Question 1

Which one of the following measures long-run economic growth?

Accepted Answer

A)  a rise in employment 
B)  an increase in the money supply 
C)  a sustained increase in the production of goods and services 
D)  an increase in the labor force 
A)  a rise in employment 
B)  an increase in the money supply 
C)  a sustained increase in the production of goods and services 
D)  an increase in the labor force

Question 2

A country's real gross domestic product (GDP), undergoes periodic fluctuations called a(n):

Accepted Answer

A)  recession. 
B)  business cycle. 
C)  expansion. 
D)  trough. 
A)  recession. 
B)  business cycle. 
C)  expansion. 
D)  trough.

Question 3

The topics studied in macroeconomics include:

Accepted Answer

A)  the price of a motorcycle. 
B)  the wages of engineers. 
C)  the general price level in the economy. 
D)  how much ice cream consumers buy. 
A)  the price of a motorcycle. 
B)  the wages of engineers. 
C)  the general price level in the economy. 
D)  how much ice cream consumers buy.

Question 4

An economic expansion in the United States is typically associated with a(n):

Accepted Answer

A)  falling inflation rate. 
B)  increase in the poverty rate. 
C)  increase in output. 
D)  decrease in corporate profits. 
A)  falling inflation rate. 
B)  increase in the poverty rate. 
C)  increase in output. 
D)  decrease in corporate profits.

Question 5

The most painful effect of a recession is:

Accepted Answer

A)  inflation. 
B)  unemployment. 
C)  money neutrality. 
D)  liquidity trap. 
A)  inflation. 
B)  unemployment. 
C)  money neutrality. 
D)  liquidity trap.

Question 6

Monetary and fiscal policy are tools to reduce the severity of recessions.

Accepted Answer

A) True 
 B)False

Question 7

An expansion is a period in which:

Accepted Answer

A)  output declines. 
B)  the price level falls. 
C)  output rises. 
D)  deflation occurs. 
A)  output declines. 
B)  the price level falls. 
C)  output rises. 
D)  deflation occurs.

Question 8

Keynesian economics stressed:

Accepted Answer

A)  the importance of total spending. 
B)  the self-correcting power of free markets. 
C)  the long run. 
D)  that the Depression should run its course to bring down the high cost of living. 
A)  the importance of total spending. 
B)  the self-correcting power of free markets. 
C)  the long run. 
D)  that the Depression should run its course to bring down the high cost of living.

Question 9

Long-run growth is the:

Accepted Answer

A)  sustained upward trend in aggregate output per person over several decades. 
B)  expansion phase of business cycles. 
C)  downturn phase of business cycles. 
D)  sustained downward trend in the employment rate over several decades. 
A)  sustained upward trend in aggregate output per person over several decades. 
B)  expansion phase of business cycles. 
C)  downturn phase of business cycles. 
D)  sustained downward trend in the employment rate over several decades.

Question 10

Choose the best answer. The purpose of macroeconomic policy is to:

Accepted Answer

A)  bring unemployment closer to the natural rate. 
B)  reduce the severity of recessions. 
C)  rein in excessively strong expansions. 
D)  bring unemployment closer to the natural rate, rein in excessively strong expansions, and reduce the severity of recessions. 
A)  bring unemployment closer to the natural rate. 
B)  reduce the severity of recessions. 
C)  rein in excessively strong expansions. 
D)  bring unemployment closer to the natural rate, rein in excessively strong expansions, and reduce the severity of recessions.

Question 11

The sequence of business cycle phases is:

Accepted Answer

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

Question 12

Long-run growth is the sustained upward trend in:

Accepted Answer

A)  aggregate output per person over several decades. 
B)  the unemployment rate over time. 
C)  interest rates over time. 
D)  aggregate output per person over the business cycle. 
A)  aggregate output per person over several decades. 
B)  the unemployment rate over time. 
C)  interest rates over time. 
D)  aggregate output per person over the business cycle.

Question 13

Fiscal policy attempts to affect the level of overall spending by making changes in:

Accepted Answer

A)  the interest rate. 
B)  the money supply. 
C)  banking regulations. 
D)  taxes and spending. 
A)  the interest rate. 
B)  the money supply. 
C)  banking regulations. 
D)  taxes and spending.

Question 14

The central mission of modern macroeconomics is to prevent:

Accepted Answer

A)  shortages. 
B)  surpluses. 
C)  high gas prices. 
D)  a deep recession like the Great Depression. 
A)  shortages. 
B)  surpluses. 
C)  high gas prices. 
D)  a deep recession like the Great Depression.

