Question 1

What is the central bank in the US formally known as?

Accepted Answer

A)  The Bureau of Monetary Policy. 
B)  The Federal Reserve Board. 
C)  The Federal Bureau of Reserve. 
D)  The Federal Monetary Board. 
E)  The Federal Policy Board. 
A)  The Bureau of Monetary Policy. 
B)  The Federal Reserve Board. 
C)  The Federal Bureau of Reserve. 
D)  The Federal Monetary Board. 
E)  The Federal Policy Board.

Question 2

Why is the unemployment rate more difficult to measure in poorer countries such as China?

Accepted Answer

A)  Many workers decide to stay in agriculture. 
B)  Lack of coordination between provincial authorities. 
C)  There is no reliable census figure to base the measure on. 
D)  Statistical agency is short on staff. 
E)  None of the above. 
A)  Many workers decide to stay in agriculture. 
B)  Lack of coordination between provincial authorities. 
C)  There is no reliable census figure to base the measure on. 
D)  Statistical agency is short on staff. 
E)  None of the above.

Question 3

A comparison of the average growth rates for the periods 1980- 1999 and 2000- 2007 for Australia indicates that:

Accepted Answer

A)  the average growth rates are the same. 
B)  the average growth rate has slightly increased in the more recent period. 
C)  the recent increase in average growth rates is due to large increases in capital formation. 
D)  the recent increase in average growth rates is due to the fact that Australia is a lucky country. 
E)  the average growth rates have decreased in the more recent period. 
A)  the average growth rates are the same. 
B)  the average growth rate has slightly increased in the more recent period. 
C)  the recent increase in average growth rates is due to large increases in capital formation. 
D)  the recent increase in average growth rates is due to the fact that Australia is a lucky country. 
E)  the average growth rates have decreased in the more recent period.

Question 4

Discuss the developments in the US that turned the housing price decline into a major financial crisis.

Accepted Answer

The fall in housing prices exposed the p

Question 5

Discuss the possible sources of China's phenomenal output growth rates.

Accepted Answer

There are two sources. First, the invest

Question 6

Discuss why it is more accurate to use the purchasing power parity (PPP) method when comparing output per capita across countries?

Accepted Answer

Goods are usually cheaper in poorer coun

Question 7

What was the US government's policy response to lower consumption and falling firm investment?

Accepted Answer

A)  Cut taxes and decreased spending. 
B)  Raised taxes and decreased spending. 
C)  Cut taxes and increased spending. 
D)  Raised taxes and increased spending. 
E)  None of the above. 
A)  Cut taxes and decreased spending. 
B)  Raised taxes and decreased spending. 
C)  Cut taxes and increased spending. 
D)  Raised taxes and increased spending. 
E)  None of the above.

Question 8

Briefly explain the two channels of transmission that turned the US crisis into a world crisis.

Accepted Answer

The first channel was the dramatic decre

Question 9

What are the sources of China's phenomenal output growth rates?

Accepted Answer

A)  Very high accumulation of capital. 
B)  Very fast technological progress. 
C)  Very hard working people. 
D)  Both A and B. 
E)  Both B and C. 
A)  Very high accumulation of capital. 
B)  Very fast technological progress. 
C)  Very hard working people. 
D)  Both A and B. 
E)  Both B and C.

Question 10

Explain why some economists are concerned about recent increases in US budget deficits.

Accepted Answer

An increase in the budget deficit is bel

Question 11

Briefly explain the disagreement on when and how to reduce the US budget deficit.

Accepted Answer

There are two different views on how bes

Question 12

Discuss what is meant by labour market rigidities and explain how they might cause the relatively high unemployment in Europe.

Accepted Answer

Examples of labour market rigidities are

Question 13

Discuss some of the potential benefits and costs of the adoption of the Euro.

Accepted Answer

One of the benefits of the Euro is large

Question 14

What are the two transmission channels that turned the US crisis into a global crisis?

Accepted Answer

A)  The exchange rate and consumption channels. 
B)  The trade and financial channels. 
C)  The financial and exchange rate channels. 
D)  The exchange rate and trade channels. 
E)  The consumption and trade channels. 
A)  The exchange rate and consumption channels. 
B)  The trade and financial channels. 
C)  The financial and exchange rate channels. 
D)  The exchange rate and trade channels. 
E)  The consumption and trade channels.

