Question 1

The Great Recession officially ended in

Accepted Answer

A) December 2017. 
B) April 2008. 
C) June 2009. 
D) August 2011. 
E) None of these 
A) December 2017. 
B) April 2008. 
C) June 2009. 
D) August 2011. 
E) None of these

Question 2

Describe the behavior of real GDP, the unemployment rate, and the inflation rate over the long term and the short term for the U.S. economy during the past 50 years. In what ways are movements in the three variables related?

Accepted Answer

Real GDP has steadily increased over the

Question 3

The term per capita refers to

Accepted Answer

A) the rate of change. 
B) the rate of inflation. 
C) the population. 
D) the price level. 
E) the name of the country. 
A) the rate of change. 
B) the rate of inflation. 
C) the population. 
D) the price level. 
E) the name of the country.

Question 4

Which of the following statements is true?

Accepted Answer

A) There is no relationship between real GDP and the unemployment rate over a business cycle. 
B) During a business cycle, the unemployment rate declines at the same time real GDP declines. 
C) During a business cycle, the unemployment rate increases at the same time real GDP declines. 
D) During a business cycle, the unemployment rate increases at the same time real GDP increases. 
E) During a business cycle, the unemployment rate increases only if real GDP is below potential GDP. 
A) There is no relationship between real GDP and the unemployment rate over a business cycle. 
B) During a business cycle, the unemployment rate declines at the same time real GDP declines. 
C) During a business cycle, the unemployment rate increases at the same time real GDP declines. 
D) During a business cycle, the unemployment rate increases at the same time real GDP increases. 
E) During a business cycle, the unemployment rate increases only if real GDP is below potential GDP.

Question 5

Which of the following statements is true?

Accepted Answer

A) Interest rates decline before each recession. 
B) Interest rates rise before each recession. 
C) Changes in interest rates are not correlated with the ups and downs of the economy. 
D) There are no long-term trends in interest rates. 
E) There is only one interest rate. 
A) Interest rates decline before each recession. 
B) Interest rates rise before each recession. 
C) Changes in interest rates are not correlated with the ups and downs of the economy. 
D) There are no long-term trends in interest rates. 
E) There is only one interest rate.

Question 6

The term depression best describes

Accepted Answer

A) all of the recessions occurring after World War II except for the 1990-1991 recession. 
B) all of the recessions occurring after World War II including the 1990-1991 recession. 
C) all of the recessions that have ever occurred. 
D) the 1990-1991 recession. 
E) the recessions that occurred in 1920-1921, 1929-1933, and 1937-1938. 
A) all of the recessions occurring after World War II except for the 1990-1991 recession. 
B) all of the recessions occurring after World War II including the 1990-1991 recession. 
C) all of the recessions that have ever occurred. 
D) the 1990-1991 recession. 
E) the recessions that occurred in 1920-1921, 1929-1933, and 1937-1938.

Question 7

Over the past 50 years, the average rate of increase in U.S. real GDP per capita has been about

Accepted Answer

A) 5 percent. 
B) 0 percent. 
C) 13 percent. 
D) -3 percent. 
E) 2 percent. 
A) 5 percent. 
B) 0 percent. 
C) 13 percent. 
D) -3 percent. 
E) 2 percent.

Question 8

Suppose you have $1,000, which you can put in two different types of accounts at a bank. One account pays interest of 9 percent per year; the other pays an interest rate of 3 percent per year plus the rate of inflation. Calculate the amount of money you will have at the end of one year if the inflation rate is 5 percent. What is the real rate of return in each case? Which account would you prefer if you expected inflation to be 8 percent?

Accepted Answer

At the end of one year, you would have $

Question 9

Discuss the relationship between each of the following variables based on the experience of the U.S. economy over the past 40 years.

Accepted Answer

The answer of Discuss the relationship between each of the...

Question 10

Economic growth theory aims to explain the short-term fluctuations in real GDP.

Accepted Answer

A) True 
 B)False

Question 11

What is the difference between a recession and a depression? Have there been any depressions over the last 50 years? Justify your answer.

Accepted Answer

There is no formal definition for a depr

Question 12

Which of the following statements about potential GDP is true?

Accepted Answer

A) Potential GDP is not equal to the maximum level of real GDP. 
B) Potential GDP is equal to the downward trend in real GDP. 
C) Potential GDP represents the GDP a country will experience when the real interest rate is equal to zero. 
D) Potential GDP represents the long-run tendency of the economy to grow. 
E) Potential GDP is equal to the average level of real GDP. 
A) Potential GDP is not equal to the maximum level of real GDP. 
B) Potential GDP is equal to the downward trend in real GDP. 
C) Potential GDP represents the GDP a country will experience when the real interest rate is equal to zero. 
D) Potential GDP represents the long-run tendency of the economy to grow. 
E) Potential GDP is equal to the average level of real GDP.

Question 13

Which of the following statements is the most accurate?

