WORLD SCHOOLS DEBATING CHAMPIONSHIPS
The aims of the World Schools Debating Championships are:
1. To achieve excellence in debating
2.To encourage debating throughout the world
4.To promote international understanding
3 To promote free speech
In order to further these aims, all participating nations agree that:
- The team of any participating nation may be required to debate any issue
-The team of any participating nation may be required to debate against the team of any other participating nation
- The team of any participating nation is entitled to take part in the Championships on the same basis as any other participating nation's team
WORLD SCHOOLS DEBATING CHAMPIONSHIPS
RULES
(Last amended July 2007)
Format
1. (a) The format for debates in the Championships is three speakers a side with only two teams in each debate.
(b) After all speakers have spoken once, the first or second speaker for each side gives a reply speech, with the opposition reply going first and the proposition second.
2. The host is encouraged to run other competitions on different debating styles during the Championships.
3. (a) Speaking time for speeches is 8 minutes, and for reply speeches 4 minutes.
(b) The method of signalling timing for speakers is at the discretion of the host.
(c) In addition to time signals referred to in rule 3 (b), team members or the team coach may give time signals to a speaker provided that the signals are discreet and unobtrusive.
3A. (a) Before a debate begins, each team must inform the chairperson of the names of their three speakers and the order they will be speaking in.
(b) The only persons who may speak in a debate are the three speakers for each team announced by the chairperson at the start of that debate.
(c) During a debate speakers may not communicate with their coach, other team members who are not speaking in that debate, or any person in the audience, except to receive time signals in accordance with rule 3 (c).
(d) Notwithstanding rule 3A (b), if, during a debate, a speaker declares that they are unable to make their speech, another speaker from that team who was announced by the chairperson as speaking in that debate may give a speech in substitution.
(e) If a substitute speech is given in accordance with rule 3A (d), judges shall award that speech the lowest possible score within the Marking Standard, regardless of the quality of the speech. (If such a situation occurs, the marks for this speech shall not be used in the calculation for any individual speaker rankings or awards.)
(f) Rule 3A (e) shall not apply in the case of reply speeches provided that, in accordance with rule 1(b), the reply speech is delivered by either the first or second speaker on the team.
Eligibility
4. (a) Each nation may send only one team to compete at the Championships.
(b) A member of a nation’s team must:
(i) have been a full-time student at a secondary school within six months of the start of the Championships
(ii) either:
(a) have been ordinarily resident in the nation for the previous 12 months, or
(b) be a passport-holding citizen of the nation, or
(c) have been a full-time student at a secondary school in the nation within six months of the start of the Championships
(iii) have reached their 14th birthday by the start of the Championships
(iv) not to have reached their 19th birthday by the start of the Championships
(v) not be enrolled at a tertiary or post-secondary school institution where their first term of study begins on or before the opening day of the Championships
(c) The selection and composition of a national team is a matter for the debating organisation of that nation.
(d) A team may have up to five members.
(e) For the purposes of 4 (b) (ii), where a student is between school and post secondary study, the period of six months is calculated from the end of the student's final school term.
(f) Definition of institutions:
(i) Students completing an extra year of schooling beyond normal requirements at an institution that is plainly a secondary school only, but which gives no tertiary credits, are eligible providing they meet the age criteria.
(ii) Students completing an extra year of schooling beyond normal requirements at an institution that is plainly a secondary school only, but who may be given credits at some subsequent tertiary institution, are eligible providing they meet the age criteria.
(iii) Students completing at least one year or more, at an institution that spans both secondary and tertiary levels, but who may be given credits at the tertiary level, are eligible providing they meet the age criteria and are not clearly completing the first year at a tertiary level.
(iv) Students completing at least one year or more, at an institution that gives credits at the tertiary levels for entry into another tertiary institution at the third year or above, are ineligible even if they meet the age criteria.
4A. (a) Every team at the championship must be accompanied by a team coach.
(b) All team coaches must be aged 19 or above.
(c) Each nation which sends a team to the championship shall appoint a coach, adjudicator or registered observer from that country to serve as their team manager, who shall be responsible for looking after the welfare of their team members and ensuring their compliance with the Code of Conduct.
(d) All team managers must be aged 19 or older and must have reached the age of majority in both the host nation and the nation the team represents.
5. (a) Under these rules, a nation must be either:
(i) a member state of the United Nations; or
(ii) recognised under rule 5 (b) or 5 (c).
(b) A territory may be considered a nation under these rules if:
(i) it is eligible to enter teams in competitions organised by at least two of these organisations:
(a) the Fédération Internationale de Football Association;
(b) the International Olympic Committee;
(c) the Commonwealth Games Federation; and
(d) the International Rugby Board; or
(ii) a two-thirds majority of the World Schools Debating Council agrees.
(c) Two or more territories may be considered a single nation under these rules if a two-thirds majority of the World Schools Debating Council agrees. The Council's approval must set out the name under which that nation’s team may compete and the flag or symbol that it may use.
(d) If:
(i) a territory’s status changes immediately before a championship;
(ii) that territory asks to be considered a nation under these rules, but it does not meet the criteria set out in rule 5 (a) (i) or 5 (b) (i); and
(iii) the Executive Committee of the World Schools Debating Council does not consider it feasible to seek the Council’s consent under rule 5 (b) (ii) before that championship,
the Executive Committee may declare that the territory is a nation under these rules for that championship only. The Executive Committee must consider the organisational needs of the territory and the Convenor when deciding whether to make that declaration.
(e) The World Schools Debating Council must resolve any disputes about eligibility. If the Executive Committee declares that a territory is a nation under rule 5 (d), the Council may decide later that the territory is not a nation under these Rules. However, the Council may not disqualify that territory from fully participating in the single championship allowed by the Executive Committee.
The Draw
6. (a) If the total number of teams at the Championships is ten or less, every team shall debate every other team in the preliminary rounds.
(b) If the total number of teams at the Championships is more than ten, every team shall debate eight other teams in the preliminary rounds. The draw for the preliminary debates is to be conducted by the Convenor using a system to achieve approximately equal and fair sets of opponents for all teams.
(c) As far as possible, each team shall have the same number of debates on any day as any other teams. A team may not debate more than three times in a day in the preliminary rounds unless the team agrees prior to the start of the Championships.
7. (a) At the end of the preliminary rounds, teams shall be ranked according to the number of wins. If teams are tied on the same number of wins, they shall be separated where practicable by elimination debates and otherwise on the following priority:
(i) number of adjudications in favour of the team
(ii) average judges' scores for each team
(b) If the total number of teams is twelve or less, the top four teams shall debate in Semi-Finals, with the top team against the fourth and the second team against the third. The winners of the Semi-Finals compete in the Grand Final.
(c) If the total number of teams is more than twelve, the top eight teams shall debate in Quarter-Finals as follows:
- Quarter-Final A - Team 1 and Team 8
- Quarter-Final B - Team 2 and Team 7
- Quarter-Final C - Team 3 and Team 6
- Quarter-Final D - Team 4 and Team 5
The winners of the Quarter-Finals debate in Semi-Finals with the winner of Quarter-Final A against the winner of Quarter-Final D and the winner of Quarter-Final B against the winner of Quarter-Final C.
(d) If the total number of teams is more than 24, the top 16 teams shall debate in Octo-Finals as follows:
- Octo-Final A - Team 1 and Team 16
- Octo-Final B - Team 2 and Team 15
- Octo-Final C - Team 3 and Team 14
- Octo-Final D - Team 4 and Team 13
- Octo-Final E - Team 5 and Team 12
- Octo-Final F - Team 6 and Team 11
- Octo-Final G - Team 7 and Team 10
- Octo-Final H - Team 8 and Team 9
The winners of the Octo-Finals debate in the Quarter-Finals as follows:
- Quarter-Final A - Winner of Octo-Final A and winner of Octo-Final H
- Quarter-Final B - Winner of Octo-Final B and winner of Octo-Final G
- Quarter-Final C - Winner of Octo-Final C and winner of Octo-Final F
- Quarter-Final D - Winner of Octo-Final D and winner of Octo-Final E
The winners of the Quarter-Finals debate in Semi-Finals with the winner of Quarter-Final A against the winner of Quarter-Final D, and the winner of Quarter-Final B against the winner of Quarter-Final C. The winners of the Semi-Finals compete in the Grand Final.
(e) At the end of the championships, teams’ final rankings shall be determined as follows:
(i) The champions and runners-up shall be ranked 1 and 2 respectively
(ii) All other teams shall be ranked according the round of the championships the team reached and, where equal, their preliminary round ranking (in accordance with rule 7 [a]).
8. (a) Octo-Finals, Quarter-Finals and Semi-Finals shall be Impromptu Debates.
(b) The Grand Final shall be on a topic announced at the same time as the topics for the prepared debates in the preliminary rounds. At the end of the second Semi-Final, the two teams in the Grand Final shall toss to decide which team shall take the affirmative.
9. (a) If a team withdraws after the draw has been sent to the teams, the host may make a new draw only if:
(i) to do so would not alter the sides nor topics for any team, or
(ii) all teams affected by the new draw agree.
(b) Where a new draw has not been made, all teams who would have debated against the team that has withdrawn are taken to have won the debate by forfeit if they win at least a majority of their other debates, but are otherwise taken to have lost the debate by forfeit.
(c) Where a team has either won or lost a debate by forfeit, the team will be taken to have received the following number of judges in its favour for that debate:
(i) if the average number of judges in its favour in its other debates is higher than 2.5, it receives 3 judges for that debate;
(ii) if the average number of judges in its favour in its other debates is higher than 1.5 but less than or equal to 2.5, it receives 2 judges for that debate.
(iii) if the average number of judges in its favour in its other debates is higher than 0.5 but less than or equal to 1.5, it receives 1 judge for that debate;
(iv) if the average number of judges in its favour in its other debates is less than or equal to 0.5, it receives no judges for that debate.
Judges
10. (a) All championship debates shall be judged by an odd-numbered panel of at least three judges;
(b) Judges shall not judge the team from their own nation.
(c) A team coach shall not judge a debate.
(d) A judge shall not assist in the coaching of a team at the championship.
(e) A judge may judge the same team more than once, provided that the judge does not judge that team a disproportionate number of times.
11. (a) A debate is won by the team which has a majority of the votes of the judges.
(b) The cumulative judges marks or winning margins of teams are not used to determine which team wins a debate.
12. (a) The marking standard, rules of debate, and principles of judging, are set out in the Judging Schedule which is an annex to these Rules.
(b) The Judging Schedule is a part of these Rules and may be amended in the same way that the Rules may be amended.
(c) The Council may authorise guidelines and instructional material for judges, consistent with the Judging Schedule and the Rules.
(d) The host shall ensure that judges are familiar with the Judging Schedule and any guidelines and instructional material authorised by the Council.
(e) All judges shall judge in accordance with the Judging Schedule and any guidelines and instructional material authorised by the Council.
13. (a) Subject to this rule, to be eligible to judge at a championship ("an eligible judge") a person must :
(i) be nominated by the organisation or team of that person's nation which is the member of the Council for that country as set out in rule 22,
(ii) be experienced at judging the highest level of senior school or university debates in that person’s nation and have judged such debates regularly during the two years prior to the championship, and
(iii) not have been a debater at the previous championship.
(b) The Chief Adjudicator may accept a person to be an eligible judge at a championship who meets the requirements of rule 13 (a) (iii) but who does not meet the requirements of the rest of rule 13 (a) if:
(i) that person has judged at a previous championship, or
(ii) in the opinion of the Chief Adjudicator, the person is sufficiently experienced and competent to be an eligible judge.
(c) Judges for all Championship debates, including the Grand Final, are to be selected for their ability to judge, not because they hold any particular office or occupation.
14. (a) The Chief Adjudicator may assess an eligible judge at any time before or during a championship to determine that judge’s:
(i) competence to judge, and
(ii) understanding of the Rules, the Judging Schedule, and any guidelines and instructional material authorised by the Council.
(b) The Chief Adjudicator may at any time, as a result of an assessment in accordance with Rule 14 (a), decide that that judge should not judge any debates, or should not judge any further debates without a further assessment if the Chief Adjudicator is satisfied that there is sufficient doubt about that judge’s ability to judge competently or impartially.
(c) In undertaking an assessment in accordance with Rule 14(a) the Chief Adjudicator may take into consideration:
(i) Whether the judge has been able or unable to give sufficient reasons for awarding the debate to one team as against another;
(ii) Whether the judge has misdirected himself or herself as to some or more of the rules of debate to a significant extent;
(iii) Whether the judge has made remarks to a team or other participant at the championship in a way that casts significant doubt as to the judge's competence or impartiality;
(iv) Whether as a result of excessive consumption of alcohol or other substances or tiredness or sickness or other such factors, the ability or perceived ability of the judge to judge competently is seriously in question;
(v) Whether a complaint has been upheld against the judge pursuant to Rule 16A.
(vi) Any representations made by the judge in question;
(vii) Any other matter the Chief Adjudicator considers relevant
(d) Before deciding whether a judge should not judge a further debate or debates, the Chief Adjudicator in conjunction with the Chief Adjudicator’s panel shall determine whether the matter could be more appropriately resolved by counselling or other appropriate procedure.
(e) In undertaking an assessment provided for in Rule 14(a) the Chief Adjudicator shall:
(i) inform himself or herself of evidence and facts as he or she deems fit; and
(ii) consult with the Chief Adjudication Panel
(f) Notwithstanding Rule 14(a)-(e), no result of any debate shall be overturned.
15. (a) There shall be a Chief Adjudicator for each championship.
(b) The Convenor shall nominate the Chief Adjudicator. The nomination must be approved either by the World Council at its meeting the previous year, or by the Executive if the appointment is made after that.
(c) In accordance with the Rules, the Chief Adjudicator is responsible for:
(i) determining the eligibility of judges,
(ii) training judges prior to the start of the championship,
(iii) assessing whether eligible judges are competent to judge debates,
(iv) assigning judges to debates,
(v) recording results of debates,
(vi) determining the team rankings at the end of the preliminary rounds,
(vii) determining the draw for the Octo-Finals, Quarter-Finals, Semi -Finals and Grand Final, and
(viii) any other matter connected with the adjudication of debates at a championship.
16. (a) Prior to the start of a championship the Chief Adjudicator may nominate a panel of senior and experienced judges from different countries to assist the Chief Adjudicator in his or her responsibilities.
(b) A member of the Chief Adjudicator’s panel may advise and assist the Chief Adjudicator, but may not independently carry out any of the Chief Adjudicator’s responsibilities or exercise the Chief Adjudicator’s powers.
16A. (a) Any complaint about a judge in a particular debate shall be made to the Chief Adjudicator:
(i) Within 24 hours of the alleged incident giving rise to the complaint,
(ii) By:
(a) A judge or judges accredited by the Chief Adjudicator for the tournament and who were on a panel of judges with the judge who is the subject of the complaint; or
(b) The official and registered coach or team manager of a team participating in the tournament who shall make the complaint in writing;
(b) Complaints shall include but are not necessarily restricted to one or more of the following:
(i) The judge has misdirected him/herself as to one or more of the rules of debate to a significant extent;
(ii) The judge has made remarks prior to, during or after a debate in a way that raises significant doubt as to his or her impartiality for that debate.
(c) Upon receipt of a complaint pursuant to Rule 16A (a) and (b), the Chief Adjudicator shall determine:
(i) Whether the complaint can be resolved without further investigation; or
(ii) Whether the complaint requires further investigation in which case the Chief Adjudicator shall undertake such further investigation including but not limited to talking to:
(a) The judge who is the subject of the complaint, and
(b) Other judges on the panel with that judge, and/or
(c) Coaches present at the debate and/or
(d) Such other persons as the Chief Adjudicator shall deem appropriate.
(d) In conjunction with the Chief Adjudicator’s panel, the Chief Adjudicator shall determine the complaint by:
(i) Dismissing the complaint; or
(ii) Upholding the complaint and:
(a) Taking no further action; or
(b) Counselling the judge; or
(c) Directing that the judge act as a ‘shadow judge’ for such portion of the championships as the Chief Adjudicator shall deem appropriate; or
(d) Directing that the judge undergo further training prior to acting further as a judge at the championship; or
(e) Standing the judge down for such portion of the championship as the Chief Adjudicator shall deem appropriate; or
(f) Referring the matter to the Complaints Officer.
(e) No determination pursuant to Rule 16A (d) (ii) shall be made without the further investigation to which Rule 16A (c) (ii) refers and in particular, without first speaking to the judge who is the subject of the complaint.
(f) Where a complaint has been determined according to rule 16A (d) (i), the Chief Adjudicator shall advise the following people:
(i) The person or persons who made the complaint, either in writing if the complaint was in writing or verbally if the complaint was made verbally;
(ii) Where the determination according to Rule 16A (d) (i) is the result of the further investigation to which Rule 16A (c) (ii) refers, the judge who was the subject of the complaint shall be advised in writing.
(g) Where any complaint has been determined pursuant to Rule 16A (d) (ii), the Chief Adjudicator shall advise the following people in writing:
(i) The person or persons who made the complaint;
(ii) The judge who was the subject of the complaint;
(iii) The Chief Adjudicator of the immediate following championship.
(h) Notwithstanding Rule 16A (a)-(g), no result of any debate shall be overturned.
Motions
17. (a) There shall be a Motions Committee for a championship.
(b) The Motions Committee shall consist of:
(i) two members nominated by the host, and
(ii) five members elected by the Council no later than four months prior to the start of the championships reflecting the geographic, cultural and linguistic diversity of the participants at the championships.
(c) A coach of a team at a championship is not eligible to be a member of the Motions Committee for that championship.
(d) The Motions Committee shall select all motions for debate at the championship.
(e) At least eight weeks prior to the start of the championship, the Motions Committee shall forward to the host the list of motions it has selected for prepared debates including the Grand Final.
(f) The host shall forthwith notify all teams of the prepared motions for debate.
(g) At least one day before the start of a championship the Motions Committee shall give to the host a set of motions for the impromptu preliminary rounds.
(h) That set of motions shall include at least one more motion than is required for the preliminary rounds.
(i) At least one day before the announcement of the draw for the Octo-Finals, Quarter-Finals and Semi-Finals, the Motions Committee shall give to the host a set of motions for those debates.
Language
18. All Championship debates shall be in English.
19. (a) Special awards shall be given to:
(i) the highest-ranked English-as-a-foreign-language (EFL) team, and
(ii) the highest-ranked English-as-a-second-language (ESL) team.
(b) Individual team members shall be classified as follows:
(i) As an EFL speaker if:
(a) They do not come from a first-language English-speaking family, and
(b) They attend a school where English is not used as a medium of instruction.
(ii) As an ESL speaker if:
(a) They do not come from a first-language English-speaking family, and
(b) They attend a school where English is used as a medium of instruction.
(iii) As a native English speaker if they come from a first-language English-speaking family.
(c) Teams shall be classified as follows:
(i) As an EFL team if:
(a) English is not an official language of the country, and
(b) All or all-but-one of the team members meet the criteria for being classified as an EFL speaker in accordance with 19(b)(i).
(ii) As an ESL team if:
(a) English is not an official language of the country,
(b) The team is not eligible to be classified as an EFL team in accordance with 19(c)(i), and
(b) No more than one of the team members meets the criteria for being classified as a native English speaker in accordance with 19(b)(iii).
(iii) As a native English-speaking team if they do not meet the criteria for being classified as an EFL or ESL team in accordance with 19(c)(i) and (ii).
(d) If a team wishes to be eligible for the EFL or ESL award (in accordance with 19[a] and [c]), the coach must submit a form to the Convenor prior the start of the championships outlining the family and educational linguistic backgrounds of each of the debaters on the team.
(e) Based on the information in the forms submitted in accordance with 19(d) and any other information available, the Chief Adjudicator shall determine which teams in the championships are to be classified as EFL teams and ESL teams in accordance with 19(c). The Chief Adjudicator shall publish a list of the teams eligible for the EFL and ESL awards (“the published list”) no later than the end of the first day of debates during the championships.
(f) Any team may appeal against the inclusion on, or exclusion from, the published list of any team, including their own.
(g) An appeal shall be in writing and submitted by the coach to the Chief Adjudicator. The Chief Adjudicator shall circulate any written appeals to the members of the World Schools Debating Council.
(h) The Council shall consider any appeal prior to the announcement of the winners of the ESL and EFL awards. If the Council feels there is sufficient justification (in accordance with these Rules) it may amend the published list by a simple majority vote.
(i) A team which reaches the Grand Final of the Championships shall be ineligible for the EFL and ESL awards.
(j) In addition to the special awards given to the highest-ranked EFL and ESL teams, special awards shall also be given to all teams which reach the Semi-Finals or Grand Final of the championships.
Impromptu Debates
20. (a) At the discretion of the host, up to one-half of the debates for any team in the preliminary rounds may be impromptu debates, provided that every team has as close as possible to the same number of impromptu debates as every other team in the preliminary rounds.
(b) The preparation time and procedure for impromptu debates are in the discretion of the host, provided that:
(i) both teams in an impromptu debate receive the topic (or choice of topics) at the same time,
(ii) insofar as possible, each team shall have the same number of affirmative and negative sides in impromptu debates, and
(iii) both teams in an impromptu debate are give similar preparation rooms and conditions.
(c) Where the preparation time allowed for an impromptu debate is longer than half an hour, only the members of the team may take part in the preparation.
(d) Teams may not bring any handwritten, printed or published materials with them into their preparation room for impromptu debates, with the exception of an English Language dictionary, a bilingual dictionary, and a single-volume encyclopaedia or almanac per team.
(e) A person taking part in the preparation of an impromptu debate may not take into the preparation room a telephone, computer or any other device capable of communicating or accessing information outside the preparation room.
