Question 1

Macroeconomists think that

Accepted Answer

A)  most questions about individual markets are more important than the overall economy. 
B)  questions of overall unemployment are less important than the jobs of particular workers. 
C)  the details of resource allocation and individual market prices are less important than the amount of national output. 
D)  the causes of unemployment usually lie with the personalities of individual workers. 
E)  the price of particular products is more important than the overall price level. 
A)  most questions about individual markets are more important than the overall economy. 
B)  questions of overall unemployment are less important than the jobs of particular workers. 
C)  the details of resource allocation and individual market prices are less important than the amount of national output. 
D)  the causes of unemployment usually lie with the personalities of individual workers. 
E)  the price of particular products is more important than the overall price level.

Question 2

The first year of the Bush administration in 2001 could be represented as a(n)

Accepted Answer

A)  increase in the aggregate demand curve. 
B)  decrease in the aggregate demand curve. 
C)  increase in the aggregate supply curve. 
D)  decrease in the aggregate supply curve. 
A)  increase in the aggregate demand curve. 
B)  decrease in the aggregate demand curve. 
C)  increase in the aggregate supply curve. 
D)  decrease in the aggregate supply curve.

Question 3

John Maynard Keynes wrote that economies can suffer recession or depression for many years if the government does not intervene.

Accepted Answer

A) True 
 B)False

Question 4

Nominal GDP is calculated by using

Accepted Answer

A)  prices set in a base year. 
B)  average prices in all major cities. 
C)  current prices 
D)  prices charged by initial producers. 
A)  prices set in a base year. 
B)  average prices in all major cities. 
C)  current prices 
D)  prices charged by initial producers.

Question 5

If the government uses stabilization policies to reduce inflation,the economy may have to suffer

Accepted Answer

A)  higher rates of real GDP growth. 
B)  higher rates of unemployment. 
C)  lower rates of unemployment. 
D)  higher rates of price level growth. 
A)  higher rates of real GDP growth. 
B)  higher rates of unemployment. 
C)  lower rates of unemployment. 
D)  higher rates of price level growth.

Question 6

Nominal GDP is another term for

Accepted Answer

A)  current dollar GDP. 
B)  constant dollar GDP. 
C)  adjusted dollar GDP. 
D)  relative value GDP. 
A)  current dollar GDP. 
B)  constant dollar GDP. 
C)  adjusted dollar GDP. 
D)  relative value GDP.

Question 7

The main reason that President Clinton was forced to revise his campaign promise to cut taxes was that,in 1993,he faced a large

Accepted Answer

A)  balance of payments surplus. 
B)  balance of payments deficit. 
C)  federal budget deficit. 
D)  federal budget surplus. 
A)  balance of payments surplus. 
B)  balance of payments deficit. 
C)  federal budget deficit. 
D)  federal budget surplus.

Question 8

Economic aggregates are not observable in the "real world."

Accepted Answer

A) True 
 B)False

Question 9

To fight inflation,the government may

Accepted Answer

A)  decrease aggregate demand, which will also lead to lower unemployment rates. 
B)  increase aggregate demand, which will also lead to lower unemployment rates. 
C)  increase aggregate demand, which will also lead to higher unemployment rates. 
D)  decrease aggregate demand, which will also lead to higher unemployment rates. 
A)  decrease aggregate demand, which will also lead to lower unemployment rates. 
B)  increase aggregate demand, which will also lead to lower unemployment rates. 
C)  increase aggregate demand, which will also lead to higher unemployment rates. 
D)  decrease aggregate demand, which will also lead to higher unemployment rates.

Question 10

What is Gross Domestic Product? What is included in this statistic? What is excluded? Give two examples of goods or services that are included in GDP and two examples of goods or services that are excluded.

Accepted Answer

Gross Domestic Product is an aggregate a

Question 11

The primary benefit to the macroeconomy of increasing government spending is a(n)

Accepted Answer

A)  decrease in the price level. 
B)  decrease in real GDP. 
C)  increase in the price level. 
D)  decrease in the unemployment rate. 
A)  decrease in the price level. 
B)  decrease in real GDP. 
C)  increase in the price level. 
D)  decrease in the unemployment rate.

Question 12

The Italian government collects a smaller amount of the taxes it is owed than the U.S.government.Other things being equal,

Accepted Answer

A)  U.S. and Italian GDP should be equal. 
B)  U.S. GDP should be higher than Italian GDP. 
C)  U.S. GDP should be lower than Italian GDP. 
D)  U.S. residents are better off than Italian residents. 
A)  U.S. and Italian GDP should be equal. 
B)  U.S. GDP should be higher than Italian GDP. 
C)  U.S. GDP should be lower than Italian GDP. 
D)  U.S. residents are better off than Italian residents.

Question 13

If aggregate demand shifts inward over a long period of time,with aggregate supply held constant,the economy should experience

Accepted Answer

A)  unemployment. 
B)  recession. 
C)  stagflation. 
D)  inflation. 
E)  budget surpluses. 
A)  unemployment. 
B)  recession. 
C)  stagflation. 
D)  inflation. 
E)  budget surpluses.

Question 14

Recessions

Accepted Answer

A)  almost never occur in the American economy. 
B)  follow a regular and predictable cycle. 
C)  are common features of the American economy. 
D)  have been abolished by wise macroeconomic policy. 
A)  almost never occur in the American economy. 
B)  follow a regular and predictable cycle. 
C)  are common features of the American economy. 
D)  have been abolished by wise macroeconomic policy.