Question 15

What is the US share of world GDP in 2011?

Accepted Answer

A)  22%. 
B)  21%. 
C)  18%. 
D)  19%. 
E)  20%. 
A)  22%. 
B)  21%. 
C)  18%. 
D)  19%. 
E)  20%.

Question 16

In 2011, output per capita in Australia was approximately equal to:

Accepted Answer

A)  $53,500. 
B)  $43,500. 
C)  $73,500. 
D)  $33,500. 
E)  $63,400. 
A)  $53,500. 
B)  $43,500. 
C)  $73,500. 
D)  $33,500. 
E)  $63,400.

Question 17

Why has the transition from a planned economy to a market economy been smoother in China than the process observed in central and eastern European countries?

Accepted Answer

Some have argued that the pace of the re

Question 18

The standard of living typically refers to:

Accepted Answer

A)  the rate of unemployment. 
B)  expenditure per capita. 
C)  the rate of output growth. 
D)  wealth per capita. 
E)  output per capita. 
A)  the rate of unemployment. 
B)  expenditure per capita. 
C)  the rate of output growth. 
D)  wealth per capita. 
E)  output per capita.

Question 19

Why has the Chinese economy experienced higher output growth compared to those in Central Europe and former Soviet republics?

Accepted Answer

A)  Tight political control from one party rule allowed for quick economic transitions. 
B)  Tight political control from one party rule allowed for widespread corruption. 
C)  Tight political control from one party rule allowed for better property rights protection. 
D)  Tight political control from one party rule allowed for market deregulation. 
E)  Tight political control from one party rule allowed for the sale of farmland. 
A)  Tight political control from one party rule allowed for quick economic transitions. 
B)  Tight political control from one party rule allowed for widespread corruption. 
C)  Tight political control from one party rule allowed for better property rights protection. 
D)  Tight political control from one party rule allowed for market deregulation. 
E)  Tight political control from one party rule allowed for the sale of farmland.

Question 20

Briefly discuss the three possible reasons that allowed Australia to avoid the worst of the global crisis.

Accepted Answer

First, with increasing economic links to

Exam 1: A Tour of the World

What is the central bank in the US formally known as?

Why is the unemployment rate more difficult to measure in poorer countries such as China?

A comparison of the average growth rates for the periods 1980- 1999 and 2000- 2007 for Australia indicates that:

Discuss the developments in the US that turned the housing price decline into a major financial crisis.

Discuss the possible sources of China's phenomenal output growth rates.

Discuss why it is more accurate to use the purchasing power parity (PPP) method when comparing output per capita across countries?

What was the US government's policy response to lower consumption and falling firm investment?

Briefly explain the two channels of transmission that turned the US crisis into a world crisis.

What are the sources of China's phenomenal output growth rates?

Explain why some economists are concerned about recent increases in US budget deficits.

Briefly explain the disagreement on when and how to reduce the US budget deficit.

Discuss what is meant by labour market rigidities and explain how they might cause the relatively high unemployment in Europe.

Discuss some of the potential benefits and costs of the adoption of the Euro.

What are the two transmission channels that turned the US crisis into a global crisis?

What is the US share of world GDP in 2011?

In 2011, output per capita in Australia was approximately equal to:

Why has the transition from a planned economy to a market economy been smoother in China than the process observed in central and eastern European countries?

The standard of living typically refers to:

Why has the Chinese economy experienced higher output growth compared to those in Central Europe and former Soviet republics?

Briefly discuss the three possible reasons that allowed Australia to avoid the worst of the global crisis.

A Tour of the Book

The Goods Market

Financial Markets

Goods and Financial Markets: the Islm Model

The Labour Market

Putting All Markets Together: the Asad Model

The Phillips Curve, the Natural Rate of Unemployment and Inflation

The Crisis

The Facts of Growth

Saving, Capital Accumulation and Output

Technological Progress and Growth

Technological Progress: the Short, the Medium and the Long Run

Expectations: the Basic Tools

Financial Markets and Expectations

Expectations, Consumption and Investment

Expectations, Output and Policy

Openness in Goods and Financial Markets

The Goods Market

Output, the Interest Rate and the Exchange Rate

Exchange Rate Regimes

Should Policy-Makers Be Restrained

Fiscal Policy: a Summing up

Monetary Policy: a Summing up

Epilogue: the Story of Macroeconomics

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