World Schools Debating Council
21. There shall be a World Schools Debating Council, consisting of a representative of every nation attending the Championships.
22. (a) Where a nation has a national or regional debating organisation that is sponsoring the nation's team at the Championships, that body shall select the representative for the country on the Council.
(b) In all other cases, the team shall select the representative for the nation on the Council.
23. (a) The Council shall meet at least once each Championships and shall decide:
(i) The venue and approximate dates for the next Championships subject to rule 23 (b) and (c);
(ii) Any amendments to be made to these Rules as well as any other matters that it thinks necessary.
(b) Championships shall be held annually where possible and shall be held either wholly within the period 1 January to 28 February or the period 1 July to 31 August.
(c) The dates and venue for the Championships shall be fixed no later than two Championships prior to the one for which the dates and venue are to be fixed (“the scheduled Championships”) subject to Rule 23 (d) (deferral) and Rule 23 (e) and (f) (variation).
(d) In the case where the Council is unable to decide the venue and therefore the dates for the scheduled Championships in accordance with Rule 23 (c), the Council may defer the fixing of the dates and venue of the scheduled Championships for such time as it shall consider necessary but no later than 12 months prior to the first day of the scheduled Championships.
(e) The Council may vary the dates specified in Rule 23 (b) provided that such variation is passed by a two-thirds majority of those members entitled to vote according to the rules and either present or casting votes in a postal ballot; and
(i) such variation is passed no later than 12 months before the first day of the scheduled Championships, or;
(ii) in the case where the dates for the scheduled Championships have already been fixed, and it is proposed to vary the originally fixed dates, no later than 12 months prior to the first day of the originally scheduled Championships, or;
(iii) where the variation is considered less than 12 months prior to the first day of the originally scheduled Championships, only in a case of genuine emergency, disaster or Act of God (as determined by the Council by a two-thirds majority of those members entitled to vote according to the Rules and either present or casting votes in a postal ballot)
(f) The Council may vary the venue which has been fixed in accordance with Rule 23 (c) or (d), provided that such variation is passed by a two-thirds majority of those members entitled to vote according to the Rules and either present or casting votes in a postal ballot; and
(i) such variation is passed no later than 12 months before the first day of the scheduled Championships, or;
(ii) where the variation is considered less than 12 months prior to the first day of the originally scheduled Championships, only in a case of genuine emergency, disaster, Act of God, issues of safety for participants, failure of the host to abide by the Charter or lack of preparedness by the host (as determined by the Council by a two-thirds majority of those members entitled to vote according to the Rules and either present or casting votes in a postal ballot).
24. The Council shall meet when necessary to resolve any disputes or questions as to the meaning of these Rules and any other disputes that arise during the course of the Championships. All members may attend such meetings of the Council, but those directly affected by the dispute or question may not vote.
25. The quorum for a meeting of the Council is a majority of the members eligible to attend.
26. (a) A meeting of the Council shall be chaired by the representative of the host nation, or if that person is not available, by a member of the Council elected by the meeting.
(b) Apart from amendments to the Rules, a resolution of the Council is passed by a majority of those present and voting.
27. (a) Motions to amend the Rules must either be proposed by the Executive Committee, or proposed and seconded by two member nations. The Executive Committee or the proposing nation must notify members of the Council of such a motion at least one month in advance of the meeting of the Council.
(b) A resolution to amend the Rules must be passed by a two-thirds majority of those members present and entitled to vote according to the Rules.
(c) Only a member whose team has attended at least two of the previous three World Schools Debating Championships shall be entitled to vote according to rule 27 (b).
(d) A resolution to amend the Rules may be passed by postal ballot (including post, fax or e-mail) between two World Schools Debating Championships with the following conditions:
(i) The Executive Committee shall be responsible for the holding of the ballot, and must do so if requested by any two nations (as Proposer and Seconder). The Executive Committee may also hold postal ballots for motions it wishes to propose to the Council.
(ii) All nations entitled to vote according to the Rules are notified of the resolution no later than one month prior to the holding of the ballot. All other nations present at the previous World Schools Debating Championships without voting rights should be notified of the resolutions at this time and invited to give official comments.
(iii) A two-thirds majority of those entitled to vote cast votes in the postal ballot.
(iv) A two-thirds majority of those taking part in the ballot vote in favour of the resolution.
(v) A member of the Council is entitled to vote in postal ballots if that nation's team has competed in at least two of the previous three World Schools Debating Championships (in accordance with Rule 27 [c]).
(vi) The official voting representative of each nation shall be the same representative as at the preceding World Council meeting. If that person is not available, the nation's National Committee shall appoint a successor. If there is no National Committee, the representative shall be at the discretion of the Executive Committee.
(vii) Any postal ballot which seeks to amend the Rules must be completed at least two months prior to the start of the next World Schools Debating Championships.
28. (a) There shall be a Charter for the Championships.
(b) The Charter is a part of these Rules and shall be amended in accordance with the requirements for amending these Rules.
(c) Every participating team at a Championship must agree to abide by the Charter.
(d) A team will forfeit any debate in which it fails to abide by the Charter.
(e) Following the first rounds and before any draw is made for subsequent round, the all teams must declare their willingness to debate any team which has qualified or any motion or will forfeit their place in the subsequent rounds in favour of the next ranked team.
(f) Every host must agree to abide by the Charter.
(g) The Council may consider the failure of a host to abide by the Charter and take such action as it sees fit.
29. (a) There shall be a Code of Conduct for the Championships, as set out in Annex Three to these Rules.
(b) The Code is a part of these Rules and shall be amended in accordance with the requirements for amending these Rules.
(c) Each participant at a Championship shall agree to abide by the Code of Conduct and shall indicate that agreement in writing prior to the Championship as specified in the Code of Conduct.
Executive Committee
30. There shall be an Executive Committee of the World Schools Debating Council.
31. The members of the Executive Committee are:
(a) a Chairperson elected by the Council;
(b) a Vice-Chairperson elected by the Council;
(c) a Secretary elected by the Council;
(d) six members, elected by the Council, who shall each chair one of the working groups described in Rule 35;
(e) up to three members appointed to each working group by the Chairperson of that group.
32. For the purposes of internal decision making, the nine elected members shall have a vote, but not the appointed members.
33. The elected members shall hold office from the Council Meeting at which they are elected until the following Council Meeting.
34. No person shall serve as Chairperson, Vice-Chairperson or Secretary of the Executive Committee for more than five consecutive terms of office.
35. (a) The Executive Committee shall be responsible for action in all areas falling outside the responsibilities of an individual Convenor, and will focus on key issues through its working groups.
(b) The Chairperson shall determine which areas each working group shall focus on and which of the elected members shall chair each working group.
(c) If the Council feels that there is a particular area which needs attention, it may mandate the Chairperson to establish a working group to focus on this area.
36. The Executive Committee may provide direction and interpretation of the Rules to the Convenor or host of the next Championships as and when required. In case of dispute, appeal may be made to the World Council by Convenor or Executive Committee.
37. Subject to Rule 36, the Executive Committee shall have no governing power over a Convenor, the Championships or the World Council; all decisions by the Executive requiring an amendment to the Rules or Charter shall be referred to the World Council.
38. The Executive Committee must make biannual written reports to the World Council.
Annex One - Judging Schedule
A. Marking Standard
1.1 Each speaker's substantive speech is marked out of 100, with 40 for content, 40 for style and 20 for strategy.
1.2 The reply speech is marked out of 50, with 20 for content, 20 for style and 10 for strategy.
1.3 In order to encourage consistency of marks, speeches are marked within the accepted range of marks and judges may not go outside that range. (See the Marking Standard - Annex 2).
1.4 Judges may not use any other marking standard or categorise of marks.
1.5 If a debater declares that they are unable to make their speech after a debate has begun, another member of their team who was announced by the chairperson as being a speaker in that debate may speak in their place. In such a situation judges shall award the speech the lowest possible score within the Marking Standard, regardless of the quality of the speech.
2.1 Content is the argument used by the speaker, divorced from the speaking style.
2.2 If an argument is weak it should be marked accordingly, even if the other team does not expose its weakness.
2.3 In deciding the strength or weakness of an argument, judges should not be influenced by their own personal beliefs or specialised knowledge.
3.1 Style is the way speakers speak.
3.2 Judges should make allowance for different accents, speaking styles and debating terminology.
3.3 Debaters for whom English is a second language shall be judged as if they were native English speakers.
3.4 In general, the use of palm-cards, lecterns, folders, notepads or other forms of speakers notes should not affect the mark a speaker is given.
3.5 However, speakers should not read their speeches, but should use notes that they refer to only from time to time.
4.1 Strategy covers two concepts:
4.1.1 Whether the speaker understands what are the issues of the debate, and
4.1.2 The structure and timing of the speaker's speech.
4.2 A speaker who answers the critical issues with weak responses should get poor marks for content but good marks for strategy.
B. Definitions and Cases
5.1 The Proposition must present a reasonable definition of the motion. This means:
5.1.1 On receiving a motion, both teams should ask: ‘What is the issue that the two teams are expected to debate? What would an ordinary intelligent person reading the motion think that it is about?’
5.1.2 If the motion poses a clear issue for debate (i.e. it has an obvious meaning), the Proposition must define the motion accordingly. When the motion has an obvious meaning (one which the ordinary intelligent person would realise), any other definition would not be reasonable.
5.1.3 If there is no obvious meaning to the motion, the range of possible meanings is limited to those that allow for a reasonable debate. Choosing a meaning that does not allow the Opposition room for debate would not be a reasonable definition. Truisms and tautologies leave the Opposition no room for debate and are clearly illegitimate. Defining absolute words literally may prevent a reasonable debate, and they can therefore be read down.
5.1.4 When defining the words in the motion so as (i) to allow the obvious meaning to be debated or (ii) (when there is no obvious meaning) to give effect to a possible meaning which would allow for a reasonable debate, the Proposition must ensure that the definition is one the ordinary intelligent person would accept.
5.2 The definition must match the level of abstraction (or specificity) of the motion, so that the debate is as specific or general as the motion itself. Specific motions should be defined specifically and general motions generally.
5.3 Motions expressed as general principles must be proven true as general principles. A single example will neither prove nor disprove a general principle. Finding arguments that explain the majority of relevant examples will be more important.
5.4 When suggesting parameters to the debate, or proposing particular models or criteria to judge it by, the Proposition must ensure such parameters, models or criteria are themselves reasonable. They must be ones that the ordinary intelligent person would accept as applicable to the debate.
5.4.1 The Proposition’s ability to set reasonable parameters to a debate does not provide a licence to restrict the motion arbitrarily.
5.4.2 When the motion requires the Proposition to propose a solution to a problem and the Proposition has to set out the details of its proposed solution to prove its effectiveness, the Proposition must ensure that the detailed solution given (the Proposition’s ‘model’ or ‘plan’) is a reasonable one, such that the ordinary intelligent person would accept it is applicable to the debate.
5.5 If the Proposition’s definition is unreasonable, the Opposition may:
5.5.1 Accept it anyway (and debate the Proposition’s case regardless);
5.5.2 Challenge it (argue that the definition is unreasonable, put up an alternative, reasonable definition and a case based on this);
5.5.3 Broaden the debate back to the words in the motion (if the Proposition has unreasonably restricted the motion and is arguing a narrower version of it);
5.5.4 Challenge the definition (as in 5.5.2), but argue that ‘even if’ it is reasonable, the Proposition’s case is flawed (as in 5.5.1).
5.6 The definition settled, each team has to present a case, supported by arguments and examples.
5.6.1 A case sums up the team’s arguments and states why its side of the motion is correct.
5.6.2 Arguments are reasons or rationales why the team’s case is correct.
5.6.3 Examples are facts, events, occurrences and the like that show the team’s arguments are correct.
5.7 Whereas an unduly restrictive definition (such as limiting a general motion to a single example) is illegitimate and can be challenged or broadened, a Proposition that runs a restrictive case (such as limiting itself to a single argument) acts legitimately and cannot be challenged for doing so, but runs the risk of the Opposition being able to more easily counter that case (by disproving that one argument and/ or by raising other arguments that disprove the motion, as defined).
C. The Roles of the Speakers
6.1 The role of the first speaker of the proposition is to define the topic, establish the issues for the debate, outline the proposition case, announce the case division between the speakers, and present his or her part of the proposition case.
6.2 The proposition may define the topic in any way provided that the definition -
6.2.1 is reasonably close to the plain meaning of the topic,
6.2.2 allows the opposition team reasonable room to debate,
6.2.3 is not tautological or truistic, and
6.2.4 is otherwise a reasonable definition.
6.3 Squirreling, place-setting and time-setting are not permitted
6.3.1 Squirreling is the distortion of the definition to enable a team to argue a pre-prepared argument that it wishes to debate regardless of the motion actually set;
6.3.2 Place-setting is the setting of a debate of general application in a particular place
6.3.3 Time-setting is the setting of a debate of general application in a particular time, past or future.
7.1 The role of the first speaker of the opposition side is to challenge the definition if necessary, present an alternative definition if the definition is challenged, respond to the proposition case, outline the opposition case, announce the case division, and present his or her part of the opposition case.
7.2 The first opposition may challenge the definition only if it does not conform to 5.2 or 5.3. If it challenges the definition, the first opposition must propose a new definition that conforms to 5.2 and 5.3.
7.3 If the first opposition does not challenge the definition, the opposition is taken to have accepted the definition and the opposition may not challenge the definition in any other speech unless the proposition significantly alters the definition in their subsequent speeches.
7.4 In responding to the proposition case, the opposition team may produce a positive choice of its own, or merely attack the case presented by the proposition. If it chooses to produce a positive case of its own, it must in fact produce that case through its speeches, and not concentrate solely on attacking the case presented by the proposition.
8.1 The role of the second speaker of the proposition is to deal with the definition if it has been challenged, respond to the opposition case, and continue with the proposition case as outlined by the first speaker.
8.2 If the second proposition does not challenge a re-definition of the debate made by the first opposition, the proposition is taken to have accepted the opposition's re-definition and no further challenges to the definition may be made.
8.3 The role of the second speaker of the opposition is to deal with the definition if it is still in issue, respond to the proposition case, and continue with the opposition case as outlined by the first speaker.
9.1 The role of both third speakers is to deal with the definition if it is still in issue, and respond to the other team's case.
9.2 The third speaker of either team may have a small part of the team's case to present, but his is not obligatory as the third speaker's primary role is to respond to what has gone before in the debate.
9.3 If the third speaker is to present a part of the team's case, this must be announced in the case division by the first speaker.
10.1 The more the debate progresses, the more each speaker must spend time dealing with what has been said by previous speakers.
10.2 Hence the more the debate progresses, the less time will be spent by each speaker in presenting a new part of the team case and the more time will be spent responding to the other team's arguments.
11.1 The role of the reply speeches is to sum up the debate from the team's viewpoint, including a response to the other team's overall case and a summary of the speaker's own team’s case.
11.2 The reply speaker may be either the first or second speaker of the team, but not the third.
11.3 The reply speakers are in reverse order, with the opposition reply first and the proposition reply last.
11.4 Neither reply speaker may introduce a new part of the team case.
11.5 A reply speaker may respond to an existing argument by raising a new example that illustrates that argument, but may not otherwise introduce a new argument.
12.1 The proposition team does not have to prove its case beyond reasonable doubt, but merely that its case is true in the majority of cases or as a general proposition.
12.2 The opposition team must prove more than a reasonable doubt about the proposition case.
12.3 Where the topic is expressed as an absolute, the proposition must prove the topic true in the significant majority of cases, but not in every single conceivable instance.
12.4 Where the topic is expressed as an absolute, the opposition must do more than present a single instance where the topic is not true and prove that it is not true for at least a significant minority of cases.
D. Points of Information
13.1 Between the first and seventh minutes of a speaker's substantive speech, members of the other team may offer points of information.
13.2 The purpose of a point of information is to make a short point or ask a short question of the speaker.
13.3 Points of information need not be addressed through the person chairing the debate, and may be in the form of a question.
13.4 A point of information should be brief, and no longer than 15 seconds.
14.1 Points of information are an important part of the clash between the teams, and enable speakers to remain a part of the debate even when they are not making a speech.
14.2 Hence a speaker should offer points of information both before and after that speaker has given his or her substantive speech.
15.1 The speaker has the absolute right to refuse to accept a point of information, or to accept it only at the end of the next sentence.
15.2 However, a speaker is obliged to accept some points of information, provided that they have been offered at reasonable times in the speaker's speech.
15.3 As a general rule a speaker should accept at least 2 points of information in his or her speech. But a speaker who accepts a significantly greater number of points of information risks losing control of his or her speech.
15.4 Members of the opposing team should not offer an excessive number of points of information to the point that they are barracking. As a general rule each team member should offer between 2 and 4 points of information per speech, and should not offer them within a short time of a previous point of information having been offered.
16.1 The response by the speaker to a point of information should be included in the mark for that speaker's speech.
16.2 The offering of points of information should be included in the mark for the speaker offering points.
E. The Judging
17.1 Judges mark independently of each other, and should sit apart from each other during the debate so that they cannot see each other's mark-sheets.
17.2 At the end of the debate, the judges fill in their mark-sheets independently, and hand them to the person chairing the debate before leaving the debate room briefly to confer.
17.3 The purpose of the conference is to brief one of the judges to give a short adjudication on behalf of the judges.
17.4 The adjudication should be short, and should explain the result to the audience. In particular, it should set out the key reasons why the winning team won, and comment on significant matters of debate style or technique that were displayed in the debate.
17.5 The adjudication should be constructive, not negative.
Annex Two - The Marking Standard
1. Substantive Speeches (out of 100)
Standard Overall
(/100) Style
(/40) Content
(/40) Strategy
(/20)
Exceptional 80 32 32 16
Excellent 76-79 31 31 15-16
Extremely Good 74-75 30 30 15
Very Good 71-73 29 29 14-15
Good 70 28 28 14
Satisfactory 67-69 27 27 13-14
Competent 65-66 26 26 13
Pass 61-64 25 25 12-13
Improvement Needed 60 24 24 12
2. Reply Speeches (out of 50)
Standard Overall
(/100) Style
(/40) Content
(/40) Strategy
(/20)
Exceptional 40 16 16 8
Very Good to Excellent 36-39 15 15 7.5
Good 35 14 14 7
Pass to Satisfactory 31-34 13 13 6.5
Improvement Needed 30 12 12 6
In marking reply speeches it might be easier to mark them out of 100 and then halve each mark. That will leave you with half-mark steps, but that is not a problem. Thus a reply speech could be given, say, 13.5 for content, 14.5 for style and 7.5 for strategy, for a total of 35.5.
Annex Three - Code of Conduct for the World Schools Debating Championships
1. Introduction
1.1 Purpose of the Code of Conduct
The World Schools Debating Championships brings together participants from around the world to compete in a short, intensive debating event. Normally the participants stay together in one host venue, engage in debates at several different host schools during the event, and attend a variety of tours or social events together.
In this environment, it is very important that all the participants have a common understanding of the standards of behaviour expected of them in order to maintain a safe and enjoyable event for everyone involved. The purpose of this Code of Conduct is thus to help maintain a pleasant, safe and healthy environment for all participants in each Championship.
1.2 To whom does the Code of Conduct apply?
This Code of Conduct shall apply to the following participants in the Championship:
(a) debaters
(b) team coaches
(c) team managers
(d) adjudicators (including shadow adjudicators)
(e) registered observers
(f) individuals assigned other roles by the host organising committee.
1.3 All participants must agree to abide by this Code of Conduct
(a) Before the start of each Championship, all participants shall sign the undertaking at the conclusion of this Code of Conduct that they will abide by this Code of Conduct for the duration of the tournament.
(b) At least one parent or guardian of every debater attending the Championship shall also sign the undertaking.
(c) No participant shall be allowed to be involved in the Championship event unless:
(i) he/she has signed such an undertaking
(ii) in the case of a participant who is a debater, one parent or guardian has signed the undertaking.
1.4 Who is responsible for ensuring compliance with the Code of Conduct during the Championship?
(a) All participants shall ensure that they comply with the Code of Conduct for the duration of the Championship.
(b) In addition, each nation which sends a team to the Championship shall appoint a coach, an adjudicator or a registered observer to serve as the team manager as defined in Rule 4A of the Rules and who shall be responsible for ensuring that the debaters comply with the Code of Conduct for the duration of the Championship.
(c) The team manager shall:
(i) attend the Championship; and
(ii) be at least 19 years of age; and
(iii) be deemed legally an adult or have attained the age of majority in both the host nation and in the nation the team represents.
(d) No team of debaters shall be allowed to participate in the Championship unless such a person is appointed.
1.5 What do the terms in this Code of Conduct mean?
Most of the terms used in this Code of Conduct should be self-explanatory. However, to be clear:
(a) “Age of majority” means the age at which an individual becomes an adult as specified by either the United Nations Convention on the Rights of the Child or the legislation of the host nation, whichever is the older age
(b) “Championship” means the World Schools Debating Championship in which the people listed in paragraph 1.2 are participating
(c) “complainant” means a person who has complained about a breach of the Code of Conduct
(d) “host” means the organising committee of the country which is hosting the Championship for that year
(e) “laws of the host country” include the law of the state or region within the host country in which the championship is being held, as well as the host country’s national law
(f) “nation” is as defined in Rules 4 and 5 of the World Schools Debating Championship Rules
(g) “sexual harassment” means any unwanted, unwelcome or uninvited behaviour of a sexual nature which makes a person feel humiliated, intimidated or offended. Sexual harassment can take on many different forms and may include physical contact, verbal comments, jokes, propositions, the display of offensive material or other behaviour which creates a sexually hostile environment. Examples of sexual harassment include but are not limited to uninvited touching, smutty jokes or comments, sex-based insults, repeated invitations to go out after prior refusal, persistent insinuations about a person’s private life. Sexual harassment is not behaviour which is consensual, welcome and reciprocated but for the purposes of the Championships does also include behaviour specified in paragraph 2.4.
