Question 1

Macroeconomic models:

Accepted Answer

A) assume all wages and prices are sticky. 
B) assume all wages and prices are flexible. 
C) make different assumptions to explain different aspects of the macroeconomy. 
D) focus primarily on the optimizing behavior of households and firms. 
A) assume all wages and prices are sticky. 
B) assume all wages and prices are flexible. 
C) make different assumptions to explain different aspects of the macroeconomy. 
D) focus primarily on the optimizing behavior of households and firms.

Question 2

The total income of everyone in the economy adjusted for the level of prices is called:

Accepted Answer

A) a recession. 
B) an inflation. 
C) real GDP. 
D) a business fluctuation. 
A) a recession. 
B) an inflation. 
C) real GDP. 
D) a business fluctuation.

Question 3

When studying the short-run behavior of the economy an assumption of is more plausible, in contrast to studying the long-run equilibrium behavior of an economy, when an assumption of is more plausible.

Accepted Answer

A) inflation; unemployment 
B) unemployment; inflation 
C) flexible prices; sticky prices 
D) sticky prices; flexible prices 
A) inflation; unemployment 
B) unemployment; inflation 
C) flexible prices; sticky prices 
D) sticky prices; flexible prices

Question 4

The inflation rate in the United States averaged about:

Accepted Answer

A) zero between 1900 and 1950. 
B) zero between 1950 and 2000. 
C) 10 percent between 1900 and 1950. 
D) 10 percent between 1950 and 2000. 
A) zero between 1900 and 1950. 
B) zero between 1950 and 2000. 
C) 10 percent between 1900 and 1950. 
D) 10 percent between 1950 and 2000.

Question 5

Which statement below best illustrates the "art," rather than the "science" of macroeconomics?

Accepted Answer

A) Macroeconomic data provide the motivation for new macroeconomic theory. 
B) Macroeconomic relationships can be expressed using symbols and equations. 
C) Macroeconomists must determine which simplifying assumptions give misleading 
D) Graphs and charts can be used to illustrate the history of macroeconomic variables. 
A) Macroeconomic data provide the motivation for new macroeconomic theory. 
B) Macroeconomic relationships can be expressed using symbols and equations. 
C) Macroeconomists must determine which simplifying assumptions give misleading 
D) Graphs and charts can be used to illustrate the history of macroeconomic variables.

Question 6

Macroeconomics is based on microeconomics for all of the following reasons except:

Accepted Answer

A) when we study the economy as a whole, we must consider the decisions of individual economic actors. 
B) aggregate variables are simply the sum of variables describing many individual decisions. 
C) macroeconomic decision makers, when they make their choices, are required to maximize utility functions. 
D) to understand the determinants of aggregate investment, we must think about a firm's deciding whether to build a new factory. 
A) when we study the economy as a whole, we must consider the decisions of individual economic actors. 
B) aggregate variables are simply the sum of variables describing many individual decisions. 
C) macroeconomic decision makers, when they make their choices, are required to maximize utility functions. 
D) to understand the determinants of aggregate investment, we must think about a firm's deciding whether to build a new factory.

Question 7

Which of the following is the best example of a sticky price?

Accepted Answer

A) the price of a barrel of oil 
B) the price of the U.S. dollar in terms of euros 
C) the price of a share of stock 
D) the price of a soda in a vending machine 
A) the price of a barrel of oil 
B) the price of the U.S. dollar in terms of euros 
C) the price of a share of stock 
D) the price of a soda in a vending machine

Question 8

Macroeconomists cannot conduct controlled experiments, such as testing various tax and expenditure policies, because:

Accepted Answer

A) it is against the law. 
B) they tried it once and it did not work. 
C) they must make use of the data history gives them. 
D) economists already know the Answer s that would come out of 
A) it is against the law. 
B) they tried it once and it did not work. 
C) they must make use of the data history gives them. 
D) economists already know the Answer s that would come out of

Question 9

A period of falling prices is called:

Accepted Answer

A) deflation. 
B) inflation. 
C) a depression. 
D) a recession. 
A) deflation. 
B) inflation. 
C) a depression. 
D) a recession.

Question 10

The assumption of continuous market clearing means that: Aswer

Accepted Answer

A) sellers can sell all that they want at the going price. 
B) buyers can buy all that they want at the going price. 
C) in any given month, buyers can buy all that they want and sellers can sell all that they want at the going price. 
D) at any given instant, buyers can buy all that they want and sellers can sell all that they want at the going price. 
A) sellers can sell all that they want at the going price. 
B) buyers can buy all that they want at the going price. 
C) in any given month, buyers can buy all that they want and sellers can sell all that they want at the going price. 
D) at any given instant, buyers can buy all that they want and sellers can sell all that they want at the going price.

Macroeconomic models:

The total income of everyone in the economy adjusted for the level of prices is called:

When studying the short-run behavior of the economy an assumption of is more plausible, in contrast to studying the long-run equilibrium behavior of an economy, when an assumption of is more plausible.

The inflation rate in the United States averaged about:

Which statement below best illustrates the "art," rather than the "science" of macroeconomics?

Macroeconomics is based on microeconomics for all of the following reasons except:

Which of the following is the best example of a sticky price?

Macroeconomists cannot conduct controlled experiments, such as testing various tax and expenditure policies, because:

A period of falling prices is called:

The assumption of continuous market clearing means that: Aswer

The Data of Macroeconomics

National Income: Where It Comes From and Where It Goes

Money and Inflation

The Open Economy

Unemployment

Economic Growth I: Capital Accumulation and Population Growth

Economic Growth II: Technology, Empirics, and Policy

Introduction to Economic Fluctuations

Aggregate Demand I: Building the Is-Lm Model

Aggregate Demand II: Applying the Is-Lm Model

Aggregate Supply and the Short-Run Tradeoff Between Inflation and Unemployment

Stabilization Policy

Government Debt and Budget Deficits

Introduction to the Financial System

Asset Prices and Interest Rates

Securities Markets

Banking

Financial Crises

Filters

Exam 1: The Science of Macroeconomics

Macroeconomic models:

The total income of everyone in the economy adjusted for the level of prices is called:

When studying the short-run behavior of the economy an assumption of is more plausible, in contrast to studying the long-run equilibrium behavior of an economy, when an assumption of is more plausible.

The inflation rate in the United States averaged about:

Which statement below best illustrates the "art," rather than the "science" of macroeconomics?

Macroeconomics is based on microeconomics for all of the following reasons except:

Which of the following is the best example of a sticky price?

Macroeconomists cannot conduct controlled experiments, such as testing various tax and expenditure policies, because:

A period of falling prices is called:

The assumption of continuous market clearing means that: Aswer

The Data of Macroeconomics

National Income: Where It Comes From and Where It Goes

Money and Inflation

The Open Economy

Unemployment

Economic Growth I: Capital Accumulation and Population Growth

Economic Growth II: Technology, Empirics, and Policy

Introduction to Economic Fluctuations

Aggregate Demand I: Building the Is-Lm Model

Aggregate Demand II: Applying the Is-Lm Model

Aggregate Supply and the Short-Run Tradeoff Between Inflation and Unemployment

Stabilization Policy

Government Debt and Budget Deficits

Introduction to the Financial System

Asset Prices and Interest Rates

Securities Markets

Banking

Financial Crises

Filters