Question 1

Low inflation rates and high inflation rates impose different costs on society.

Accepted Answer

A) True 
 B)False

Question 2

The economic benefits of owning a home are greater when home prices are

Accepted Answer

A)  falling and interest rates are high. 
B)  rising and interest rates are low. 
C)  rising and interest rates are high. 
D)  falling and interest rates are low. 
A)  falling and interest rates are high. 
B)  rising and interest rates are low. 
C)  rising and interest rates are high. 
D)  falling and interest rates are low.

Question 3

Saving is often discouraged by usury laws during inflationary periods because

Accepted Answer

A)  nominal rates of interest are kept above real rates of interest. 
B)  nominal rates of interest are kept below inflation rates. 
C)  nominal rates of interest are kept above inflation rates. 
D)  real rates of interest are kept above inflation rates. 
A)  nominal rates of interest are kept above real rates of interest. 
B)  nominal rates of interest are kept below inflation rates. 
C)  nominal rates of interest are kept above inflation rates. 
D)  real rates of interest are kept above inflation rates.

Question 4

In the analysis of potential GDP, labor and capital are considered

Accepted Answer

A)  inputs. 
B)  final goods and services. 
C)  byproducts of economic growth. 
D)  outputs. 
A)  inputs. 
B)  final goods and services. 
C)  byproducts of economic growth. 
D)  outputs.

Question 5

The nominal interest rate is the sum of the

Accepted Answer

A)  real interest rate and the historic rate of inflation. 
B)  real interest rate and the expected rate of inflation. 
C)  historic rate of inflation and the expected rate of inflation. 
D)  expected rate of inflation and the rate of price level increase. 
A)  real interest rate and the historic rate of inflation. 
B)  real interest rate and the expected rate of inflation. 
C)  historic rate of inflation and the expected rate of inflation. 
D)  expected rate of inflation and the rate of price level increase.

Question 6

Inflation often bestows unearned income on

Accepted Answer

A)  homeowners. 
B)  lenders. 
C)  creditors. 
D)  fixed income receivers. 
A)  homeowners. 
B)  lenders. 
C)  creditors. 
D)  fixed income receivers.

Question 7

One basic way to boost the nation's growth rate is to

Accepted Answer

A)  increase wages paid to labor. 
B)  slow the rate of technical progress. 
C)  reduce the population growth rate. 
D)  accumulate more capital 
A)  increase wages paid to labor. 
B)  slow the rate of technical progress. 
C)  reduce the population growth rate. 
D)  accumulate more capital

Question 8

GDP equals hours of work times

Accepted Answer

A)  labor force. 
B)  output per hour. 
C)  population. 
D)  capital stock. 
A)  labor force. 
B)  output per hour. 
C)  population. 
D)  capital stock.

Question 9

In 2009 the average unemployment rate in U.S.averaged

Accepted Answer

A)  4.6 percent. 
B)  5.4 percent. 
C)  7.2 percent. 
D)  9.3 percent. 
A)  4.6 percent. 
B)  5.4 percent. 
C)  7.2 percent. 
D)  9.3 percent.

Question 10

Which of the following groups would be most optimistic about the effects of economic growth?

Accepted Answer

A)  Environmentalists 
B)  Psychologists 
C)  Economists 
D)  All would be similar in their views 
A)  Environmentalists 
B)  Psychologists 
C)  Economists 
D)  All would be similar in their views

Question 11

One of the social benefits of frictional unemployment is that

Accepted Answer

A)  workers get time off from work. 
B)  economic growth is limited. 
C)  workers move from less to more valuable firms. 
D)  wage rates decrease. 
A)  workers get time off from work. 
B)  economic growth is limited. 
C)  workers move from less to more valuable firms. 
D)  wage rates decrease.

Question 12

Someone unemployed for a long period of time due to technological change would be described as structurally unemployed.

Accepted Answer

A) True 
 B)False

Question 13

One of the determinants of real GDP is output per hour of labor.This statistic is called labor

Accepted Answer

A)  force growth. 
B)  productivity. 
C)  force participation. 
D)  force input. 
A)  force growth. 
B)  productivity. 
C)  force participation. 
D)  force input.

Question 14

Are there key differences between an increase in the capital stock and an improvement in the level of technology?

Accepted Answer

There is no significant difference to an

Question 15

As capital goods depreciate, the growth of labor productivity will increase.

Accepted Answer

A) True 
 B)False

Question 16

During inflationary periods

Accepted Answer

A)  the real value of money rises. 
B)  the real value of money remains constant. 
C)  the real value of money falls. 
D)  the purchasing power of money rises. 
A)  the real value of money rises. 
B)  the real value of money remains constant. 
C)  the real value of money falls. 
D)  the purchasing power of money rises.

Question 17

Labor productivity times hours of work equals

Accepted Answer

A)  per capita GDP. 
B)  capital stock. 
C)  population. 
D)  GDP. 
A)  per capita GDP. 
B)  capital stock. 
C)  population. 
D)  GDP.

Question 18

The growth rate of potential GDP is the sum of the growth rates of

Accepted Answer

A)  labor force and population. 
B)  labor force and labor productivity. 
C)  labor force and capital stock. 
D)  labor productivity and capital stock. 
A)  labor force and population. 
B)  labor force and labor productivity. 
C)  labor force and capital stock. 
D)  labor productivity and capital stock.

Question 19

Small differences in economic growth rates translate into significant differences in living standards.

Accepted Answer

A) True 
 B)False

Question 20

During inflationary periods

Accepted Answer

A)  all prices rise at the rate of inflation. 
B)  real wages must necessarily decline. 
C)  some prices may fall. 
D)  relative prices do not change. 
A)  all prices rise at the rate of inflation. 
B)  real wages must necessarily decline. 
C)  some prices may fall. 
D)  relative prices do not change.

Exam 23: The Goals of Macroeconomic Policy

Low inflation rates and high inflation rates impose different costs on society.

The economic benefits of owning a home are greater when home prices are

Saving is often discouraged by usury laws during inflationary periods because

In the analysis of potential GDP, labor and capital are considered

The nominal interest rate is the sum of the

Inflation often bestows unearned income on

One basic way to boost the nation's growth rate is to

GDP equals hours of work times

In 2009 the average unemployment rate in U.S.averaged

Which of the following groups would be most optimistic about the effects of economic growth?

One of the social benefits of frictional unemployment is that

Someone unemployed for a long period of time due to technological change would be described as structurally unemployed.

One of the determinants of real GDP is output per hour of labor.This statistic is called labor

Are there key differences between an increase in the capital stock and an improvement in the level of technology?

As capital goods depreciate, the growth of labor productivity will increase.

During inflationary periods

Labor productivity times hours of work equals

The growth rate of potential GDP is the sum of the growth rates of

Small differences in economic growth rates translate into significant differences in living standards.

During inflationary periods

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: The Importance of Marginal Analysis

Securities: Business Finance, and the Economy: The Tail that Wags the Dog?

The Firm and the Industry under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets I: The Price System

The Shortcomings of Free Markets

The Market's Prime Achievement: Innovation and Growth

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: The Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

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