(h) “start of the Championship” means the commencement of the first formal event or function of the Championship
The Code of Conduct
2. What is expected of participants?
2.1 What participants must do
During the championship, all participants must:
(a) behave in a respectful and courteous manner towards other participants in the event, guests and sponsors of the championship, and members of the public attending championship events
(b) abide by the laws of the host nation
(c) abide by any rules, guidelines and restrictions set by the host organising committee to keep the event regulated and ensure the safety of participants.
2.2 What participants must not do
During the championships, participants must not:
(a) make insulting comments, jokes, insults, or insinuations about another person’s culture, race, religion, gender or sexual orientation or which may be construed as being derogatory or as harassment, whether in the presence of that person or in any other forum in which the person may not be present.
(b) stalk or physically harass another individual
(c) engage in any form of violence or threats of violence
(d) engage in any form of sexual harassment [as defined in paragraphs 1.5 (d) and 2.4]
(e) take or use other people’s property without permission
(f) intentionally cause damage to the property of other individuals or of any host venues
(g) consume any substance which they are not legally entitled to consume in the host country, or supply any such substances to others
(h) consume or be under the influence of alcohol or drugs in a way which may bring the championships into disrepute.
2.3 Behaviour during debates
(a) Participants in the Championship, especially coaches and debaters, must not confront adjudicators in an aggressive manner after a debate.
(b) Feedback between teams and adjudicators must be given and received in a constructive and non-confrontational manner.
2.4 Relationships
Any romantic or sexually-based relationship during the Championship between a debater and an adult acting as a coach, adjudicator, shadow adjudicator, team manager, observer or in any other capacity will not be tolerated and shall be treated as sexual harassment regardless of intention or apparent consent.
Enforcement of the Code of Conduct
3. What happens if a participant breaches the Code of Conduct?
3.1 Breaches can be reported to a Complaints Officer
If a participant believes that another participant has breached this Code of Conduct, s/he may report the breach to an appointed Complaints Officer.
3.2 Who are the Complaints Officers?
Before each championship, the Convenor shall nominate two Complaints Officers – one male and one female. The nominations for Complaints Officers must be approved by:
(a) the World Schools Debating Council at its meeting at the previous year, or
(b) the World Schools Debating Council Executive Committee at least 90 days before the Championship begins, if the nomination was not approved at the previous meeting of the Council.
3.3 What will the Complaints Officers do?
Each Complaints Officer shall be responsible for:
(a) being available to participants to receive complaints about breaches of this Code of Conduct
(b) investigating complaints
(c) supporting the complainant appropriately, which could include referring him/her to:
(i) a counsellor
(ii) a doctor
(iii) a lawyer
(iv) the police
(v) their parents
(vi) an adult member of their family or contingent.
3.4 Complaints Officers can deal with some complaints themselves
If the Complaints Officer considers it appropriate, they may discuss the complaint with the complainant and the person about whom the complaint has been made to try to resolve the matter by mediation so that both parties are satisfied with the outcome of the matter.
3.5 Complaints Officers can refer complaints to the Complaints Committee
(a) A Complaints Officer may refer a complaint to the Complaints Committee. Such a referral must be submitted in writing to the Chairperson of the Complaints Committee.
(b) Complaints of the following nature must be referred to the Complaints Committee:
(i) any form of violence or threat of violence
(ii) sexual harassment
(iii) stalking or physical harassment
(iv) the consumption or supply of substances which are illegal in the host country
(v) a participant’s being under the influence of alcohol or drugs in a manner which has brought or threatens to bring the Championship into disrepute
(vi) any form of inappropriate relationship between a debater and any other participant
(vii) wilful damage to public property or the property of a host venue.
4. What happens if a complaint is referred to the Complaints Committee?
4.1 Who forms the Complaints Committee?
(a) Every championship shall have a Complaints Committee comprising
(i) at least three members; and
(ii) at least one person of each gender; and
(iii) at least one but no more than two members from the host nation; and
(iv) neither of the Complaints Officers who have been approved for the same Championship as the Complaints Committee.
(b) The members of the Complaints Committee shall be approved by:
(i) the World Schools Debating Council at its meeting at the previous year, or
(ii) by the World Schools Debating Council Executive Committee at least 90 days before the championship begins if the nomination was not approved at the previous meeting of the Council.
(c) The Complaints Committee shall appoint one of its members to serve as Chairperson by the start of each Championship at which it will operate.
(d) Subject to 4.1 (b), each member of the Complaints Committee shall serve until such time as a replacement is appointed.
4.2 When must the Complaints Committee meet?
(a) The Complaints Committee’s Chairperson shall convene a committee meeting:
(i) if a Complaints Officer refers a complaint to them in writing
(ii) if the Complaints Committee otherwise considers it appropriate.
(b) The Complaints Committee shall convene a meeting within 24 hours of receiving a complaint in accordance with 4.2 (a) above.
4.3 What can the Complaints Committee do?
(a) At a meeting to discuss a complaint, the Complaints Committee may:
(i) decide to take no further action
(ii) make a decision about the complaint without a hearing (but it may not suspend or expel the person complained about without a hearing) or
(iii) hold a hearing about the complaint.
(b) Regardless of which option it takes, the Complaints Committee may also refer the complaint to the host country’s relevant authorities (such as the police) if it considers that this is appropriate.
4.4 What are the rights of a person complained about at a hearing?
If the Complaints Committee holds a hearing, the person complained about must:
(a) be told what the complaint is about
(b) be told the date and time of the hearing
(c) be allowed to participate in the hearing and to be heard
(d) be allowed to bring a person of their choice with them to the meeting with whom s/he may confer before and during the hearing
(e) be allowed to remain silent during the hearing if s/he so chooses
(f) be allowed not to attend the hearing if s/he so chooses.
4.5 A person complained about who is not legally an adult in the host country shall have special protection and assistance
(a) If the Complaints Committee holds a hearing and the person complained about is not legally an adult in the host country, the Complaints Committee shall:
(i) ensure that the person complained about fully understands his/her rights as set out in paragraph 4.4 above before the hearing begins
(ii) ensure that an adult chosen by the person complained about attends the hearing to support the person complained
(iii) if the person complained about is unable to choose an adult to attend with him or her, select an adult to take on this role.
(b) The adult chosen in accordance with paragraph 4.5(a) shall attend the hearing and shall be able to speak on behalf of the person complained about at the hearing.
4.6 Hearings are confidential
Until the Complaints Committee makes a decision about a complaint, details of the complaint and the hearing shall be kept confidential and shall be discussed only with the people participating in the hearing.
4.7 What can the Complaints Committee do without a hearing?
If the Complaints Committee reaches a decision about a complaint without a hearing, it may:
(a) dismiss the complaint, or
(b) uphold it and:
(i) take no action
(ii) counsel the person complained about
(iii) warn the person complained about.
4.8 What can the Complaints Committee do at the conclusion of a hearing?
If the Complaints Committee holds a hearing, it may:
(a) dismiss the complaint, or
(b) uphold it and:
(i) take no action
(ii) counsel the person complained about
(iii) warn the person complained about
(iv) suspend the person complained about from the Championship for as long as it thinks appropriate
(v) expel the respondent from the Championship
(vi) ban the person complained about from all future Championships or a specified number of future Championships.
4.9 What the Complaints Committee can consider at a hearing.
The Complaints Committee shall inform itself at a hearing and generally as to evidence and facts in its absolute discretion and as it sees fit, subject to this Code of Conduct.
4.10 The Complaints Committee’s decision is final
The Complaints Committee’s decision shall be final. The person complained about is not able to appeal it, but where the person complained about has been expelled for longer than the next Championship he or she can apply for readmittance in accordance with section 6 below.
5 Who must be told about the Complaints Committee’s decision?
5.1 Where there has been no hearing
Where a complaint has been decided without a hearing, the Chairperson of the Complaints Committee must give a written copy of the decision to:
(a) the complainant
(b) the Complaints Officer who referred the complaint
(c) the Convenor
(d) the person complained about
(e) where the person complained about is a debater, the team manager.
5.2 Where there has been a hearing
Where a complaint has led to a hearing, the Chairperson of the Complaints Committee must give a written copy of the decision to:
(a) the people mentioned above in 5.1 (“Where there has been no hearing”)
(b) the parent or guardian of a person complained about, if that person is a debater and not an adult according to the laws of his/her home nation
(c) the Chief Adjudicator, if the complaint has been about an adjudicator.
5.3 Where a hearing has led to a suspension or expulsion
Where a complaint has led to a suspension or expulsion, the Chairperson of the Complaints Committee must give a written copy of the decision to:
(a) the people mentioned above in rule 5.2 (“Where there has been a hearing”)
(b) the World Schools Debating Council Executive Committee through that Executive Committee’s Chairperson
(c) the Convenor and Chief Adjudicator of the following year’s championship.
5.4 Where the person complained about is expelled from future Championships
(a) Where the person complained about is expelled from all or any future Championships, the Secretary of the World Schools Debating Council Executive Committee shall ensure that a copy of the Complaints Committee’s written decision is kept on file.
(b) The person complained about shall have the right to apply to be readmitted in accordance with paragraph 6 below.
5.5 Limitation on disclosing Complaints Committee decision
The written decision of the Complaints Committee shall not be disclosed, published, produced, copied, or otherwise communicated to people other than those specified in 5.1 to 5.4 above unless:
(a) The complainant and the person complained about agree; or
(b) Disclosure of the Complaints Committee’s written decision is required by the law which applies in the home nation of the person complained about and/or in the host nation in which the complaint arose.
6 What are the rights of a person who is suspended or expelled?
6.1 A young person must be looked after
Where the Complaints Committee decision has led to a suspension or expulsion and the person suspended or expelled is not legally an adult in the host country, the Complaints Committee, in conjunction with the Convenor, shall take all reasonable steps to ensure that the person suspended or expelled is able to make satisfactory arrangements for:
(a) accommodation and meals for the duration of his/her suspension or until he/she is able to return to his/her home country
(b) returning to his/her home country if he/she has been expelled from the Championship.
6.2 Where a person has been expelled for longer than the next Championship
(a) Where the Complaints Committee’s decision has led to an expulsion and the person complained about has been expelled for longer than the next Championship, the person complained about may, after the conclusion of the following Championship, apply in writing to the Chairperson of the World Schools Debating Council Executive Committee to be readmitted as a participant at future Championships.
(b) If the Chairperson of the World Schools Debating Council Executive Committee receives an application by such a person to be readmitted (“the applicant”):
(i) the application shall be forwarded to the Chairperson of the Complaints Committee as soon as possible
(ii) the Chairperson of the Complaints Committee shall discuss the application with the other members of the Complaints Committee, and the Complaints Committee shall make a decision whether to grant or decline the application within 90 days of receiving the application.
6.3 What is the process for a hearing on the application for readmittance?
The process for a hearing on the application is:
(a) the Complaints Committee shall either hold a hearing in person (if practical), or shall discuss the issue by telephone, video link, e-mail or in writing, depending on constraints of cost, time and the distance between the parties
(b) the person applying for reinstatement (“the applicant”) shall be invited to submit statements in writing in support of the application to be readmitted, and may additionally be asked to submit answers to specific questions by the Complaints Committee
(c) the Complaints Committee shall determine who, apart from the applicant the applicant and such persons as the applicant may decide, may be asked to submit written statements regarding the applicant. These may include:
(i) referees about the applicant’s character or change of circumstances
(ii) the Complaints Officer who received the original complaint
(iii) the original complainant
(iv) a current Complaints Officer.
(d) the Complaints Committee shall inform itself at a hearing about the application and generally as to evidence and facts in its absolute discretion and as it sees fit, subject to this Code of Conduct.
6.4 Hearings about the application are confidential
Until the Complaints Committee makes a decision about the application for readmittance, details of the application and the hearing shall be kept confidential and shall be discussed only with the people participating in the hearing.
6.5 What must the Complaints Committee do to decide on the application?
(a) The Complaints Committee must make a decision about the application by:
(i) declining the application, or
(ii) readmitting the applicant subject to any conditions the committee thinks fit, or
(iii) readmitting the applicant without any conditions.
(b) After making a decision about the application, the Complaints Committee must send a written copy of its decision to:
(i) the applicant
(ii) the current Complaints Officers
(iii) the World Schools Debating Council Executive Committee, through that Executive Committee’s Chairperson
(iv) the Convenor and Chief Adjudicator of the following Championship
(v) the person who made the original complaint about the applicant.
6.6 Limitation on disclosing Complaints Committee decision about the application
The written decision of the Complaints Committee shall not be disclosed, published, produced, copied, or otherwise communicated to people other than those specified in paragraph 6.5 unless:
(a) The applicant agrees; or
(b) Disclosure of the Complaints Committee’s written decision is required by the law which applies in the home nation of the applicant and/or in the host nation in which the breach of this Code of Conduct occurred.
6.7 The Complaints Committee’s decision about the application is final
The Complaints Committee’s decision on the application shall be final. The applicant is not able to appeal it but s/he can apply again for readmittance or for the removal of any conditions imposed on readmittance 6 months or more following the decision on the application. The new application must also be made according to paragraph 6.
Undertaking
7. Undertaking required to be signed prior to the commencement of the Championship
Undertaking by all those participating in the World Schools Debating Championship
I ______________________________________________________________________ undertake that:
(a) I have read and understood the Code of Conduct above and
(b) I will abide by the Code of Conduct for the duration of the _______________ World Schools Debating Championship
Signed ……………………………………………… Dated ………………………………………………
Undertaking by parent or guardian of debater(s) participating in the Championship
I ______________________________________________________________________ undertake that:
(a) I am a parent/guardian of _______________________________________________ who is a debater
participating in the _______________ World Schools Debating Championship
(b) I have read and understood the Code of Conduct above
(c) I have explained the Code of Conduct to the above debater
(d) I have instructed the above debater that I expect and require the debater to abide by the Code of Conduct
(e) the debater has confirmed to me that s/he will abide by the Code of Conduct.
Senin, 26 Mei 2008
Soal Prediksi Olimpiade Science Nasional2
Tes OSN 2008
1. The points emphasized in John Maynard Keynes's 1936 book The General Theory of Employment, Interest, and Money included
A) the role of expectations of future profits in determining investment.
B) the stability of expectations of future profits.
C) the government should take control of production and employment.
D) the division process.
2 . The topics that would have been found in a macroeconomics textbook in 1960 included
A) much discussion of monetary policy and a downplaying of fiscal policy.
B) the IS-LM model.
C) a full discussion of expectations.
D) the relationship between production and inflation.
3. Milton Friedman's critique of the dominant tradition in macroeconomics in the 1960s included
A) then-standard models greatly underestimated the government's ability to manage and control the economy.
B) then-standard models greatly overestimated the power of fiscal policy and greatly underestimated the power of monetary policy.
C) then-standard models greatly underestimated the degree of fixed prices.
D) the government's budget deficit or surplus told you most of what you needed to know about how economic policy was working.
4. Macroeconomists in the early 1960s
A) tended to think that an increase in aggregate demand would eventually cause expected inflation to increase, which would shift the Phillips curve to the right.
B) tended to think that an increase in aggregate demand would eventually cause expected inflation to increase, which would shift the Phillips curve to the left.
C) tended to think that the short-run Phillips curve was fixed and that aggregate demand could be increased without causing the Phillips curve to shift to the right.
D) tended to think that supply created its own demand.
5. The Milton Friedman - Edmund Phelps analysis of the Phillips curve
A) emphasized that it was fixed and that aggregate demand could be increased without causing the Phillips curve to shift to the right.
B) emphasized that an increase in aggregate demand would eventually cause expected inflation to increase, which would shift the Phillips curve to the left.
C) emphasized that an increase in unemployment would eventually cause expected inflation to increase, which would shift the Phillips curve to the right.
D) emphasized that an increase in aggregate demand would eventually cause expected inflation to increase, which would shift the Phillips curve to the right.
6. The key elements in understanding business cycles believed by economists working in both Keynesian and monetarist traditions include
A) there is no need to understand the determinants of nomianl aggregate demand.
B) there is no need to understand the division of changes in nominal aggregate demand into changes in production (and employment) and changes in prices (inflation or deflation).
C) real fundamentals effectively determine the values of real quantities like GDP even in the short run.
D) the need to understand the velocity of money, the determinants of investment spending, the multiplier, crowding out, the natural rate of unemployment, the rate of expected inflation, and the Phillips curve.
7. Real business cycle theorists believe that the key to understanding business cycles is
A) the need to understand the determinants of nomianl aggregate demand.
B) that the same theory that determines what happens in the long run should also be applied to explain fluctuations in the short run.
C) the need to understand the division of changes in nominal aggregate demand into changes in production (and employment) and changes in prices (inflation or deflation).
D) the need to understand the velocity of money, the determinants of investment spending, the multiplier, crowding out, the natural rate of unemployment, the rate of expected inflation, and the Phillips curve.
8 According to real business cycle theorists, the incentive to work hard now depends on, among other things,
A) the wage last year.
B) the real exchange rate.
C) the wage expected in the future.
D) the real price level.
9 According to real business cycle theorists, hours worked would increase
A) if the current wage increases relative to past wages.
B) if the future wage increases relative to the current wage.
C) if the real interest rate increases.
D) if highly valuable investment opportunities become less plentiful.
10 According to real business cycle theorists, hours worked would decrease
A) if labor becomes less productive.
B) if the current wage increases relative to the future wage.
C) if the real interest rate increases.
D) if highly valuable investment opportunities become more plentiful.
11 Problems of real business cycle theory pointed out by critics include
A) in the economy as a whole, total work hours decrease because some people become unemployed, not because most individuals work less hours.
B) in the economy as a whole, total work hours decrease because most individuals work less hours, not because some people become unemployed.
C) the unemployment rate is fairly stable over the business cycle.
D) high unemployment in a recession is a market-clearing phenomenon.
12 According to real business cycle theorists,
A) production fluctuates because of aggregate demand shocks.
B) production fluctuates because of inadequate monetary policy.
C) production fluctuates because of international shocks.
D) production fluctuates because of the changing value of output and the changing productivity of the economy.
13 According to real business cycle theories, the reasons why production increases include
A) an improvement in production technology.
B) a unique opportunity for consumption.
C) a decrease in the value of output.
D) an expansionary fiscal policy.
14 Critics of real business cycle theory have problems with the claim that the economy experiences
A) large negative shocks to aggregate demand.
B) large negative shocks to consumption spending.
C) large negative shocks to productivity.
D) contractionary fiscal policy.
15 Since at least the 1930s, the mainstream of macroeconomics
A) has attributed the sluggishness of aggregate demand - the fact that the Phillips curve has a slope - to stickiness in wages and prices.
B) has attributed the sluggishness of aggregate supply - the fact that the Phillips curve has a slope - to stickiness in wages and prices.
C) has attributed the sluggishness of aggregate supply - the fact that the Phillips curve is vertical - to the flexibility of wages and prices.
D) has attributed the sluggishness of aggregate demand - the fact that the monetary policy reaction function has a slope - to stickiness in wages and prices.
16 The reasons suggested by New Keynesian Economics for the stickiness in wages and prices include
A) prices do not adjust immediately and completely in the short run because it is costly to change them.
B) a price adjustment or a failure to adjust prices on the part of one firm does not affect other firms.
C) one firm's best choice for its price depends only on that firm's costs.
D) changing prices does allow firms to maximize profits.
17 In the standard view, fiscal deficits
A) stimulate the economy in the long run as long as the central bank takes action to raise interest rates.
B) stimulate the economy in the long run as long as the central bank does not take action to raise interest rates.
C) stimulate the economy in the long run as long as the central bank does not take action to neutralize the fiscal stimulus.
D) stimulate the economy in the short run as long as the central bank takes actions to raise interest rates.
18 The problems that economists have with Ricardian Equivalence include
A) there is no incentive for people to fully work out what an increased deficit in the present implies for their future taxes.
B) myopia - perhaps people are not near-sighted enough to fully work out what an increased deficit in the present implies for their future taxes.
C) liquidity constraints - perhaps people can't easily borrow and lend as needed.
D) the beneficiaries of government spending today are the ones who will have to pay the increased taxes in the future.
19 The reasons offered by economists to explain why consumers seem unwilling to borrow to maintain consumption spending during a recession include
A) the typical consumer is impatient and risk averse.
B) current income is not a good proxy for permanent income.
C) the typical consumer is a risk taker.
D) psychologists should take seriously what economists have to say about how humans reason.
20 The reasons why monetary policy could become less powerful in the future include
A) deposits at commercial banks will become more important in the future.
B) deposits at savings banks will become more important in the future.
C) people will decrease their usage of reserve-backed commercial bank deposits as transactions balances.
D) less and less transactions will be carried out by credit cards and debit cards.
1 Between the United States Civil War in the 1860s and the end of the twentieth century the share of the U.S. labor force engaged in agriculture
A) increased from about 50 percent to about 80 percent.
B) decreased from about 80 percent to about 50 percent.
C) decreased from about 50 percent to about 2 percent.
D) decreased from about 60 percent to about 25 percent.
2 In the United States economy 100 years ago,
A) the government social insurance state was quite well developed.
B) the tax system was very progressive.
C) every person had easy access to all occupations.
D) most households found it very difficult to borrow.
3 The automatic stabilizers which have been developed in the last 100 years to help dampen the business cycle
A) deposit insurance.
