Weekly Review Quiz As of 2010-12-16 Economics: Macro

Weekly Review Quiz as of 2010-12-16 Economics: Macro

Shopping Spree Fuels Surge by Sudeep Reddy and Rachel Dodes 12/15/2010 http://online.wsj.com/article/SB20001424052748704694004576019774100025428.html

1. The Commerce Department reported that retail sales in November were up 0.8% from October, another sign that the U.S. economy is on the road to recovery. But which sector experienced a decline?

* a) Electronics and appliances b) Books and music c) sporting goods d) clothing e) food

Fed Sticks to Bond-Buying Policy by Luca Di Leo and Jon Hilsenrath 12/15/2010 http://online.wsj.com/article/SB20001424052748704694004576019712503334654.html

2. Even though consumer spending appears to be rising, the Federal Reserve continued its bond buying program in an effort to ______interest rates, as it still believes that U.S. unemployment will ______while inflation will ______a) lower; rise; rise b) raise; rise; remain low * c) lower; rise; remain low d) raise; fall; rise e) lower; fall; remain low

Japan PM Proposes Corporate Tax Cut by Takashi Nakamichi 12/14/2010 http://online.wsj.com/article/SB10001424052748703727804576018012161136104.html

3. Japan's Prime Minister, Naoto Kan, proposed cutting the Japanese corporate tax rate by 5 percentage points. According to macroeconomic theory, this move could potentially have all of the following effects on the economy except a) An increase in business investment b) An increase in inflation c) An increase in the value of the Japanese yen d) An increase in economic growth * e) All of the above are possible China Concedes Reality, Raises Inflation Target by Jason Dean 12/15/2010 http://online.wsj.com/article/SB10001424052748703734204576019590982105186.html

4. What is the likely reason that prices are rising in China? a) China's central bank raised interest rates recently b) An appreciation of the Chinese currency (the Yuan) c) Increases in Chinese imports * d) An increase in bank credit by China's state-run banks e) All of the above help to increase prices

Exports Rebound, Boosting Economy by Sudeep Reddy and Justin Lahart 12/11/2010 http://online.wsj.com/article/SB10001424052748704457604576011200355928760.html

5. The Commerce Department reported that exports surged in October, helping to both reduce the U.S. trade deficit and fuel economic growth. All of the following reasons help to explain this data except a) A drop in the value of the U.S. dollar b) Rising global demand for American automobiles and agricultural goods c) Increased overseas labor costs * d) All of the above e) b) and c) only