Transcript Economic Jeopardy - Redwood High School

MACROECONOMIC
Jeopardy
Have Fun!
The graph below shows a nation’s PPF curve for the production
of good Y2 and Y1. Which of the following is true?
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
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E
A. The OC of producing
more of Y2 is decreasing
amount of Y1
B. Point D represents
unemployed economic
resources
C. The OC of more Y2 is
constant Y1
D. Point D represents an
unproductive labor force
E. The OC of more Y1 is
an increasing amount of Y2
Which of the following transactions
would be counted in GDP?



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
D
A. The wage you receive from babysitting your
neighbor’s kids
B. The sale of illegal drugs
C. The sale of cucumbers to a pickle manufacturer
D. The sale of a pound of tomatoes at a supermarket
E. The resale of a sweater you received for
Christmas on EBAY
If Real GDP = $200 billion and the
price index = 200 nominal GDP is


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B
A.
B.
C.
D.
E.
$4 billion
$400 billion
$200 billion
$ 2 billion
Indeterminable with information given
When disposable income increases by
$X





B
A.
B.
C.
D.
E.
Consumption increases by more than $X
Saving increases by less than $X
Saving increases by exactly $X
Savings remain constant
Savings decrease by more than $X
Which of the following is true about
the consumption function?
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
A
A. The slope = to the MPC
B. The slope is equal to MPS
C. The slope is equal to MPS + MPC
D. It shifts upward when consumers are
pessimistic
E. It shifts downward when consumer wealth
increases in value.
Which of the following most likely
increases real GDP?





D
A.
B.
C.
D.
E.
An increase in real rate of interest
An increase in taxes
A decrease in net exports
An increase in government spending
A lower value of consumer wealth
Which of the following choices is most likely to create
the greatest decrease in real GDP?



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
C
A. The govt decreases spending, matched with a
decrease in taxes
B. The government increases spending with no
increase in taxes
C. The government decreases spending with no
change in taxes
D. The government holds spending constant while
increasing taxes
E. The government increases spending matched with
an increase of taxes
The tax multiplier increases in
magnitude when





C
A.
B.
C.
D.
E.
The MPS increases
The spending multiplier falls
The MPC increases
Government spending increases
Taxes increase
Which of the following is the source of
the supply of loanable funds?




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E
A.
B.
C.
D.
E.
The stock market
Investors
Net exports
Banks and mutual funds
Savers
You don’t like your job in a market bagging groceries and you
quit then start looking for a new job what type of unemployment
is this?





D
A.
B.
C.
D.
E.
Cyclical
Structural
Seasonal
Frictional
Underemployed
Which of the following best describes
the LRAS curve?
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A
A. Always vertical in the long run
B. Always upward sloping b/c it follows the
Law of Supply
C. Always horizontal
D. Always downward sloping
E. Can’t be determined w/out more
information
Stagflation most likely results from
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

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B
A.
B.
C.
D.
E.
Increasing AD with constant AS
Decreasing AS with constant AD
Decreasing AD with constant AS
A decrease in both AS and AD
Increase in both AS and Ad
Equilibrium and real GDP is far below full employment
and the govt lowers household taxes. Which is the
likely result?
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

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
A
A. Unemployment falls with little inflation
B. Unemployment rises with little inflation
C. Unemployment falls with rampant
inflation
D. Unemployment rises with high inflation
E. No change in either unemployment or
inflation
The effect of the spending multiplier is
lessened if



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
E
A. The price level is constant with an increase in
AD
B. The price level falls with an increase in AS
C. The price level is constant with an increase in
long run AS
D. The price level falls with an increase in both AD
and AS
E. The price level rises with an increase in AD
Which of the following would NOT be an example of
contractionary fiscal policy?
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
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D
A. Decreasing money spent on social programs
B. Increasing income taxes
C. Canceling the annual cost of living raises for
government employees
D. Increasing money spent to pay for government
programs
E. Doing nothing with a temporary budget surplus
The crowding out effect from government borrowing is
best described as
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

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B
A. The rightward shift of AD in response to decreasing real
interest rates from contractionary fiscal policy
B. The leftward shift in AD in response to rising real interest
rates from expansionary fiscal policy
C. The effect of the President increasing money supply,
which decreases real interest rates
D. The effect on the economy of hearing the chairman of the
Fed saying that the economy is in a recession
E. The lower exports due to appreciating dollar versus other
currencies
Which of the following fiscal policies is likely to be
most effective when the economy is experiencing an
inflationary gap?
 A. The government decreases taxes and keeps
spending unchanged
 B. The govt increases spending and keeps taxes
unchanged
 C. The govt increases government spending
matched with an increase in taxes
 D. The govt decreases spending and keeps taxes
unchanged
 E. The govt increases taxes and decreases spending
E
Which of the following would likely
slow a nation’s economic growth?