B) regressive income tax.
C) inflation insurance.
D) guaranteed minimum income.
4 In the late nineteenth century, the bulk of the improvements in labor productivity
A) came from improvements in the efficiency of labor.
B) came from labor deepening: the building up of the infrastructure and the factories of the country.
C) came from labor working longer hours.
D) came from capital deepening: the building up of the infrastructure and the factories of the country.
5 In the twentieth century, the bulk of the improvements in labor productivity
A) came from capital deepening: the building up of the infrastructure and the factories of the country.
B) came from labor deepening: the building up of the infrastructure and the factories of the country.
C) came from improvements in the efficiency of labor.
D) came from labor working longer hours.
6 Changes that will transform the macroeconomy in the future include
A) continued increase in financial flexibility that allows consumers to borrow more easily.
B) less need for productivity increases in agriculture and manufacturing.
C) international investments will become more difficult to make.
D) the importance of international trade will decrease.
7 If liquidity constraints - the inability to borrow - continue to decrease for households,
A) the marginal propensity to consume will increase.
B) the marginal propensity to consume will decrease.
C) the marginal propensity to consume will not be affected.
D) the marginal propensity to save will decrease.
8 The marginal propensity to expend will decrease
A) if international trade continues to increase.
B) if liquidity constraints - the inability to borrow - continue to decrease for households.
C) if international investments become easier to make.
D) if the marginal propensity to export decreases.
9 The multiplier is likely to get smaller
A) if international trade starts to decrease.
B) if the exchange rate sensitivity of exports increases.
C) if liquidity constraints - the inability to borrow - continue to decrease for households.
D) if the interest sensitivity of investment increases.
10 U.S. merchandise imports
A) have doubled as a share of total goods production since 1960.
B) have doubled as a share of total goods production since 1900.
C) have quadrupled as a share of total goods production since 1960.
D) have tripled as a share of total goods production since 1900.
11 Unanticipated large-scale inventory accumulation or drawdowns
A) have been a minor source of fluctuations in employment and output over the past century.
B) have been a principal source of fluctuations in employment and output over the past century.
C) have been a principal cause of inflation over the past century.
D) have been a principal cause of interest rate movements over the past century.
12 Prior to World War I
A) the U.S. economy experienced recessions that were much shorter in length than post-World War II recessions.
B) experienced expansions that were much longer in length than post-World War II expansions.
C) fiscal and monetary policy worked together to be effective stabilization policies in the United States.
D) neither fiscal nor monetary policy were feasible as stabilization policy in the United States.
13 In the post-World War II era
A) the business cycle has been driven by economic policies that allowed unemployment to rise, followed by expansionary fiscal and monetary policies to reverse the rise in unemployment.
B) the business cycle has been about 25 to 30 percent smaller than prior to World War I.
C) inflation has been less of a problem than prior to World War I.
D) borrowing by households has decreased from what it was prior to World War I.
14 The facts about the Great Depression include
A) from full employment in 1929, real GDP fell until it was about 10 percent below potential output by 1933.
B) consumption spending collapsed: by 1932 real consumption spending was less than one-ninth of what it had been three years before.
C) unemployment had reached a quarter of the labor force by 1933.
D) investment spending held fairly steady throughout the 1930s.
15 The possible shocks that triggered the Great Depression include
A) the stock market crash of 1931.
B) an increase in imports caused by a sharp increase in the marginal propensity to import.v
C) a downward shift in the price of gold.
D) a downward shift in the baseline level of investment spending caused by a decrease in investment in residential housing.
16 Falling price levels reduce real GDP
A) because real exchange rates increase, reducing exports and increasing imports, and because wealth is redistributed from creditors to debtors.
B) because real income decreases and consumption spending decreases, and because income is redistributed from debtors to creditors.
C) because real interest rates decrease, reducing investment spending, and because wealth is redistributed from creditors to debtors.
D) because real interest rates increase, reducing investment spending, and because wealth is redistributed from debtors to creditors.
17 Europe in the 1990s
A) has experienced remarkably low unemployment rates.
B) has experienced growth rates that have been much higher than in the United States.
C) has experienced unemployment rates that have been much higher than in the United States.
D) has experienced inflation rates that have been much lower than in the United States.
18 In western Europe since the 1970s
A) the Phillips Curve seems to have shifted to the left.
B) the Phillips Curve seems to have been remarkably stable.
C) the Monetary Policy Reaction Curve seems to have shifted to the left.
D) the Phillips Curve seems to have shifted to the right.
19 The potential for a stock market and a real estate price collapse to become a real problem
A) is worsened when lots of enterprises and individuals have been careful not to borrow heavily using the inflated values as collateral.
B) is worsened when lots of enterprises and individuals have borrowed heavily using the inflated values as collateral.
C) is lessened when lots of enterprises and individuals have borrowed heavily using the inflated values as collateral.
D) is not really affected when lots of enterprises and individuals have borrowed heavily using the inflated values as collateral.
20 In Japan in the 1990s
A) the IS curve shifted to the right because of an increase in the marginal propensity to consume.
B) the LM curve shifted to the left partially due to investment spending being depressed.
C) the IS curve shifted to the left partially due to investment spending being depressed.
D) the LM curve became more vertical because monetary policy was tight.
1 Nominal GDP is calculated by
A) adding up all of the goods and services produced in the economy, valued in current year market prices.
B) adding up all of the goods and services produced in the economy, valued in base year market prices.
C) adding up all of the final goods and services produced in the economy, valued in current year market prices.
D) adding up all of the final goods and services produced in the economy, valued in base year market prices.
2 The unemployment rate
A) is the principal measure of material well-being and economic productivity.
B) is the proportional rate of change of the price level.
C) is the principal determinant of the level of investment, and a principal determinant of future economic growth.
D) is the principal measure of how far production is falling short of potential output.
3 The real long-term interest rate
A) is the principal determinant of the level of investment, and a principal determinant of future economic growth.
B) is the principal measure of material well-being and economic productivity.
C) is the principal measure of how far production is falling short of potential output.
D) is the proportional rate of change of the price level.
4 Subtracting the rate of inflation from nominal interest rates
A) gives you the real exchange rate.
B) gives you the real interest rate.
C) gives you the real unemployment rate.
D) gives you real GDP.
5 An individual in the Mexico wishing to invest in Europe would need to _____________ in the foreign exchange market.
A) sell pesos and buy euros
B) buy pesos and sell euros
C) buy dollars and sell pesos
D) sell euros and sell dollars
6 The price of stocks will decrease if
A) investors become optimistic and expect that long-term earnings will decrease.
B) investors become pessimistic and expect that long-term earnings will decrease.
C) the risk premium associated with holding stocks decreases.
D) the real interest rate decreases.
7 If the risk premium associated with holding stocks increases at the same time that the real rate of interest increases,
A) we would initially expect the price of stocks to increase.
B) we would initially expect the price of stocks to decrease.
C) we would initially expect the price of bonds to decrease.
D) we would be unable to determine the impact on the price of stocks unless we knew the relative magnitudes of the changes.
8 If investors become more pessimistic and expect that long-term earnings will decrease at the same time that the real rate of interest decreases,
A) we would initially expect the price of stocks to increase.
B) we would initially expect the price of bonds to decrease.
C) we would be unable to determine the impact on the price of stocks unless we knew the relative magnitudes of the changes.
D) we would initially expect the price of stocks to decrease.
9 The information summed up by the real value of the stock market includes
A) the desire of businesses to purchase capital goods.
B) the current level of earnings, or profits.
C) the level of savings in the economy.
D) attitudes toward consumption spending.
10 If the nominal interest rate is 9% and rate of inflation is 6%, the real interest rate is approximately
A) 15%.
B) 3%.
C) 1.5%.
D) -3%.
11 If the inflation rate, as measured by the CPI, over the past year was 5%, a basket of goods and services that cost _____ a year ago would be equivalent to _______ at the current price level.
A) $200,000, $210,000
B) $150,000, $155,000
C) $50,000, $55,000
D) $200,000, $201,000
12 If the CPI changes from 110 in one year to 118 the next, the rate of inflation over that time period is
A) 8%.
B) 218%.
C) 7.27%.
D) 107.27%.
13 The labor force is composed of those who are
A) employed plus those that are not working.
B) unemployed plus those who are looking for work.
C) employed plus those who would like to work but have given up looking for work.
D) employed plus those who are looking for work.
14 Suppose that real GDP is $10 trillion and the unemployment rate is 5.5%. If, over the next year, potential output grows by 2 percent and the unemployment rate decreases by 1 percentage point to 4.5%, real GDP will increase to
A) $10.25 trillion.
B) $10.45 trillion.
C) $10.3 trillion.
D) $10.40 trillion.
15 The reasons that Okun's Law coefficient is greater than one include
A) technological change occurs.
B) the unemployment rate counts discouraged workers.
C) average hours of work per week increase as the economy comes out of a recession.
D) when business returns to normal, firms initially ask existing employees to work less hours.
16 Since 1948, the labor force participation rate
A) has been increasing for males and decreasing for females.
B) has been increasing for both males and females.
C) has been decreasing for both males and females.
D) has been decreasing for males and increasing for females.
17 If nominal GDP was $9.8 trillion and the GDP deflator was 140, real GDP would be
A) $70 billion ($.07 trillion).
B) $7 trillion.
C) $8.4 trillion.
D) $13.72 trillion.
18 Residential structures are a component of
A) consumption expenditures.
B) government expenditures.
C) net exports.
D) investment expenditures.
19 Which of the following would be considered a component of government purchases?
A) A pension check sent to a retired federal employee.
B) A Social Security check sent to an individual.
C) The purchase of a military aircraft.
D) A check sent to a disabled veteran.
20 Stock prices are likely to increase if
A) investors expect long-run earnings to decrease.
B) investors are more willing to tolerate risk than before.
C) investors become more risk averse.
D) interest rates increase.
1 Which of the following is not a concern of macroeconomics?
A) economy-wide employment
B) changes in the aggregate price level
C) economy-wide levels of production
D) wages in particular occupations
2 Which of the following is not one of the six key variables in macroeconomics?
A) the unemployment rate
B) the price of corn
C) the inflation rate
D) the interest rate
3 Which of the following is not one of the six key variables in macroeconomics?
A) the level of employment in the restaurant industry
B) the exchange rate
C) the inflation rate
D) the level of the stock market
4 Real GDP is a measure of the economy's
A) employment level
B) money supply
C) stock market level
D) output level
5 When the domestic currency's value in terms of other currencies is high,
A) we say the domestic currency is depreciated.
B) we say the domestic currency has excess value.
C) we say the domestic currency is overvalued.
D) we say that foreign currencies are overvalued.
6 If a domestic currency has depreciated
A) foreign-made goods are cheap relative to domestic-made goods.
B) domestic-made goods are cheap relative to foreign-made goods.
C) government spending is likely to decrease.
D) the money supply is likely to increase.
7 Periods in which production increases and unemployment decreases are called
A) macroeconomic expansions.
B) business cycles.
C) recessions, or possibly, depressions.
D) inflation.
8 Microeconomists
A) focus on the economy as a whole.
B) spend much time analyzing how total income changes, and how changes in income cause changes in other modes of economic behavior.
C) consider the possibility that decision makers might change the quantities they produce before they change the prices they charge.
D) assume that economic adjustment occurs first through prices that change to balance supply and demand.
9 Macroeconomists
A) hold total income constant.
B) spend a great deal of time and energy investigating how people form their expectations and change them over time.
C) don't worry much about how decision makers form their expectations.
D) assume that economic adjustment occurs first through prices that change to balance supply and demand.
10 In the latter half of the 1990s, unemployment in the United States was
A) greater than its trend level.
B) equal to its trend level.
C) less than its trend level.
D) not relevant to its trend level.
11 Which of the following is not likely to be considered part of economic activity?
A) Purchasing a new automobile.
B) Working in a restaurant.
C) Trimming the bushes in your yard.
D) Buy a new book.
12 Which of the following is not likely to be considered part of economic activity?
A) Getting your automobile washed at as car wash.
B) Washing your clothes in a laundromat.
C) Fixing you own car.
D) Leasing a new automobile.
13 An example of an investment good is
A) a stock certificate for General Motors.
B) machine tools.
C) certificates of deposit.
D) mutual funds.
14 When interest rates increase,
A) consumption expenditures tend to increase.
B) investment expenditures tend to increase.
C) investment expenditures tend to decrease.
D) government expenditures tend to decrease.
15 The yield curve shows the difference between
A) short-term and long-term stock dividends.
B) short-term and long-term stock prices.
C) short-term and long-term inflation rates.
D) short-term and long-term interest rates.
16 The 1970s was a decade of generally
A) low output growth, increasing unemployment, and decreasing inflation.
B) high output growth, increasing unemployment, and decreasing inflation.
C) low output growth, increasing unemployment, and increasing inflation.
D) high output growth, decreasing unemployment, and decreasing inflation.
17 The 1990s was a decade of generally
A) low output growth, increasing unemployment, and increasing inflation.
B) high output growth, decreasing unemployment, and decreasing inflation.
C) high output growth, increasing unemployment, and decreasing inflation.
D) high output growth, increasing unemployment, and decreasing inflation.
18 Which of the following macroeconomic scenarios would likely decrease your chances of receiving a reasonable job offer as you near graduation from your college of university?
A) low output growth and high unemployment.
B) low inflation and low unemployment.
C) high output growth and low unemployment.
D) low output growth and high inflation.
19 During most of the 1970s, real GDP per worker in the United States was
A) greater than its trend level.
B) equal to its trend level.
C) less than its trend level.
D) not relevant to its trend level.
20 Which of the following is not likely to be considered part of economic activity?
A) Washing your automobile.
B) Hiring someone to mow your lawn.
C) Making hamburgers in a restaurant.
D) Renting an apartment
1 The relationship between the government's debt and the government's deficit (or surplus) is
A) the change in the deficit for a year is equal to the debt (or surplus) for that year.
B) the change in the debt for a year is equal to the deficit (or surplus) for that year.
C) the change in the surplus for a year is equal to the debt (or deficit) for that year.
D) the debt and deficit are the same.
2 One of the reasons why economists are interested in the debt and the deficit is
A) the deficit is a convenient measure of monetary policy's role in stabilization policy.
B) the deficit affects the position of the IS curve.
C) the deficit affects the position of the LM curve.
D) the debt and deficit are not very closely connected with national savings and investment.
3 A rising government debt
A) tends to increase capital formation and lower the economy's long-run steady-state growth path.
B) tends to decrease capital formation and lower the economy's long-run steady-state growth path.
C) tends to increase the steady-state GDP per worker.
D) means that taxes in the future will be lower because of lower interest charges.
4 A decreasing government debt
A) tends to decrease capital formation.
B) tends to decrease the economy's long-run steady-state growth path.
C) means that taxes in the future will be higher to pay higher interest charges.
D) tends to increase the steady-state GDP per worker.
5 An increase in government purchases
A) shifts the LM curve to the right.
B) makes the IS curve more vertical.
C) makes the LM curve more horizontal.
D) shifts the IS curve to the right.
6 An increase in government tax collections
A) shifts the IS curve to the left and may change its slope.
B) shifts the LM curve to the right and may change its slope.
C) shifts the IS curve to the right and may change its slope.
D) shifts the LM curve to the left and may change its slope.
7 If the Federal Reserve tightens monetary policy so that real interest rates increase and real GDP decreases,
A) tax revenues will decrease, increasing the government's cash deficit, but not changing the full-employment budget balance.
B) tax revenues will decrease, decreasing the government's cash deficit, and increasing the full-employment deficit.
C) tax revenues will increase, decreasing the government's cash deficit, and decreasing the full-employment deficit.
D) tax revenues will increase, decreasing the government's cash deficit, but not changing the full-employment budget balance.
8 When real GDP decreases and unemployment increases
A) tax revenue increases, swinging the cash budget toward surplus.
B) social welfare spending decreases, swinging the cash budget toward deficit.
C) social welfare spending increases, swinging the cash budget toward surplus.
D) tax revenue decreases, swinging the cash budget toward deficit.
9 Further adjustments that need to be made to the reported cash budget level include
A) an adjustment for inflation in the stock market.
B) an adjustment for public investment.
C) an adjustment for public consumption.
D) an adjustment for assets and generational accounting.
10 Economists suggest that governments should adopt capital budgeting because
A) the cost of consumption goods should be amortized over a period of time rather than completely charged to the budget when incurred.
B) the federal government is located in Washington, D.C.
C) the cost of capital goods should be amortized over a period of time rather than completely charged to the budget when incurred.
D) the true debt is understated unless capital budgeting is used.
11 Fiscal policy is sustainable if
A) the debt-to-money supply ratio is heading for a steady state.
B) the deficit-to-money supply ratio is heading for a steady state.
C) the deficit-to-government spending ratio is heading toward a steady state.
D) the debt-to GDP ratio is heading for a steady state.
12 In an economy with a constant cash-balance deficit of 2 percent of GDP, a long-run inflation rate of 3% per year, a labor force growth rate of 2% per year, and a growth rate of output per worker of 1% per year,
A) the steady-state debt-to-GDP ratio would be 1/2.
B) the steady-state debt-to-GDP ratio would be 1/3.
C) the steady-state deficit-to-GDP ratio would be 1/2.
D) the steady-state deficit-to-GDP ratio would be 1/3.
13 If the labor force growth rate increases,
A) the steady-state deficit-to-GDP ratio will decrease.
B) the steady-state debt-to-GDP ratio will decrease.
C) the steady-state debt-to-GDP ratio will increase.
D) the steady-state deficit-to-GDP ratio will increase.
14 The higher the debt-to-GDP ratio,
A) the less risky an investment do financiers judge the debt of the country and the less willing they will be to buy and hold that debt.
B) the less risky an investment do financiers judge the debt of the country and the more willing they will be to buy and hold that debt.
C) the more risky an investment do financiers judge the debt of the country and the less willing they will be to buy and hold that debt.
D) the more risky an investment do financiers judge the debt of the country and the more willing they will be to buy and hold that debt.
15 The lower the debt-to-GDP ratio,
A) the more risky an investment do financiers judge the debt of the country, reducing the interest rate that governments will have to pay to convince people to buy and hold the debt.
B) the less risky an investment do financiers judge the debt of the country, increasing the interest rate that governments will have to pay to convince people to buy and hold the debt.
C) the less risky an investment do financiers judge the debt of the country, reducing the interest rate that governments will have to pay to convince people to buy and hold the debt.
D) the more risky an investment do financiers judge the debt of the country, increasing the interest rate that governments will have to pay to convince people to buy and hold the debt.
16 A deficit is sustainable only if
A) the associated steady-state debt-to-GDP ratio is low enough that investors judge the debt safe enough to buy and hold.
B) the associated steady-state debt-to-GDP ratio is high enough to attract risk adverse investors.
C) the associated steady-state debt-to-GDP ratio is high enough that investors judge the debt safe enough to buy and hold.
D) it is equal to zero.
17 The only two time periods in which the upward movement in the debt-to-GDP ratio was not associated with a war were
A) the 1970s during the Carter presidency and the 1990s during the Clinton presidency.
B) the 1940s during the Truman presidency and the 1950s during the Eisenhower presidency.
C) the Great Depression during the 1930ss and the 1940s during the Truman presidency.
D) the Great Depression during the 1930s and the 1980s during the Reagan and Bush presidencies.
18 In the short-run, a government budget deficit produced by a tax cut
A) increases consumption spending and shifts the LM curve to the right.
B) increases consumption spending and shifts the Phillips curve to the right.
C) decreases consumption spending and shifts the IS curve to the left.
D) increases consumption spending and shifts the IS curve to the right.
19 An increase in the government's budget deficit
A) will lead to a decrease in imports, a depreciated dollar, an increase in exports, and a decrease in the international trade deficit.
B) will lead to an increase in imports, a depreciated dollar, an increase in exports, and an uncertain effect on the international trade deficit.
C) will lead to an increase in imports, an appreciated dollar, a decrease in exports, and an increase in the international trade deficit.
D) will lead to a decrease in imports, an appreciated dollar, a decrease in exports, and an uncertain effect on the international trade deficit.
20 Lower full-employment deficits
A) shift the IS curve to the right, raise real interest rates, and reduce consumption spending.
B) shift the IS curve to the right, raise real interest rates, and reduce investment spending.
C) shift the IS curve to the left, lower interest rates, and increase consumption spending.
D) shift the IS curve to the left, lower interest rates, and increase investment spending.
1 Changes in fiscal policy
A) shift the LM curve out and back.
B) shift the Phillips curve out and back.
C) shift the potential output curve out and back.
D) shift the IS curve out and back.
2 Changes in monetary policy
A) shift the Phillips curve out and back.
B) shift the LM curve out and back.
C) shift the IS curve out and back.
D) shift the potential output curve out and back.
3 Fiscal and monetary policy, along with the economic environment,
A) set the level of aggregate supply and move the economy along the Phillips curve, raising and lowering inflation and unemployment.
B) set the level of aggregate supply and move the economy along the aggregate demand curve, raising and lowering inflation and unemployment.
C) set the level of aggregate demand and move the economy along the Phillips curve, raising and lowering inflation and unemployment.
D) set the level of aggregate demand and move the economy along the aggregate demand curve, raising and lowering inflation and unemployment.
4 Changes in expectations of inflation, changes in the natural rate of unemployment, and supply shocks
A) change the position of the short-run Phillips curve, raising and lowering inflation and unemployment.
B) change the level of aggregate demand and move the economy along the Phillips curve, raising and lowering inflation and unemployment.
C) change the level of aggregate supply and move the economy along the Phillips curve, raising and lowering inflation and unemployment.
