Study Guide for EC301 Essay

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Study Guide for EC301

Your final exam consists of 34 multiple choice questions and three problems. I have listed below an example of what your exam will look like. This is your final exam.

Good luck on your final. You just need to study these questions and you will do well on your final exam. Tom

Econ 301 Intermediate Macroeconomics Study Guide, Professor Thomas Hiestand, Park University Online,

Final Exam (Weight 300 Points) ______________________________

Multiple choice Questions. (Weight 5 points each) Choose the best answer.

1) The unemployment rate is the number of

2) The value of steel sold to an automobile producer is __________ directly included in the GDP because __________.

3) In the simplest Keynesian model of the determination of income, interest rates are assumed

4) An increase in the money supply will raise equilibrium GDP if the

5) The aggregate demand curve may be derived from the IS-LM analysis by shifting

6) Suppose that members of Congress and the President believe that the natural rate of unemployment is 2% but in fact it is 6%, and employing fiscal policy they increase AD each time unemployment rises above 2%. The underestimation of the natural rate combined with adaptive expectations will

7) Unanticipated inflation will hurt __________ and help __________.

8) Once monetary policy is dedicated to controlling the level of nominal GDP, then fiscal policy

9) A major side-effect of a stimulative fiscal policy is that it will

10) The conditions for joining the "Euro" single-currency block led a number of European countries to __________ and consequently reduce their debt-GDP ratios.

11) The national debt must eventually be paid off to 12) Over a decade or longer, a government budget deficit

13) As an individual, you cannot participate in the financial markets to issue new stock or sell new bonds because

14) The quantity equation makes the demand for money depend on

15) The quantity theory of money assumed

16) Keynes's "speculative motive" for holding money

17) If the level of interest rates increases, then the current value and price of a bond paying a fixed interest payment will

18) The central issue in the stabilization policy debate is

19) The increase of the real money supply by 10% by the Federal Reserve when the unemployment rate rises by 1% is an example of

20) Non-activists believe that the IS curve is

21) In the early 1970s monetary growth was relatively stable yet unemployment and prices were quite unstable. This suggests that

22) A policymaker would prefer that the lag in the effect of a policy be or size.

23) Which of the following statements best describes the rational expectations hypothesis?

24) Business cycles will occur if either of the two theories below characterizes the behavior of the economy

25) If it is less costly for business firms to adjust the labor demanded as the price level changes than it is for…