Question 1

Periods in which output and employment are falling are:

Accepted Answer

A) recessions. 
B) booms. 
C) expansions. 
D) deflations. 
A) recessions. 
B) booms. 
C) expansions. 
D) deflations.

Question 2

In recent times, the U.S. government has been trying to help the economy through one of the worst economic slumps ever. The policies used are based on _____ theory.

Accepted Answer

A) Keynesian 
B) classical 
C) supply-side 
D) trickle-down 
A) Keynesian 
B) classical 
C) supply-side 
D) trickle-down

Question 3

Which is a microeconomic question rather than a macroeconomic question?

Accepted Answer

A) Will a decrease in the income tax rate lift the nation out of a recession? 
B) Will an increase in consumer spending cause inflation? 
C) Will a decrease in the income tax rate lead to a government budget deficit? 
D) Will an increase in the cigarette tax reduce the number of packs sold? 
A) Will a decrease in the income tax rate lift the nation out of a recession? 
B) Will an increase in consumer spending cause inflation? 
C) Will a decrease in the income tax rate lead to a government budget deficit? 
D) Will an increase in the cigarette tax reduce the number of packs sold?

Question 4

An independent panel of economic experts at the _____ analyzes the macroeconomy and determines when recessions begin and end.

Accepted Answer

A) Bureau of the Census 
B) President's Council of Economic Advisers 
C) Treasury Department 
D) National Bureau of Economic Research 
A) Bureau of the Census 
B) President's Council of Economic Advisers 
C) Treasury Department 
D) National Bureau of Economic Research

Question 5

If the value of a country's exports is greater than the value of its imports, it is:

Accepted Answer

A) running a trade surplus. 
B) running a trade deficit. 
C) in an economic contraction. 
D) likely to find its investment spending greater than its level of saving. 
A) running a trade surplus. 
B) running a trade deficit. 
C) in an economic contraction. 
D) likely to find its investment spending greater than its level of saving.

Question 6

In the paradox of thrift:

Accepted Answer

A) firms that are pessimistic about the future lay off the most saving-conscientious workers. 
B) when families and business are feeling pessimistic about the future, they spend more. 
C) increased saving by individuals increases their chances of becoming unemployed. 
D) risky behavior during economic tough times has large negative consequences for society. 
A) firms that are pessimistic about the future lay off the most saving-conscientious workers. 
B) when families and business are feeling pessimistic about the future, they spend more. 
C) increased saving by individuals increases their chances of becoming unemployed. 
D) risky behavior during economic tough times has large negative consequences for society.

Question 7

Which of the following statements is TRUE?

Accepted Answer

A) In the past century, the population of the United States has grown faster than output. 
B) Long-run growth models and business cycle models are the same. 
C) Since World War II, the economy of Argentina has grown faster than the economy of Canada. 
D) The level of saving is important for long-run growth. 
A) In the past century, the population of the United States has grown faster than output. 
B) Long-run growth models and business cycle models are the same. 
C) Since World War II, the economy of Argentina has grown faster than the economy of Canada. 
D) The level of saving is important for long-run growth.

Question 8

The concept that the whole is greater than the sum of its parts best characterizes:

Accepted Answer

A) microeconomics. 
B) supply and demand. 
C) macroeconomics. 
D) business forecasting. 
A) microeconomics. 
B) supply and demand. 
C) macroeconomics. 
D) business forecasting.

Question 9

What do a rubbernecking traffic jam and the paradox of thrift have in common?

Accepted Answer

A) Individual behavior has large negative consequences for the whole of society. 
B) Seemingly bad behavior ends up harming everyone. 
C) Seemingly careless behavior leads to good times for all. 
D) Government intervention can only make matters worse. 
A) Individual behavior has large negative consequences for the whole of society. 
B) Seemingly bad behavior ends up harming everyone. 
C) Seemingly careless behavior leads to good times for all. 
D) Government intervention can only make matters worse.

Question 10

Changing the level of government spending is an example of _____ policy.

Accepted Answer

A) fiscal 
B) interest rate 
C) monetary 
D) exchange rate 
A) fiscal 
B) interest rate 
C) monetary 
D) exchange rate

Question 11

The most painful effect of a recession is:

Accepted Answer

A) inflation. 
B) unemployment. 
C) money neutrality. 
D) liquidity trap. 
A) inflation. 
B) unemployment. 
C) money neutrality. 
D) liquidity trap.

Question 12

Which of the following statements is CORRECT?

Accepted Answer

A) Supply and demand cannot explain why a particular good or service becomes more expensive relative to other goods and services. 
B) Inflation affects only the more advanced countries, whereas less advanced countries face deflation. 
C) Prices of most goods and services remained stable during the Great Depression. 
D) When the economy is in recession and jobs are hard to find, inflation tends to fall. 
A) Supply and demand cannot explain why a particular good or service becomes more expensive relative to other goods and services. 
B) Inflation affects only the more advanced countries, whereas less advanced countries face deflation. 
C) Prices of most goods and services remained stable during the Great Depression. 
D) When the economy is in recession and jobs are hard to find, inflation tends to fall.

Question 13

Macroeconomics focuses on:

Accepted Answer

A) the economy as a whole. 
B) individual decisions. 
C) wages. 
D) the allocation of scarce resources. 
A) the economy as a whole. 
B) individual decisions. 
C) wages. 
D) the allocation of scarce resources.

