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MacroEconomics questions

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1. GDP measures underestimate the value of output produced by an economy
because they include services not transferred through markets? T or F
2. Real GDP measures the value of goods and services using current-year
prices? T or F
3. Investments are actions that incur costs today but provide expected bene%ts
in the future. T or F
4. Banks prefer to make loans than keep reserves because they earn interest on
loans but not reserves. T or F
5. When one individual writes a check to another individual, the money supply
will NOT be changed? T or F
6. The exchange rate between currencies of di/erent countries is controlled
primarily by supply and demand in currency markets. T or F
7. If supply of a product increases and demand for the product decreases,
equilibrium price will de%nitely change. T or F
8. Markets exist to facilitate exchange between people. T or F
9. When product prices increase faster than nominal wages increases, the real
value of wages decreases. T or F
10. Excesses supply in an unregulated market will cause the price of a product
to fall. T or F
11. Two goods are substitutes, if an increase in the price of one good leads to an
increase in demand for the other. T or F
12. An increase in demand will cause the equilibrium price and quantity to rise,
ceteris paribus.
13. An increase in wages will shift the supply curve up and to the left. T or F
14. If the quantity supplied of a product is greater than the quantity demanded
for a product, there is pressure in the market to push the price upward. T or F

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15. According to the principle of diminishing returns, an additional worker
decreases total output. T or F
Answers:-
1. GDP measures underestimate the value of output produced by an economy
because they include services not transferred through markets? T or F

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2. Real GDP measures the value of goods and services using current-year
prices? T or F
3. Investments are actions that incur costs today but provide expected bene%ts
in the future. T or F
4. Banks prefer to make loans than keep reserves because they earn interest on
loans but not reserves. T or F
5. When one individual writes a check to another individual, the money supply
will NOT be changed? T or F
6. The exchange rate between currencies of di/erent countries is controlled
primarily by supply and demand in currency markets. T or F
7. If supply of a product increases and demand for the product decreases,
equilibrium price will de%nitely change. T or F
8. Markets exist to facilitate exchange between people. T or F
9. When product prices increase faster than nominal wages increases, the real
value of wages decreases. T or F
10. Excesses supply in an unregulated market will cause the price of a product
to fall. T or F
11. Two goods are substitutes, if an increase in the price of one good leads to an
increase in demand for the other. T or F
12. An increase in demand will cause the equilibrium price and quantity to rise,
ceteris paribus .T or F
13. An increase in wages will shift the supply curve up and to the left. T or F
14. If the quantity supplied of a product is greater than the quantity demanded
for a product, there is pressure in the market to push the price upward. T or F
15. According to the principle of diminishing returns, an additional worker
decreases total output. T or F

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