Exposé subprime

CORRECTION OF THE MIDTERM EXAM

Which of these is not one of the macroeconomics objectives given by the magic square of Kaldor?

• a.  Inflation rate above 2%.

• b.  Weak unemployment rate.

• c.  Positive trade balance.

• d.  Economic growth.

Following the crisis of 1929, the US industrial production felt by 50%. The US industrial production will return to its 1929 level:

• a.  With the Second World War underway.

• b.  In the early 1930s.

• c.  After the publication of the book: The general theory of employment, interest and money by John Maynard Keynes in 1936.

• d.  Any of the previous propositions.

Which of these is not part of the triple Keynesian break?

• a.  Break with the Neoclassical analysis.

• b.  Break with the object of study.

• c.  Break with the political visions of the present.

• d.  Break with the Monetarist analysis.

From demographic data, INSEE statisticians show that the active population should sharply decreases in the coming semesters. How do you think that would affect the labor market?

• a.  The labor supply curve will shift to the left.

• b.  The labor demand curve will shift to the right.

• c.  The equilibrium real wage will decrease.

• d.  The labor supply curve will shift to the right.

The Gross Value Added (GVA) measures:

• a.  The difference between intermediate consumption and annual revenue.

• b.  The difference between output and intermediate consumption.

• c.  The difference between intermediate consumption and output.

• d.  Any of the previous propositions.

Which of these is not a technique to control the money supply?

• a.  The open-market operations

• b.  The payment facilities.

• c.  The minimum reserves.

• d.  The standing facilities.

Which of these is part of the short-term economic policy?

• a.  Monetary policy.

• b.  Industrial policy.

• c.  Competition policy.

• d.  Any of the previous propositions.

In the circular flow of income, injections include:

• AD = C + I + G + X – M

• AD = P + GFCF + C + X – M

• AD = C + GFCF + G + X – M

• AD = C + T + G + X – M

In the circular flow of income, there are relationships between withdrawals and injections. An increase in Savings (S) correspond to:

• a.  An increase of Investments (I).

• b.  An increase of public expenditures (G).

• c.  An increase of foreign currency, which can facilitate imports (M).

• d.  Any of the previous propositions.

In the case of monetary flows, exchanges via the labor market between households and non-financial corporations are represented by:

• a.  An arrow from households and that goes to non-financial corporations

• b.  An arrow from non-financial corporations and that goes to households.

• c.  An arrow passing through public administrations.

• d.  Any of the previous propositions.

In 1958, India industrial group Tata, a Parsian family group that recently bought the Jaguar and Land Rover brands, paid its workers a daily wage of 8 Indian rupees. If the consumer price was 12 in 1958 and 852 in 2017, how the daily wage in 2017 should be?

• 1 278

• 6 720

• 6 816

• 568

Which of these is not a function of money?

• A book money.

• A means of evaluation.

• Medium of exchange.

• A means of storing wealth.

What do not cause money supply to rise?

• An inflow of funds from abroad.

• Banks choose to hold a higher liquidity ratio.

• A public-sector deficit.

• The non-bank private sector choose to hold less cash.

Which of these is a cause of disequilibrium unemployment?

• a.  Seasonal unemployment.

• b.  Real-wage unemployment.

• c.  Structural unemployment.

• d.  Frictional unemployment.

Which of these is part of the non-market sector?

• a.  Criminal economy.

• b.  Shadow economy.

• c.  Undeclared work.

• d.  Domestic work.

Which of these is not part of the 5 main assumptions of perfect competition?

• Atomicity assumption.

• Complementary assumption. 

• Fluidity assumption.

• Homogenous product assumption.

Which of these is one of the 3 reasons why people want to hold their assets in the form of money?

• The transaction motive.

• The evaluation motive.

• The precautionary motive.

• The speculative or assets motive.

Which of these is wrong?

• The European Central Bank President is Mario Draghi.

• The European Central Bank has a clear mandate.

• The European Central Bank is an independent institution of political power.

• The European Central Bank can finance public deficit.

Which of these is true?

• Demand-pull inflation is caused by continuing decrease in aggregate demand.

• Demand-pull inflation is associated with continuing rightward shift in aggregate demand curve.

• Cost-pull inflation is associated with continuing rightward shift in aggregate supply curve.

• Cost-pull inflation can be related to a decrease in the cost of raw material.

Which of these is not a method to calculate GDP?

• The expense method.

• The value method.

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