ECO 202 ACTUAL EXAM 2024|MACRO ECONOMICS VERIFIED EXAM QUESTIONS AND CORRECT ANSWERS ALL GRADED A+|GUARANTEED SUCCESS|LATEST UPDATE
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ECO 202 Macro economics
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ECO 202 Macro Economics
ECO 202 ACTUAL EXAM 2024|MACRO ECONOMICS VERIFIED EXAM QUESTIONS AND CORRECT ANSWERS ALL GRADED A+|GUARANTEED SUCCESS|LATEST UPDATE
Suppose you have $200 to invest at a nominal interest rate of 8%. If the inflation rate is 3%, then the real return on your investment is: - ANSWER-...
ECO 202 ACTUAL EXAM 2024|MACRO
ECONOMICS VERIFIED EXAM
QUESTIONS AND CORRECT ANSWERS
ALL GRADED A+|GUARANTEED
SUCCESS|LATEST UPDATE 2024-2025
Suppose you have $200 to invest at a nominal interest rate of 8%. If the inflation rate
is 3%, then the real return on your investment is: - ANSWER-✔$10
If Table 11.3 represents all the investments available to the economy, the nominal
interest rate is 10%, and there is no inflation, what will be the level of investment in
the economy? (Note that the Cost represents the level of investment for each
investment project.) - ANSWER-✔$100
The present value of a given payment in the future _______ when interest rates rise.
- ANSWER-✔decreases
Which of the following is not included in M1? - ANSWER-✔savings accounts
Assume the following information about the DUCK BANK: Bank deposits are $30,000;
Loans are $20,000; Reserves are $5,000; and the reserve requirement is 10%. The
DUCK BANK is holding _______ in excess reserves. - ANSWER-✔$2,000
If the banking system has a required reserve ratio of 5 percent, then the money
multiplier is: - ANSWER-✔20
If the FED sells $7.5 million of US bonds and the reserve requirement is 25%, M1 will
eventually: - ANSWER-✔decrease by $30 million
If the quantity of money demanded exceeds the quantity of money supplied, then
the: - ANSWER-✔interest rate will increase
, If the FED has a major policy objective to decrease unemployment, it should: -
ANSWER-✔decrease the reserve requirement and/or conduct an open market
purchase.
Refer to Fig. 13.1. Assume the initial equilibrium point is the intersection of the solid
money demand and supply lines. Which point is a likely equilibrium outcome if the
FED conducts an open market sale and real income decreases? - ANSWER-✔E
When money is used to express the value of goods and services, it is functioning as a:
- ANSWER-✔unit of account
An open market purchase by the Fed: - ANSWER-✔Increases both investment and
output
Suppose consumer tastes and preferences shift from a desire to go skiing to an
interest in snowboarding. If skis and snowboards are produced by different firms,
then firms that produce snowboards will experience: - ANSWER-✔a rise in prices,
which will induce them to increase production and increase the number of workers.
Assuming a long-run Classical aggregate supply curve, a decrease in the money
supply results in _______ in output and _______ in prices. (Note there is a typo in
the ANS9 answer to question 20 in QUES9, as the answer should state that the long-
run Classical supply is perfectly INELASTIC, not perfectly ELASTIC.) - ANSWER-✔no
change; a decrease
Assuming a short-run Keynesian aggregate supply curve, a decrease in taxes results
in _______ in output and _______ in prices. - ANSWER-✔a substantial increase; a
slight or no increase
Consider Fig. 9.2. A simultaneous increase in the labor force due to an increase in
immigration and an increase in government spending would cause a movement from
________ . - ANSWER-✔B to C
If the government wants to reduce unemployment, government spending should be
________ and/or taxes should be _________. - ANSWER-✔increased; decreased
In a situation where the government is operating on a budget surplus, it can reduce
its overall debt by ________ . - ANSWER-✔buying back bonds it has sold to the
public.
If firms experience an unplanned increase in inventories, they are likely to: -
ANSWER-✔decrease production.
If the consumption function is C = 50 + 0.75 y, where C is consumption and y is
output, then the marginal propensity to consume is _______ and the Keynesian
multipler is _____. - ANSWER-✔0.75; 4
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