Question 1

During the Great Depression,

Accepted Answer

A) unemployment and prices increased while output decreased 
B) unemployment increased while output and prices decreased 
C) unemployment and prices decreased while output increased 
D) unemployment and output decreased while prices increased 
E) unemployment and output increased while prices decreased 
A) unemployment and prices increased while output decreased 
B) unemployment increased while output and prices decreased 
C) unemployment and prices decreased while output increased 
D) unemployment and output decreased while prices increased 
E) unemployment and output increased while prices decreased

Question 2

The economy is so __________ that we need to __________ matters.

Accepted Answer

A) complex,further complicate 
B) simple,further simplify 
C) simple,complicate 
D) complex,simplify 
E) complex,completely ignore 
A) complex,further complicate 
B) simple,further simplify 
C) simple,complicate 
D) complex,simplify 
E) complex,completely ignore

Question 3

Which of the following statements is correct?

Accepted Answer

A) A budget deficit is a flow variable; debt is a stock variable. 
B) A budget deficit is a stock variable; debt is a flow variable. 
C) A budget deficit and the debt are both stock variables. 
D) The budget deficit decreases when debt increases. 
E) Debt increases when the budget deficit decreases. 
A) A budget deficit is a flow variable; debt is a stock variable. 
B) A budget deficit is a stock variable; debt is a flow variable. 
C) A budget deficit and the debt are both stock variables. 
D) The budget deficit decreases when debt increases. 
E) Debt increases when the budget deficit decreases.

Question 4

Which of the following is not the proper subject matter for macroeconomics?

Accepted Answer

A) unemployment levels 
B) inflation rates 
C) levels of national output 
D) the price of corn 
E) the role of government 
A) unemployment levels 
B) inflation rates 
C) levels of national output 
D) the price of corn 
E) the role of government

Question 5

The word stagflation describes a situation in which a higher price level occurs simultaneously with

Accepted Answer

A) lower employment 
B) lower unemployment 
C) higher aggregate output 
D) federal budget deficits 
E) federal budget surpluses 
A) lower employment 
B) lower unemployment 
C) higher aggregate output 
D) federal budget deficits 
E) federal budget surpluses

Question 6

A decrease in the price level will cause

Accepted Answer

A) an increase in the quantity of aggregate output supplied 
B) a decrease in the quantity of aggregate output supplied 
C) a leftward shift of the aggregate supply curve 
D) a rightward shift of the aggregate supply curve 
E) a leftward or rightward shift of the aggregate supply curve,depending on the reason for the price change 
A) an increase in the quantity of aggregate output supplied 
B) a decrease in the quantity of aggregate output supplied 
C) a leftward shift of the aggregate supply curve 
D) a rightward shift of the aggregate supply curve 
E) a leftward or rightward shift of the aggregate supply curve,depending on the reason for the price change

Question 7

Since 1947,

Accepted Answer

A) the U.S.price level has fallen while real GDP rose 
B) U.S.real GDP has grown at about the same rate as nominal GDP 
C) U.S.employment increased while utilization of capital declined 
D) the U.S.price level has doubled,despite eight recessions 
E) U.S.real GDP has quintupled,despite eight recessions 
A) the U.S.price level has fallen while real GDP rose 
B) U.S.real GDP has grown at about the same rate as nominal GDP 
C) U.S.employment increased while utilization of capital declined 
D) the U.S.price level has doubled,despite eight recessions 
E) U.S.real GDP has quintupled,despite eight recessions

Question 8

Which of the following is a stock variable?

Accepted Answer

A) U.S.exports 
B) sales by corporations 
C) borrowing by the federal government 
D) household wealth 
E) net exports 
A) U.S.exports 
B) sales by corporations 
C) borrowing by the federal government 
D) household wealth 
E) net exports

Question 9

A fall in the price level

Accepted Answer

A) moves the economy rightward along the aggregate demand curve 
B) moves the economy leftward along the aggregate demand curve 
C) shifts the aggregate demand curve to the left 
D) shifts the aggregate demand curve to the right 
E) is inconsistent with the other-things-constant assumption on which the aggregate demand curve is based 
A) moves the economy rightward along the aggregate demand curve 
B) moves the economy leftward along the aggregate demand curve 
C) shifts the aggregate demand curve to the left 
D) shifts the aggregate demand curve to the right 
E) is inconsistent with the other-things-constant assumption on which the aggregate demand curve is based

Question 10

Suppose the economy is initially in equilibrium and then an energy shock occurs,such as when OPEC raised oil prices.Which of the following is likely to result?

Accepted Answer

A) Both the price level and aggregate output will rise. 
B) Both aggregate output and the price level will fall. 
C) Employment will rise. 
D) Stagflation. 
E) The price level will fall. 
A) Both the price level and aggregate output will rise. 
B) Both aggregate output and the price level will fall. 
C) Employment will rise. 
D) Stagflation. 
E) The price level will fall.

