Question 1

When the Great Depression reached its trough in 1933, the unemployment rate was approximately:

Accepted Answer

A) 5%. 
B) 10%. 
C) 25%. 
D) 50%. 
A) 5%. 
B) 10%. 
C) 25%. 
D) 50%.

Question 2

If macroeconomic policy has been successful over time, it is likely that the economy has not seen:

Accepted Answer

A) any inflation. 
B) any severe recessions. 
C) any unemployment. 
D) a business cycle. 
A) any inflation. 
B) any severe recessions. 
C) any unemployment. 
D) a business cycle.

Question 3

Which of the following are considered to be the two types of macroeconomic policies?

Accepted Answer

A) monetary and fiscal policy 
B) monetary and regulation policy 
C) fiscal and regulation policy 
D) fiscal policy and price controls 
A) monetary and fiscal policy 
B) monetary and regulation policy 
C) fiscal and regulation policy 
D) fiscal policy and price controls

Question 4

Between 1980 and 2014, inflation wiped out most of the wage gains of the typical worker.

Accepted Answer

A) True 
 B)False

Question 5

The economy is in a recession and Congress passes legislation to reduce income taxes. Tom, seeing an increase in his take-home pay, goes to Best Buy and purchases a new television. Why is the tax cut a macroeconomic issue, while Tom's new TV is a microeconomic issue?

Accepted Answer

The tax cut is an example of fiscal poli

Question 6

What is long-run economic growth, and why is it so important for a nation's economy?

Accepted Answer

Long-run economic growth is the sustaine

Question 7

Which of the following statements is TRUE?

Accepted Answer

A) Long-run growth started during the Renaissance. 
B) Long-run growth started in the early 1700s. 
C) Peasants in eighteenth-century Europe had a standard of living more than 50 times that of the Egyptian peasants in the age of the pharaohs. 
D) Long-run growth is a relatively modern phenomenon. 
A) Long-run growth started during the Renaissance. 
B) Long-run growth started in the early 1700s. 
C) Peasants in eighteenth-century Europe had a standard of living more than 50 times that of the Egyptian peasants in the age of the pharaohs. 
D) Long-run growth is a relatively modern phenomenon.

Question 8

An economic expansion in the United States is typically associated with a(n):

Accepted Answer

A) falling inflation rate. 
B) increase in the poverty rate. 
C) falling unemployment rate. 
D) decrease in corporate profits. 
A) falling inflation rate. 
B) increase in the poverty rate. 
C) falling unemployment rate. 
D) decrease in corporate profits.

Question 9

The paradox of thrift highlights:

Accepted Answer

A) the role of investment in the macroeconomy. 
B) how individual decisions to save more may worsen a recession. 
C) how an increase in spending occurs during recessions. 
D) irrational behavior on the part of households. 
A) the role of investment in the macroeconomy. 
B) how individual decisions to save more may worsen a recession. 
C) how an increase in spending occurs during recessions. 
D) irrational behavior on the part of households.

Question 10

The most widely used indicator of the conditions in the labor market is the:

Accepted Answer

A) unemployment rate. 
B) population growth rate. 
C) inflation rate. 
D) trade deficit. 
A) unemployment rate. 
B) population growth rate. 
C) inflation rate. 
D) trade deficit.

Question 11

A trade surplus occurs:

Accepted Answer

A) during economic contractions only. 
B) when the value of imports exceeds the value of exports. 
C) when the value of imports is less than the value exports. 
D) when unemployment is rising. 
A) during economic contractions only. 
B) when the value of imports exceeds the value of exports. 
C) when the value of imports is less than the value exports. 
D) when unemployment is rising.

Question 12

The sequence of business cycle phases is:

Accepted Answer

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

Question 13

Which of the following is TRUE about inflation and deflation?

Accepted Answer

A) Both are good for the economy. 
B) Inflation is always good for the economy and deflation is always bad for the economy. 
C) Inflation is always bad for the economy and deflation is always good for the economy. 
D) Both inflation and deflation can pose problems for the economy. 
A) Both are good for the economy. 
B) Inflation is always good for the economy and deflation is always bad for the economy. 
C) Inflation is always bad for the economy and deflation is always good for the economy. 
D) Both inflation and deflation can pose problems for the economy.

Question 14

Fiscal policy can be used to reduce the severity of recessions.

Accepted Answer

A) True 
 B)False

Question 15

John Maynard Keynes believed that the government should:

Accepted Answer

A) actively try to mitigate the effects of recessions by using fiscal and monetary policies. 
B) not interfere with the economy but let the economy self-correct. 
C) intervene only when there is a boom but let the recession run its course. 
D) not use fiscal and monetary policies, as these policies have long-term adverse effects. 
A) actively try to mitigate the effects of recessions by using fiscal and monetary policies. 
B) not interfere with the economy but let the economy self-correct. 
C) intervene only when there is a boom but let the recession run its course. 
D) not use fiscal and monetary policies, as these policies have long-term adverse effects.

