Macroeconomics

Multiple Choice Questions

Que From 13 According to the price-setting relation in our labour market model, ... Select one: O A. a decrease in the unemployment rate will increase nominal wage demands. O B. an increase in the unemployment rate will decrease nominal wage demands. O C. a decrease in the mark-up, given the nominal wage, will decrease the price per unit. O D. a decrease in the nominal wage, given the mark-up, will increase the price per unit.Which one of the following statements is INCORRECT, referring to the balanced budget multiplier? Assume that c = 0.6. The government increases its spending by 300 and taxes also increase by 300, then .. Select one: O A. there will be still a net expansionary effect on the equilibrium level of output and income, although there is an increase of R300 in taxes. O B. the multiplier effect for an increase in government spending will be higher than the backwards multiplier effect for an increase in taxes since the multiplier starts to operate from 300 in the case of government spending and in the case of taxes it operates through the change in disposable income. O C. the increase in the level of output and income will be 750 due to the increase in government spending and the decrease in the level of output and income will be 450 due to the increase in taxes. The net effect is an increase of 300 in the level of output and income. O D. the increase in the level of output and income will be 750 due to the increase in government spending and the increase in the level of output and income will be 450 due to the increase in taxes. The net effect is an increase of 300 in the level of output and income.Which one of the following statements is INCORRECT regarding the goods market model? Select one: O A. A decrease in taxes to decrease unemployment will be more effective in a labour-intensive economy than in a capital-intensive economy. O B. Assume that a budget deficit occurs in Country Baloi. To reduce the budget deficit, the Minister of Finance can implement an expansionary fiscal policy. O C. An increase in government spending and/or a decrease in taxes can decrease cyclical unemployment. O D. Jobless growth and government budget constraints are factors that can prevent a situation of full employment in the goods market model.EX10 / Welcome Message / ECS2602-Exam Oct/Nov 2022 Quist NOM 16 This question is based on the following information: The country of Mambala is facing a recession and an unacceptable budget deficit. The government implements an increase in taxation to deal with the budget deficit. The central bank responds by decreasing the interest rate to fully counteract the decrease in the level of output and income. Which one of the following statements is correct? The results of the overall impact of these policy actions in an open economy are as follows: Select one: O A. The interest rate declines, investment spending will increase, and the appreciation of the domestic currency results in a decrease in exports and an increase in imports since the level of output and income returns to its initial level. O B. The interest rate declines, investment spending will be indeterminate, and the overall impact on the trade balance is an increase in exports and a decrease in imports since the level of output and income returns to its initial level. O C. The interest rate increases, investment spending will decrease, and the overall impact on the trade balance is an increase in exports and a decrease in imports since the level of output and income returns to its initial level. O D. The interest rate declines, investment spending will increase, and the overall impact on the trade balance is an increase in exports and a zero impact on imports since the level of output and income returns to its initial level.Dashboard / My courses / ECS2602-22-EX10 / Welcome Message / ECS2602-Exam Oct/Nov 2022 Qus FROM ! In our labour market model, which one of the following statements is correct? An increase in unemployment .. Select one: O A. will increase the prices of products. O B. makes it more attractive for workers to quit. O C. increases the nominal wage demands of workers. O D. decreases the bargaining position of workers, and consequently, their nominal wage demands decrease.In the IS-LM model for an open economy, an increase in the budget deficit has the following impact: Select one: O A. The interest rate will be unchanged because the central bank sets it, and therefore the exchange rate is also unchanged. O B. An increase in the interest rate, which causes a capital inflow, a depreciation of the exchange rate, an increase in exports and, possibly, an improvement of the trade balance. O C. A decrease in the interest rate, which causes a capital outflow, a depreciation of the exchange rate, an increase in exports and, possibly, an improvement of the trade balance. O D. The interest rate will be unchanged because the central bank sets it, and therefore the exchange rate will appreciate because the demand for goods and services increases.Dust Mom , a Which one of the following statements is INCORRECT regarding our financial market model? Select one: O A. The quantity of money is a function of the creation of demand deposits. O B. The lower interest rate on bank loans to clients will increase demand deposits, and the quantity of money increases. O C. An increase in the repo rate leads to an increase in the interest rate on loans to bank clients, and the number of loans decrease and consequently, the quantity of money decreases. O D. In our financial market model, the quantity of money is exogenously determined by "people's decisions" to hold currency or deposits