Question 1

Which of these signifies the role of money in an economy?

Accepted Answer

A)  It acts as a tool for poverty alleviation in the economy. 
B)  It serves as a medium of exchange in the economy. 
C)  It indicates the economic wellbeing of a nation. 
D)  It helps differentiate between the nominal and real income of a nation. 
E)  It is a clear indicator of the growth in national income. 
A)  It acts as a tool for poverty alleviation in the economy. 
B)  It serves as a medium of exchange in the economy. 
C)  It indicates the economic wellbeing of a nation. 
D)  It helps differentiate between the nominal and real income of a nation. 
E)  It is a clear indicator of the growth in national income.

Question 2

Which of these changes was observed in the United States between 1929 and 1933?

Accepted Answer

A)  The aggregate supply curve shifted inward with no change in the aggregate demand curve. 
B)  The aggregate demand curve shifted inward with no change in the aggregate supply curve. 
C)  The aggregate demand curve shifted outward with no change in the aggregate supply curve. 
D)  The aggregate supply curve shifted outward with no change in the aggregate demand curve. 
E)  The aggregate supply and demand curves both shifted outward. 
A)  The aggregate supply curve shifted inward with no change in the aggregate demand curve. 
B)  The aggregate demand curve shifted inward with no change in the aggregate supply curve. 
C)  The aggregate demand curve shifted outward with no change in the aggregate supply curve. 
D)  The aggregate supply curve shifted outward with no change in the aggregate demand curve. 
E)  The aggregate supply and demand curves both shifted outward.

Question 3

How is GDP calculated?

Accepted Answer

A)  by adding up the production of all goods and services in the economy 
B)  by adding up the cost of all goods and services in the economy 
C)  by adding up the quantity of all goods and services in the economy 
D)  by measuring the economy's price level during a particular year 
E)  by subtracting the value of all goods and services produced by the government and the value of those produced by the private sector 
A)  by adding up the production of all goods and services in the economy 
B)  by adding up the cost of all goods and services in the economy 
C)  by adding up the quantity of all goods and services in the economy 
D)  by measuring the economy's price level during a particular year 
E)  by subtracting the value of all goods and services produced by the government and the value of those produced by the private sector

Question 4

A recession is best defined as a period during which _____

Accepted Answer

A)  the percentage of the population employed increases. 
B)  employment, output, and income decrease. 
C)  the money supply in an economy decreases. 
D)  the usage of labor and capital resources increases. 
E)  budget deficit and trade deficit decrease. 
A)  the percentage of the population employed increases. 
B)  employment, output, and income decrease. 
C)  the money supply in an economy decreases. 
D)  the usage of labor and capital resources increases. 
E)  budget deficit and trade deficit decrease.

Question 5

Stagflation is a situation with high unemployment rates, high inflation rates, and little or no growth in the economy.

Accepted Answer

A) True 
 B)False

Question 6

The objective of macroeconomics is to _____

Accepted Answer

A)  study the effect of tariffs and quotas on the production of goods and services. 
B)  analyze the role of government in the political system of a country. 
C)  develop and test theories about how the overall economy works. 
D)  improve the competitiveness of U.S. firms. 
E)  understand the different costs associated with production. 
A)  study the effect of tariffs and quotas on the production of goods and services. 
B)  analyze the role of government in the political system of a country. 
C)  develop and test theories about how the overall economy works. 
D)  improve the competitiveness of U.S. firms. 
E)  understand the different costs associated with production.

Question 7

Which of the following economic measures is most useful in comparing different economies across the world?

Accepted Answer

A)  aggregate supply 
B)  total unemployment 
C)  gross domestic product 
D)  net national product 
E)  aggregate expenditure 
A)  aggregate supply 
B)  total unemployment 
C)  gross domestic product 
D)  net national product 
E)  aggregate expenditure

Question 8

Most countries usually allow people and goods to move more freely _____ their borders than _____ their borders.

Accepted Answer

A)  across; within 
B)  within; across 
C)  outside; across 
D)  outside; within 
E)  around;within 
A)  across; within 
B)  within; across 
C)  outside; across 
D)  outside; within 
E)  around;within

Question 9

Which of these is most likely to result when a demand-management policy is used in an economy that is experiencing stagflation?

