Macroeconomics Video Course On Line Mid Term Exam

THIS IS IT  -- IT'S HERE!!!!! GOOD LUCK

YOU MUST HAVE IT TURNED INTO ME BY TUESDAY, AUG 4
IF ONLY SO THAT YOU DO NOT GET TOO FAR BEHIND IN YOUR WORK

IF YOU ARE EXPERIENCING SERIOUS PROBLEMS WITH ANY PARTS OF THE EXAM, PLEASE FIND TIME TO SET DOWN WITH ME TO WORK ON PARTS OF IT
THAT I CAN HELP YOU WITH. LIKE TUES, AUG 4. YOU WILL ALSO BE ABLE 
TO UPGRADE THE TEST BY 'CORRECTING' IT AFTER YOU GET YOUR GRADE ON IT -- DOING SO WILL RAISE YOUR GRADE ON IT BY ONE LETTER.


Matching Part I

__1. opportunity cost
__2. production possibilities curve
__3. capital goods
__4. consumer goods
__5. laissez faire
__6. public goods
__7. circular flow model
__8. contractionary disequilibrium
__9. expansionary disequilibrium
__10. leakages
__11. injections
__12. economic growth
__13. economic development
__14. labor intensive 
__15. capital intensive
__16. theory of labor power
__17. labor theory of value
__18. intermediate goods
__19. transfer payments
__20. net taxes
__21. nominal GDP
__22. real GDP
__23. C + I + G + Xn
__24. CPI
__25. deflation
__26. stagflation

Matching Part II

__1. expenditures approach
__2. income approach
__3. Joseph Schumpeter
__4. Potential GDP
__5. frictional unemployment
__6. structural unemployment
__7. cyclical unemployment
__8. consumption function
__9. disposable income
__10. MPC
__11. Keynesian Multiplier
__12. fiscal policy
__13. dissavings
__14. equilibrium GDP
__15. automatic stabilizers
__16. recessionary gap
__17. inflationary gap
__18. inflation
__19. Phillips Curve
__20. real income
__21. money illusion
__22. productivity
__23. demand
__24. equilibrium price
__25. double counting
__26. deflator


ANSWERS TO MATCHING PART I

A.the idea that greater value arises from 
the increased output of higher levels of 
technological production.
B.goods and services provided usually 
by government which can be consumer 
in theory without diminishing their 
availability to others in the society.
C.Injections are greater than leakages 
in the circular flow model.
D.output on high technology investment.
E.include such things as net taxes, savings, and imports.
F.not sold to the ultimate user, but as an input 
in producing final goods and services.
G.the notion often attributed to Marx, 
but predating him, that value arises 
from the labor put into the making 
of a good or service.
H.graphing of combinations of various goods 
a society might produce with given 
plant and equipment, expressing alternative
opportunity cost choices.
I.made usually by govenment to individuals or business 
who do not contribute directly and immediately 
to the wealth production process.
J.the value of goods and services produced 
in an economoy in a given year adjusted 
to reflect changes in the value of money 
that have occured.
K.literally means 'hands off' and is usually 
used in connection with the market based 
economic philosophy of Adam Smith.
L.production which is output by low technology means.
M.Leakages exceed injections on the circular flow model.
N.what must be given up, or forgone, 
in order to have something 
else; value of what certain resources 
could have produced had they been used 
in the best alternative way.
O. a period marked by both inflation 
and a stagnant economy, such as took place 
in the middle and late 1970's.
P.a representation of an economy which demonstrates 
the flow of factors of production, payments, etc 
from households to businesses, and can be expanded 
to show sources of disequilibrium 
from leakages and injections.
Q. total taxes less transer payments; 
a leakage in the circular flow model.
R.output which consists of items 
that purchased as part of an individual's 
standard of living.
S.a decrease in the general price level.
T.an increased level of economic activity 
given the existing plant and equipment.
U.one of the problems with the Keynesian analysis 
is shown in this method of estimating GDP 
because the Keynesian prescription 
of raising aggregate demand by increasing G 
must come from subtrations from either C or I 
and hence will not increase the aggregate demand line.
V. goods which are utilized to produce 
other goods for consumption.
W.value of the goods and services produced in an economy 
in a year measured by current dollar figures.
X.the government's official measure of inflation.
Y.would be such things as government purchase 
expenditures, exports, and investment.
Z.a greater level of output based 
on technological innovation and productivity increases.


ANSWERS TO MATCHING PART II

A.value of earnings adjusted to reflect inflation.
B.a rise in the general price level which reflects
a decreasing value of the currency.
C.often viewed as innocuous, it refers to those 
who are 'between' jobs, but could also include 
those who have left jobs due to 
harassment, discrimination, etc. It is also equal 
to 'full employment' or the 'natural rate of unemployment."
D.on the Keynesian cross graph, this represents 
expenditure in excess of income.
E.economist who argued that the business cycle 
was not necessarily bad, saying it was in fact 
the 'gale of creative destruction.'
F.originally purported to demonstrate an inverse 
relationship between inflation and unemployment.
G.actual GDP is below potential 
H.regards GDP as sum of incomes derived from production 
of this year's total output.
I.involves taxation and spending and is largely 
at the discretion of the Congress and the President.
J.occurs due to a mismatch between skills 
and needs of the economy
K.potential GDP is greater than actual GDP
L.value of goods and services that could have been produced 
had the economy been operating at full capacity.
M.features structured into the economy 
which tend to work counter-cyclically 
and stabilize fluctuations in the business 
cycle--usually fiscal instruments--but operate 
once structured without legislation or government 
policy actions.
N.relationship between consumption spending 
and disposable income; amount of consumption 
expenditure that will occur at various levels 
of disposable income.
O.value of national output at which the flow 
of income generated by this level of output 
results in a level of spending precisely sufficient 
to buy that level of output.
P.estimated based on the sum of spending on final goods 
and services produced in a year.
Q.actual consumption.
R.1/1-MPC
S.after tax income
T.increased output based on smaller input; 
generally based on technological innovation.
U.the price toward which the forces of supply and demand 
are driving a market.
V.perception of increased earnings or cost 
which are inaccurate because they do not consider 
inflationary changes which have taken place.
W.fluctuates with changes in the business cycle.
X.technique for 'adjusting' the value of dollars 
to reflect inflation.
Y.^C/^DPI     (note ^ = "change in")
Z.a problem in estimating GDP because it may reflect 
repeated counting of the same value, as in the value 
of leather, cattle, and shoes, and thus over-estimate
the product.


GRADING SCALE

48-52 A
42-47 B
36-41 C
30-31 D



This is the actual mid-term exam for the summer macro video course. 
Use the text, or whatever other resources you wish 
to do the matching.
It is recommended that you e mail your answers to the instructor
(or put them on the web site some of you may create for this class), 
but they may be turned in on 'hard copy.' 
Place them in an envelope and give them to the receptionist at the college 
to put in my mailbox -- do keep a copy (I have not
yet lost any work turned in this way, but just in case . . .).



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