Question 1

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 2

Distinguish between real rate of interest and nominal rate of interest.

Accepted Answer

The real rate of interest is the percent

Question 3

If 10 years ago, the price of a movie ticket was $5 and the average hourly wage was $10, and today the price of a movie ticket is $8 and the average hourly wage is $20, then

Accepted Answer

A) movies are now relatively cheaper in terms of work hours. 
B) movies are now relatively more expensive in terms of work hours. 
C) the relative price of movies has remained constant. 
D) workers now need to work longer hours to earn one movie ticket. 
A) movies are now relatively cheaper in terms of work hours. 
B) movies are now relatively more expensive in terms of work hours. 
C) the relative price of movies has remained constant. 
D) workers now need to work longer hours to earn one movie ticket.

Question 4

Some economists believe that one of the following improvements in the tax code could lead to more technological progress.

Accepted Answer

A) A tax on nominal rather than real capital gains 
B) A tax on real rather than nominal capital gains 
C) A tax on capital rather than labor 
D) investment A tax on labor rather than capital 
A) A tax on nominal rather than real capital gains 
B) A tax on real rather than nominal capital gains 
C) A tax on capital rather than labor 
D) investment A tax on labor rather than capital

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

An increase in the capital stock would be expected to

Accepted Answer

A) decrease the labor force. 
B) increase the level of output. 
C) decrease real GDP per capita. 
D) increase real GDP per capita. 
A) decrease the labor force. 
B) increase the level of output. 
C) decrease real GDP per capita. 
D) increase real GDP per capita.

Question 7

Taxes on capital gains and interest decline as inflation rates increase.

Accepted Answer

A) True 
 B)False

Question 8

The program of unemployment insurance in the United States was created during the

Accepted Answer

A) Great Depression. 
B) Reagan recession. 
C) Kennedy administration. 
D) Great Society. 
A) Great Depression. 
B) Reagan recession. 
C) Kennedy administration. 
D) Great Society.

Question 9

A nation's standard of living depends on its population and labor productivity.

Accepted Answer

A) True 
 B)False

Question 10

Unemployment insurance is a part of

Accepted Answer

A) stabilization policy. 
B) growth policy. 
C) right to work laws. 
D) social security. 
A) stabilization policy. 
B) growth policy. 
C) right to work laws. 
D) social security.

Question 11

Potential GDP is an estimate of the economy's ability to produce goods and services if the

Accepted Answer

A) labor force is fully employed. 
B) price level is stable. 
C) trade balance is zero. 
D) federal budget is balanced. 
A) labor force is fully employed. 
B) price level is stable. 
C) trade balance is zero. 
D) federal budget is balanced.

Question 12

The federal government collects taxes on

Accepted Answer

A) real capital gains. 
B) nominal capital gains. 
C) real capital losses. 
D) nominal capital losses. 
A) real capital gains. 
B) nominal capital gains. 
C) real capital losses. 
D) nominal capital losses.

Question 13

How is the unemployment rate calculated? Describe the three principal types of unemployment.

Accepted Answer

The unemployment rate is a percentage ob

Question 14

Americans would probably be supportive of

Accepted Answer

A) strict controls on hours of work. 
B) limits on income potential. 
C) mandatory work limits. 
D) loose controls on economic activities. 
A) strict controls on hours of work. 
B) limits on income potential. 
C) mandatory work limits. 
D) loose controls on economic activities.

Question 15

Americans viewed the 12 percent mortgage interest rates of the 1980s as exorbitantly high while they considered the 7 percent mortgage interest rates of the late 1990s as reasonable.This represents a confusion of

Accepted Answer

A) actual and expected inflation. 
B) real versus nominal inflation. 
C) real versus expected mortgage payments. 
D) real versus nominal interest rates. 
A) actual and expected inflation. 
B) real versus nominal inflation. 
C) real versus expected mortgage payments. 
D) real versus nominal interest rates.

Question 16

The production function shows the volume of output that can be produced from given inputs.

Accepted Answer

A) True 
 B)False

Question 17

Does the existence of unemployment insurance eliminate the economic costs of unemployment?

Accepted Answer

While unemployment insurance reduces the

Question 18

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

Accepted Answer

A) Environmentalists 
B) Psychologists 
C) Economists 
D) Political Scientists 
A) Environmentalists 
B) Psychologists 
C) Economists 
D) Political Scientists

Question 19

The rate of interest written on a contract between a borrower and a lender is the

Accepted Answer

A) nominal interest rate. 
B) real interest rate. 
C) implied interest rate. 
D) expected interest rate. 
A) nominal interest rate. 
B) real interest rate. 
C) implied interest rate. 
D) expected interest rate.

Question 20

Inflation tends to redistribute real income from lenders to borrowers.

Accepted Answer

A) True 
 B)False

Exam 22: The Goals of Macroeconomic Policy

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

Distinguish between real rate of interest and nominal rate of interest.

If 10 years ago, the price of a movie ticket was $5 and the average hourly wage was $10, and today the price of a movie ticket is $8 and the average hourly wage is $20, then

Some economists believe that one of the following improvements in the tax code could lead to more technological progress.

The nominal interest rate is the sum of the

An increase in the capital stock would be expected to

Taxes on capital gains and interest decline as inflation rates increase.

The program of unemployment insurance in the United States was created during the

A nation's standard of living depends on its population and labor productivity.

Unemployment insurance is a part of

Potential GDP is an estimate of the economy's ability to produce goods and services if the

The federal government collects taxes on

How is the unemployment rate calculated? Describe the three principal types of unemployment.

Americans would probably be supportive of

Americans viewed the 12 percent mortgage interest rates of the 1980s as exorbitantly high while they considered the 7 percent mortgage interest rates of the late 1990s as reasonable.This represents a confusion of

The production function shows the volume of output that can be produced from given inputs.

Does the existence of unemployment insurance eliminate the economic costs of unemployment?

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

The rate of interest written on a contract between a borrower and a lender is the

Inflation tends to redistribute real income from lenders to borrowers.

What Is Economics

The Economony: 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

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

The Economics of 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

Contemporary Issues in the Useconomy

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