Accepted Answer

A)  a decrease in investment spending 
B)  an increase in the rate of inflation 
C)  an increase in unemployment 
D)  a decrease in the rate of inflation 
E)  a decrease in real GDP 
A)  a decrease in investment spending 
B)  an increase in the rate of inflation 
C)  an increase in unemployment 
D)  a decrease in the rate of inflation 
E)  a decrease in real GDP

Question 10

Keynes believed that the best method for tackling recessions was to reduce government spending and raise taxes, thereby reducing the federal budget deficit.

Accepted Answer

A) True 
 B)False

Question 11

What does real GDP measure?

Accepted Answer

A)  the change in real output 
B)  the change in the amount of goods and services sold 
C)  the economy's price level changes over time 
D)  trends in the business cycle 
E)  the dollar value of all production 
A)  the change in real output 
B)  the change in the amount of goods and services sold 
C)  the economy's price level changes over time 
D)  trends in the business cycle 
E)  the dollar value of all production

Question 12

Which of the following statements regarding the U.S. economy is correct?

Accepted Answer

A)  The economy, unlike the body, does not renew itself. 
B)  Decision makers are not connected with the economy as a whole. 
C)  Money circulates throughout the economy. 
D)  Policy makers rarely need to know how a healthy economy works. 
E)  Macroeconomists have the ability to run economy-wide experiments. 
A)  The economy, unlike the body, does not renew itself. 
B)  Decision makers are not connected with the economy as a whole. 
C)  Money circulates throughout the economy. 
D)  Policy makers rarely need to know how a healthy economy works. 
E)  Macroeconomists have the ability to run economy-wide experiments.

Question 13

The mercantilism policy failed to generate gains from trade for countries that adopted it because of _____

Accepted Answer

A)  increases in consumer spending. 
B)  high levels of federal debt. 
C)  supply-side shocks from oil-exporting countries. 
D)  runaway inflation in the United States. 
E)  retaliations from other countries. 
A)  increases in consumer spending. 
B)  high levels of federal debt. 
C)  supply-side shocks from oil-exporting countries. 
D)  runaway inflation in the United States. 
E)  retaliations from other countries.

Question 14

When did the longest contraction on record occur?

Accepted Answer

A)  between 1873 and 1879 
B)  during the Great Depression 
C)  during the Great Recession 
D)  during the 1930s 
E)  during the early 1970s 
A)  between 1873 and 1879 
B)  during the Great Depression 
C)  during the Great Recession 
D)  during the 1930s 
E)  during the early 1970s

Question 15

An increase in government spending, other things constant, will cause a _____

Accepted Answer

A)  leftward shift of the aggregate supply curve. 
B)  rightward shift of the aggregate supply curve. 
C)  leftward shift of the aggregate demand curve. 
D)  rightward shift of the aggregate demand curve. 
E)  downward movement along the aggregate supply curve. 
A)  leftward shift of the aggregate supply curve. 
B)  rightward shift of the aggregate supply curve. 
C)  leftward shift of the aggregate demand curve. 
D)  rightward shift of the aggregate demand curve. 
E)  downward movement along the aggregate supply curve.

Question 16

A fall in the price level will _____

Accepted Answer

A)  cause an upward movement along the aggregate demand curve. 
B)  cause a downward movement along the aggregate demand curve. 
C)  cause a leftward shift of the aggregate demand curve. 
D)  cause a rightward shift of the aggregate demand curve. 
E)  have no impact on the aggregate demand curve. 
A)  cause an upward movement along the aggregate demand curve. 
B)  cause a downward movement along the aggregate demand curve. 
C)  cause a leftward shift of the aggregate demand curve. 
D)  cause a rightward shift of the aggregate demand curve. 
E)  have no impact on the aggregate demand curve.

Question 17

Which of the following is a flow variable?

Accepted Answer

A)  price level 
B)  U.S. population 
C)  money supply 
D)  investment spending 
E)  household debt 
A)  price level 
B)  U.S. population 
C)  money supply 
D)  investment spending 
E)  household debt

Question 18

Which of the following variables is measured only at a particular point in time and not over different time periods?