D) change the level of aggregate demand and move the economy along the aggregate demand curve, raising and lowering inflation and unemployment.
5 If the Federal Reserve wanted to pursue an expansionary monetary policy, it could
A) lower the discount rate.
B) sell U.S. government bonds.
C) increase the reserve requirement.
D) raise credit card interest rates.
6 A policy option for a country that finds itself in a liquidity trap situation is
A) expansionary fiscal policy via increased government purchases.
B) expansionary monetary policy designed to decrease interest rates and increase investment spending.
C) contractionary fiscal policy via increased taxes.
D) contractionary monetary policy designed to decrease inflation expectations.
7 The past forty years have seen the level of Federal Government spending
A) as a share of GDP increase significantly, with the share of mandatory spending decreasing and discretionary spending increasing.
B) as a share of GDP remain roughly constant, with the share of mandatory spending increasing and discretionary spending decreasing.
C) as a share of GDP remain roughly constant, with the share of mandatory spending decreasing and discretionary spending increasing.
D) as a share of GDP has decreased, with the share of mandatory spending increasing and discretionary spending decreasing.
8 Unemployment and inflation were low and stable in the United States
A) between 1940 and 1950.
B) between the mid-1950s and the late 1960s.
C) between 1967 and 1975.
D) between 1976 and 1983.
9 The natural rate of unemployment and expected inflation increased in the United States
A) between 1967 and 1975.
B) between the mid-1950s and the late 1960s.
C) between the mid-1980s and the mid-1990s.
D) during the 1930s.
10 The stagflation of the early 1970s was the result of
A) expansionary aggregate demand policies and a decrease in expected inflation
B) contractionary aggregate demand policies and a decrease in expected inflation.
C) expansionary aggregate demand policies.
D) expansionary aggregate demand policies and an increase in expected inflation.
11 The velocity of money since 1980 has been
A) unstable and predictable around a steady upward trend.
B) stable and predictable with a constant downward trend.
C) unstable and unpredictable without any discernable trend.
D) stable and predictable with a constant upward trend.
12 Each of the following is a component of the Conference Board's Index of Leading Indicators except
A) stock prices, 500 common stocks.
B) average weekly initial claims for unemployment insurance.
C) manufacturers' new orders, consumer goods and materials.
D) average weekly initial claims for disability insurance.
13 As an example of the problem of using only the money supply as a leading indicator, during 1992 if M1 were used as the measure of the money supply rather than M3
A) monetary policy would have been deemed contractionary, deepening the 1990-92 recession.
B) monetary policy would have been deemed expansionary, resulting in short-term real interest rates of less than zero.
C) monetary policy would have been deemed expansionary, resulting in short-term nominal interest rates of less than zero.
D) monetary policy would have been deemed neutral.
14 If the reserve requirement is 4% and the Federal Reserve increases the reserves in the banking system by $20 billion, the potential increase in the money supply is
A) $5000 billion.
B) $500 billion.
C) $50 billion.
D) $5 billion.
15 If the reserve requirement is 8%, the money multiplier is
A) 12.5.
B) 125.
C) 1.25.
D) .125.
16 If the reserve requirement is 8%, households' and businesses' desired holding ratio of currency-to-deposits is .1, and the ratio of excess reserves to total deposits that banks desire to hold is .04, the money multiplier is
A) 6.1.
B) 1.2.
C) 50.
D) 5.
17 A decrease in the reserve requirement will
A) decrease the value of the money multiplier.
B) increase the value of the money multiplier.
C) increase the value of the autonomous spending multiplier.
D) decrease the value of the autonomous spending multiplier.
18 If households' and businesses' decide to hold more currency relative to deposits,
A) the value of the autonomous spending multiplier will decrease.
B) the value of the money multiplier will increase.
C) the value of the money multiplier will not change.
D) the value of the money multiplier will decrease.
19 If the principal instability in the economy is due to shifts in the IS curve,
A) targeting interest rates will stabilize the magnitude of shocks to the economy.
B) targeting the exchange rate will stabilize the magnitude of the shocks to the economy.
C) targeting interest rates will do little or nothing to stabilize the magnitude of shocks to the economy.
D) the Federal Reserve should take monetary policy action to shift the IS curve in the opposite direction of the shock.
20 If the principal instability in the economy is due to instability in the velocity of money,
A) targeting interest rates will stabilize the magnitude of shocks to the economy.
B) targeting interest rates will do little or nothing to stabilize the magnitude of shocks to the economy.
C) it would be better to have a monetary policy reaction function that reacts to leading indicators and outcomes.
D) the Federal Reserve should take monetary policy action to shift the IS curve in the opposite direction of the shock.
1 Changes in _____________ is the driving force behind the business cycle.
A) consumption spending
B) investment spending
C) the money supply
D) government purchases
2 In the sticky-price model, the interest rate is set
A) directly by businesses or indirectly by the combination of the stock of money and the liquidity preference of households and the central bank.
B) directly by households or indirectly by the combination of the stock of money and the liquidity preference of businesses and the central bank.
C) directly by Congress or indirectly by the combination of the stock of money and the liquidity preference of households and businesses.
D) directly by the central bank or indirectly by the combination of the stock of money and the liquidity preference of households and businesses.
3 A source of fluctuations in investment spending is
A) changes in government expectations of future output growth.
B) changes in households' expectations about future output growth.
C) changes in households' expectations about future risk.
D) changes in investors' expectations about future profits.
4 The increase in the interest rate that the market charges on _________ loans over __________ loans is called the ____________.
A) long-term; short-term; term premium
B) short-term; long-term; term premium
C) long-term; short term; yield premium
D) short-term; long-term; yield premium
5 The riskier that lenders believe a loan to be,
A) the higher will be the term premium they will charge.
B) the lower will be the risk premium they will charge.
C) the higher will be the risk premium they will charge.
D) the more willing they will be to make the loan at the risk-free interest rate.
6 The slope of the investment function
A) tells us by how much investment spending is discouraged by a one-unit increase in the short-term, risky, nominal interest rate.
B) tells us what the level of investment spending would be if the long-term, risky, real interest rate were 0.
C) tells us what the level of investment spending would be if the short-term, risky, nominal interest rate were 0.
D) tells us by how much investment spending is discouraged by a one-unit increase in the long-term, risky, real interest rate.
7 An increase in the domestic real interest rate
A) will reduce the real exchange rate and reduce the level of exports.
B) will increase the real exchange rate and increase the level of exports.
C) will reduce the real exchange rate and increase the level of exports.
D) will increase the real exchange rate and reduce the level of exports.
8 The IS curve tells us
A) what equilibrium level of real GDP corresponds to each value of the nominal interest rate.
B) what equilibrium level of real GDP corresponds to each value of the real interest rate.
C) what equilibrium level of real GDP corresponds to each value of the price level.
D) what equilibrium level of real GDP corresponds to each value of the money supply.
9 The factors that influence the slope of the IS curve include
A) the baseline level of consumption spending and the level of foreign real GDP.
B) the marginal propensity to consume and the interest rate-sensitivity of investment spending.
C) the level of real GDP and the baseline level of investment spending.
D) foreign real interest rates and the level of government purchases.
10 If the marginal propensity to expend is equal to .8, the interest rate sensitivity of investment is equal to $100 billion, the interest rate sensitivity of the exchange rate is 10, and the exchange rate sensitivity of exports is $7 billion, a one percentage point change in the real interest rate will change the level of aggregate demand by
A) $170 billion.
B) -$850 billion.
C) $850 billion.
D) -$170 billion.
11 A decrease in the baseline level of consumption spending will
A) shift the IS curve to the left.
B) shift the IS curve to the right.
C) make the IS curve more vertical.
D) make the IS curve less vertical.
12 A decrease in the marginal propensity to consume will
A) shift the IS curve to the left.
B) shift the IS curve to the right.
C) make the IS curve more vertical.
D) make the IS curve less vertical.
13 If the economy is operating below (to the left of) the IS curve, then real GDP is _______ than planned expenditure,
A) greater; inventories are decreasing faster than expected, and businesses will reduce production.
B) greater; inventories are increasing faster than expected, and businesses will reduce production.
C) less; inventories are increasing faster than expected, and businesses will increase production.
D) less; inventories are decreasing faster than expected, and businesses will increase production.
14 If the MPE is equal to .8, the baseline level of spending is $3 trillion, a one percentage point decrease in the real interest rate increases investment spending by $100 billion and exports by $20 billion, and the real interest rate is equal to 5%, then the equilibrium level of real GDP is
A) $15 trillion.
B) $18 trillion.
C) $3 trillion.
D) $12 trillion.
15 If the MPE is equal to .8, a one percentage point decrease in the real interest rate increases investment spending by $100 billion and exports by $20 billion, the real interest rate is equal to 5%, and the baseline level of investment spending increases by $100 billion, the change in the equilibrium level of real GDP would be
A) -$.125 trillion
B) $.125 trillion.
C) $.5 trillion.
D) -$.5 trillion.
16 If the Federal Reserve raises interest rates,
A) the IS curve will shift to the left and the level of aggregate demand will decrease.
B) the level of aggregate demand will move upward along the IS curve and thus decrease.
C) the level of aggregate demand will move downward along the IS curve and thus increase.
D) the IS curve will shift to the right and the level of aggregate demand will increase.
17 Suppose that the Federal Reserve has decided that there is a deflationary gap of $1 trillion in the economy. Suppose further that the estimated slope of the IS curve is -$500 billion. By how many percentage points would the Fed need to decrease the real interest rate in order close the deflationary gap?
A) 5
B) 2
C) .5
D) 20
18 The major determinant of the term premium is
A) expectations of the expected profitability of investment projects.
B) expectations of future consumption spending.
C) expectations of future monetary policy.
D) expectations of future government purchases.
19 In the early 1980s (1982 to 1985) the US economy
A) experienced a shifting of the IS curve to the right because of increased business optimism, tax increases, and decreased government purchases.
B) experienced a shifting of the IS curve to the right because of tax reductions, and increased government purchases.
C) experienced a movement down and to the right along the IS curve.
D) experienced a shifting of the IS curve to the right due to a decrease in interest rates.
20 From 1992 until the end of the decade, the US economy
A) experienced a shifting of the IS curve to the left due to an increase in interest rates.
B) experienced a movement down and to the right along the IS curve.
C) experienced a shifting of the IS curve inward because of increased business optimism and tight fiscal policy.
D) experienced a shifting of the IS curve to the left due to a decrease in the baseline level of investment spending.
1 In the United States during the 1970s, the price level
A) rose at a level of 60 percent per month.
B) rose at a level of between five and ten percent per year.
C) rose at a level of 60 percent per year.
D) rose at a level of 60 percent per week.
2 The classical dichotomy means
A) that real variables (such as the price level)can be analyzed and calculated without thinking of nominal variables such as real GDP, real investment spending, or the real exchange rate.
B) that real variables (such as real GDP, real investment spending, or the real exchange rate) cannot be analyzed and calculated without thinking of nominal variables such as the price level.
C) that real variables (such as real GDP, real investment spending, or the real exchange rate) can be analyzed and calculated without thinking of nominal variables such as the price level.
D) that real variables (such as real GDP, real investment spending, or the price level) can be analyzed and calculated with out thinking of nominal variables such as wage rate.
3 Each of the following is part of the economy's stock of money except
A) coin and currency that are transferred by handing the cash over to the seller.
B) checking account balances that are transferred by writing a check.
C) credit cards held by the public sector.
D) other assets that can be turned into cash or demand deposits nearly instantaneously, risklessly, and costlessly.
4 Anything that alters the real value of the domestic money in terms of its purchasing power over goods and services
A) will also alter the real terms of those existing contracts that use money as the medium of exchange.
B) will invalidate existing contracts that use money as the unit of account.
C) will cause people to hoard money.
D) will also alter the real terms of those existing contracts that use money as the unit of account.
5 The cost of holding money in one's portfolio
A) is that holding money makes you wealthier than holding other assets.
B) is how much it costs to store money.
C) is the rate of return foregone by not holding interest-bearing assets.
D) is that it makes buying things easier.
6 The amount of wealth households and businesses wish to hold in the form of money depends on
A) the opportunity cost of holding money - the lost interest and profits- and the benefits of holding money - the ease of transactions gained
B) the opportunity cost of holding money - the ease of making transactions gained - and the benefits of holding money - the interest and profits gained.
C) the opportunity cost of holding money - the cost of transactions not made - and the benefits of holding money - the status gained by doing so.
D) the savings rate of households and businesses.
7 The amount of money households and businesses wish to hold will _________ if total spending decreases and will _________ if transactions technology decreases.
A) increase; increase
B) decrease; increase
C) decrease; decrease
D) increase; decrease
8 The American quantity equation is
A) M = (1/V) x (P x Y).
B) M / V = P x Y
C) M / P = V x Y
D) M x V = P x Y
9 In the American form of the quantity theory, V represents
A) the velocity of money: the amount of money households and businesses wish to hold.
B) the velocity of money: how many times a year the average unit of money shows up in someone's income and is then used to buy a final good or service that counts in GDP.
C) the velocity of money: amount of money households and businesses actually hold.
D) the velocity of money: amount of wealth households and businesses wish to hold.
10 In the flexible-price model of the macroeconomy with a given velocity of money and real GDP, the price level is equal to
A) (V x Y) / M.
B) (Y / V) x M.
C) (V / Y) x M.
D) (M / V) + Y.
11 If the real GDP is equal to $10 trillion, the stock of money is equal to $3 trillion, and the velocity of money is equal to 5, the price level would be equal to
A) 16.7.
B) 1.5.
C) 6.
D) 10.6.
12 If the money supply increases by 8%, velocity decreases by 2%, and real GDP grows by 3%, then the price level
A) will increase by 9%.
B) will increase by 13%.
C) will increase by 3%.
D) will increase 7%.
13 Using the quantity theory of money, the bulk of changes in the rate of inflation is due to
A) changes in the growth rate the velocity of money.
B) changes in the growth rate of real GDP.
C) changes in the growth rate of real wages.
D) changes in the growth rate of the money supply.
14 One problem with the quantity theory of money is that, in the real world,
A) real GDP fluctuates greatly.
B) inflation is not always proportional to money growth.
C) real wages fluctuate greatly.
D) the velocity of money never changes.
15 The opportunity cost of holding money is
A) the real rate of interest.
B) the negative of the expected inflation rate.
C) the difference between the expected inflation rate and the real interest rate.
D) the sum of the expected inflation rate and the real interest rate.
16 If the nominal interest rate increases, the demand for money will ________ and the velocity of money will ________.
A) increase; decrease
B) decrease; increase
C) increase; increase
D) decrease; decrease
17 If the expected inflation rate increases, the demand for money will ________ and the velocity of money will ________.
A) decrease; increase
B) increase; decrease
C) increase; increase
D) decrease; decrease
18 In the flexible price macroeconomy, an increase in the rate of growth of the money supply
A) leads to an immediate jump in real GDP, to an increase in the inflation rate, to a decrease in the quantity of money demanded, and to an increase in the velocity of money.
B) leads to an immediate jump in real GDP, to a decrease in the inflation rate, and to a decrease in the quantity of money demanded, and to a decrease in the velocity of money.
C) leads to an immediate jump in the price level, to an increase in the inflation rate, to an increase in the quantity of money demanded, and to a decrease in the velocity of money.
D) leads to an immediate jump in the price level, to an increase in the inflation rate, to a decrease in the quantity of money demanded, and to an increase in the velocity of money.
19 The costs of moderate inflation that is greater than expected include
A) redistribution of wealth from creditors to debtors and the creation of uncertainty and unpredictability.
B) redistribution of income from wage workers to salaried workers and the creation of uncertainty and unpredictability.
C) redistribution of income from the service sector to the manufacturing sector and the creation of a windfall gain for creditors.
D) redistribution of wealth from creditors to debtors and a tendency to increase nominal interest rates and thus reduce investment spending.
20 A government that finances its spending by printing money
A) is actually financing its spending by borrowing from the public.
B) is actually financing its spending by levying a tax on holdings of cash.
C) is actually financing its spending by borrowing from other branches of government.
D) is actually financing its spending by borrowing from people in other countries.
1 The two principal channels through which policies and initial conditions work to accelerate or retard growth are
A) their impact on the available level of technology and labor force of the economy.
B) their impact on the available level of capital goods and capital intensity of the economy.
C) their impact on the available level of capital goods and labor force in the economy.
D) their impact on the available level of technology and capital intensity of the economy.
2 The two principal determinants of capital intensity are
A) the consumption and labor efforts being made in the economy.
B) the investment effort being made in the economy and the investment requirements of the economy.
C) the investment and saving efforts being made in the economy.
D) the investment and saving requirements of the economy.
3 In a steady-state balanced-growth equilibrium,
A) the capital intensity of the economy is increasing.
B) the capital-output ratio is decreasing.
C) the economy's capital stock and its level of real GDP are growing at the same proportional rate.
D) the capital-output ratio is increasing.
4 The labor force, the capital stock, and the level of technology
A) are components of the production function.
B) are components of aggregate demand.
C) are components of the money supply.
D) are components of national income.
5 The correct form of the Cobb-Douglas production function is
A) (Y/L) = (K/L)a x (E)1-a
B) (Y/K) = (K/L)a x (E)1-a
C) (L/Y) = (K/L)a x (E)1-a
D) (K/L) = (Y/L)a x (E)1-a
6 A level of the parameter a of the Cobb-Douglas production near zero means
A) that the extra amount of output made possible by each additional unit of capital declines very slowly as the capital stock increases.
B) that the extra amount of output made possible by each additional unit of capital declines very quickly as the capital stock increases.
C) that the extra amount of output made possible by each additional unit of labor declines very quickly as the capital stock increases.
D) that the extra amount of output made possible by each additional unit of savings declines very quickly as the capital stock increases.
7 If there is a doubling of the stock of capital per worker, then output per worker will also double when
A) the parameter a of the Cobb-Douglas production function is close to one.
B) the parameter a of the Cobb-Douglas production function equals zero.
C) the parameter a of the Cobb-Douglas production function equals one.
D) the parameter a of the Cobb-Douglas production function is close to zero.
8 An increase in the parameter E of the Cobb-Douglas production function means
A) less output per worker can be produced for each possible value of the capital stock per worker.
B) the value of capital per worker increases.
C) that the economy becomes less productive.
D) more output per worker can be produced for each possible value of the capital stock per worker.
9 If, in the Cobb-Douglas production, the value of E is $20000, a is .6 and capital per worker is $250,000, then output per worker would be approximately
A) $54928.
B) $91028.
C) $112000.
D) $158000
10 The growth rate of the capital stock will increase if the proportion of the output level saved and invested _________ and the rate of depreciation of the capital stock __________.
A) increases; increases
B) decreases; increases
C) increases; decreases
D) decreases; decreases
11 One of the factors influencing the economy's output growth rate is
A) the rate of employment growth
B) the rate of growth in the efficiency of capital
C) the rate of growth in the efficiency of labor
D) the tax rate
12 If the current level of output in the economy is $12 trillion a year, the current year's capital stock in the economy is $30 trillion, the savings rate is 20 percent and the rate of depreciation of capital stock is 3 percent, next year's capital stock will be _______ and the growth rate of the capital stock will be ______.
A) $31.5 trillion; 105%
B) $31.5 trillion; 5%
C) $17.64 trillion; 76.4%
D) $31.5 trillion; 1.05%
13 The growth rate of capital-per-worker will increase if the labor force growth rate _________ and will decrease if the rate of depreciation _________.
A) increases; decreases
B) increases; increases
C) decreases; increases
1 The flexible-price assumption means that
A) prices and wages don't change very quickly in response to excess demand or supply.
B) prices are flexible enough for markets to clear but wages are not.
C) prices and wages will adjust in response to excess demand or supply.
D) output will adjust in response to excess demand or supply.
2 Two sets of factors determine the levels of potential (and actual) output and of real wages in the flexible-price model of the macroeconomy:
A) the balance of exports and imports and the production function.
B) the balance of supply and demand in the stock market and the production function.
C) the balance of savings and investment and the production function.
D) the balance of supply and demand in the labor market and the production function.
3. The Classical assumptions of the macroeconomy include
A) wages and prices can be sticky or fixed.
B) expectations are consistent with full employment.
C) the labor market can be out of equilibrium causing involuntary employment.
D) shocks to aggregate demand will change the composition and the level of GDP.
4 The Keynesian assumptions of the macroeconomy include
A) wages and prices are fully flexible.
B) expectations are consistent with full employment.
C) the labor market can be out of equilibrium, causing involuntary unemployment.
D) shocks to aggregate demand will change the composition but not the level of GDP.
5 If the typical firm stops hiring labor when the extra revenue from the output produced by the last worker hired just equals his or her wage,
A) it will achieve the highest possible level of revenue.
B) it will achieve the highest possible level of profit.
C) it will not be earning any profits.
D) it will achieve the lowest possible level of profit.
6 The typical firm's demand for labor for the Cobb-Douglas production function with K=1 is
A) ((1-a)Ea-1/(W/P))1/a
B) ((1-a)E1-a/(W/P))a
C) ((1-a)E1-a/(W/P))1/a
D) ((1-a)Ea/(W/P))1/a
7 In the Classical Model, if the quantity of labor demanded at current wages and prices is less than the quantity of labor supplied
A) unemployment will result.
B) the real wage will decrease, increasing the quantity of labor demanded until it is equal to the quantity of labor supplied.
C) the real wage will decrease, decreasing the quantity of labor demanded until it is equal to the quantity of labor supplied.
D) the real wage will increase, decreasing the quantity of labor demanded until it is equal to the quantity of labor supplied.
