of technological progress, which quantity remains constant?

m)

The Golden Rule capital stock is defined as the steady-state capital level that:

Test de repaso. Preguntas 1-15: Contabilidad nacional, inflación y mercado laboral

Select the correct response for questions 1 through 15:

.

Test de repaso. Preguntas 1-15: Contabilidad nacional, inflación y mercado laboral

Select the correct response for questions 1 through 15:

c.

When personal disposable income is equal to zero, which outcome occurs?

k.

In economic terminology, personal income is a:

m.

Assuming a marginal propensity to consume of $c_1 = 0.8$, which policy shock generates the greatest expansion in output?

Test de repaso. Preguntas 1-15: Contabilidad nacional, inflación y mercado laboral

Select the correct response for questions 1 through 15:

g)

Unemployment in the labor market reflects:

h)

In an economy with 180 million employed workers, 20 million actively searching for employment, and 45 million discouraged non-workers, the official unemployment rate is:

j)

The civilian labor force consists of:

d.

If Japan observed continuous declines in its GDP deflator during the late 1990s, we know with certainty that:

k.

Suppose an automobile manufacturer incurs $100 million in intermediate material expenses and$200 million in labor compensation, achieving gross sales of $800 million. What is the value added generated?

b.

In macroeconomics, the term "investment" refers to:

c.

Given the consumption schedule $C = 250 + 0.75Y_D$, the autonomous expenditure multiplier is:

e.

In the standard goods market framework, which variable is strictly exogenous?

g.

An increase in the marginal propensity to consume $c_1$ will:

h.

For $C = 250 + 0.75Y_D$, if public purchases rise by 100, equilibrium GDP will expand by:

i.

Which parameter adjustment lowers the expenditure multiplier?

j.

In an economy without international transactions, aggregate national saving is defined as:

l.

In goods market equilibrium analysis, an increase in the marginal propensity to save causes:

m.

Given the consumption relationship $C = c_0 + c_1(Y - T)$, a 1-unit increase in income translates to:

n.

Which transaction is NOT recorded as fixed investment?

a.

Which monetary asset is included in narrow money?

f.

Which of the following forms of financial wealth is a component of the money supply?

o.

Which asset is excluded from the money supply definition?

13. Test de repaso. Preguntas 31-45: Mercados monetarios, curvas IS-LM y trampa de liquidez

Select the correct response for questions 31 through 45:

b.

A pure discount bond promises a single redemption value of $1,000 in one year. If the prevailing market interest rate is 15%, the bond's price equals:

c.

High-powered money (the monetary base) comprises:

e.

Which event causes the money multiplier to shrink?

f.

Demand for liquid money balances:

g.

The money demand curve shifts to the right whenever:

h.

Assuming the non-bank public holds zero physical cash (c = 0) and commercial banks maintain a reserve ratio of 0.10, the money multiplier equals:

l.

The LM relation represents equality between:

13. Test de repaso. Preguntas 31-45: Mercados monetarios, curvas IS-LM y trampa de liquidez

Select the correct response for questions 31 through 45:

a.

For any given interest rate, points on the LM curve describe:

d.

The IS schedule portrays:

i.

In a liquidity trap scenario:

j.

Suppose an economy undertakes fiscal expansion while the central bank cuts interest rates simultaneously (monetary expansion). Output will:

k.

If the central bank executes a contractionary monetary policy while consumer confidence improves, then:

m.

When fiscal stimulus coincides with an interest rate reduction, in the IS-LM framework:

n.

Which event shifts the IS curve to the right?

o.

In the extended IS-LM model with credit risk, an increase in financial risk aversion leads to:

14 Test de repaso. Preguntas 46-60: Prima de riesgo, economía abierta y política fiscal

Select the correct response for questions 46 through 60:

.

14 Test de repaso. Preguntas 46-60: Prima de riesgo, economía abierta y política fiscal

Select the correct response for questions 46 through 60:

n. When the euro appreciates against the US dollar:

15. Test de repaso. Preguntas 61-75: Tipos de cambio real/nominal y fijación salarial

Select the correct response for questions 61 through 75:

a.

If financial investors become less risk-averse and confident in the banking system, borrowers will experience:

b.

The borrowing rate applicable to private businesses and households combines:

e.

Investors demanding identical expected returns across safe and risky assets exhibit:

g.

A commercial bank has $160M in assets,$140M in liabilities, and $20M in equity capital. If total asset values drop by$30M, the bank's leverage ratio:

i.

If the central bank wants to reduce the real policy rate and the zero lower bound is binding ($i = 0$), the lowest real policy rate it can attain is:

15. Test de repaso. Preguntas 61-75: Tipos de cambio real/nominal y fijación salarial

Select the correct response for questions 61 through 75:

o. Under $P^e = P$, the natural level of output occurs when:

15. Test de repaso. Preguntas 61-75: Tipos de cambio real/nominal y fijación salarial

Select the correct response for questions 61 through 75:

c.

