Macroeconomic questions

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Macroeconomic questions




1) If the real interest rate is 6% ans the expected rate of inflation is 4%, then :


a. the nominal interest


b. the nominal interest on a loan of $1000 for 1 year is $100


c. the tax on the loan is $1000


d. all of the above


e. only (a) and (b)


 


2) which of the following is NOT a source of revenue for the federal government


a. printing of currency


b. personal income tax


c. corporate income tax


d. indirect taxes


e. investment income


 


3)which of the following is NOT an explanation as to why people save


a. the life cycle theory


b. the money multiplier


c. precautionary motive


d. bequest motive


 


4) which of the following is not a monetary policy


a. printing bank notes


b. open market operations


c. changes in the overnight interest rate


d. quantitative easing (Q.E)


e. lending and loan guarantee programs


 


 


10 )Which of the following is NOT a category of federal government spending? 


a. spending on currently produced goods and services 


b. tranfers to the bank of canada 


c. transfers to a person and corporations 


d. transfers to other levels governement 


e. interest payments on public debt 


 


11)which of the following poses serious problems to the use of discretionary fiscal policy to close  either recessionary gap or an inflationary gab?


a. recognition lags


b. uncertainty about how the economy reacts to policy changes


c. implementation lags


d. all of the above


e. none of the aboce


 


12)An expansionary fiscal policy would be one that ? 


a. lowers governement spending ans lowers taxes 


b. raises spending ans lowers taxes 


c. raises spending and raises taxes even more 


d. raises taxes rates 


e. lowers investment spending


 


13) financial intermediation is the process by which depository institutions 


a. offer financial advice 


b. take money from the domestic economy ans invest it abroad 


c. purchase and sell foreign currencies 


d. print money and lend it the government 


e. accept savings from ultimate creditors and len the savings to ultimate debtors


 


15)which of the following is NOT used by the federal government to finance its expenditures


a. taxation


b. borrowing from domestic private sector


c. borrowing from foreigners


d. borrowing from the Bank of Canada


e. Borrowing from other levels of government


 


16) Fiscal policy


a. deals with manipulating exchange rates


b. is relatively easy to conduct


c. deals with the spending ans taxing powers of the governement to stabilize the economy


d. calls for stabilizing changes in the monetary supply


e. calls for higher interest rate


 


17) which of the following househol assets is the most liquid


a. bonds


b. stocks


c. househols appliances


d. real estate


e. money


 


19) the motives for holding money include


a. speculative motive


b. precautionary motive


c. transaction motive


d. all the above


e. only (b) and (c)


 


20) which of the following is NOT an assumption to the classical model


a. interest rate flexibility


b. macroeconomic overproduction


c. Say's law


d. price flexibility


e. wage flexibility



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