8 If a _________ in a full employment economy, the real wage will ________.
A) increases; increase
B) decreases; decrease
C) increases; decrease
D) none of the above
9 The four components of national income are
A) consumption spending, savings, government purchases, net exports.
B) consumption spending, investment spending, government purchases, net exports.
C) consumption spending, investment spending, tax revenue, net exports.
D) consumption spending, investment spending, government purchases, gross exports.
10 In the model developed in the text, consumption spending (C) is broken down into
A) a baseline level of consumption (C0) plus a fraction (Cy) of total income
B) a fraction (Cy) of disposable income.
C) a baseline level of consumption (C0) plus a fraction (Cy x (1-t)) of disposable income.
D) a baseline level of consumption (C0) plus a fraction (Cy) of disposable income.
11 The marginal propensity to consume (MPC, Cy)
A) is the amount by which consumption spending changes in response to a $1 change in total income.
B) is the amount households would spend on consumption goods if they had no income at all.
C) is the amount by which consumption spending would change in response to a $1 change in household wealth.
D) is the amount by which consumption spending changes in response to a $1 change in disposable income.
12 If C0 is $1 trillion, Cy is .75, the tax rate is .10, and the level of national income is $10 trillion, consumption spending would equal
A) $7.75 trillion.
B) $6.75 trillion.
C) $8.75 trillion.
D) $5.75 trillion.
13 Investment spending tends to vary _______ with business managers' confidence and _______ with real interest rates.
A) directly; inversely
B) directly; directly
C) inversely; inversely
D) inversely; directly
14 A lower interest rate leads to higher investment spending because
A) higher interest rates lower the appropriately discounted return and make more investment projects profitable.
B) lower interest rates lower the appropriately discounted return and make more investment projects profitable.
C) higher interest rates increase the appropriately discounted return and make fewer investment projects profitable.
D) lower interest rates increase the appropriately discounted return and make more investment projects profitable.
15 If I0 is equal to $5 trillion, Ir is equal to $20000 billion, and r is 5%, investment spending would equal
A) $1 trillion.
B) $4 trillion.
1 Facts about the economy of the United States over the decade of the 1990s include
A) real GDP growth at an average rate of 3.8 percent per year.
B) a stable, but very high, inflation rate.
C) net exports have been consistently positive.
D) a stable, but rather high, unemployment rate.
2 The reasons that the flexible-price model does not give a complete picture of the macroeconomy include
A) real GDP growth is always smooth.
B) real GDP growth is always positive.
C) the unemployment rate is not always equal to the natural rate.
D) inflation is sometimes negative.
3 In the recession or depression phase of the business cycle,
A) production and employment increase while the inflation rate decreases.
B) production, employment, and the inflation rate decrease.
C) production, employment, and the inflation rate increase.
D) production, unemployment, and the inflation rate increase.
4 In the expansion or boom phase of the business cycle,
A) real GDP grows slower than trend.
B) the investment spending share of real GDP generally increases.
C) unemployment increases.
D) inflation decreases.
5 In the sticky-price model, the consequences of a decrease in the marginal propensity to consume include
A) an increase in exports.
B) an increase in government purchases.
C) an increase in investment spending.
D) a decrease in real GDP.
6 One of the possible reasons why prices are sticky is
A) managers and workers find that changing prices or renegotiating wages is costly.
B) managers and workers lack the ability to differentiate between changes in total economy-wide spending with changes in demand for their specific products.
C) the level of prices is as much a physical as an economic variable.
D) managers and workers suffer from "real illusion."
7 If prices are sticky, lower aggregate demand will
A) increase production which will increase incomes, which will increase consumption spending, which will further increase aggregate demand.
B) decrease production which will decrease incomes, which will decrease consumption spending, which will further decrease aggregate demand.
C) decrease production which will decrease incomes, which will decrease investment spending, which will further decrease aggregate demand.
D) decrease production which will increase incomes, which will increase consumption spending, which will further increase aggregate demand.
8 In the multiplier process, a decrease in spending
A) causes an increase in production and incomes, which leads to a further increase in spending.
B) causes a decrease in prices and wages, which causes a further decrease in spending.
C) causes a decrease in production and incomes, which leads to a further decrease in spending.
D) causes a decrease in production and incomes, which leads to an increase in spending.
9 The level of investment spending is determined by
A) the nominal interest rate and assessments of profitability made by business investment committees.
B) the nominal exchange rate and assessments of profitability made by business investment committees.
C) the real interest rate and assessments of profitability made by business investment committees.
D) the real exchange rate and assessments of profitability made by business investment committees.
10 The parameters of the investment spending equation are
A) I0: the baseline level of investment spending, and Iy: the marginal propensity to invest.
B) I0: the interest sensitivity of investment, and Ir: the baseline level of investment spending.
C) I0: the interest sensitivity of investment, and Ir: the marginal propensity to invest.
D) I0: the baseline level of investment spending, and Ir: the interest sensitivity of investment.
11 If the marginal propensity to consume increases or the tax rate decreases
A) the slope of the planned expenditure line will decrease.
B) the intercept of the planned expenditure line will increase.
C) the slope of the planned expenditure line will increase.
D) the intercept of the planned expenditure line will decrease.
12 If foreign real income increases,
A) the slope of the planned expenditure line will increase.
B) the intercept of the planned expenditure line will increase.
C) the slope of the planned expenditure line will decrease.
D) the intercept of the planned expenditure line will decrease.
13 If the marginal propensity to expend is equal to .6, and the level of autonomous spending increases by $1500 billion, the equilibrium level of national income will
A) increase by $1500 billion.
B) decrease by $1500 billion.
C) increase by $3750 billion.
D) increase by $2500 billion.
14 If the level of autonomous spending is $6000 billion, the marginal propensity to expend is .4, and the level of national income is $9000, planned expenditures would be equal to
A) $9600 billion and inventory accumulation would equal $600 billion.
B) $11400 billion and inventory accumulation would equal $2400 billion.
C) $11400 billion and inventory accumulation would equal -$2400 billion.
D) $9600 billion and inventory accumulation would equal -$600 billion.
15 If Cy = .8, t = .2, IMy = .1, and autonomous spending increases by $1500 billion, the equilibrium level of national income
A) will increase by $3261 billion.
B) will decrease by $3261 billion.
C) will decrease by $2027 billion.
D) will increase by $2027 billion.
16 If Cy = .75, t = .2, IMy = .1, the value of the multiplier would be
A) .4.
B) .6.
C) 2.
D) 2.5.
17 If the marginal propensity to import decreases and the tax rate decreases, the marginal propensity to expend will _______ and the value of the multiplier _______.
A) increase; decreases.
B) increase; increases.
C) decrease; increases.
D) decrease; decreases.
18 If the marginal propensity to import increases, the marginal propensity to expend will _______ and the value of the multiplier _______.
A) increase; increases.
B) increase; decreases.
C) decrease; decreases.
D) decrease; increases.
19 If the MPE is equal to .6 and the gap between planned expenditures and potential output is $1500 billion, the necessary change in autonomous spending to bring planned expenditures to potential output would be
A) $1500 billion.
B) -$1500 billion.
C) $900 billion.
D) $600 billion.
20 The automatic working of the government's income tax system (and, to a lesser extent, its social welfare programs) function
A) as an automatic destabilizer.
B) as an automatic change in the money supply.
C) as an automatic stabilizer.
D) as an automatic change in private savings.
1. The points emphasized in John Maynard Keynes's 1936 book The General Theory of Employment, Interest, and Money included
A) the role of expectations of future profits in determining investment.
B) the stability of expectations of future profits.
C) the government should take control of production and employment.
D) the division process.
2 . The topics that would have been found in a macroeconomics textbook in 1960 included
A) much discussion of monetary policy and a downplaying of fiscal policy.
B) the IS-LM model.
C) a full discussion of expectations.
D) the relationship between production and inflation.
3. Milton Friedman's critique of the dominant tradition in macroeconomics in the 1960s included
A) then-standard models greatly underestimated the government's ability to manage and control the economy.
B) then-standard models greatly overestimated the power of fiscal policy and greatly underestimated the power of monetary policy.
C) then-standard models greatly underestimated the degree of fixed prices.
D) the government's budget deficit or surplus told you most of what you needed to know about how economic policy was working.
4. Macroeconomists in the early 1960s
A) tended to think that an increase in aggregate demand would eventually cause expected inflation to increase, which would shift the Phillips curve to the right.
B) tended to think that an increase in aggregate demand would eventually cause expected inflation to increase, which would shift the Phillips curve to the left.
C) tended to think that the short-run Phillips curve was fixed and that aggregate demand could be increased without causing the Phillips curve to shift to the right.
D) tended to think that supply created its own demand.
5. The Milton Friedman - Edmund Phelps analysis of the Phillips curve
A) emphasized that it was fixed and that aggregate demand could be increased without causing the Phillips curve to shift to the right.
B) emphasized that an increase in aggregate demand would eventually cause expected inflation to increase, which would shift the Phillips curve to the left.
C) emphasized that an increase in unemployment would eventually cause expected inflation to increase, which would shift the Phillips curve to the right.
D) emphasized that an increase in aggregate demand would eventually cause expected inflation to increase, which would shift the Phillips curve to the right.
6. The key elements in understanding business cycles believed by economists working in both Keynesian and monetarist traditions include
A) there is no need to understand the determinants of nomianl aggregate demand.
B) there is no need to understand the division of changes in nominal aggregate demand into changes in production (and employment) and changes in prices (inflation or deflation).
C) real fundamentals effectively determine the values of real quantities like GDP even in the short run.
D) the need to understand the velocity of money, the determinants of investment spending, the multiplier, crowding out, the natural rate of unemployment, the rate of expected inflation, and the Phillips curve.
7. Real business cycle theorists believe that the key to understanding business cycles is
A) the need to understand the determinants of nomianl aggregate demand.
B) that the same theory that determines what happens in the long run should also be applied to explain fluctuations in the short run.
C) the need to understand the division of changes in nominal aggregate demand into changes in production (and employment) and changes in prices (inflation or deflation).
D) the need to understand the velocity of money, the determinants of investment spending, the multiplier, crowding out, the natural rate of unemployment, the rate of expected inflation, and the Phillips curve.
8 According to real business cycle theorists, the incentive to work hard now depends on, among other things,
A) the wage last year.
B) the real exchange rate.
C) the wage expected in the future.
D) the real price level.
9 According to real business cycle theorists, hours worked would increase
A) if the current wage increases relative to past wages.
B) if the future wage increases relative to the current wage.
C) if the real interest rate increases.
D) if highly valuable investment opportunities become less plentiful.
10 According to real business cycle theorists, hours worked would decrease
A) if labor becomes less productive.
B) if the current wage increases relative to the future wage.
C) if the real interest rate increases.
D) if highly valuable investment opportunities become more plentiful.
11 Problems of real business cycle theory pointed out by critics include
A) in the economy as a whole, total work hours decrease because some people become unemployed, not because most individuals work less hours.
B) in the economy as a whole, total work hours decrease because most individuals work less hours, not because some people become unemployed.
C) the unemployment rate is fairly stable over the business cycle.
D) high unemployment in a recession is a market-clearing phenomenon.
12 According to real business cycle theorists,
A) production fluctuates because of aggregate demand shocks.
B) production fluctuates because of inadequate monetary policy.
C) production fluctuates because of international shocks.
D) production fluctuates because of the changing value of output and the changing productivity of the economy.
13 According to real business cycle theories, the reasons why production increases include
A) an improvement in production technology.
B) a unique opportunity for consumption.
C) a decrease in the value of output.
D) an expansionary fiscal policy.
14 Critics of real business cycle theory have problems with the claim that the economy experiences
A) large negative shocks to aggregate demand.
B) large negative shocks to consumption spending.
C) large negative shocks to productivity.
D) contractionary fiscal policy.
15 Since at least the 1930s, the mainstream of macroeconomics
A) has attributed the sluggishness of aggregate demand - the fact that the Phillips curve has a slope - to stickiness in wages and prices.
B) has attributed the sluggishness of aggregate supply - the fact that the Phillips curve has a slope - to stickiness in wages and prices.
C) has attributed the sluggishness of aggregate supply - the fact that the Phillips curve is vertical - to the flexibility of wages and prices.
D) has attributed the sluggishness of aggregate demand - the fact that the monetary policy reaction function has a slope - to stickiness in wages and prices.
16 The reasons suggested by New Keynesian Economics for the stickiness in wages and prices include
A) prices do not adjust immediately and completely in the short run because it is costly to change them.
B) a price adjustment or a failure to adjust prices on the part of one firm does not affect other firms.
C) one firm's best choice for its price depends only on that firm's costs.
D) changing prices does allow firms to maximize profits.
17 In the standard view, fiscal deficits
A) stimulate the economy in the long run as long as the central bank takes action to raise interest rates.
B) stimulate the economy in the long run as long as the central bank does not take action to raise interest rates.
C) stimulate the economy in the long run as long as the central bank does not take action to neutralize the fiscal stimulus.
D) stimulate the economy in the short run as long as the central bank takes actions to raise interest rates.
18 The problems that economists have with Ricardian Equivalence include
A) there is no incentive for people to fully work out what an increased deficit in the present implies for their future taxes.
B) myopia - perhaps people are not near-sighted enough to fully work out what an increased deficit in the present implies for their future taxes.
C) liquidity constraints - perhaps people can't easily borrow and lend as needed.
D) the beneficiaries of government spending today are the ones who will have to pay the increased taxes in the future.
19 The reasons offered by economists to explain why consumers seem unwilling to borrow to maintain consumption spending during a recession include
A) the typical consumer is impatient and risk averse.
B) current income is not a good proxy for permanent income.
C) the typical consumer is a risk taker.
D) psychologists should take seriously what economists have to say about how humans reason.
20 The reasons why monetary policy could become less powerful in the future include
A) deposits at commercial banks will become more important in the future.
B) deposits at savings banks will become more important in the future.
C) people will decrease their usage of reserve-backed commercial bank deposits as transactions balances.
D) less and less transactions will be carried out by credit cards and debit cards.
1 Between the United States Civil War in the 1860s and the end of the twentieth century the share of the U.S. labor force engaged in agriculture
A) increased from about 50 percent to about 80 percent.
B) decreased from about 80 percent to about 50 percent.
C) decreased from about 50 percent to about 2 percent.
D) decreased from about 60 percent to about 25 percent.
2 In the United States economy 100 years ago,
A) the government social insurance state was quite well developed.
B) the tax system was very progressive.
C) every person had easy access to all occupations.
D) most households found it very difficult to borrow.
3 The automatic stabilizers which have been developed in the last 100 years to help dampen the business cycle
A) deposit insurance.
B) regressive income tax.
C) inflation insurance.
D) guaranteed minimum income.
4 In the late nineteenth century, the bulk of the improvements in labor productivity
A) came from improvements in the efficiency of labor.
B) came from labor deepening: the building up of the infrastructure and the factories of the country.
C) came from labor working longer hours.
D) came from capital deepening: the building up of the infrastructure and the factories of the country.
5 In the twentieth century, the bulk of the improvements in labor productivity
A) came from capital deepening: the building up of the infrastructure and the factories of the country.
B) came from labor deepening: the building up of the infrastructure and the factories of the country.
C) came from improvements in the efficiency of labor.
D) came from labor working longer hours.
6 Changes that will transform the macroeconomy in the future include
A) continued increase in financial flexibility that allows consumers to borrow more easily.
B) less need for productivity increases in agriculture and manufacturing.
C) international investments will become more difficult to make.
D) the importance of international trade will decrease.
7 If liquidity constraints - the inability to borrow - continue to decrease for households,
A) the marginal propensity to consume will increase.
B) the marginal propensity to consume will decrease.
C) the marginal propensity to consume will not be affected.
D) the marginal propensity to save will decrease.
8 The marginal propensity to expend will decrease
A) if international trade continues to increase.
B) if liquidity constraints - the inability to borrow - continue to decrease for households.
C) if international investments become easier to make.
D) if the marginal propensity to export decreases.
9 The multiplier is likely to get smaller
A) if international trade starts to decrease.
B) if the exchange rate sensitivity of exports increases.
C) if liquidity constraints - the inability to borrow - continue to decrease for households.
D) if the interest sensitivity of investment increases.
10 U.S. merchandise imports
A) have doubled as a share of total goods production since 1960.
B) have doubled as a share of total goods production since 1900.
C) have quadrupled as a share of total goods production since 1960.
D) have tripled as a share of total goods production since 1900.
11 Unanticipated large-scale inventory accumulation or drawdowns
A) have been a minor source of fluctuations in employment and output over the past century.
B) have been a principal source of fluctuations in employment and output over the past century.
C) have been a principal cause of inflation over the past century.
D) have been a principal cause of interest rate movements over the past century.
12 Prior to World War I
A) the U.S. economy experienced recessions that were much shorter in length than post-World War II recessions.
B) experienced expansions that were much longer in length than post-World War II expansions.
C) fiscal and monetary policy worked together to be effective stabilization policies in the United States.
D) neither fiscal nor monetary policy were feasible as stabilization policy in the United States.
13 In the post-World War II era
A) the business cycle has been driven by economic policies that allowed unemployment to rise, followed by expansionary fiscal and monetary policies to reverse the rise in unemployment.
B) the business cycle has been about 25 to 30 percent smaller than prior to World War I.
C) inflation has been less of a problem than prior to World War I.
D) borrowing by households has decreased from what it was prior to World War I.
14 The facts about the Great Depression include
A) from full employment in 1929, real GDP fell until it was about 10 percent below potential output by 1933.
B) consumption spending collapsed: by 1932 real consumption spending was less than one-ninth of what it had been three years before.
C) unemployment had reached a quarter of the labor force by 1933.
D) investment spending held fairly steady throughout the 1930s.
15 The possible shocks that triggered the Great Depression include
A) the stock market crash of 1931.
B) an increase in imports caused by a sharp increase in the marginal propensity to import.v
C) a downward shift in the price of gold.
D) a downward shift in the baseline level of investment spending caused by a decrease in investment in residential housing.
16 Falling price levels reduce real GDP
A) because real exchange rates increase, reducing exports and increasing imports, and because wealth is redistributed from creditors to debtors.
B) because real income decreases and consumption spending decreases, and because income is redistributed from debtors to creditors.
C) because real interest rates decrease, reducing investment spending, and because wealth is redistributed from creditors to debtors.
D) because real interest rates increase, reducing investment spending, and because wealth is redistributed from debtors to creditors.
17 Europe in the 1990s
A) has experienced remarkably low unemployment rates.
B) has experienced growth rates that have been much higher than in the United States.
C) has experienced unemployment rates that have been much higher than in the United States.
D) has experienced inflation rates that have been much lower than in the United States.
18 In western Europe since the 1970s
A) the Phillips Curve seems to have shifted to the left.
B) the Phillips Curve seems to have been remarkably stable.
C) the Monetary Policy Reaction Curve seems to have shifted to the left.
D) the Phillips Curve seems to have shifted to the right.
19 The potential for a stock market and a real estate price collapse to become a real problem
A) is worsened when lots of enterprises and individuals have been careful not to borrow heavily using the inflated values as collateral.
B) is worsened when lots of enterprises and individuals have borrowed heavily using the inflated values as collateral.
C) is lessened when lots of enterprises and individuals have borrowed heavily using the inflated values as collateral.
D) is not really affected when lots of enterprises and individuals have borrowed heavily using the inflated values as collateral.
20 In Japan in the 1990s
A) the IS curve shifted to the right because of an increase in the marginal propensity to consume.
B) the LM curve shifted to the left partially due to investment spending being depressed.
C) the IS curve shifted to the left partially due to investment spending being depressed.
D) the LM curve became more vertical because monetary policy was tight.
1 Nominal GDP is calculated by
A) adding up all of the goods and services produced in the economy, valued in current year market prices.
B) adding up all of the goods and services produced in the economy, valued in base year market prices.
C) adding up all of the final goods and services produced in the economy, valued in current year market prices.
D) adding up all of the final goods and services produced in the economy, valued in base year market prices.
2 The unemployment rate
A) is the principal measure of material well-being and economic productivity.
B) is the proportional rate of change of the price level.
C) is the principal determinant of the level of investment, and a principal determinant of future economic growth.
D) is the principal measure of how far production is falling short of potential output.
3 The real long-term interest rate
A) is the principal determinant of the level of investment, and a principal determinant of future economic growth.
B) is the principal measure of material well-being and economic productivity.
C) is the principal measure of how far production is falling short of potential output.
D) is the proportional rate of change of the price level.
4 Subtracting the rate of inflation from nominal interest rates
A) gives you the real exchange rate.
B) gives you the real interest rate.
C) gives you the real unemployment rate.
D) gives you real GDP.
5 An individual in the Mexico wishing to invest in Europe would need to _____________ in the foreign exchange market.
A) sell pesos and buy euros
B) buy pesos and sell euros
C) buy dollars and sell pesos
D) sell euros and sell dollars
6 The price of stocks will decrease if
A) investors become optimistic and expect that long-term earnings will decrease.
B) investors become pessimistic and expect that long-term earnings will decrease.
C) the risk premium associated with holding stocks decreases.
D) the real interest rate decreases.
7 If the risk premium associated with holding stocks increases at the same time that the real rate of interest increases,
A) we would initially expect the price of stocks to increase.
B) we would initially expect the price of stocks to decrease.
C) we would initially expect the price of bonds to decrease.
D) we would be unable to determine the impact on the price of stocks unless we knew the relative magnitudes of the changes.
8 If investors become more pessimistic and expect that long-term earnings will decrease at the same time that the real rate of interest decreases,
A) we would initially expect the price of stocks to increase.
B) we would initially expect the price of bonds to decrease.
C) we would be unable to determine the impact on the price of stocks unless we knew the relative magnitudes of the changes.
