Weekly Review Quiz as of 2010-12-02
Economics:Macro

Federal Pay Freeze Planned
by Jonathan Weisman and Damian Paletta
11/30/2010

1. All of the following are likely to be criticisms of President Obama's proposal on Monday to freeze government employee wages except

a) It only saves the government $5 billion (from a $1.3 trillion fiscal deficit)
b) There should also be a hiring freeze, according to Republicans
c) It would impact almost 2 million employees
d) The proposal does not affect U.S. senators, congressmen and their staff
* e) All of the above are valid criticisms of the plan

Inflation Adds to Pressure for Stronger Yuan
by Andrew Batson
11/30/2010

2. Worries about rising prices (up 4.4% recently) may cause the Chinese government to ______their currency, which will increase ______and lower ______.

a) appreciate; imports; unemployment
b) depreciate; economic growth; exports
* c) appreciate; imports; economic growth
d) depreciate; imports; unemployment
e) appreciate; exports; economic growth

Public Still Feels Inflation's Pinch
by Mark Whitehouse
11/29/2010

3. If inflation is so low, as according to policy officials (1.2% over the past year, as reported by the Labor Department), then why do U.S. households feel that prices are rising at a faster rate?

a) The public pays more attention to prices that fluctuate frequently (like oil).
b) The public pays more attention to prices of goods that they buy frequently (like food), even if it constitutes a lower portion of their disposable income
c) Inflation expectations tend to be higher among middle-class Americans (as opposed to older or poorer citizens), who make up the largest demographic.
d) All of the above
* e) a) and b) only

Europe Sets Bailout Rules
by Marcus Walker and Charles Forelle
11/29/2010

4. Ireland is the second Euro-zone country to receive a bailout this year, due to severe budget deficits crippling their ability to borrow further via bond issuance. Other EU countries that are also in potential trouble include all of the following except:

* a) Germany
b) Italy
c) Spain
d) Portugal
e) All of the above are having fiscal deficit and credit problems.

5. The details of Ireland's €68 billion bailout package were announced on Sunday. The largest contributor (lending €22.5 billion) is

a) the U.K.
* b) the International Monetary Fund
c) the U.S.A.
d) Euro-zone countries
e) Denmark