BỘ GIÁO DỤC VÀ ĐÀO TẠO ĐỀ THI HỌC PHẦN

TRƯỜNG ĐẠI HỌC KINH TẾ QUỐC DÂN

KINH TẾ VĨ MÔ
Hệ: CTTT Khoá: 60
Địa điểm thi: Trường ĐH KTQD
KHOA: KINH TẾ HỌC Ngày thi: 10/12/2019
Bộ môn: KINH TẾ VĨ MÔ Thời gian làm bài: 90 phút
ĐỀ SỐ: 1

Question 1 (4 marks): Choose the best answer to each question.

1. Which of the following would NOT be true in a world without scarcity?

A. There would be no need for the science of economics.
B. Everyone would have all the goods and services they wanted.
C. There would have to be an infinite supply of every resource.
D. There would be opportunity costs.
2. For some racquet sports there have been increases in the size of the racquets and the methods and materials
used for making them make have improved. What problem in the construction of the CPI is this most relevant
to?
A. substitution bias
B. introduction of new goods
C. unmeasured quality change
D. income bias
3. If Microsoft sells a bond they are
A. borrowing directly from the public.
B. borrowing indirectly from the public.
C. lending directly to the public.
D. lending indirectly to the public.
4. The unemployment rate is computed as the number of unemployed
A. divided by the labor force times 100.
B. divided by the number of people employed times 100.
C. divided by the adult population times 100.
D. times the participation rate times 100.
5. An increase in the minimum wage would
A. increase both the quantity demanded and the quantity supplied of labor.
B. decrease both the quantity demanded and the quantity supplied of labor.
C. increase the quantity of labor demanded while decreasing the quantity supplied.
D. decrease the quantity of labor demanded while increasing the quantity supplied.
6. If the reserve ratio is 10 percent, the money multiplier is
A. 100.
B. 10.
C. 9/10.
D. 1/10.

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7. The shoeleather cost of inflation refers to
A. the fall in real income associated with inflation.
B. the time spent searching for low prices when inflation rises.
C. the waste of resources used to maintain lower money holdings.
D. the increased cost to the government of printing more money.
8. If a U.S. household buys a $75 handbag from Italy, U.S. consumption increases by $75, U.S.
A. imports increase by $75, and U.S. GDP increases by $75.
B. imports increase by $75, but U.S. GDP is unaffected.
C. imports are unaffected, and U.S. GDP is unaffected.
D. exports increase by $75, and U.S. GDP increases by $75.
9. Productivity
A. is nearly the same across countries and so provides no help explaining differences across countries in the
standard of living.
B. explains very little of the differences across countries in the standard of living.
C. explains some, but not most of the differences across countries in the standard of living.
D. explains most of the differences across countries in the standard of living.
10. What would happen in the market for loanable funds if the government were to decrease the tax rate on
interest income?
A. The supply of and demand for loanable funds would shift right.
B. The supply of and demand for loanable funds would shift left.
C. The supply of loanable funds would shift right and the demand for loanable funds would shift left.
D. None of the above are correct.

11. Which of the following would be U.S. foreign direct investment (outward))?
A. A Swedish car manufacturer opens a plant in Tennessee.
B. A Dutch citizen buys shares of stock in a U.S. company.
C. KFC opens a restaurant in Jamaica.
D. Your economics professor buys stock in companies located in Japan.
12. Which of the following equations is correct?
A. S = I + C
B. S = I – NX
C. S = I + NCO
D. S = NX – NCO.
13. Fiscal policy refers to the idea that aggregate demand is changed by changes in
A. the money supply.
B. government spending and taxes.
C. trade policy.
D. All of the above are correct.
14. Which of the following typically rises during a recession?
A. garbage collection
B. unemployment
C. corporate profits
D. automobile sales
15. The sticky wage theory of the short-run aggregate supply curve says that when the price level rises more than
expected, the real wage
A. rises, so employment rises.
B. rises, so employment falls.
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 C. falls, so employment rises.
D. falls, so employment falls.
16. Suppose a stock market crash makes people feel poorer. This decrease in wealth would induce people to
A. decrease consumption, which shifts aggregate supply left.
B. decrease consumption, which shifts aggregate demand left.
C. increase consumption, which shifts aggregate supply right.
D. increase consumption, which shifts aggregate demand right.
17. Assume the money market is initially in equilibrium. If the price level decreases, according to liquidity
preference theory there is an excess
A. supply of money until the interest rate increases.
B. supply of money until the interest rate decreases.
C. demand for money until the interest rate increases.
D. demand for money until the interest rate decreases.
18. If the U.S. real exchange rate appreciates relative to the euro, U.S. exports to Europe
A. and European exports to the U.S. rise.
B. and European exports to the U.S. fall.
C. rise, and European exports to the U.S. fall.
D. fall, and European exports to the U.S. rise.
19. According to the crowding-out effect, an increase in government spending
A. increases the interest rate and so increases investment spending.
B. increases the interest rate and so decreases investment spending.
C. decreases the interest rate and so increases investment spending.
D. decreases the interest rate and so decreases investment spending.
20. If policymakers contract aggregate demand, then inflation
A. and unemployment rise.
B. rises, but unemployment falls.
C. falls, but unemployment rises.
D. and unemployment fall.

Question 2 (2 marks): Suppose that a simple economy produces only four goods and services: sweaters, CDs,
sugar, and soft drinks. Assume one half of the sugar is used in making the soft drinks and the other half of
the sugar is purchased by households.
Product Quantity Price
Sweaters 50 $15.00
CDs 10 10.00
Sugar 200 0.90
Soft drinks 400 0.75

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 a. Calculate nominal GDP for this simple economy.
b. Assume that compared to the base year, prices of sweaters and soft drinks increased by 50% while prices of
others unchanged. Calculate real GDP and GDP deflator.
(See more on PROBLEMS AND APPLICATIONS: Questions 5, 6, 7, 9 (chapter 23), Questions 2, 3, 5, 7
(chapter 24)
Inflation rate = 20%
Nominal income is 40 in 2018 and 60 in 2019. % change in nominal income = 50%.
% change real income = % change in nominal income - % change prices = 50% - 20% = 30%.

Question 3 (2 marks):
a. Use a loanable funds diagram to analyze the impact of an increase in government deficit on the interest rate,
investment and national saving.
Supply = Savings (Sp + Sg), Sp = Yd – Tax, Sg = Tax - G; Demand = Investment
b. The banking system has $10 million in reserves, the reserve requirement is 10 percent. The public holds no
cash. Assume that the central bank purchases $3 million government bonds in open market operations and
there are no excess reserves. Calculate the change in money supply resulted from the above policy and
show its effects on interest rates and money quantity in the money market diagram.

Ms = mm x MB, mm = (1/rr)/, rr = R/D

R = 10 and rr = 10%  mm = 10
MB = + 3, Ms = mm x MB = 10 x 3 = 30.

Question 4 (2 marks): Assume the economy is initially in a long run equilibrium.

a. Use the AD-AS and the Philips curve diagrams to show the short-run effects on prices (inflation) and
output (unemployment) if central bank buys government bonds in the open market operations.
AD = C(Y-T, r) + I(r) + G + NX(e,p/p*, tariff, taste,…)
AS = F(K, L, H, T, R, production costs, expected)

central bank buys government bonds in the open market operations  Ms increases  r decreases  C and
I increase  AD increase, AD curve shifts to the right.

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b. In order to maintain output what would government do with taxes in response to the event in part (a)?

Note: Students are NOT allowed to use text books or any other documents