D) we would initially expect the price of stocks to decrease.
9 The information summed up by the real value of the stock market includes
A) the desire of businesses to purchase capital goods.
B) the current level of earnings, or profits.
C) the level of savings in the economy.
D) attitudes toward consumption spending.
10 If the nominal interest rate is 9% and rate of inflation is 6%, the real interest rate is approximately
A) 15%.
B) 3%.
C) 1.5%.
D) -3%.
11 If the inflation rate, as measured by the CPI, over the past year was 5%, a basket of goods and services that cost _____ a year ago would be equivalent to _______ at the current price level.
A) $200,000, $210,000
B) $150,000, $155,000
C) $50,000, $55,000
D) $200,000, $201,000
12 If the CPI changes from 110 in one year to 118 the next, the rate of inflation over that time period is
A) 8%.
B) 218%.
C) 7.27%.
D) 107.27%.
13 The labor force is composed of those who are
A) employed plus those that are not working.
B) unemployed plus those who are looking for work.
C) employed plus those who would like to work but have given up looking for work.
D) employed plus those who are looking for work.
14 Suppose that real GDP is $10 trillion and the unemployment rate is 5.5%. If, over the next year, potential output grows by 2 percent and the unemployment rate decreases by 1 percentage point to 4.5%, real GDP will increase to
A) $10.25 trillion.
B) $10.45 trillion.
C) $10.3 trillion.
D) $10.40 trillion.
15 The reasons that Okun's Law coefficient is greater than one include
A) technological change occurs.
B) the unemployment rate counts discouraged workers.
C) average hours of work per week increase as the economy comes out of a recession.
D) when business returns to normal, firms initially ask existing employees to work less hours.
16 Since 1948, the labor force participation rate
A) has been increasing for males and decreasing for females.
B) has been increasing for both males and females.
C) has been decreasing for both males and females.
D) has been decreasing for males and increasing for females.
17 If nominal GDP was $9.8 trillion and the GDP deflator was 140, real GDP would be
A) $70 billion ($.07 trillion).
B) $7 trillion.
C) $8.4 trillion.
D) $13.72 trillion.
18 Residential structures are a component of
A) consumption expenditures.
B) government expenditures.
C) net exports.
D) investment expenditures.
19 Which of the following would be considered a component of government purchases?
A) A pension check sent to a retired federal employee.
B) A Social Security check sent to an individual.
C) The purchase of a military aircraft.
D) A check sent to a disabled veteran.
20 Stock prices are likely to increase if
A) investors expect long-run earnings to decrease.
B) investors are more willing to tolerate risk than before.
C) investors become more risk averse.
D) interest rates increase.
1 Which of the following is not a concern of macroeconomics?
A) economy-wide employment
B) changes in the aggregate price level
C) economy-wide levels of production
D) wages in particular occupations
2 Which of the following is not one of the six key variables in macroeconomics?
A) the unemployment rate
B) the price of corn
C) the inflation rate
D) the interest rate
3 Which of the following is not one of the six key variables in macroeconomics?
A) the level of employment in the restaurant industry
B) the exchange rate
C) the inflation rate
D) the level of the stock market
4 Real GDP is a measure of the economy's
A) employment level
B) money supply
C) stock market level
D) output level
5 When the domestic currency's value in terms of other currencies is high,
A) we say the domestic currency is depreciated.
B) we say the domestic currency has excess value.
C) we say the domestic currency is overvalued.
D) we say that foreign currencies are overvalued.
6 If a domestic currency has depreciated
A) foreign-made goods are cheap relative to domestic-made goods.
B) domestic-made goods are cheap relative to foreign-made goods.
C) government spending is likely to decrease.
D) the money supply is likely to increase.
7 Periods in which production increases and unemployment decreases are called
A) macroeconomic expansions.
B) business cycles.
C) recessions, or possibly, depressions.
D) inflation.
8 Microeconomists
A) focus on the economy as a whole.
B) spend much time analyzing how total income changes, and how changes in income cause changes in other modes of economic behavior.
C) consider the possibility that decision makers might change the quantities they produce before they change the prices they charge.
D) assume that economic adjustment occurs first through prices that change to balance supply and demand.
9 Macroeconomists
A) hold total income constant.
B) spend a great deal of time and energy investigating how people form their expectations and change them over time.
C) don't worry much about how decision makers form their expectations.
D) assume that economic adjustment occurs first through prices that change to balance supply and demand.
10 In the latter half of the 1990s, unemployment in the United States was
A) greater than its trend level.
B) equal to its trend level.
C) less than its trend level.
D) not relevant to its trend level.
11 Which of the following is not likely to be considered part of economic activity?
A) Purchasing a new automobile.
B) Working in a restaurant.
C) Trimming the bushes in your yard.
D) Buy a new book.
12 Which of the following is not likely to be considered part of economic activity?
A) Getting your automobile washed at as car wash.
B) Washing your clothes in a laundromat.
C) Fixing you own car.
D) Leasing a new automobile.
13 An example of an investment good is
A) a stock certificate for General Motors.
B) machine tools.
C) certificates of deposit.
D) mutual funds.
14 When interest rates increase,
A) consumption expenditures tend to increase.
B) investment expenditures tend to increase.
C) investment expenditures tend to decrease.
D) government expenditures tend to decrease.
15 The yield curve shows the difference between
A) short-term and long-term stock dividends.
B) short-term and long-term stock prices.
C) short-term and long-term inflation rates.
D) short-term and long-term interest rates.
16 The 1970s was a decade of generally
A) low output growth, increasing unemployment, and decreasing inflation.
B) high output growth, increasing unemployment, and decreasing inflation.
C) low output growth, increasing unemployment, and increasing inflation.
D) high output growth, decreasing unemployment, and decreasing inflation.
17 The 1990s was a decade of generally
A) low output growth, increasing unemployment, and increasing inflation.
B) high output growth, decreasing unemployment, and decreasing inflation.
C) high output growth, increasing unemployment, and decreasing inflation.
D) high output growth, increasing unemployment, and decreasing inflation.
18 Which of the following macroeconomic scenarios would likely decrease your chances of receiving a reasonable job offer as you near graduation from your college of university?
A) low output growth and high unemployment.
B) low inflation and low unemployment.
C) high output growth and low unemployment.
D) low output growth and high inflation.
19 During most of the 1970s, real GDP per worker in the United States was
A) greater than its trend level.
B) equal to its trend level.
C) less than its trend level.
D) not relevant to its trend level.
20 Which of the following is not likely to be considered part of economic activity?
A) Washing your automobile.
B) Hiring someone to mow your lawn.
C) Making hamburgers in a restaurant.
D) Renting an apartment
1 The relationship between the government's debt and the government's deficit (or surplus) is
A) the change in the deficit for a year is equal to the debt (or surplus) for that year.
B) the change in the debt for a year is equal to the deficit (or surplus) for that year.
C) the change in the surplus for a year is equal to the debt (or deficit) for that year.
D) the debt and deficit are the same.
2 One of the reasons why economists are interested in the debt and the deficit is
A) the deficit is a convenient measure of monetary policy's role in stabilization policy.
B) the deficit affects the position of the IS curve.
C) the deficit affects the position of the LM curve.
D) the debt and deficit are not very closely connected with national savings and investment.
3 A rising government debt
A) tends to increase capital formation and lower the economy's long-run steady-state growth path.
B) tends to decrease capital formation and lower the economy's long-run steady-state growth path.
C) tends to increase the steady-state GDP per worker.
D) means that taxes in the future will be lower because of lower interest charges.
4 A decreasing government debt
A) tends to decrease capital formation.
B) tends to decrease the economy's long-run steady-state growth path.
C) means that taxes in the future will be higher to pay higher interest charges.
D) tends to increase the steady-state GDP per worker.
5 An increase in government purchases
A) shifts the LM curve to the right.
B) makes the IS curve more vertical.
C) makes the LM curve more horizontal.
D) shifts the IS curve to the right.
6 An increase in government tax collections
A) shifts the IS curve to the left and may change its slope.
B) shifts the LM curve to the right and may change its slope.
C) shifts the IS curve to the right and may change its slope.
D) shifts the LM curve to the left and may change its slope.
7 If the Federal Reserve tightens monetary policy so that real interest rates increase and real GDP decreases,
A) tax revenues will decrease, increasing the government's cash deficit, but not changing the full-employment budget balance.
B) tax revenues will decrease, decreasing the government's cash deficit, and increasing the full-employment deficit.
C) tax revenues will increase, decreasing the government's cash deficit, and decreasing the full-employment deficit.
D) tax revenues will increase, decreasing the government's cash deficit, but not changing the full-employment budget balance.
8 When real GDP decreases and unemployment increases
A) tax revenue increases, swinging the cash budget toward surplus.
B) social welfare spending decreases, swinging the cash budget toward deficit.
C) social welfare spending increases, swinging the cash budget toward surplus.
D) tax revenue decreases, swinging the cash budget toward deficit.
9 Further adjustments that need to be made to the reported cash budget level include
A) an adjustment for inflation in the stock market.
B) an adjustment for public investment.
C) an adjustment for public consumption.
D) an adjustment for assets and generational accounting.
10 Economists suggest that governments should adopt capital budgeting because
A) the cost of consumption goods should be amortized over a period of time rather than completely charged to the budget when incurred.
B) the federal government is located in Washington, D.C.
C) the cost of capital goods should be amortized over a period of time rather than completely charged to the budget when incurred.
D) the true debt is understated unless capital budgeting is used.
11 Fiscal policy is sustainable if
A) the debt-to-money supply ratio is heading for a steady state.
B) the deficit-to-money supply ratio is heading for a steady state.
C) the deficit-to-government spending ratio is heading toward a steady state.
D) the debt-to GDP ratio is heading for a steady state.
12 In an economy with a constant cash-balance deficit of 2 percent of GDP, a long-run inflation rate of 3% per year, a labor force growth rate of 2% per year, and a growth rate of output per worker of 1% per year,
A) the steady-state debt-to-GDP ratio would be 1/2.
B) the steady-state debt-to-GDP ratio would be 1/3.
C) the steady-state deficit-to-GDP ratio would be 1/2.
D) the steady-state deficit-to-GDP ratio would be 1/3.
13 If the labor force growth rate increases,
A) the steady-state deficit-to-GDP ratio will decrease.
B) the steady-state debt-to-GDP ratio will decrease.
C) the steady-state debt-to-GDP ratio will increase.
D) the steady-state deficit-to-GDP ratio will increase.
14 The higher the debt-to-GDP ratio,
A) the less risky an investment do financiers judge the debt of the country and the less willing they will be to buy and hold that debt.
B) the less risky an investment do financiers judge the debt of the country and the more willing they will be to buy and hold that debt.
C) the more risky an investment do financiers judge the debt of the country and the less willing they will be to buy and hold that debt.
D) the more risky an investment do financiers judge the debt of the country and the more willing they will be to buy and hold that debt.
15 The lower the debt-to-GDP ratio,
A) the more risky an investment do financiers judge the debt of the country, reducing the interest rate that governments will have to pay to convince people to buy and hold the debt.
B) the less risky an investment do financiers judge the debt of the country, increasing the interest rate that governments will have to pay to convince people to buy and hold the debt.
C) the less risky an investment do financiers judge the debt of the country, reducing the interest rate that governments will have to pay to convince people to buy and hold the debt.
D) the more risky an investment do financiers judge the debt of the country, increasing the interest rate that governments will have to pay to convince people to buy and hold the debt.
16 A deficit is sustainable only if
A) the associated steady-state debt-to-GDP ratio is low enough that investors judge the debt safe enough to buy and hold.
B) the associated steady-state debt-to-GDP ratio is high enough to attract risk adverse investors.
C) the associated steady-state debt-to-GDP ratio is high enough that investors judge the debt safe enough to buy and hold.
D) it is equal to zero.
17 The only two time periods in which the upward movement in the debt-to-GDP ratio was not associated with a war were
A) the 1970s during the Carter presidency and the 1990s during the Clinton presidency.
B) the 1940s during the Truman presidency and the 1950s during the Eisenhower presidency.
C) the Great Depression during the 1930ss and the 1940s during the Truman presidency.
D) the Great Depression during the 1930s and the 1980s during the Reagan and Bush presidencies.
18 In the short-run, a government budget deficit produced by a tax cut
A) increases consumption spending and shifts the LM curve to the right.
B) increases consumption spending and shifts the Phillips curve to the right.
C) decreases consumption spending and shifts the IS curve to the left.
D) increases consumption spending and shifts the IS curve to the right.
19 An increase in the government's budget deficit
A) will lead to a decrease in imports, a depreciated dollar, an increase in exports, and a decrease in the international trade deficit.
B) will lead to an increase in imports, a depreciated dollar, an increase in exports, and an uncertain effect on the international trade deficit.
C) will lead to an increase in imports, an appreciated dollar, a decrease in exports, and an increase in the international trade deficit.
D) will lead to a decrease in imports, an appreciated dollar, a decrease in exports, and an uncertain effect on the international trade deficit.
20 Lower full-employment deficits
A) shift the IS curve to the right, raise real interest rates, and reduce consumption spending.
B) shift the IS curve to the right, raise real interest rates, and reduce investment spending.
C) shift the IS curve to the left, lower interest rates, and increase consumption spending.
D) shift the IS curve to the left, lower interest rates, and increase investment spending.
1 Changes in fiscal policy
A) shift the LM curve out and back.
B) shift the Phillips curve out and back.
C) shift the potential output curve out and back.
D) shift the IS curve out and back.
2 Changes in monetary policy
A) shift the Phillips curve out and back.
B) shift the LM curve out and back.
C) shift the IS curve out and back.
D) shift the potential output curve out and back.
3 Fiscal and monetary policy, along with the economic environment,
A) set the level of aggregate supply and move the economy along the Phillips curve, raising and lowering inflation and unemployment.
B) set the level of aggregate supply and move the economy along the aggregate demand curve, raising and lowering inflation and unemployment.
C) set the level of aggregate demand and move the economy along the Phillips curve, raising and lowering inflation and unemployment.
D) set the level of aggregate demand and move the economy along the aggregate demand curve, raising and lowering inflation and unemployment.
4 Changes in expectations of inflation, changes in the natural rate of unemployment, and supply shocks
A) change the position of the short-run Phillips curve, raising and lowering inflation and unemployment.
B) change the level of aggregate demand and move the economy along the Phillips curve, raising and lowering inflation and unemployment.
C) change the level of aggregate supply and move the economy along the Phillips curve, raising and lowering inflation and unemployment.
D) change the level of aggregate demand and move the economy along the aggregate demand curve, raising and lowering inflation and unemployment.
5 If the Federal Reserve wanted to pursue an expansionary monetary policy, it could
A) lower the discount rate.
B) sell U.S. government bonds.
C) increase the reserve requirement.
D) raise credit card interest rates.
6 A policy option for a country that finds itself in a liquidity trap situation is
A) expansionary fiscal policy via increased government purchases.
B) expansionary monetary policy designed to decrease interest rates and increase investment spending.
C) contractionary fiscal policy via increased taxes.
D) contractionary monetary policy designed to decrease inflation expectations.
7 The past forty years have seen the level of Federal Government spending
A) as a share of GDP increase significantly, with the share of mandatory spending decreasing and discretionary spending increasing.
B) as a share of GDP remain roughly constant, with the share of mandatory spending increasing and discretionary spending decreasing.
C) as a share of GDP remain roughly constant, with the share of mandatory spending decreasing and discretionary spending increasing.
D) as a share of GDP has decreased, with the share of mandatory spending increasing and discretionary spending decreasing.
8 Unemployment and inflation were low and stable in the United States
A) between 1940 and 1950.
B) between the mid-1950s and the late 1960s.
C) between 1967 and 1975.
D) between 1976 and 1983.
9 The natural rate of unemployment and expected inflation increased in the United States
A) between 1967 and 1975.
B) between the mid-1950s and the late 1960s.
C) between the mid-1980s and the mid-1990s.
D) during the 1930s.
10 The stagflation of the early 1970s was the result of
A) expansionary aggregate demand policies and a decrease in expected inflation
B) contractionary aggregate demand policies and a decrease in expected inflation.
C) expansionary aggregate demand policies.
D) expansionary aggregate demand policies and an increase in expected inflation.
11 The velocity of money since 1980 has been
A) unstable and predictable around a steady upward trend.
B) stable and predictable with a constant downward trend.
C) unstable and unpredictable without any discernable trend.
D) stable and predictable with a constant upward trend.
12 Each of the following is a component of the Conference Board's Index of Leading Indicators except
A) stock prices, 500 common stocks.
B) average weekly initial claims for unemployment insurance.
C) manufacturers' new orders, consumer goods and materials.
D) average weekly initial claims for disability insurance.
13 As an example of the problem of using only the money supply as a leading indicator, during 1992 if M1 were used as the measure of the money supply rather than M3
A) monetary policy would have been deemed contractionary, deepening the 1990-92 recession.
B) monetary policy would have been deemed expansionary, resulting in short-term real interest rates of less than zero.
C) monetary policy would have been deemed expansionary, resulting in short-term nominal interest rates of less than zero.
D) monetary policy would have been deemed neutral.
14 If the reserve requirement is 4% and the Federal Reserve increases the reserves in the banking system by $20 billion, the potential increase in the money supply is
A) $5000 billion.
B) $500 billion.
C) $50 billion.
D) $5 billion.
15 If the reserve requirement is 8%, the money multiplier is
A) 12.5.
B) 125.
C) 1.25.
D) .125.
16 If the reserve requirement is 8%, households' and businesses' desired holding ratio of currency-to-deposits is .1, and the ratio of excess reserves to total deposits that banks desire to hold is .04, the money multiplier is
A) 6.1.
B) 1.2.
C) 50.
D) 5.
17 A decrease in the reserve requirement will
A) decrease the value of the money multiplier.
B) increase the value of the money multiplier.
C) increase the value of the autonomous spending multiplier.
D) decrease the value of the autonomous spending multiplier.
18 If households' and businesses' decide to hold more currency relative to deposits,
A) the value of the autonomous spending multiplier will decrease.
B) the value of the money multiplier will increase.
C) the value of the money multiplier will not change.
D) the value of the money multiplier will decrease.
19 If the principal instability in the economy is due to shifts in the IS curve,
A) targeting interest rates will stabilize the magnitude of shocks to the economy.
B) targeting the exchange rate will stabilize the magnitude of the shocks to the economy.
C) targeting interest rates will do little or nothing to stabilize the magnitude of shocks to the economy.
D) the Federal Reserve should take monetary policy action to shift the IS curve in the opposite direction of the shock.
20 If the principal instability in the economy is due to instability in the velocity of money,
A) targeting interest rates will stabilize the magnitude of shocks to the economy.
B) targeting interest rates will do little or nothing to stabilize the magnitude of shocks to the economy.
C) it would be better to have a monetary policy reaction function that reacts to leading indicators and outcomes.
D) the Federal Reserve should take monetary policy action to shift the IS curve in the opposite direction of the shock.
1 Changes in _____________ is the driving force behind the business cycle.
A) consumption spending
B) investment spending
C) the money supply
D) government purchases
2 In the sticky-price model, the interest rate is set
A) directly by businesses or indirectly by the combination of the stock of money and the liquidity preference of households and the central bank.
B) directly by households or indirectly by the combination of the stock of money and the liquidity preference of businesses and the central bank.
C) directly by Congress or indirectly by the combination of the stock of money and the liquidity preference of households and businesses.
D) directly by the central bank or indirectly by the combination of the stock of money and the liquidity preference of households and businesses.
3 A source of fluctuations in investment spending is
A) changes in government expectations of future output growth.
B) changes in households' expectations about future output growth.
C) changes in households' expectations about future risk.
D) changes in investors' expectations about future profits.
4 The increase in the interest rate that the market charges on _________ loans over __________ loans is called the ____________.
A) long-term; short-term; term premium
B) short-term; long-term; term premium
C) long-term; short term; yield premium
D) short-term; long-term; yield premium
5 The riskier that lenders believe a loan to be,
A) the higher will be the term premium they will charge.
B) the lower will be the risk premium they will charge.
C) the higher will be the risk premium they will charge.
D) the more willing they will be to make the loan at the risk-free interest rate.
6 The slope of the investment function
A) tells us by how much investment spending is discouraged by a one-unit increase in the short-term, risky, nominal interest rate.
B) tells us what the level of investment spending would be if the long-term, risky, real interest rate were 0.
C) tells us what the level of investment spending would be if the short-term, risky, nominal interest rate were 0.
D) tells us by how much investment spending is discouraged by a one-unit increase in the long-term, risky, real interest rate.
7 An increase in the domestic real interest rate
A) will reduce the real exchange rate and reduce the level of exports.
B) will increase the real exchange rate and increase the level of exports.
C) will reduce the real exchange rate and increase the level of exports.
D) will increase the real exchange rate and reduce the level of exports.
8 The IS curve tells us
A) what equilibrium level of real GDP corresponds to each value of the nominal interest rate.
B) what equilibrium level of real GDP corresponds to each value of the real interest rate.
C) what equilibrium level of real GDP corresponds to each value of the price level.
D) what equilibrium level of real GDP corresponds to each value of the money supply.
9 The factors that influence the slope of the IS curve include
A) the baseline level of consumption spending and the level of foreign real GDP.
B) the marginal propensity to consume and the interest rate-sensitivity of investment spending.
C) the level of real GDP and the baseline level of investment spending.
D) foreign real interest rates and the level of government purchases.
10 If the marginal propensity to expend is equal to .8, the interest rate sensitivity of investment is equal to $100 billion, the interest rate sensitivity of the exchange rate is 10, and the exchange rate sensitivity of exports is $7 billion, a one percentage point change in the real interest rate will change the level of aggregate demand by
A) $170 billion.