Question 15

One role of government policy is to:

Accepted Answer

A)  provide insurance to cover damages from macroeconomic fluctuations. 
B)  attempt to manage short-run macroeconomic fluctuations. 
C)  subsidize private insurance for businesses to cover harm from macroeconomic fluctuations. 
D)  avoid Keynesian economics. 
A)  provide insurance to cover damages from macroeconomic fluctuations. 
B)  attempt to manage short-run macroeconomic fluctuations. 
C)  subsidize private insurance for businesses to cover harm from macroeconomic fluctuations. 
D)  avoid Keynesian economics.

Question 16

Which is a microeconomic question, rather than a macroeconomic question?

Accepted Answer

A)  Will a decrease in the income tax rate lift the nation out of a recession? 
B)  Will an increase in consumer spending cause inflation? 
C)  Will a decrease in the income tax rate lead to a government budget deficit? 
D)  Will an increase in the cigarette tax reduce the number of packs sold? 
A)  Will a decrease in the income tax rate lift the nation out of a recession? 
B)  Will an increase in consumer spending cause inflation? 
C)  Will a decrease in the income tax rate lead to a government budget deficit? 
D)  Will an increase in the cigarette tax reduce the number of packs sold?

Question 17

Macroeconomics entails the study of the:

Accepted Answer

A)  overall behavior of the economy. 
B)  individual decision makers. 
C)  market structures. 
D)  cost and production decisions by firms. 
A)  overall behavior of the economy. 
B)  individual decision makers. 
C)  market structures. 
D)  cost and production decisions by firms.

Question 18

Which question is the MOST appropriate to the study of MICROECONOMICS?

Accepted Answer

A)  How does the aggregate price level affect consumer spending? 
B)  How does the level of interest rates affect investment spending? 
C)  How much will Sony charge for the new game system to be introduced later this year? 
D)  How does the GDP affect overall government spending? 
A)  How does the aggregate price level affect consumer spending? 
B)  How does the level of interest rates affect investment spending? 
C)  How much will Sony charge for the new game system to be introduced later this year? 
D)  How does the GDP affect overall government spending?

Question 19

According to official statistics for the United States, since the Great Depression:

Accepted Answer

A)  economists are confident that the business cycle has been tamed. 
B)  the economy has constantly had positive real GDP growth rates. 
C)  the economy had longer recessions than expansions only during the 1960s and 1990s. 
D)  the economy has not had another severe and prolonged economic downturn comparable to it. 
A)  economists are confident that the business cycle has been tamed. 
B)  the economy has constantly had positive real GDP growth rates. 
C)  the economy had longer recessions than expansions only during the 1960s and 1990s. 
D)  the economy has not had another severe and prolonged economic downturn comparable to it.

Question 20

Use of monetary policy entails changes in:

Accepted Answer

A)  government spending. 
B)  tax receipts. 
C)  the quantity of money. 
D)  tax rates. 
A)  government spending. 
B)  tax receipts. 
C)  the quantity of money. 
D)  tax rates.

Which one of the following measures long-run economic growth?

A country's real gross domestic product (GDP), undergoes periodic fluctuations called a(n):

The topics studied in macroeconomics include:

An economic expansion in the United States is typically associated with a(n):

The most painful effect of a recession is:

Monetary and fiscal policy are tools to reduce the severity of recessions.

An expansion is a period in which:

Keynesian economics stressed:

Long-run growth is the:

Choose the best answer. The purpose of macroeconomic policy is to:

The sequence of business cycle phases is:

Long-run growth is the sustained upward trend in:

Fiscal policy attempts to affect the level of overall spending by making changes in:

The central mission of modern macroeconomics is to prevent:

One role of government policy is to:

Which is a microeconomic question, rather than a macroeconomic question?

Macroeconomics entails the study of the:

Which question is the MOST appropriate to the study of MICROECONOMICS?

According to official statistics for the United States, since the Great Depression:

Use of monetary policy entails changes in:

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

Which one of the following measures long-run economic growth?

A country's real gross domestic product (GDP), undergoes periodic fluctuations called a(n):

The topics studied in macroeconomics include:

An economic expansion in the United States is typically associated with a(n):

The most painful effect of a recession is:

Monetary and fiscal policy are tools to reduce the severity of recessions.

An expansion is a period in which:

Keynesian economics stressed:

Long-run growth is the:

Choose the best answer. The purpose of macroeconomic policy is to:

The sequence of business cycle phases is:

Long-run growth is the sustained upward trend in:

Fiscal policy attempts to affect the level of overall spending by making changes in:

The central mission of modern macroeconomics is to prevent:

One role of government policy is to:

Which is a microeconomic question, rather than a macroeconomic question?

Macroeconomics entails the study of the:

Which question is the MOST appropriate to the study of MICROECONOMICS?

According to official statistics for the United States, since the Great Depression:

Use of monetary policy entails changes in:

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