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Ollscoil na hÉireann, Gaillimh GX_____
National University of Ireland, Galway
Semester 2 Examinations 2008/
Exam Code(s) 1BA1, 1BA11, 1BA6, 1BA7, 1BCS1, 1BCW1, 1BFS1, 1BGL1,1BHR1, 1BIS1, 1BTP1, 1BWM1, 1BWM1, 1EM1, 1OA Exam(s) 1 st B.A., 1 st B.A. (Hist.), 1 st B.A. (PSP), 1 st B.A. (Psych.), 1 st B.A. (Child St.), 1st^ B.A. (Creat. Writ.), 1st^ B.A. (Film St.), B.A. (Gaeilge & Leann an Aist.), 1st^ B.A. (Human Rights), 1 st^ B.A. (Irish St.), 1st^ B.A. (Theatre & Perform.), 1st^ B.A. (Women St.), Erasmus, Occasional Module Code(s) EC Module(s) Principles of Macroeconomics Paper No. 1 Repeat Paper External Examiner(s) Professor Robert Wright Internal Examiner(s) Professor Eamon O’Shea Professor Terrence McDonough Instructions: Answer all questions (no negative marking). Please use the MCQ answer sheet provided, using lines 1 – 40. Duration 2 hours No. of Pages Department(s) Economics Course Co-ordinator(s) T. McDonough Requirements : MCQ Yes Handout Statistical Tables Graph Paper Log Graph Paper
Answer all questions (no negative marking). Please use the MCQ answer sheet provided, using lines 1 – 40.
- Economics is the study of how people allocate scarce resources among alternative uses to produce goods and services. This is the definition of economics according to which school? a. Neoclassical b. Marxian c. Institutional d. Keynesian
- A MODEL is a set of simplified statements about the economy which answers several questions. Which of the following is not included in these questions? a. Who are the important actors? b. What are the important behaviours? c. What are the important relationships? d. What are the important regulations?
- Individuals are the important actors in which school of economics? a. Neoclassical b. Marxian c. Institutional d. Keynesian
- The main relationships are conflictual in which school? a. Neoclassical b. Marxian c. Institutional d. Keynesian
- In the lecture McDonough argued the relationship between theory and facts is a. dialectical b. overdetermined c. tenuous d. none of the above
- Classes exist when a. one group of people lives off the labour of another group. b. one group of people has more social influence than another group.
a. Net Domestic Product b. Net National Product c. environmentally adjusted Net Domestic Product d. disposable income.
- Discouraged workers are an example of a. measured unemployment b. hidden unemployment c. the ineffectiveness of training schemes d. discrimination by employers
- In the neoclassical theory the supply of labour slopes up because a. the wage falls b. leisure is valuable c. the demand for labour slopes down d. as wages fall, prices rise
- In the neoclassical theory unemployment results when a. the wage is allowed to reach equilibrium b. the supply of labour equals the demand for labour c. the wage is stuck above equilibrium d. the wage is stuck below equilibrium
- The marginal propensity to consume is the a. change in consumption divided by the change in disposable income b. slope of the consumption function c. change in consumption over the life cycle of the consumer d. both a and b
- Where production equals aggregate expenditure a. the economy is at equilibrium GDP b. the equilibrium is along the 45 degree line c. there is no tendency for the GDP to change d. all of the above
- If the investment line in the Keynesian cross graph is flat, investment is not related to a. business confidence b. the level of income c. innovations
d. future expectations of profitability C = 20 + 7/8 GDP I = 100 G = 100 X = 20 M = 1/8 GDP
- The equilibrium level of GDP in this model is a. 900 b. 960 c. 1920 d. 1000
- Suppose investment rises by 10. The new equilibrium would be a. 1000 b. 1960 c. 900 d. 1200
- Calculate the multiplier for this model. a. 4 b. 8 c. 7 d. 10
- Using the original equilibrium, suppose the full employment level of income is 1000. The government should increase government spending to a. 110 b. 120 c. 140 d. 180
- According to the Keynesian approach, responses to unemployment could include all of the following except a. raising government expenditure b. cutting taxes c. increasing the money supply d. allowing wages to fall
c. the international trade effect d. all of the above
- In the long run Aggregate Supply a. slopes up b. slopes down c. is vertical d. is horizontal
- According to the quantity theory of money a. the quantity of money is predictable and changes slowly b. the quantity of output is flexible c. the quantity of money varies widely d. prices do not vary directly with the money supply
- A negative supply shock will a. raise the price level and lower output b. lower the price level and raise output c. raise the price level and raise output d. lower the price level and lower output
- Investment divided by the change in GDP is the a. multiplier b. accelerator c. velocity d. none of the above
- Borrowing is risky because a. yield on investments is uncertain b. payments on debt are certain c. banks are subject to default d. both a and b
- According to the Marxian theory which of the following is favorable to profits during the upturn a. demand b. effort c. wages d. raw materials prices
- According to the neoclassical theory of development the most important thing is
a. to get the prices right b. to promote import substituting industries c. to keep surpluses from leaving the country d. to negotiate fair trading relationships
- Gunnar Myrdal thought the play of market forces would a. increase inequalities b. decrease inequalities c. have little impact on equalities d. be the most important force in promoting development
- The development of underdevelopment is a a. neoclassical position b. Marxian position c. Keynesian position d. institutional position