Accepted Answer

A) Deflation is when the rate of inflation declines. 
B) Disinflation only occurs when the price level declines. 
C) The end of the Great Inflation in 1980 was followed by deflation. 
D) Disinflation is when the rate of inflation declines. 
E) Deflation and disinflation always happen at the same time. 
A) Deflation is when the rate of inflation declines. 
B) Disinflation only occurs when the price level declines. 
C) The end of the Great Inflation in 1980 was followed by deflation. 
D) Disinflation is when the rate of inflation declines. 
E) Deflation and disinflation always happen at the same time.

Question 14

Over the past 50 years, the U.S. population

Accepted Answer

A) declined by about 90 million people. 
B) increased by slightly over 120 million people. 
C) declined by about 10 million people. 
D) increased by about 10 million people. 
E) increased by over 500 million people. 
A) declined by about 90 million people. 
B) increased by slightly over 120 million people. 
C) declined by about 10 million people. 
D) increased by about 10 million people. 
E) increased by over 500 million people.

Question 15

Exhibit 17-2
  
-Based on the data in Exhibit 17-2, a recession occurred beginning in which year?

Accepted Answer

A) 2006 
B) 2007 
C) 2008 
D) 2009 
E) 2010 
A) 2006 
B) 2007 
C) 2008 
D) 2009 
E) 2010

Question 16

When real GDP per capita is increasing, the standard of living is improving on average.

Accepted Answer

A) True 
 B)False

Question 17

Low and stable inflation

Accepted Answer

A) is important in order to have economic growth, since inflation and growth are positively correlated. 
B) is important in order to have economic growth, since inflation and growth are negatively correlated. 
C) is not important in order to have economic growth. 
D) is important in order to have economic growth, since economic growth and inflation are not correlated. 
E) is not important in order to have economic growth because there is a positive correlation between economic growth and inflation. 
A) is important in order to have economic growth, since inflation and growth are positively correlated. 
B) is important in order to have economic growth, since inflation and growth are negatively correlated. 
C) is not important in order to have economic growth. 
D) is important in order to have economic growth, since economic growth and inflation are not correlated. 
E) is not important in order to have economic growth because there is a positive correlation between economic growth and inflation.

Question 18

Which of the following statements is true about the U.S. rate of inflation between 1973 and 2004?

Accepted Answer

A) The rate of inflation trended upward during this period. 
B) The rate of inflation trended downward during this period. 
C) The rate of inflation fluctuated between 2 and 3 percent during this period. 
D) Until 1980 the rate of inflation trended upward, and after 1980 the rate of inflation trended downward. 
E) Until 1980 the rate of inflation trended downward, and after 1980 the rate of inflation trended upward. 
A) The rate of inflation trended upward during this period. 
B) The rate of inflation trended downward during this period. 
C) The rate of inflation fluctuated between 2 and 3 percent during this period. 
D) Until 1980 the rate of inflation trended upward, and after 1980 the rate of inflation trended downward. 
E) Until 1980 the rate of inflation trended downward, and after 1980 the rate of inflation trended upward.

Question 19

Suppose real GDP per capita grows at a rate of 3 percent. How many years will it take for it to double? What if the growth in real GDP per capita were 2 percent?

Accepted Answer

Using the years-to-d

Question 20

Potential GDP is

Accepted Answer

A) a measure of short-term movements in GDP. 
B) another name for GDP. 
C) the upward trend line in real GDP. 
D) another name for real GDP. 
E) another name for aggregate demand. 
A) a measure of short-term movements in GDP. 
B) another name for GDP. 
C) the upward trend line in real GDP. 
D) another name for real GDP. 
E) another name for aggregate demand.

Exam 17: Macroeconomics: the Big Picture

The Great Recession officially ended in

Describe the behavior of real GDP, the unemployment rate, and the inflation rate over the long term and the short term for the U.S. economy during the past 50 years. In what ways are movements in the three variables related?

The term per capita refers to

Which of the following statements is true?

Which of the following statements is true?

The term depression best describes

Over the past 50 years, the average rate of increase in U.S. real GDP per capita has been about

Discuss the relationship between each of the following variables based on the experience of the U.S. economy over the past 40 years.

Economic growth theory aims to explain the short-term fluctuations in real GDP.

What is the difference between a recession and a depression? Have there been any depressions over the last 50 years? Justify your answer.

Which of the following statements about potential GDP is true?

Which of the following statements is the most accurate?

Over the past 50 years, the U.S. population

Exhibit 17-2 -Based on the data in Exhibit 17-2, a recession occurred beginning in which year?

When real GDP per capita is increasing, the standard of living is improving on average.

Low and stable inflation

Which of the following statements is true about the U.S. rate of inflation between 1973 and 2004?

Suppose real GDP per capita grows at a rate of 3 percent. How many years will it take for it to double? What if the growth in real GDP per capita were 2 percent?

Potential GDP is

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Efficiency of Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, Monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Measuring the Production, Income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Economic Growth Around the World

International Trade

International Finance

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