Question 1

During inflation the _____ price level _____.

Accepted Answer

A)  average; falls 
B)  average; increases 
C)  average; remains constant 
D)  real; falls 
A)  average; falls 
B)  average; increases 
C)  average; remains constant 
D)  real; falls

Question 2

The additional profit earned by Microsoft Corporation by marketing and using a proprietary method of coding software is a microeconomic issue.

Accepted Answer

A) True 
 B)False

Question 3

Per capita economic growth is:

Accepted Answer

A)  growth per unit of capital. 
B)  growth per person. 
C)  always accelerated during a business cycle. 
D)  a sustained increase in interest rates. 
A)  growth per unit of capital. 
B)  growth per person. 
C)  always accelerated during a business cycle. 
D)  a sustained increase in interest rates.

Question 4

Which statement about the U.S. economy is FALSE?

Accepted Answer

A)  Since the Second World War, aggregate output has grown more slowly than the population. 
B)  Since the Second World War, aggregate output has grown more rapidly than the population. 
C)  Since the Second World War, macroeconomic policy has helped make the economy more stable. 
D)  Long-run growth per capita is the key to higher wages and a rising standard of living. 
A)  Since the Second World War, aggregate output has grown more slowly than the population. 
B)  Since the Second World War, aggregate output has grown more rapidly than the population. 
C)  Since the Second World War, macroeconomic policy has helped make the economy more stable. 
D)  Long-run growth per capita is the key to higher wages and a rising standard of living.

Question 5

With inflation:

Accepted Answer

A)  overall prices are increasing, although some may be decreasing. 
B)  all prices must be increasing. 
C)  the economy must be contracting. 
D)  the economy must be producing at full employment. 
A)  overall prices are increasing, although some may be decreasing. 
B)  all prices must be increasing. 
C)  the economy must be contracting. 
D)  the economy must be producing at full employment.

Question 6

Expansions are periods when real GDP and employment are growing.

Accepted Answer

A) True 
 B)False

Question 7

Which statement is TRUE?

Accepted Answer

A)  In the past century, the population of the United States has grown faster than output. 
B)  Long-run growth models and business cycle models are the same. 
C)  Since World War II, the economy of Argentina has grown faster than the economy of Canada. 
D)  The level of saving is important for long-run growth. 
A)  In the past century, the population of the United States has grown faster than output. 
B)  Long-run growth models and business cycle models are the same. 
C)  Since World War II, the economy of Argentina has grown faster than the economy of Canada. 
D)  The level of saving is important for long-run growth.

Question 8

Economists have identified several consecutive quarters of falling employment, and forecasts for the next few months suggest more of the same. The economy is at the _____ stage of the business cycle.

Accepted Answer

A)  recession 
B)  expansion 
C)  peak 
D)  trough 
A)  recession 
B)  expansion 
C)  peak 
D)  trough

Question 9

The switching between recessions and expansions is known as the:

Accepted Answer

A)  unemployment rate. 
B)  long-run economic growth. 
C)  business cycle. 
D)  macroeconomy. 
A)  unemployment rate. 
B)  long-run economic growth. 
C)  business cycle. 
D)  macroeconomy.

Question 10

The point on a business cycle when real GDP stops rising and begins falling is a(n):

Accepted Answer

A)  peak. 
B)  trough. 
C)  expansion. 
D)  recession. 
A)  peak. 
B)  trough. 
C)  expansion. 
D)  recession.

Question 11

Which statement is CORRECT?

Accepted Answer

A)  Supply and demand cannot explain why a particular good or service becomes more expensive relative to other goods and services. 
B)  Inflation affects only the more advanced countries, whereas less advanced countries face deflation. 
C)  Employment levels remained stable during the Great Depression. 
D)  When the economy is in recession and jobs are hard to find, inflation tends to fall. 
A)  Supply and demand cannot explain why a particular good or service becomes more expensive relative to other goods and services. 
B)  Inflation affects only the more advanced countries, whereas less advanced countries face deflation. 
C)  Employment levels remained stable during the Great Depression. 
D)  When the economy is in recession and jobs are hard to find, inflation tends to fall.

Question 12

Long-run economic growth is best measured by:

Accepted Answer

A)  a sustained rise in the production of goods and services. 
B)  the growth of the money supply. 
C)  trade surpluses in the long run. 
D)  the rate of private saving. 
A)  a sustained rise in the production of goods and services. 
B)  the growth of the money supply. 
C)  trade surpluses in the long run. 
D)  the rate of private saving.

Question 13

Long-run growth is a(n):

Accepted Answer

A)  sustained upward trend in the economy's overall output per person, which generates higher incomes and a higher standard of living for its members. 
B)  increase in the rate of inflation across time, which reduces real salaries. 
C)  increase in the overall output of the economy over a three- or four-year period. 
D)  reduction in the price level over decades. 
A)  sustained upward trend in the economy's overall output per person, which generates higher incomes and a higher standard of living for its members. 
B)  increase in the rate of inflation across time, which reduces real salaries. 
C)  increase in the overall output of the economy over a three- or four-year period. 
D)  reduction in the price level over decades.

