Question 1

An economy can increase its total output of goods and services if it

Accepted Answer

A) increases the hours of work or output per hour. 
B) increases the hours of work or decreases output per hour. 
C) decreases hours of work or decreases output per hour. 
D) decreases hours of work and decreases output per hour. 
A) increases the hours of work or output per hour. 
B) increases the hours of work or decreases output per hour. 
C) decreases hours of work or decreases output per hour. 
D) decreases hours of work and decreases output per hour. A

Question 2

During periods of high inflation, such as the 1979-1980 period, the existence of usury laws may cause

Accepted Answer

A) nominal rates of interest to be above real rates. 
B) negative nominal rates of interest. 
C) negative real rates of interest. 
D) real rates of interest to be above nominal rates. 
A) nominal rates of interest to be above real rates. 
B) negative nominal rates of interest. 
C) negative real rates of interest. 
D) real rates of interest to be above nominal rates. C

Question 3

Last year your job at the university cafeteria paid you $9 an hour and the price of a music download was $1.00.This year your cafeteria job pays $9.90 per hour and download costs $1.10.You are clearly

Accepted Answer

A) worse off because of inflation. 
B) worse off because the download is now relatively more expensive. 
C) better off because your wage rate went up. 
D) better off because the download now costs less work. 
A) worse off because of inflation. 
B) worse off because the download is now relatively more expensive. 
C) better off because your wage rate went up. 
D) better off because the download now costs less work. D

Question 4

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 5

In 2009, which of the following countries had the lowest average unemployment rates?

Accepted Answer

A) Canada 
B) France 
C) Italy 
D) Germany 
E) United States 
A) Canada 
B) France 
C) Italy 
D) Germany 
E) United States

Question 6

Gladys agrees to lend Kay $1,000 for one year at a nominal rate of interest of 5 percent.At the end of the year prices have actually risen by 7 percent.

Accepted Answer

A) Gladys earns extra real income. 
B) Kay loses extra real income. 
C) Kay receives extra real income. 
D) Neither party gains or loses if the loan is repaid. 
A) Gladys earns extra real income. 
B) Kay loses extra real income. 
C) Kay receives extra real income. 
D) Neither party gains or loses if the loan is repaid.

Question 7

Labor productivity is calculated by dividing GDP by

Accepted Answer

A) population. 
B) the price level. 
C) capital stock 
D) labor force. 
A) population. 
B) the price level. 
C) capital stock 
D) labor force.

Question 8

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 9

The main cost that low inflation imposes on an economy is that low inflation

Accepted Answer

A) inevitably leads to high inflation. 
B) distorts some economic decisions. 
C) reduces real wages. 
D) benefits lenders at the expense of borrowers. 
A) inevitably leads to high inflation. 
B) distorts some economic decisions. 
C) reduces real wages. 
D) benefits lenders at the expense of borrowers.

Question 10

People who failed to look for a job are classified as

Accepted Answer

A) unemployed. 
B) underemployed. 
C) out of the labor force. 
D) part time employed. 
A) unemployed. 
B) underemployed. 
C) out of the labor force. 
D) part time employed.

Question 11

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 12

Rachel agrees to lend Phoebe $100 for six months and charges her interest of 2 percent.At the end of the six-month period, prices have risen by 4 percent.

Accepted Answer

A) Purchasing power has been redistributed to Rachel. 
B) No purchasing power has been redistributed. 
C) Purchasing power has been redistributed to Phoebe. 
D) Both Rachel and Phoebe received extra purchasing power. 
A) Purchasing power has been redistributed to Rachel. 
B) No purchasing power has been redistributed. 
C) Purchasing power has been redistributed to Phoebe. 
D) Both Rachel and Phoebe received extra purchasing power.

Question 13

Older people often reminisce about the "good old days" when prices were much lower.This is misplaced nostalgia primarily because in the "good old days,"

Accepted Answer

A) prices were not really that low. 
B) wages were much lower also. 
C) people worked longer hours. 
D) people had more leisure time. 
A) prices were not really that low. 
B) wages were much lower also. 
C) people worked longer hours. 
D) people had more leisure time.

Question 14

The United States has never suffered through periods of hyperinflation in its history.

Accepted Answer

A) True 
 B)False

Question 15

In the United States, labor productivity is approximately

Accepted Answer

A) $73 per hour. 
B) $94 per hour. 
C) $102 per hour. 
D) $110 per hour. 
A) $73 per hour. 
B) $94 per hour. 
C) $102 per hour. 
D) $110 per hour.

Question 16

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 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

Recent research suggests that the federal minimum wage law

Accepted Answer

A) clearly causes significant unemployment. 
B) causes unemployment for teenagers. 
C) causes unemployment for high wage workers. 
D) may not cause much, if any, unemployment. 
A) clearly causes significant unemployment. 
B) causes unemployment for teenagers. 
C) causes unemployment for high wage workers. 
D) may not cause much, if any, unemployment.

Question 19

When comparing the costs of inflation to society, it is important to distinguish between

Accepted Answer

A) low versus high rates of inflation. 
B) expected versus unexpected inflation. 
C) high price levels and low price levels. 
D) real versus nominal inflation. 
A) low versus high rates of inflation. 
B) expected versus unexpected inflation. 
C) high price levels and low price levels. 
D) real versus nominal inflation.

Question 20

Jorge, a computer programmer, was laid off when his firm went out of business.He began to look for work, but was struck by a car and his hands and one leg were broken.He is unable to use the computer to seek jobs, or to go to interviews for jobs.It is now week 5 of 6 weeks in his cast.According to the current rules, Jorge will probably be classified as:

Accepted Answer

A) ​employed 
B) ​unemployed 
C) ​out of the labor force 
D) ​unemployable 
A) ​employed 
B) ​unemployed 
C) ​out of the labor force 
D) ​unemployable

Exam 23: The Goals of Macroeconomic Policy

An economy can increase its total output of goods and services if it

During periods of high inflation, such as the 1979-1980 period, the existence of usury laws may cause

Last year your job at the university cafeteria paid you $9 an hour and the price of a music download was $1.00.This year your cafeteria job pays $9.90 per hour and download costs $1.10.You are clearly

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

In 2009, which of the following countries had the lowest average unemployment rates?

Gladys agrees to lend Kay $1,000 for one year at a nominal rate of interest of 5 percent.At the end of the year prices have actually risen by 7 percent.

Labor productivity is calculated by dividing GDP by

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

The main cost that low inflation imposes on an economy is that low inflation

People who failed to look for a job are classified as

Saving is often discouraged by usury laws during inflationary periods because

Rachel agrees to lend Phoebe $100 for six months and charges her interest of 2 percent.At the end of the six-month period, prices have risen by 4 percent.

Older people often reminisce about the "good old days" when prices were much lower.This is misplaced nostalgia primarily because in the "good old days,"

The United States has never suffered through periods of hyperinflation in its history.

In the United States, labor productivity is approximately

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

Labor productivity times hours of work equals

Recent research suggests that the federal minimum wage law

When comparing the costs of inflation to society, it is important to distinguish between

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: the Price System

The Shortcomings of Free Markets

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

Is Useconomic Leadership Threatened

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

He 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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