Question 11

The laissez-faire approach popular before the Great Depression influenced the U.S.government to see business downturns as

Accepted Answer

A) natural phases in an otherwise healthy system,and therefore to take short-term deficit spending measures to help recovery 
B) natural phases in an otherwise healthy system,and therefore to wait for recovery to occur naturally 
C) serious maladies in an otherwise healthy system,and therefore to work to redesign the system to avoid such failure in the future 
D) failures of the type of system Adam Smith envisaged,and therefore to work to move toward a modern,more managed economy 
E) failures of the system to achieve the form that Adam Smith envisaged,and therefore to work to decrease government interference at the micro level 
A) natural phases in an otherwise healthy system,and therefore to take short-term deficit spending measures to help recovery 
B) natural phases in an otherwise healthy system,and therefore to wait for recovery to occur naturally 
C) serious maladies in an otherwise healthy system,and therefore to work to redesign the system to avoid such failure in the future 
D) failures of the type of system Adam Smith envisaged,and therefore to work to move toward a modern,more managed economy 
E) failures of the system to achieve the form that Adam Smith envisaged,and therefore to work to decrease government interference at the micro level

Question 12

If the U.S.price level increases,the aggregate quantity of U.S.output demanded

Accepted Answer

A) decreases because U.S.products become cheaper relative to foreign products 
B) decreases because U.S.products become more expensive relative to foreign products 
C) increases because U.S.products become cheaper relative to foreign products 
D) increases because U.S.products become more expensive relative to foreign products 
A) decreases because U.S.products become cheaper relative to foreign products 
B) decreases because U.S.products become more expensive relative to foreign products 
C) increases because U.S.products become cheaper relative to foreign products 
D) increases because U.S.products become more expensive relative to foreign products

Question 13

Exhibit 5-2  
-Refer to Exhibit 5-2.Which line or point represents aggregate demand?

Accepted Answer

A) line a 
B) line b 
C) line c 
D) line d 
E) point e 
A) line a 
B) line b 
C) line c 
D) line d 
E) point e

Question 14

Which of the following is a flow variable?

Accepted Answer

A) U.S.plant and equipment 
B) the U.S.population 
C) money supply 
D) investment spending 
E) household debt 
A) U.S.plant and equipment 
B) the U.S.population 
C) money supply 
D) investment spending 
E) household debt

Question 15

Who wrote The General Theory of Employment,Interest,and Money?

Accepted Answer

A) Adam Smith 
B) Jean Baptiste Say 
C) François Quesnay 
D) John Maynard Keynes 
E) Alfred Marshall 
A) Adam Smith 
B) Jean Baptiste Say 
C) François Quesnay 
D) John Maynard Keynes 
E) Alfred Marshall

Question 16

Between 1929 and the depth of the Great Depression in 1933,the United States encountered the following:

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 17

Which of the following would indicate the beginnings of an expansion of the economy?

Accepted Answer

A) fewer new firms are started 
B) stock market prices decline 
C) consumer confidence improves 
D) housing construction slows 
E) orders for new equipment decrease 
A) fewer new firms are started 
B) stock market prices decline 
C) consumer confidence improves 
D) housing construction slows 
E) orders for new equipment decrease

Question 18

President Nixon fought the inflation of the early 1970s with

Accepted Answer

A) increased taxes 
B) increased government spending 
C) decreased taxes 
D) decreased government spending 
E) wage and price controls 
A) increased taxes 
B) increased government spending 
C) decreased taxes 
D) decreased government spending 
E) wage and price controls

Question 19

The aggregate supply curve has

Accepted Answer

A) a negative slope 
B) a positive slope 
C) a zero slope (a horizontal line) 
D) an infinite slope (a vertical line) 
E) a negative slope like the aggregate demand curve,only steeper 
A) a negative slope 
B) a positive slope 
C) a zero slope (a horizontal line) 
D) an infinite slope (a vertical line) 
E) a negative slope like the aggregate demand curve,only steeper

Question 20

Exhibit 5-1    
-In Exhibit 5-1,from the beginning of period 1 to the end of period 2,nominal GDP went from

Accepted Answer

A) $40,000 to $18,000 and back again 
B) $40,000 to $18,000 and stayed there 
C) $40,000 to $18,000 in period 1 and to $10,000 in period 2 
D) $40,000 to $18,000 to $10,000 in period 1 and stayed there in period 2 
E) $40,000 to $18,000 to $10,000 in period 1 and then back to $18,000 in period 2 
A) $40,000 to $18,000 and back again 
B) $40,000 to $18,000 and stayed there 
C) $40,000 to $18,000 in period 1 and to $10,000 in period 2 
D) $40,000 to $18,000 to $10,000 in period 1 and stayed there in period 2 
E) $40,000 to $18,000 to $10,000 in period 1 and then back to $18,000 in period 2

Exam 5: Introduction to Macroeconomics

During the Great Depression,

The economy is so __________ that we need to __________ matters.

Which of the following statements is correct?

Which of the following is not the proper subject matter for macroeconomics?

The word stagflation describes a situation in which a higher price level occurs simultaneously with

A decrease in the price level will cause

Since 1947,

Which of the following is a stock variable?

A fall in the price level

Suppose the economy is initially in equilibrium and then an energy shock occurs,such as when OPEC raised oil prices.Which of the following is likely to result?

The laissez-faire approach popular before the Great Depression influenced the U.S.government to see business downturns as

If the U.S.price level increases,the aggregate quantity of U.S.output demanded

Exhibit 5-2 -Refer to Exhibit 5-2.Which line or point represents aggregate demand?

Which of the following is a flow variable?

Who wrote The General Theory of Employment,Interest,and Money?

Between 1929 and the depth of the Great Depression in 1933,the United States encountered the following:

Which of the following would indicate the beginnings of an expansion of the economy?

President Nixon fought the inflation of the early 1970s with

The aggregate supply curve has

Exhibit 5-1 -In Exhibit 5-1,from the beginning of period 1 to the end of period 2,nominal GDP went from

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand, supply, and Markets

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Aggregate Demand

Baggregate Expenditure and 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

Externalities and the Environment

International Finance

Economic Development

understanding Graphs

National Income Accounts

The Algebra of Demand-Side Equilibrium

Filters

The economy is so that we need to matters.