A nominal appreciation of the Japanese yen indicates that:

)

d.

Holding all other factors constant, which development raises the real exchange rate $\varepsilon = EP/P^*$?

)

f.

If the Japanese price level is 1.0, the US price level is 2.0, and the nominal exchange rate is 100 yen per dollar, what is the real exchange rate between the US and Japan?

)

h.

From the perspective of the US economy, an increase in the nominal exchange rate (foreign currency per dollar) implies that:

)

j.

The real exchange rate represents:

)

k.

Which mathematical expression reflects the euro price of foreign currency?

)

l.

If $E$ (defined as units of foreign currency per unit of domestic currency) rises by 5%:

)

m.

If the nominal exchange rate decreases by 4% while domestic and foreign price levels remain constant:

)

n.

Holding all other factors fixed, which event causes the real exchange rate to appreciate?

)

16 Test de repaso. Preguntas 76-90: Margen de precios, tasa natural y expectativas de inflación

Select the correct response for questions 76 through 90:

a.

If employers and labor unions expect general consumer prices to rise by 5%, nominal bargained wages will:

)

b.

For the production relation $Y = AN$, labor productivity corresponds to:

)

c.

The natural rate of unemployment represents the unemployment rate:

)

d.

In the labor market model, an increase in the firm markup $m$ causes:

)

e.

The price-setting relation is given by $P = (1 + m)W$. Under perfect product market competition, the markup parameter $m$ equals:

)

f.

The natural level of employment $N_n$ increases when:

)

g.

In the price-setting relationship, the current aggregate price level depends on:

)

h.

Which structural development generates an increase in the natural level of output $Y_n$?

)

j.

When actual prices match expected price levels ($P = P^e$):

)

k.

A worker's reservation wage is defined as:

)

l.

Based on the wage-setting curve, a drop in the unemployment rate produces:

)

n.

Under $Y = AN$, a reduction in the unemployment rate causes the price-setting (PS) real wage to:

)

o.

Empirical data across European Union economies show that the natural rate of unemployment:

)

16 Test de repaso. Preguntas 76-90: Margen de precios, tasa natural y expectativas de inflación

Select the correct response for questions 76 through 90:

i.

According to the Phillips curve, whenever the actual unemployment rate falls below the natural rate of unemployment:

m.

If real GDP is sustained above potential GDP, the Phillips curve guarantees that:

Test de repaso. Preguntas 91-105: Rigidez laboral, IS-LM-PC y neutralidad a medio plazo

Select the correct response for questions 91 through 105:

a.

Suppose greater international trade intensifies product market competition in Spain. We would expect:

b.

Which factor is NOT regarded as a structural labor market rigidity contributing to European unemployment?

d.

A statutory reduction in the minimum wage causes:

e.

If the central bank executes monetary tightening, in the short run:

f.

In the price-setting equation, the aggregate price level depends directly on:

j.

Which element is NOT considered a structural labor market rigidity?

Test de repaso. Preguntas 91-105: Rigidez laboral, IS-LM-PC y neutralidad a medio plazo

Select the correct response for questions 91 through 105:

c.

In periods when inflation exhibits low persistence (as in the US before the mid-1960s):

g.

Which development generates a shift of the Phillips curve?

i.

Following the 1970s oil shocks, inflation expectations were best characterized by:

l.

When inflation displays low historical persistence:

Test de repaso. Preguntas 91-105: Rigidez laboral, IS-LM-PC y neutralidad a medio plazo

Select the correct response for questions 91 through 105:

h)

Starting from natural output, a fiscal budget expansion causes a short-run increase in:

)

k)

Starting at potential output, which shift will NOT alter the medium-run expenditure composition of GDP?

)

m)

Within the IS-LM-PC synthesis, which event reduces the medium-run natural level of output?

)

n)

An increase in taxation from an initial medium-run equilibrium will, in the medium run, have NO impact on:

)

o)

In the IS-LM-PC framework, which policy causes a short-run rise in the unemployment rate?

)

l. Okun's law dictates that whenever the actual unemployment rate falls below the natural rate:

a.

Which shock leads to an increase in the aggregate price level?

)

b.

Which structural event increases the natural level of GDP?

)

c.

Based on the Phillips curve, when GDP exceeds its potential level:

)

d.

If consumer confidence surges in period $t+1$ starting from a medium-run equilibrium in $t$, how does the short run compare to $t$?

)

e.

Because true potential output is unobservable in real time, central banks adjust monetary policy using:

)

o.

If period $t+1$ output exceeds potential and inflation exceeds expected inflation, to keep the real policy rate unchanged the central bank must:

)