Question 14

Macroeconomics focuses on:

Accepted Answer

A)  the economy as a whole. 
B)  individual decisions. 
C)  wages. 
D)  the allocation of scarce resources. 
A)  the economy as a whole. 
B)  individual decisions. 
C)  wages. 
D)  the allocation of scarce resources.

Question 15

Choose the best answer. The topics studied in macroeconomics include:

Accepted Answer

A)  inflation. 
B)  unemployment. 
C)  economic growth. 
D)  inflation, unemployment, and economic growth. 
A)  inflation. 
B)  unemployment. 
C)  economic growth. 
D)  inflation, unemployment, and economic growth.

Question 16

Recessions are periods when:

Accepted Answer

A)  output rises. 
B)  the aggregate price level rises. 
C)  the unemployment rate is falling. 
D)  output and employment are falling in many industries. 
A)  output rises. 
B)  the aggregate price level rises. 
C)  the unemployment rate is falling. 
D)  output and employment are falling in many industries.

Question 17

A key insight into macroeconomics is that in the short run the combined effect of individual decisions:

Accepted Answer

A)  is always the same as what one individual intended. 
B)  may be very different from what any one individual intended. 
C)  is always beneficial to the economy as a whole. 
D)  is always detrimental to the economy as a whole. 
A)  is always the same as what one individual intended. 
B)  may be very different from what any one individual intended. 
C)  is always beneficial to the economy as a whole. 
D)  is always detrimental to the economy as a whole.

Question 18

Which two types of policy are considered to be macroeconomic?

Accepted Answer

A)  monetary and fiscal policy 
B)  monetary and regulation policy 
C)  fiscal and regulation policy 
D)  fiscal policy and price controls 
A)  monetary and fiscal policy 
B)  monetary and regulation policy 
C)  fiscal and regulation policy 
D)  fiscal policy and price controls

Question 19

Goods and services that are produced in a foreign country but consumed domestically are called:

Accepted Answer

A)  exports. 
B)  imports. 
C)  investment goods. 
D)  consumer durables. 
A)  exports. 
B)  imports. 
C)  investment goods. 
D)  consumer durables.

Question 20

An open economy:

Accepted Answer

A)  trades goods and services with other countries. 
B)  does not regulate its industries. 
C)  does not impose taxes on its citizens. 
D)  allows free practice of speech and religion. 
A)  trades goods and services with other countries. 
B)  does not regulate its industries. 
C)  does not impose taxes on its citizens. 
D)  allows free practice of speech and religion.

During inflation the _ price level _.

The additional profit earned by Microsoft Corporation by marketing and using a proprietary method of coding software is a microeconomic issue.

Per capita economic growth is:

Which statement about the U.S. economy is FALSE?

With inflation:

Expansions are periods when real GDP and employment are growing.

Which statement is TRUE?

Economists have identified several consecutive quarters of falling employment, and forecasts for the next few months suggest more of the same. The economy is at the _____ stage of the business cycle.

The switching between recessions and expansions is known as the:

The point on a business cycle when real GDP stops rising and begins falling is a(n):

Which statement is CORRECT?

Long-run economic growth is best measured by:

Long-run growth is a(n):

Macroeconomics focuses on:

Choose the best answer. The topics studied in macroeconomics include:

Recessions are periods when:

A key insight into macroeconomics is that in the short run the combined effect of individual decisions:

Which two types of policy are considered to be macroeconomic?

Goods and services that are produced in a foreign country but consumed domestically are called:

An open economy:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

GDP and the CPI: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial Syst

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Filters

Exam 6: Macroeconomics: the Big Picture

During inflation the _____ price level _____.

The additional profit earned by Microsoft Corporation by marketing and using a proprietary method of coding software is a microeconomic issue.

Per capita economic growth is:

Which statement about the U.S. economy is FALSE?

With inflation:

Expansions are periods when real GDP and employment are growing.

Which statement is TRUE?

Economists have identified several consecutive quarters of falling employment, and forecasts for the next few months suggest more of the same. The economy is at the _____ stage of the business cycle.

The switching between recessions and expansions is known as the:

The point on a business cycle when real GDP stops rising and begins falling is a(n):

Which statement is CORRECT?

Long-run economic growth is best measured by:

Long-run growth is a(n):

Macroeconomics focuses on:

Choose the best answer. The topics studied in macroeconomics include:

Recessions are periods when:

A key insight into macroeconomics is that in the short run the combined effect of individual decisions:

Which two types of policy are considered to be macroeconomic?

Goods and services that are produced in a foreign country but consumed domestically are called:

An open economy:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

GDP and the CPI: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial Syst

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Filters

During inflation the _ price level _.