Question 1

Which of the following would decrease the total output of goods and services?

Accepted Answer

A)  Mandatory controls on production 
B)  Increases the hours of work 
C)  Increases in labor input growth 
D)  Increases in capital stock 
A)  Mandatory controls on production 
B)  Increases the hours of work 
C)  Increases in labor input growth 
D)  Increases in capital stock

Question 2

When a lender underestimates the rate of inflation,

Accepted Answer

A)  purchasing power is redistributed to the lender. 
B)  purchasing power is redistributed to the borrower. 
C)  the real rate of interest will be higher than expected. 
D)  the nominal interest rate was set too low. 
A)  purchasing power is redistributed to the lender. 
B)  purchasing power is redistributed to the borrower. 
C)  the real rate of interest will be higher than expected. 
D)  the nominal interest rate was set too low.

Question 3

Faster economic growth in the United States may lead to the serious macroeconomic problem of higher

Accepted Answer

A)  levels of unemployment. 
B)  federal budget deficits. 
C)  levels of inflation. 
D)  levels of poverty. 
A)  levels of unemployment. 
B)  federal budget deficits. 
C)  levels of inflation. 
D)  levels of poverty.

Question 4

Older Americans living on a pension and therefore on a fixed income tend to be made

Accepted Answer

A)  better off when prices rise. 
B)  better off when inflation rates rise. 
C)  worse off when prices rise. 
D)  worse off when prices fall. 
A)  better off when prices rise. 
B)  better off when inflation rates rise. 
C)  worse off when prices rise. 
D)  worse off when prices fall.

Question 5

Workers in country A receive an increase in wages of 10 percent at the same time the inflation rate in country A is 8 percent. Workers in country B receive an increase in wages of 3 percent and the inflation rate in country B is 1 percent. In which country are workers better off?

Accepted Answer

A)  Country A because their real wages rise by 18 percent. 
B)  Country A because their real wages rise by 10 percent. 
C)  Country B because the inflation rate is lower. 
D)  Neither country because the increase in real wages is the same. 
A)  Country A because their real wages rise by 18 percent. 
B)  Country A because their real wages rise by 10 percent. 
C)  Country B because the inflation rate is lower. 
D)  Neither country because the increase in real wages is the same.

Question 6

Recent research regarding increases in the Federal minimum wage shows that

Accepted Answer

A)  unemployment is only slightly affected. 
B)  the minimum wage has many benefits. 
C)  it improves labor productivity. 
D)  the unemployment rate rises. 
A)  unemployment is only slightly affected. 
B)  the minimum wage has many benefits. 
C)  it improves labor productivity. 
D)  the unemployment rate rises.

Question 7

The reduction of structural unemployment in U.S. economy may require

Accepted Answer

A)  an increase in the minimum wage. 
B)  a reduction in government spending. 
C)  a decrease in interest rates. 
D)  increased spending on worker retraining. 
A)  an increase in the minimum wage. 
B)  a reduction in government spending. 
C)  a decrease in interest rates. 
D)  increased spending on worker retraining.

Question 8

An increase in capital stock will shift the production function

Accepted Answer

A)  downward. 
B)  rightward. 
C)  upward. 
D)  outward. 
A)  downward. 
B)  rightward. 
C)  upward. 
D)  outward.

Question 9

Throughout the period from 1996 to 2010, U.S. Real GDP growth has been

Accepted Answer

A)  constant. 
B)  declining. 
C)  steadily increasing. 
D)  fluctuating. 
A)  constant. 
B)  declining. 
C)  steadily increasing. 
D)  fluctuating.

Question 10

Unemployment is not caused by

Accepted Answer

A)  drops in actual GDP. 
B)  persons looking for more suitable jobs. 
C)  inflation. 
D)  technological disruption. 
A)  drops in actual GDP. 
B)  persons looking for more suitable jobs. 
C)  inflation. 
D)  technological disruption.

Question 11

Mandatory controls on economic activity would

Accepted Answer

A)  limit economic growth possibilities. 
B)  prevent the economy from achieving potential GDP. 
C)  reduce the amount of poverty. 
D)  increase potential GDP. 
A)  limit economic growth possibilities. 
B)  prevent the economy from achieving potential GDP. 
C)  reduce the amount of poverty. 
D)  increase potential GDP.

Question 12

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 13

Changes in relative prices during inflationary periods usually lead to

Accepted Answer

A)  decreases in real income. 
B)  some people gaining real income. 
C)  increases in the purchasing power of money. 
D)  increases in real income. 
A)  decreases in real income. 
B)  some people gaining real income. 
C)  increases in the purchasing power of money. 
D)  increases in real income.

Question 14

The growth of the labor force and the growth of labor productivity help determine the rate of GDP growth.

Accepted Answer

A) True 
 B)False

Question 15

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 16

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.

Question 17

As capital goods depreciate, potential output falls.

Accepted Answer

A) True 
 B)False

Question 18

The principal benefit of unemployment insurance is that it

Accepted Answer

A)  reduces the occurrence of unemployment in the economy. 
B)  replaces income lost due to unemployment. 
C)  increases labor force participation. 
D)  helps reduce the period of unemployment. 
A)  reduces the occurrence of unemployment in the economy. 
B)  replaces income lost due to unemployment. 
C)  increases labor force participation. 
D)  helps reduce the period of unemployment.

Question 19

One of the key factors that determine an economy's real GDP is labor productivity, which is a measure of

Accepted Answer

A)  output per hour of work. 
B)  labor force per hour. 
C)  input per hour worked. 
D)  total hours worked. 
A)  output per hour of work. 
B)  labor force per hour. 
C)  input per hour worked. 
D)  total hours worked.

Question 20

To measure how productive workers in the economy are, the best measure to use would be

Accepted Answer

A)  real GDP. 
B)  GDP divided by the population. 
C)  GDP divided by the nation's capital stock. 
D)  GDP divided by hours worked. 
A)  real GDP. 
B)  GDP divided by the population. 
C)  GDP divided by the nation's capital stock. 
D)  GDP divided by hours worked.

Exam 22: The Goals of Macroeconomic Policy

Which of the following would decrease the total output of goods and services?

When a lender underestimates the rate of inflation,

Faster economic growth in the United States may lead to the serious macroeconomic problem of higher

Older Americans living on a pension and therefore on a fixed income tend to be made

Workers in country A receive an increase in wages of 10 percent at the same time the inflation rate in country A is 8 percent. Workers in country B receive an increase in wages of 3 percent and the inflation rate in country B is 1 percent. In which country are workers better off?

Recent research regarding increases in the Federal minimum wage shows that

The reduction of structural unemployment in U.S. economy may require

An increase in capital stock will shift the production function

Throughout the period from 1996 to 2010, U.S. Real GDP growth has been

Unemployment is not caused by

Mandatory controls on economic activity would

Americans would probably be supportive of

Changes in relative prices during inflationary periods usually lead to

The growth of the labor force and the growth of labor productivity help determine the rate of GDP growth.

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

During inflationary periods

As capital goods depreciate, potential output falls.

The principal benefit of unemployment insurance is that it

One of the key factors that determine an economy's real GDP is labor productivity, which is a measure of

To measure how productive workers in the economy are, the best measure to use would be

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

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 Us Economy

Filters