Question 1

An expansion is a period in which:

Accepted Answer

A) output declines. 
B) the price level falls. 
C) output rises. 
D) unemployment rises. 
A) output declines. 
B) the price level falls. 
C) output rises. 
D) unemployment rises.

Question 2

Goods and services that are produced in a foreign country but consumed domestically are called:

Accepted Answer

A) exports. 
B) imports. 
C) investment goods. 
D) consumer durables. 
A) exports. 
B) imports. 
C) investment goods. 
D) consumer durables.

Question 3

In a typical business cycle, the trough is immediately followed by the:

Accepted Answer

A) peak. 
B) recession. 
C) depression. 
D) expansion. 
A) peak. 
B) recession. 
C) depression. 
D) expansion.

Question 4

Expansions are periods when real GDP and employment are growing.

Accepted Answer

A) True 
 B)False

Question 5

Economists use the term long-term growth to indicate:

Accepted Answer

A) the expansion phase of the business cycle. 
B) growth of the economy over several decades. 
C) growth of the economy over one to five years. 
D) long-run growth of the value of a company. 
A) the expansion phase of the business cycle. 
B) growth of the economy over several decades. 
C) growth of the economy over one to five years. 
D) long-run growth of the value of a company.

Question 6

Recessions tend to be _____, and expansions tend to be _____.

Accepted Answer

A) short; short 
B) long; long 
C) short; long 
D) long; short 
A) short; short 
B) long; long 
C) short; long 
D) long; short

Question 7

Price stability occurs when:

Accepted Answer

A) the overall price level is zero. 
B) the economy is at full employment. 
C) the overall cost of living is changing very slowly. 
D) food prices have remained the same. 
A) the overall price level is zero. 
B) the economy is at full employment. 
C) the overall cost of living is changing very slowly. 
D) food prices have remained the same.

Question 8

The General Theory of Employment, Interest, and Money, written by _____ and published in _____, transformed the way economists thought about macroeconomics.

Accepted Answer

A) Milton Friedman; 1946 
B) Paul Samuelson; 1940 
C) John Maynard Keynes; 1936 
D) Paul Lucas; 1966 
A) Milton Friedman; 1946 
B) Paul Samuelson; 1940 
C) John Maynard Keynes; 1936 
D) Paul Lucas; 1966

Question 9

The trade balance is the difference between the value of:

Accepted Answer

A) the trade deficit and the budget deficit. 
B) exports and the imports. 
C) the exchange rates of two countries that are engaged in international trade. 
D) the national debt and the foreign debt. 
A) the trade deficit and the budget deficit. 
B) exports and the imports. 
C) the exchange rates of two countries that are engaged in international trade. 
D) the national debt and the foreign debt.

Question 10

Explain what is meant by the paradox of thrift.

Accepted Answer

During uncertain economic time

Question 11

Which would NOT be classified as a MACROECONOMIC question?

Accepted Answer

A) How many people are employed in the economy as a whole? 
B) What determines the overall level of prices? 
C) What determines the overall trade in goods, services, and financial assets between the United States and the rest of the world? 
D) What determines a university's cost of offering a new course? 
A) How many people are employed in the economy as a whole? 
B) What determines the overall level of prices? 
C) What determines the overall trade in goods, services, and financial assets between the United States and the rest of the world? 
D) What determines a university's cost of offering a new course?

Question 12

Fiscal and monetary policies:

Accepted Answer

A) have no role in macroeconomic policies. 
B) have been used by the government for over 250 years. 
C) are most effective in microeconomic settings. 
D) are used to correct for short-term economic fluctuations. 
A) have no role in macroeconomic policies. 
B) have been used by the government for over 250 years. 
C) are most effective in microeconomic settings. 
D) are used to correct for short-term economic fluctuations.

Question 13

A business cycle is a:

Accepted Answer

A) very deep and prolonged economic downturn. 
B) period in which output and employment are rising. 
C) period in which output and employment are falling. 
D) short-run alternation between economic upturns and downturns. 
A) very deep and prolonged economic downturn. 
B) period in which output and employment are rising. 
C) period in which output and employment are falling. 
D) short-run alternation between economic upturns and downturns.

Question 14

The annual percentage change in the aggregate price level is negative when there is:

Accepted Answer

A) deflation. 
B) disinflation. 
C) inflation. 
D) spiraling inflation. 
A) deflation. 
B) disinflation. 
C) inflation. 
D) spiraling inflation.

Question 15

Which statement about the U.S. economy is FALSE?