B) -$850 billion.
C) $850 billion.
D) -$170 billion.
11 A decrease in the baseline level of consumption spending will
A) shift the IS curve to the left.
B) shift the IS curve to the right.
C) make the IS curve more vertical.
D) make the IS curve less vertical.
12 A decrease in the marginal propensity to consume will
A) shift the IS curve to the left.
B) shift the IS curve to the right.
C) make the IS curve more vertical.
D) make the IS curve less vertical.
13 If the economy is operating below (to the left of) the IS curve, then real GDP is _______ than planned expenditure,
A) greater; inventories are decreasing faster than expected, and businesses will reduce production.
B) greater; inventories are increasing faster than expected, and businesses will reduce production.
C) less; inventories are increasing faster than expected, and businesses will increase production.
D) less; inventories are decreasing faster than expected, and businesses will increase production.
14 If the MPE is equal to .8, the baseline level of spending is $3 trillion, a one percentage point decrease in the real interest rate increases investment spending by $100 billion and exports by $20 billion, and the real interest rate is equal to 5%, then the equilibrium level of real GDP is
A) $15 trillion.
B) $18 trillion.
C) $3 trillion.
D) $12 trillion.
15 If the MPE is equal to .8, a one percentage point decrease in the real interest rate increases investment spending by $100 billion and exports by $20 billion, the real interest rate is equal to 5%, and the baseline level of investment spending increases by $100 billion, the change in the equilibrium level of real GDP would be
A) -$.125 trillion
B) $.125 trillion.
C) $.5 trillion.
D) -$.5 trillion.
16 If the Federal Reserve raises interest rates,
A) the IS curve will shift to the left and the level of aggregate demand will decrease.
B) the level of aggregate demand will move upward along the IS curve and thus decrease.
C) the level of aggregate demand will move downward along the IS curve and thus increase.
D) the IS curve will shift to the right and the level of aggregate demand will increase.
17 Suppose that the Federal Reserve has decided that there is a deflationary gap of $1 trillion in the economy. Suppose further that the estimated slope of the IS curve is -$500 billion. By how many percentage points would the Fed need to decrease the real interest rate in order close the deflationary gap?
A) 5
B) 2
C) .5
D) 20
18 The major determinant of the term premium is
A) expectations of the expected profitability of investment projects.
B) expectations of future consumption spending.
C) expectations of future monetary policy.
D) expectations of future government purchases.
19 In the early 1980s (1982 to 1985) the US economy
A) experienced a shifting of the IS curve to the right because of increased business optimism, tax increases, and decreased government purchases.
B) experienced a shifting of the IS curve to the right because of tax reductions, and increased government purchases.
C) experienced a movement down and to the right along the IS curve.
D) experienced a shifting of the IS curve to the right due to a decrease in interest rates.
20 From 1992 until the end of the decade, the US economy
A) experienced a shifting of the IS curve to the left due to an increase in interest rates.
B) experienced a movement down and to the right along the IS curve.
C) experienced a shifting of the IS curve inward because of increased business optimism and tight fiscal policy.
D) experienced a shifting of the IS curve to the left due to a decrease in the baseline level of investment spending.
1 In the United States during the 1970s, the price level
A) rose at a level of 60 percent per month.
B) rose at a level of between five and ten percent per year.
C) rose at a level of 60 percent per year.
D) rose at a level of 60 percent per week.
2 The classical dichotomy means
A) that real variables (such as the price level)can be analyzed and calculated without thinking of nominal variables such as real GDP, real investment spending, or the real exchange rate.
B) that real variables (such as real GDP, real investment spending, or the real exchange rate) cannot be analyzed and calculated without thinking of nominal variables such as the price level.
C) that real variables (such as real GDP, real investment spending, or the real exchange rate) can be analyzed and calculated without thinking of nominal variables such as the price level.
D) that real variables (such as real GDP, real investment spending, or the price level) can be analyzed and calculated with out thinking of nominal variables such as wage rate.
3 Each of the following is part of the economy's stock of money except
A) coin and currency that are transferred by handing the cash over to the seller.
B) checking account balances that are transferred by writing a check.
C) credit cards held by the public sector.
D) other assets that can be turned into cash or demand deposits nearly instantaneously, risklessly, and costlessly.
4 Anything that alters the real value of the domestic money in terms of its purchasing power over goods and services
A) will also alter the real terms of those existing contracts that use money as the medium of exchange.
B) will invalidate existing contracts that use money as the unit of account.
C) will cause people to hoard money.
D) will also alter the real terms of those existing contracts that use money as the unit of account.
5 The cost of holding money in one's portfolio
A) is that holding money makes you wealthier than holding other assets.
B) is how much it costs to store money.
C) is the rate of return foregone by not holding interest-bearing assets.
D) is that it makes buying things easier.
6 The amount of wealth households and businesses wish to hold in the form of money depends on
A) the opportunity cost of holding money - the lost interest and profits- and the benefits of holding money - the ease of transactions gained
B) the opportunity cost of holding money - the ease of making transactions gained - and the benefits of holding money - the interest and profits gained.
C) the opportunity cost of holding money - the cost of transactions not made - and the benefits of holding money - the status gained by doing so.
D) the savings rate of households and businesses.
7 The amount of money households and businesses wish to hold will _________ if total spending decreases and will _________ if transactions technology decreases.
A) increase; increase
B) decrease; increase
C) decrease; decrease
D) increase; decrease
8 The American quantity equation is
A) M = (1/V) x (P x Y).
B) M / V = P x Y
C) M / P = V x Y
D) M x V = P x Y
9 In the American form of the quantity theory, V represents
A) the velocity of money: the amount of money households and businesses wish to hold.
B) the velocity of money: how many times a year the average unit of money shows up in someone's income and is then used to buy a final good or service that counts in GDP.
C) the velocity of money: amount of money households and businesses actually hold.
D) the velocity of money: amount of wealth households and businesses wish to hold.
10 In the flexible-price model of the macroeconomy with a given velocity of money and real GDP, the price level is equal to
A) (V x Y) / M.
B) (Y / V) x M.
C) (V / Y) x M.
D) (M / V) + Y.
11 If the real GDP is equal to $10 trillion, the stock of money is equal to $3 trillion, and the velocity of money is equal to 5, the price level would be equal to
A) 16.7.
B) 1.5.
C) 6.
D) 10.6.
12 If the money supply increases by 8%, velocity decreases by 2%, and real GDP grows by 3%, then the price level
A) will increase by 9%.
B) will increase by 13%.
C) will increase by 3%.
D) will increase 7%.
13 Using the quantity theory of money, the bulk of changes in the rate of inflation is due to
A) changes in the growth rate the velocity of money.
B) changes in the growth rate of real GDP.
C) changes in the growth rate of real wages.
D) changes in the growth rate of the money supply.
14 One problem with the quantity theory of money is that, in the real world,
A) real GDP fluctuates greatly.
B) inflation is not always proportional to money growth.
C) real wages fluctuate greatly.
D) the velocity of money never changes.
15 The opportunity cost of holding money is
A) the real rate of interest.
B) the negative of the expected inflation rate.
C) the difference between the expected inflation rate and the real interest rate.
D) the sum of the expected inflation rate and the real interest rate.
16 If the nominal interest rate increases, the demand for money will ________ and the velocity of money will ________.
A) increase; decrease
B) decrease; increase
C) increase; increase
D) decrease; decrease
17 If the expected inflation rate increases, the demand for money will ________ and the velocity of money will ________.
A) decrease; increase
B) increase; decrease
C) increase; increase
D) decrease; decrease
18 In the flexible price macroeconomy, an increase in the rate of growth of the money supply
A) leads to an immediate jump in real GDP, to an increase in the inflation rate, to a decrease in the quantity of money demanded, and to an increase in the velocity of money.
B) leads to an immediate jump in real GDP, to a decrease in the inflation rate, and to a decrease in the quantity of money demanded, and to a decrease in the velocity of money.
C) leads to an immediate jump in the price level, to an increase in the inflation rate, to an increase in the quantity of money demanded, and to a decrease in the velocity of money.
D) leads to an immediate jump in the price level, to an increase in the inflation rate, to a decrease in the quantity of money demanded, and to an increase in the velocity of money.
19 The costs of moderate inflation that is greater than expected include
A) redistribution of wealth from creditors to debtors and the creation of uncertainty and unpredictability.
B) redistribution of income from wage workers to salaried workers and the creation of uncertainty and unpredictability.
C) redistribution of income from the service sector to the manufacturing sector and the creation of a windfall gain for creditors.
D) redistribution of wealth from creditors to debtors and a tendency to increase nominal interest rates and thus reduce investment spending.
20 A government that finances its spending by printing money
A) is actually financing its spending by borrowing from the public.
B) is actually financing its spending by levying a tax on holdings of cash.
C) is actually financing its spending by borrowing from other branches of government.
D) is actually financing its spending by borrowing from people in other countries.
1 The two principal channels through which policies and initial conditions work to accelerate or retard growth are
A) their impact on the available level of technology and labor force of the economy.
B) their impact on the available level of capital goods and capital intensity of the economy.
C) their impact on the available level of capital goods and labor force in the economy.
D) their impact on the available level of technology and capital intensity of the economy.
2 The two principal determinants of capital intensity are
A) the consumption and labor efforts being made in the economy.
B) the investment effort being made in the economy and the investment requirements of the economy.
C) the investment and saving efforts being made in the economy.
D) the investment and saving requirements of the economy.
3 In a steady-state balanced-growth equilibrium,
A) the capital intensity of the economy is increasing.
B) the capital-output ratio is decreasing.
C) the economy's capital stock and its level of real GDP are growing at the same proportional rate.
D) the capital-output ratio is increasing.
4 The labor force, the capital stock, and the level of technology
A) are components of the production function.
B) are components of aggregate demand.
C) are components of the money supply.
D) are components of national income.
5 The correct form of the Cobb-Douglas production function is
A) (Y/L) = (K/L)a x (E)1-a
B) (Y/K) = (K/L)a x (E)1-a
C) (L/Y) = (K/L)a x (E)1-a
D) (K/L) = (Y/L)a x (E)1-a
6 A level of the parameter a of the Cobb-Douglas production near zero means
A) that the extra amount of output made possible by each additional unit of capital declines very slowly as the capital stock increases.
B) that the extra amount of output made possible by each additional unit of capital declines very quickly as the capital stock increases.
C) that the extra amount of output made possible by each additional unit of labor declines very quickly as the capital stock increases.
D) that the extra amount of output made possible by each additional unit of savings declines very quickly as the capital stock increases.
7 If there is a doubling of the stock of capital per worker, then output per worker will also double when
A) the parameter a of the Cobb-Douglas production function is close to one.
B) the parameter a of the Cobb-Douglas production function equals zero.
C) the parameter a of the Cobb-Douglas production function equals one.
D) the parameter a of the Cobb-Douglas production function is close to zero.
8 An increase in the parameter E of the Cobb-Douglas production function means
A) less output per worker can be produced for each possible value of the capital stock per worker.
B) the value of capital per worker increases.
C) that the economy becomes less productive.
D) more output per worker can be produced for each possible value of the capital stock per worker.
9 If, in the Cobb-Douglas production, the value of E is $20000, a is .6 and capital per worker is $250,000, then output per worker would be approximately
A) $54928.
B) $91028.
C) $112000.
D) $158000
10 The growth rate of the capital stock will increase if the proportion of the output level saved and invested _________ and the rate of depreciation of the capital stock __________.
A) increases; increases
B) decreases; increases
C) increases; decreases
D) decreases; decreases
11 One of the factors influencing the economy's output growth rate is
A) the rate of employment growth
B) the rate of growth in the efficiency of capital
C) the rate of growth in the efficiency of labor
D) the tax rate
12 If the current level of output in the economy is $12 trillion a year, the current year's capital stock in the economy is $30 trillion, the savings rate is 20 percent and the rate of depreciation of capital stock is 3 percent, next year's capital stock will be _______ and the growth rate of the capital stock will be ______.
A) $31.5 trillion; 105%
B) $31.5 trillion; 5%
C) $17.64 trillion; 76.4%
D) $31.5 trillion; 1.05%
13 The growth rate of capital-per-worker will increase if the labor force growth rate _________ and will decrease if the rate of depreciation _________.
A) increases; decreases
B) increases; increases
C) decreases; increases
1 The flexible-price assumption means that
A) prices and wages don't change very quickly in response to excess demand or supply.
B) prices are flexible enough for markets to clear but wages are not.
C) prices and wages will adjust in response to excess demand or supply.
D) output will adjust in response to excess demand or supply.
2 Two sets of factors determine the levels of potential (and actual) output and of real wages in the flexible-price model of the macroeconomy:
A) the balance of exports and imports and the production function.
B) the balance of supply and demand in the stock market and the production function.
C) the balance of savings and investment and the production function.
D) the balance of supply and demand in the labor market and the production function.
3. The Classical assumptions of the macroeconomy include
A) wages and prices can be sticky or fixed.
B) expectations are consistent with full employment.
C) the labor market can be out of equilibrium causing involuntary employment.
D) shocks to aggregate demand will change the composition and the level of GDP.
4 The Keynesian assumptions of the macroeconomy include
A) wages and prices are fully flexible.
B) expectations are consistent with full employment.
C) the labor market can be out of equilibrium, causing involuntary unemployment.
D) shocks to aggregate demand will change the composition but not the level of GDP.
5 If the typical firm stops hiring labor when the extra revenue from the output produced by the last worker hired just equals his or her wage,
A) it will achieve the highest possible level of revenue.
B) it will achieve the highest possible level of profit.
C) it will not be earning any profits.
D) it will achieve the lowest possible level of profit.
6 The typical firm's demand for labor for the Cobb-Douglas production function with K=1 is
A) ((1-a)Ea-1/(W/P))1/a
B) ((1-a)E1-a/(W/P))a
C) ((1-a)E1-a/(W/P))1/a
D) ((1-a)Ea/(W/P))1/a
7 In the Classical Model, if the quantity of labor demanded at current wages and prices is less than the quantity of labor supplied
A) unemployment will result.
B) the real wage will decrease, increasing the quantity of labor demanded until it is equal to the quantity of labor supplied.
C) the real wage will decrease, decreasing the quantity of labor demanded until it is equal to the quantity of labor supplied.
D) the real wage will increase, decreasing the quantity of labor demanded until it is equal to the quantity of labor supplied.
8 If a _________ in a full employment economy, the real wage will ________.
A) increases; increase
B) decreases; decrease
C) increases; decrease
D) none of the above
9 The four components of national income are
A) consumption spending, savings, government purchases, net exports.
B) consumption spending, investment spending, government purchases, net exports.
C) consumption spending, investment spending, tax revenue, net exports.
D) consumption spending, investment spending, government purchases, gross exports.
10 In the model developed in the text, consumption spending (C) is broken down into
A) a baseline level of consumption (C0) plus a fraction (Cy) of total income
B) a fraction (Cy) of disposable income.
C) a baseline level of consumption (C0) plus a fraction (Cy x (1-t)) of disposable income.
D) a baseline level of consumption (C0) plus a fraction (Cy) of disposable income.
11 The marginal propensity to consume (MPC, Cy)
A) is the amount by which consumption spending changes in response to a $1 change in total income.
B) is the amount households would spend on consumption goods if they had no income at all.
C) is the amount by which consumption spending would change in response to a $1 change in household wealth.
D) is the amount by which consumption spending changes in response to a $1 change in disposable income.
12 If C0 is $1 trillion, Cy is .75, the tax rate is .10, and the level of national income is $10 trillion, consumption spending would equal
A) $7.75 trillion.
B) $6.75 trillion.
C) $8.75 trillion.
D) $5.75 trillion.
13 Investment spending tends to vary _______ with business managers' confidence and _______ with real interest rates.
A) directly; inversely
B) directly; directly
C) inversely; inversely
D) inversely; directly
14 A lower interest rate leads to higher investment spending because
A) higher interest rates lower the appropriately discounted return and make more investment projects profitable.
B) lower interest rates lower the appropriately discounted return and make more investment projects profitable.
C) higher interest rates increase the appropriately discounted return and make fewer investment projects profitable.
D) lower interest rates increase the appropriately discounted return and make more investment projects profitable.
15 If I0 is equal to $5 trillion, Ir is equal to $20000 billion, and r is 5%, investment spending would equal
A) $1 trillion.
B) $4 trillion.
1 Facts about the economy of the United States over the decade of the 1990s include
A) real GDP growth at an average rate of 3.8 percent per year.
B) a stable, but very high, inflation rate.
C) net exports have been consistently positive.
D) a stable, but rather high, unemployment rate.
2 The reasons that the flexible-price model does not give a complete picture of the macroeconomy include
A) real GDP growth is always smooth.
B) real GDP growth is always positive.
C) the unemployment rate is not always equal to the natural rate.
D) inflation is sometimes negative.
3 In the recession or depression phase of the business cycle,
A) production and employment increase while the inflation rate decreases.
B) production, employment, and the inflation rate decrease.
C) production, employment, and the inflation rate increase.
D) production, unemployment, and the inflation rate increase.
4 In the expansion or boom phase of the business cycle,
A) real GDP grows slower than trend.
B) the investment spending share of real GDP generally increases.
C) unemployment increases.
D) inflation decreases.
5 In the sticky-price model, the consequences of a decrease in the marginal propensity to consume include
A) an increase in exports.
B) an increase in government purchases.
C) an increase in investment spending.
D) a decrease in real GDP.
6 One of the possible reasons why prices are sticky is
A) managers and workers find that changing prices or renegotiating wages is costly.
B) managers and workers lack the ability to differentiate between changes in total economy-wide spending with changes in demand for their specific products.
C) the level of prices is as much a physical as an economic variable.
D) managers and workers suffer from "real illusion."
7 If prices are sticky, lower aggregate demand will
A) increase production which will increase incomes, which will increase consumption spending, which will further increase aggregate demand.
B) decrease production which will decrease incomes, which will decrease consumption spending, which will further decrease aggregate demand.
C) decrease production which will decrease incomes, which will decrease investment spending, which will further decrease aggregate demand.
D) decrease production which will increase incomes, which will increase consumption spending, which will further increase aggregate demand.
8 In the multiplier process, a decrease in spending
A) causes an increase in production and incomes, which leads to a further increase in spending.
B) causes a decrease in prices and wages, which causes a further decrease in spending.
C) causes a decrease in production and incomes, which leads to a further decrease in spending.
D) causes a decrease in production and incomes, which leads to an increase in spending.
9 The level of investment spending is determined by
A) the nominal interest rate and assessments of profitability made by business investment committees.
B) the nominal exchange rate and assessments of profitability made by business investment committees.
C) the real interest rate and assessments of profitability made by business investment committees.
D) the real exchange rate and assessments of profitability made by business investment committees.
10 The parameters of the investment spending equation are
A) I0: the baseline level of investment spending, and Iy: the marginal propensity to invest.
B) I0: the interest sensitivity of investment, and Ir: the baseline level of investment spending.
C) I0: the interest sensitivity of investment, and Ir: the marginal propensity to invest.
D) I0: the baseline level of investment spending, and Ir: the interest sensitivity of investment.
11 If the marginal propensity to consume increases or the tax rate decreases
A) the slope of the planned expenditure line will decrease.
B) the intercept of the planned expenditure line will increase.
C) the slope of the planned expenditure line will increase.
D) the intercept of the planned expenditure line will decrease.
12 If foreign real income increases,
A) the slope of the planned expenditure line will increase.
B) the intercept of the planned expenditure line will increase.
C) the slope of the planned expenditure line will decrease.
D) the intercept of the planned expenditure line will decrease.
13 If the marginal propensity to expend is equal to .6, and the level of autonomous spending increases by $1500 billion, the equilibrium level of national income will
A) increase by $1500 billion.
B) decrease by $1500 billion.
C) increase by $3750 billion.
D) increase by $2500 billion.
14 If the level of autonomous spending is $6000 billion, the marginal propensity to expend is .4, and the level of national income is $9000, planned expenditures would be equal to
A) $9600 billion and inventory accumulation would equal $600 billion.
B) $11400 billion and inventory accumulation would equal $2400 billion.
C) $11400 billion and inventory accumulation would equal -$2400 billion.
D) $9600 billion and inventory accumulation would equal -$600 billion.
15 If Cy = .8, t = .2, IMy = .1, and autonomous spending increases by $1500 billion, the equilibrium level of national income
A) will increase by $3261 billion.
B) will decrease by $3261 billion.
C) will decrease by $2027 billion.
D) will increase by $2027 billion.
16 If Cy = .75, t = .2, IMy = .1, the value of the multiplier would be
A) .4.
B) .6.
C) 2.
D) 2.5.
17 If the marginal propensity to import decreases and the tax rate decreases, the marginal propensity to expend will _______ and the value of the multiplier _______.
A) increase; decreases.
B) increase; increases.
C) decrease; increases.
D) decrease; decreases.
18 If the marginal propensity to import increases, the marginal propensity to expend will _______ and the value of the multiplier _______.
A) increase; increases.
B) increase; decreases.
C) decrease; decreases.
D) decrease; increases.
19 If the MPE is equal to .6 and the gap between planned expenditures and potential output is $1500 billion, the necessary change in autonomous spending to bring planned expenditures to potential output would be
A) $1500 billion.
B) -$1500 billion.
C) $900 billion.
D) $600 billion.
20 The automatic working of the government's income tax system (and, to a lesser extent, its social welfare programs) function
A) as an automatic destabilizer.
B) as an automatic change in the money supply.
C) as an automatic stabilizer.
D) as an automatic change in private savings.
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