Question 14

A country's real gross domestic product (GDP), undergoes periodic fluctuations called a(n):

Accepted Answer

A) recession. 
B) business cycle. 
C) expansion. 
D) trough. 
A) recession. 
B) business cycle. 
C) expansion. 
D) trough.

Question 15

The relation between a country's level of saving and investment:

Accepted Answer

A) affects its trade balances. 
B) does not affect an open economy. 
C) has often been used to correct a trade deficit but not a trade surplus. 
D) pertains to trade surpluses only. 
A) affects its trade balances. 
B) does not affect an open economy. 
C) has often been used to correct a trade deficit but not a trade surplus. 
D) pertains to trade surpluses only.

Question 16

In contrast to the conclusions drawn from microeconomics, many economists argue that in macroeconomics, government:

Accepted Answer

A) control of rent prices increases overall economic activity. 
B) intervention in markets usually leaves society as a whole worse off. 
C) taxation of goods and services does not cause a deadweight loss of economic welfare. 
D) intervention in markets can prevent or reduce the effects of adverse events on the macroeconomy. 
A) control of rent prices increases overall economic activity. 
B) intervention in markets usually leaves society as a whole worse off. 
C) taxation of goods and services does not cause a deadweight loss of economic welfare. 
D) intervention in markets can prevent or reduce the effects of adverse events on the macroeconomy.

Question 17

Which is most likely a macroeconomic, not microeconomic, question?

Accepted Answer

A) Is the national unemployment rate rising or falling? 
B) Are consumers buying more bottled water and less fruit juice? 
C) Are salaries for nurses rising or falling? 
D) Should a tax be levied on each ton of carbon dioxide a factory emits? 
A) Is the national unemployment rate rising or falling? 
B) Are consumers buying more bottled water and less fruit juice? 
C) Are salaries for nurses rising or falling? 
D) Should a tax be levied on each ton of carbon dioxide a factory emits?

Question 18

With inflation:

Accepted Answer

A) overall prices are increasing, although some may be decreasing. 
B) all prices must be increasing. 
C) the economy must be contracting. 
D) the economy must be producing at full employment. 
A) overall prices are increasing, although some may be decreasing. 
B) all prices must be increasing. 
C) the economy must be contracting. 
D) the economy must be producing at full employment.

Question 19

During inflation the _____ price level _____.

Accepted Answer

A) average; falls 
B) average; increases 
C) average; remains constant 
D) real; falls 
A) average; falls 
B) average; increases 
C) average; remains constant 
D) real; falls

Question 20

The economist whose writings in the 1930s argued that the cause of an economic depression is inadequate spending was:

Accepted Answer

A) Herbert Hoover. 
B) John Maynard Keynes. 
C) Andrew Mellon. 
D) Joseph Schumpeter. 
A) Herbert Hoover. 
B) John Maynard Keynes. 
C) Andrew Mellon. 
D) Joseph Schumpeter.

Periods in which output and employment are falling are:

In recent times, the U.S. government has been trying to help the economy through one of the worst economic slumps ever. The policies used are based on _____ theory.

Which is a microeconomic question rather than a macroeconomic question?

An independent panel of economic experts at the _____ analyzes the macroeconomy and determines when recessions begin and end.

If the value of a country's exports is greater than the value of its imports, it is:

In the paradox of thrift:

Which of the following statements is TRUE?

The concept that the whole is greater than the sum of its parts best characterizes:

What do a rubbernecking traffic jam and the paradox of thrift have in common?

Changing the level of government spending is an example of _____ policy.

The most painful effect of a recession is:

Which of the following statements is CORRECT?

Macroeconomics focuses on:

A country's real gross domestic product (GDP), undergoes periodic fluctuations called a(n):

The relation between a country's level of saving and investment:

In contrast to the conclusions drawn from microeconomics, many economists argue that in macroeconomics, government:

Which is most likely a macroeconomic, not microeconomic, question?

With inflation:

During inflation the _ price level _.

The economist whose writings in the 1930s argued that the cause of an economic depression is inadequate spending was:

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

Periods in which output and employment are falling are:

In recent times, the U.S. government has been trying to help the economy through one of the worst economic slumps ever. The policies used are based on _____ theory.

Which is a microeconomic question rather than a macroeconomic question?

An independent panel of economic experts at the _____ analyzes the macroeconomy and determines when recessions begin and end.

If the value of a country's exports is greater than the value of its imports, it is:

In the paradox of thrift:

Which of the following statements is TRUE?

The concept that the whole is greater than the sum of its parts best characterizes:

What do a rubbernecking traffic jam and the paradox of thrift have in common?

Changing the level of government spending is an example of _____ policy.

The most painful effect of a recession is:

Which of the following statements is CORRECT?

Macroeconomics focuses on:

A country's real gross domestic product (GDP), undergoes periodic fluctuations called a(n):

The relation between a country's level of saving and investment:

In contrast to the conclusions drawn from microeconomics, many economists argue that in macroeconomics, government:

Which is most likely a macroeconomic, not microeconomic, question?

With inflation:

During inflation the _____ price level _____.

The economist whose writings in the 1930s argued that the cause of an economic depression is inadequate spending was:

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

During inflation the _ price level _.