Exam 17: Macroeconomics: the Big Picture

Suppose you owe $1,000 on your credit card and you are charged a 2 percent monthly interest rate on the balance. How much in interest will be generated on that balance after the first month?

Which of the following is not a determinant of aggregate supply capability?

As a rule of thumb, a recession is

Economic growth theory

According to the theory of economic fluctuations, which of the following explains the relationship between aggregate demand and employment during a recession?

Over the last 50 years in the United States, the unemployment rate has

The highest unemployment rate recorded in the United States since World War II is

Exhibit 17-2 -Based on the data in Exhibit 17-2, the recession ended in which year?

What explains the uneven effect a recession has on the U.S. economy? Why would this matter?

The sum of the demands from the four groups that contribute to demand in the whole economy is called

Suppose the U.S. economy is currently recovering from a recession. What is the relationship between real and potential GDP? Is it likely that real GDP will stay in this position for a long period of time, say, 10 years? Briefly explain.

The U.S. economy moved closer to deflation at the end of 2008; this was the first time in 40 years that deflation seemed a possibility.

Exhibit 17-3 -The data in Exhibit 17-3 shows the values of real GDP and population for two countries, X and Y, for the years 2016 and 2017. Which of these two countries experienced a faster increase in the standard of living between 2016 and 2017?

Explain what real GDP measures.

The increase in U.S. production over the past 50 years

During the Great Depression, the unemployment rate

The interest rate is positively correlated with the inflation rate.

The labor force is

What is economic growth theory? What does it seek to distinguish, and why is it difficult to do this?

How might the economic fluctuations theory explain the movement of the unemployment rate over the business cycle?