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C
A. Guaranteed low interest loans for college
students
B. Removal of a tax on income earned on saving
C. Removal of the investment tax credit
D. More research grants given to medical schools
E. Conservation policies to manage the renewable
harvest of timber.
What function of money best defines $1.25 as the price
of a 20oz bottle of pop?
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B
A.
B.
C.
D.
E.
Medium of exchange
Unit of account (also called standard of value)
Store of value
Transfer of ownership
Fiat money
If a bank has $500 in checking deposits & the bank is
required to reserve $50 what is the reserve ratio. How
much does the bank have in excess reserves?
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



A
A. 10%, $450 in excess reserves
B. 90%, $50 in excess reserves
C. 90%, $450 in excess reserves
D. 10%, $50 in excess reserves
E. 10%, $500 in excess reserves
If the money supply increases, what happens in
the money market? Assume downward sloping D curve



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B
A.
B.
C.
D.
E.
The nominal interest rate rises
The nominal interest rate falls
The nominal interest rate does not change
Transaction demand for money falls
Transaction demand for money rises
Which of the following is a predictable advantage of
expansionary monetary policy in a recession?



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B
A. Decreases aggregate demand so that the price
level falls
B. Increases aggregate demand which increases real
GDP and increases employment
C. Increases unemployment, but low prices negate
this effect
D. It keeps interest rates high, which attracts foreign
investment
E. It boosts the value of the dollar in foreign
currency markets
The US produces rice in a competitive market. With
free trade, the world price is lower than the domestic
price, what must be true?
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
A
A. The US begins to import rice to make up for
domestic shortage
B. The US begins to export rice to make up for
domestic shortage
C. The US begins to import rice to eliminate a
domestic surplus
D. The US begins to export rice to eliminate a
domestic surplus
E. There is no incentive to import or export
If the US dollar and Chinese Yuan are traded in flexible currency
markets, which of the following causes an appreciation of the $$
relative to the Chinese Yuan?
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D
A. Lower interest rates in the US relative to China
B. Lower price levels in China relative to the US
C. Growing American preference to consumer more
Chinese made goods
D. Rising per capita GDP in China increasing
imports from the US
E. Speculation that the Chinese will decrease the
money supply
You hear that the US has a negative balance in the
current account. With this information we conclude that
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D
A. There is a trade deficit
B. There is a capital account deficit
C. There is capital account surplus
D. More US dollars are being sent abroad
than foreign currencies coming into the US
E. there is a trade surplus
Which of the following is a consequence of a
protective tariff on imported steel?



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
B
A. Net exports fall
B. Income is transferred from steel
consumers to steel producers
C. Allocative efficiency is improved
D. Income is transferred from domestic steel
to foreign steel producers
E. Aggregate supply increases
In recent years, firms that produce cameras produce less
35-mm cameras and more digital cameras. This trend is
an example of
 A. How central planners dictate which goods are
produced
 B. The market system answering the question of
how cameras are produced
 C. The market system answering the question of
what should be produced
 D. The market system answering the question of
who gets what is produced
 E. How firms fail to respond to changes in
consumer demand
C
A policy supported by supply side
economists would be

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B
A. Higher taxes on corporate profits
B. Lower tax rates on interest earned from saving
accounts
C. Removal of investment tax credits
D. A longer duration of unemployment benefits
E. Higher marginal income tax rates to fund social
welfare programs
Which of the following is likely to
shift the LRAS curve to the right?



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B
A. A nation devotes more of its resources to
nondurable consumption rather than durable goods
B. Research that improves the productivity of labor
and capital
C. More restrictive trade policies
D. Annual limits on immigration
E. A permanent increase in the price of energy
Which monetary policy would be used
to boost US exports?





C
A.
B.
C.
D.
E.
Increasing the discount rate
Increasing the reserve ratio
Buying Treasury securities
Lowering tariffs
Removing import quotas
Which component of a nation’s balance of payments
recognizes the purchase and sale of real and financial
assets between nations?


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A
A.
B.
C.
D.
E.
The capital account
The official reserves account
The current account
The trade deficit account
The trade surplus account
The RR is .10 and Mr. Rich withdraws $1Million from his
checking account and puts it in his freezer. How does this impact
the potential amount of $ in circulation?
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A
A.
B.
C.
D.
E.
Decreases by $9 million
Decreases by $1 million
Decreases by $100,000
Increases by $1 million
Decreases by $10 million