Accepted Answer

A) Since the Second World War, aggregate output has grown more slowly than the population. 
B) Since the Second World War, aggregate output has grown more rapidly than the population. 
C) Since the Second World War, macroeconomic policy has helped make the economy more stable. 
D) Long-run growth per capita is the key to higher wages and a rising standard of living. 
A) Since the Second World War, aggregate output has grown more slowly than the population. 
B) Since the Second World War, aggregate output has grown more rapidly than the population. 
C) Since the Second World War, macroeconomic policy has helped make the economy more stable. 
D) Long-run growth per capita is the key to higher wages and a rising standard of living.

Question 16

A period of rising real GDP is a(n):

Accepted Answer

A) peak. 
B) trough. 
C) expansion. 
D) recession. 
A) peak. 
B) trough. 
C) expansion. 
D) recession.

Question 17

Fiscal policy entails changes in the quantity of money or the interest rate.

Accepted Answer

A) True 
 B)False

Question 18

If a country runs a trade deficit, its investment spending is probably:

Accepted Answer

A) above its level of saving. 
B) less than its level of saving. 
C) equal to its level of saving. 
D) equal to zero. 
A) above its level of saving. 
B) less than its level of saving. 
C) equal to its level of saving. 
D) equal to zero.

Question 19

Suppose the business cycle is expanding. Predict how the economic indicators of real gross domestic product, the unemployment rate, and the inflation rate are moving.

Accepted Answer

When the economy is expanding, the natio

Question 20

Fiscal policy refers to changes in _____ to affect overall spending in the economy:

Accepted Answer

A) interest rates 
B) government spending and taxation 
C) the quantity of money 
D) interest rates and of government spending 
A) interest rates 
B) government spending and taxation 
C) the quantity of money 
D) interest rates and of government spending

An expansion is a period in which:

Goods and services that are produced in a foreign country but consumed domestically are called:

In a typical business cycle, the trough is immediately followed by the:

Expansions are periods when real GDP and employment are growing.

Economists use the term long-term growth to indicate:

Recessions tend to be _, and expansions tend to be _.

Price stability occurs when:

The General Theory of Employment, Interest, and Money, written by _ and published in _, transformed the way economists thought about macroeconomics.

The trade balance is the difference between the value of:

Explain what is meant by the paradox of thrift.

Which would NOT be classified as a MACROECONOMIC question?

Fiscal and monetary policies:

A business cycle is a:

The annual percentage change in the aggregate price level is negative when there is:

Which statement about the U.S. economy is FALSE?

A period of rising real GDP is a(n):

Fiscal policy entails changes in the quantity of money or the interest rate.

If a country runs a trade deficit, its investment spending is probably:

Suppose the business cycle is expanding. Predict how the economic indicators of real gross domestic product, the unemployment rate, and the inflation rate are moving.

Fiscal policy refers to changes in _____ to affect overall spending in the economy:

First Principles

Economic Models

Supply and Demand

International Trade 5

Gdp and Cpi: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Fiscal Policy Appendix Taxes and the Multiplier

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Events and Ideas

Open-Economy Macroeconomics

Graphs in Economics

toward a Fuller Understanding of Present Value

Filters

Exam 6: Macroeconomics: the Big Picture

An expansion is a period in which:

Goods and services that are produced in a foreign country but consumed domestically are called:

In a typical business cycle, the trough is immediately followed by the:

Expansions are periods when real GDP and employment are growing.

Economists use the term long-term growth to indicate:

Recessions tend to be _____, and expansions tend to be _____.

Price stability occurs when:

The General Theory of Employment, Interest, and Money, written by _____ and published in _____, transformed the way economists thought about macroeconomics.

The trade balance is the difference between the value of:

Explain what is meant by the paradox of thrift.

Which would NOT be classified as a MACROECONOMIC question?

Fiscal and monetary policies:

A business cycle is a:

The annual percentage change in the aggregate price level is negative when there is:

Which statement about the U.S. economy is FALSE?

A period of rising real GDP is a(n):

Fiscal policy entails changes in the quantity of money or the interest rate.

If a country runs a trade deficit, its investment spending is probably:

Suppose the business cycle is expanding. Predict how the economic indicators of real gross domestic product, the unemployment rate, and the inflation rate are moving.

Fiscal policy refers to changes in _____ to affect overall spending in the economy:

First Principles

Economic Models

Supply and Demand

International Trade 5

Gdp and Cpi: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Fiscal Policy Appendix Taxes and the Multiplier

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Crises and Consequences

Events and Ideas

Open-Economy Macroeconomics

Graphs in Economics

toward a Fuller Understanding of Present Value

Filters

Recessions tend to be _, and expansions tend to be _.

The General Theory of Employment, Interest, and Money, written by _ and published in _, transformed the way economists thought about macroeconomics.