Question 16

If a country has a trade deficit, does it indicate that the country has a serious problem?

Accepted Answer

A) No. Trade deficits occur when a country's investment spending is higher than its level of saving. 
B) Yes. Trade deficits occur when a country has low productivity. 
C) Yes. Trade deficits occur when a country does not have a comparative advantage in production. 
D) Yes. Trade deficits occur when a country has a high budget surplus. 
A) No. Trade deficits occur when a country's investment spending is higher than its level of saving. 
B) Yes. Trade deficits occur when a country has low productivity. 
C) Yes. Trade deficits occur when a country does not have a comparative advantage in production. 
D) Yes. Trade deficits occur when a country has a high budget surplus.

Question 17

During a recession, one will often observe:

Accepted Answer

A) rising aggregate output. 
B) rising unemployment rates and falling aggregate output. 
C) rising employment rates. 
D) zero unemployment rates. 
A) rising aggregate output. 
B) rising unemployment rates and falling aggregate output. 
C) rising employment rates. 
D) zero unemployment rates.

Question 18

Use of fiscal policy involves changes in:

Accepted Answer

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

Question 19

The modern macroeconomic tools used by the government are _____ policy and _____ policy.

Accepted Answer

A) tax; antitrust 
B) fiscal; monetary 
C) monetary; exchange rate 
D) capital; labor 
A) tax; antitrust 
B) fiscal; monetary 
C) monetary; exchange rate 
D) capital; labor

Question 20

Fiscal policy attempts to affect the level of overall spending by making changes in:

Accepted Answer

A) the interest rate. 
B) the money supply. 
C) banking regulations. 
D) taxes and spending. 
A) the interest rate. 
B) the money supply. 
C) banking regulations. 
D) taxes and spending.

When the Great Depression reached its trough in 1933, the unemployment rate was approximately:

If macroeconomic policy has been successful over time, it is likely that the economy has not seen:

Which of the following are considered to be the two types of macroeconomic policies?

Between 1980 and 2014, inflation wiped out most of the wage gains of the typical worker.

The economy is in a recession and Congress passes legislation to reduce income taxes. Tom, seeing an increase in his take-home pay, goes to Best Buy and purchases a new television. Why is the tax cut a macroeconomic issue, while Tom's new TV is a microeconomic issue?

What is long-run economic growth, and why is it so important for a nation's economy?

Which of the following statements is TRUE?

An economic expansion in the United States is typically associated with a(n):

The paradox of thrift highlights:

The most widely used indicator of the conditions in the labor market is the:

A trade surplus occurs:

The sequence of business cycle phases is:

Which of the following is TRUE about inflation and deflation?

Fiscal policy can be used to reduce the severity of recessions.

John Maynard Keynes believed that the government should:

If a country has a trade deficit, does it indicate that the country has a serious problem?

During a recession, one will often observe:

Use of fiscal policy involves changes in:

The modern macroeconomic tools used by the government are _ policy and _ policy.

Fiscal policy attempts to affect the level of overall spending by making changes in:

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

When the Great Depression reached its trough in 1933, the unemployment rate was approximately:

If macroeconomic policy has been successful over time, it is likely that the economy has not seen:

Which of the following are considered to be the two types of macroeconomic policies?

Between 1980 and 2014, inflation wiped out most of the wage gains of the typical worker.

The economy is in a recession and Congress passes legislation to reduce income taxes. Tom, seeing an increase in his take-home pay, goes to Best Buy and purchases a new television. Why is the tax cut a macroeconomic issue, while Tom's new TV is a microeconomic issue?

What is long-run economic growth, and why is it so important for a nation's economy?

Which of the following statements is TRUE?

An economic expansion in the United States is typically associated with a(n):

The paradox of thrift highlights:

The most widely used indicator of the conditions in the labor market is the:

A trade surplus occurs:

The sequence of business cycle phases is:

Which of the following is TRUE about inflation and deflation?

Fiscal policy can be used to reduce the severity of recessions.

John Maynard Keynes believed that the government should:

If a country has a trade deficit, does it indicate that the country has a serious problem?

During a recession, one will often observe:

Use of fiscal policy involves changes in:

The modern macroeconomic tools used by the government are _____ policy and _____ policy.

Fiscal policy attempts to affect the level of overall spending by making changes in:

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

The modern macroeconomic tools used by the government are _ policy and _ policy.