The last gift

Ryan lives in an apartment where he pays $7,000 a year in rent. Sarah lives in a house that could be rented for $21,000 a year. How much do these housing services contribute to GDP?

• $21,000

• $28,000

• $7,000

• $14,000

Meredith is looking for work as a computer programmer. Although her prospects are good, she has not yet taken a job. Julie is looking for work in a steel mill. Every time she shows up for an interview, there are more people looking for work than there are openings. Someone waiting in line with her tells her it has been that way for a long time.

• Meredith and Julie are both frictionally unemployed

• Meredith and Julie are both structurally unemployed.

• Meredith is frictionally unemployed, and Julie is structurally unemployed

• Meredith is structurally unemployed, and Julie is frictionally unemployed

If the Fed increases the money supply

• the interest rate increases, which tends to raise stock prices

• the interest rate increases, which tends to reduce stock prices

• the interest rate decreases, which tends to raise stock prices

• the interest rate decreases, which tends to reduce stock prices

Which among the following assets is the most liquid?

• corporate bonds

• fine art

• deposits that can be withdrawn using ATMs

• shares of stock

Which of the following sequences best explains the negative slope of the aggregate-demand curve?

• price level ↑ ⇒ demand for money ↓ ⇒ equilibrium interest rate ↑ ⇒ quantity of goods and services demanded ↓

• price level ↑ ⇒ demand for money ↑ ⇒ equilibrium interest rate ↓ ⇒ quantity of goods and services demanded ↓

• price level ↓ ⇒ demand for money ↓ ⇒ equilibrium interest rate ↓ ⇒ quantity of goods and services demanded ↑

• price level ↓ ⇒ equilibrium interest rate ↓ ⇒ demand for money ↑ ⇒ quantity of goods and services demanded ↑

If money demand shifted to the right and the Federal Reserve desired to return the interest rate to its original value, it could

• buy bonds to increase the money supply.

• buy bonds to decrease the money supply

• sell bonds to increase the money supply.

• sell bonds to decrease the money supply.

If U.S. consumers increase their demand for apples from New Zealand, then other things the same New Zealand’s

• imports and net exports rise.

• imports rise and net exports fall.

• exports and net exports rise.

• exports rise and net exports fall.

Egypt has exports of $500 million and imports of $750 million. Egypt

• sells more overseas then it buys from overseas; it has a trade deficit.

• sells more overseas then it buys from overseas; it has a trade surplus.

• buys more from overseas then it sells overseas; it has a trade deficit.

• buys more from overseas then it sells overseas; it has a trade surplus.

All saving in the U.S. economy shows up as

• investment in the U.S. economy.

• U.S. net capital outflow.

• either investment in the U.S. economy or U.S. net capital outflow

• None is correct.

In an open economy, gross domestic product equals $2,450 billion, consumption expenditure equals $1,390 billion, government expenditure equals $325 billion, investment equals $510 and net capital outflow equals $225 billion. What is national saving?

• $225 billion

• $510 billion

• $735 billion

• $1,390 billion