Question 15

If the prices of all goods and services rise during the year,

Accepted Answer

A)  real GDP may fall. 
B)  nominal GDP must rise. 
C)  nominal GDP may increase. 
D)  real GDP must rise. 
A)  real GDP may fall. 
B)  nominal GDP must rise. 
C)  nominal GDP may increase. 
D)  real GDP must rise.

Question 16

Figure 5-2
  
-In Figure 5-2,if the aggregate demand curve moves to the right less rapidly than the aggregate supply curve,then

Accepted Answer

A)  the price level should decline over time. 
B)  the price level should remain stable. 
C)  the price level will tend to increase. 
D)  the level of real GDP should decrease. 
A)  the price level should decline over time. 
B)  the price level should remain stable. 
C)  the price level will tend to increase. 
D)  the level of real GDP should decrease.

Question 17

Inflation refers to an increase in the

Accepted Answer

A)  price level. 
B)  rate of inflation. 
C)  total income. 
D)  real GDP. 
A)  price level. 
B)  rate of inflation. 
C)  total income. 
D)  real GDP.

Question 18

The basic organizing framework for both microeconomic and macroeconomic models is

Accepted Answer

A)  purely competitive markets. 
B)  government planning of the economy. 
C)  demand and supply. 
D)  democratic socialism. 
E)  all of the above. 
A)  purely competitive markets. 
B)  government planning of the economy. 
C)  demand and supply. 
D)  democratic socialism. 
E)  all of the above.

Question 19

Macroeconomists are distinguished from microeconomists because macroeconomists are more interested in

Accepted Answer

A)  inflation and unemployment than in individual markets. 
B)  large corporations rather than small businesses. 
C)  inflation in the United States rather than inflation in Costa Rica. 
D)  the demand for oil rather than the demand for corn. 
A)  inflation and unemployment than in individual markets. 
B)  large corporations rather than small businesses. 
C)  inflation in the United States rather than inflation in Costa Rica. 
D)  the demand for oil rather than the demand for corn.

Question 20

The economy in the period 1950 to 1998 behaved differently than the economy in the 1870 to 1940 time period.Economists explain this difference

Accepted Answer

A)  in part because of the use of stabilization policy. 
B)  because of increases in U.S. population due to the "baby boom." 
C)  in part because of the globalization of the economy. 
D)  in part because of the use of competition policy. 
A)  in part because of the use of stabilization policy. 
B)  because of increases in U.S. population due to the "baby boom." 
C)  in part because of the globalization of the economy. 
D)  in part because of the use of competition policy.

Macroeconomists think that

The first year of the Bush administration in 2001 could be represented as a(n)

John Maynard Keynes wrote that economies can suffer recession or depression for many years if the government does not intervene.

Nominal GDP is calculated by using

If the government uses stabilization policies to reduce inflation,the economy may have to suffer

Nominal GDP is another term for

The main reason that President Clinton was forced to revise his campaign promise to cut taxes was that,in 1993,he faced a large

Economic aggregates are not observable in the "real world."

To fight inflation,the government may

What is Gross Domestic Product? What is included in this statistic? What is excluded? Give two examples of goods or services that are included in GDP and two examples of goods or services that are excluded.

The primary benefit to the macroeconomy of increasing government spending is a(n)

The Italian government collects a smaller amount of the taxes it is owed than the U.S.government.Other things being equal,

If aggregate demand shifts inward over a long period of time,with aggregate supply held constant,the economy should experience

Recessions

If the prices of all goods and services rise during the year,

Figure 5-2 -In Figure 5-2,if the aggregate demand curve moves to the right less rapidly than the aggregate supply curve,then

Inflation refers to an increase in the

The basic organizing framework for both microeconomic and macroeconomic models is

Macroeconomists are distinguished from microeconomists because macroeconomists are more interested in

The economy in the period 1950 to 1998 behaved differently than the economy in the 1870 to 1940 time period.Economists explain this difference

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

The Goals of Macroeconomic Policy

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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Exam 5: An Introduction to Macroeconomics

Macroeconomists think that

The first year of the Bush administration in 2001 could be represented as a(n)

John Maynard Keynes wrote that economies can suffer recession or depression for many years if the government does not intervene.

Nominal GDP is calculated by using

If the government uses stabilization policies to reduce inflation,the economy may have to suffer

Nominal GDP is another term for

The main reason that President Clinton was forced to revise his campaign promise to cut taxes was that,in 1993,he faced a large

Economic aggregates are not observable in the "real world."

To fight inflation,the government may

What is Gross Domestic Product? What is included in this statistic? What is excluded? Give two examples of goods or services that are included in GDP and two examples of goods or services that are excluded.

The primary benefit to the macroeconomy of increasing government spending is a(n)

The Italian government collects a smaller amount of the taxes it is owed than the U.S.government.Other things being equal,

If aggregate demand shifts inward over a long period of time,with aggregate supply held constant,the economy should experience

Recessions

If the prices of all goods and services rise during the year,

Figure 5-2 -In Figure 5-2,if the aggregate demand curve moves to the right less rapidly than the aggregate supply curve,then

Inflation refers to an increase in the

The basic organizing framework for both microeconomic and macroeconomic models is

Macroeconomists are distinguished from microeconomists because macroeconomists are more interested in

The economy in the period 1950 to 1998 behaved differently than the economy in the 1870 to 1940 time period.Economists explain this difference

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

The Goals of Macroeconomic Policy

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

Filters