Accepted Answer

A)  the unemployment rate 
B)  consumer income 
C)  the federal government's debt 
D)  the federal government's budget deficit 
E)  total expenditure 
A)  the unemployment rate 
B)  consumer income 
C)  the federal government's debt 
D)  the federal government's budget deficit 
E)  total expenditure

Question 19

An example of a flow variable in economics is _____

Accepted Answer

A)  the total amount of bank loan taken by Emily. 
B)  the value of an apartment owned by Jerome. 
C)  the price of an antique painting used to decorate an office. 
D)  the earnings of Malaya from teaching piano classes each month. 
E)  the total value of the U.S. treasury bonds held by China. 
A)  the total amount of bank loan taken by Emily. 
B)  the value of an apartment owned by Jerome. 
C)  the price of an antique painting used to decorate an office. 
D)  the earnings of Malaya from teaching piano classes each month. 
E)  the total value of the U.S. treasury bonds held by China.

Question 20

A period of decline in economic activity lasting more than a few months is a(n) _____

Accepted Answer

A)  expansion. 
B)  contraction. 
C)  depression. 
D)  recession. 
E)  fluctuation. 
A)  expansion. 
B)  contraction. 
C)  depression. 
D)  recession. 
E)  fluctuation.

Which of these signifies the role of money in an economy?

Which of these changes was observed in the United States between 1929 and 1933?

How is GDP calculated?

A recession is best defined as a period during which _____

Stagflation is a situation with high unemployment rates, high inflation rates, and little or no growth in the economy.

The objective of macroeconomics is to _____

Which of the following economic measures is most useful in comparing different economies across the world?

Most countries usually allow people and goods to move more freely _ their borders than _ their borders.

Which of these is most likely to result when a demand-management policy is used in an economy that is experiencing stagflation?

Keynes believed that the best method for tackling recessions was to reduce government spending and raise taxes, thereby reducing the federal budget deficit.

What does real GDP measure?

Which of the following statements regarding the U.S. economy is correct?

The mercantilism policy failed to generate gains from trade for countries that adopted it because of _____

When did the longest contraction on record occur?

An increase in government spending, other things constant, will cause a _____

A fall in the price level will _____

Which of the following is a flow variable?

Which of the following variables is measured only at a particular point in time and not over different time periods?

An example of a flow variable in economics is _____

A period of decline in economic activity lasting more than a few months is a(n) _____

The Art and Science of Economic Analysis.

Economic Tools and Economic Systems.

Economic Decision Makers.

Demand, Supply, and Markets.

Tracking the U. S. Economy.

Unemployment and Inflation.

Productivity and Growth.

Aggregate Demand.

Aggregate Supply.

Fiscal Policy.

Federal Budgets and Public Policy.

Money and the Financial System.

Banking and the Money Supply.

Monetary Theory and Policy.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

Filters

Exam 5: Introduction to Macroeconomics.

Which of these signifies the role of money in an economy?

Which of these changes was observed in the United States between 1929 and 1933?

How is GDP calculated?

A recession is best defined as a period during which _____

Stagflation is a situation with high unemployment rates, high inflation rates, and little or no growth in the economy.

The objective of macroeconomics is to _____

Which of the following economic measures is most useful in comparing different economies across the world?

Most countries usually allow people and goods to move more freely _____ their borders than _____ their borders.

Which of these is most likely to result when a demand-management policy is used in an economy that is experiencing stagflation?

Keynes believed that the best method for tackling recessions was to reduce government spending and raise taxes, thereby reducing the federal budget deficit.

What does real GDP measure?

Which of the following statements regarding the U.S. economy is correct?

The mercantilism policy failed to generate gains from trade for countries that adopted it because of _____

When did the longest contraction on record occur?

An increase in government spending, other things constant, will cause a _____

A fall in the price level will _____

Which of the following is a flow variable?

Which of the following variables is measured only at a particular point in time and not over different time periods?

An example of a flow variable in economics is _____

A period of decline in economic activity lasting more than a few months is a(n) _____

The Art and Science of Economic Analysis.

Economic Tools and Economic Systems.

Economic Decision Makers.

Demand, Supply, and Markets.

Tracking the U. S. Economy.

Unemployment and Inflation.

Productivity and Growth.

Aggregate Demand.

Aggregate Supply.

Fiscal Policy.

Federal Budgets and Public Policy.

Money and the Financial System.

Banking and the Money Supply.

Monetary Theory and Policy.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

Filters

Most countries usually allow people and goods to move more freely _ their borders than _ their borders.