Question 1

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

Accepted Answer

A) Macroeconomic data provides 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 results. 
D) Graphs and charts can be used to illustrate the history of macroeconomic variables. 
A) Macroeconomic data provides 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 results. 
D) Graphs and charts can be used to illustrate the history of macroeconomic variables.

Question 2

In an economic model:

Accepted Answer

A) exogenous variables and endogenous variables are both fixed when they enter the model. 
B) endogenous variables and exogenous variables are both determined within the model. 
C) endogenous variables affect exogenous variables. 
D) exogenous variables affect endogenous variables. 
A) exogenous variables and endogenous variables are both fixed when they enter the model. 
B) endogenous variables and exogenous variables are both determined within the model. 
C) endogenous variables affect exogenous variables. 
D) exogenous variables affect endogenous variables.

Question 3

In a simple model of the supply and demand for pizza, the endogenous variables are:

Accepted Answer

A) the price of pizza and the price of cheese. 
B) aggregate income and the quantity of pizza sold. 
C) aggregate income and the price of cheese. 
D) the price of pizza and the quantity of pizza sold. 
A) the price of pizza and the price of cheese. 
B) aggregate income and the quantity of pizza sold. 
C) aggregate income and the price of cheese. 
D) the price of pizza and the quantity of pizza sold.

Question 4

Variables that a model tries to explain are called:

Accepted Answer

A) endogenous. 
B) exogenous. 
C) market clearing. 
D) fixed. 
A) endogenous. 
B) exogenous. 
C) market clearing. 
D) fixed.

Question 5

The production function for an economy can be expressed as Y = F(K,L), where Y is real GDP, K is the quantity of capital in the economy, and L is the quantity of labor in the economy.
a. If F( ) = 100 + 3K + 9L, what is real GDP if the quantity of capital is 200 and the quantity of labor is 500?
b. What is/are the endogenous variable(s) in this model?
c. What is/are the exogenous variable(s) in this model?

Accepted Answer

a. Y = 10

Question 6

In the relationship expressed in functional form, Y = G(K, L), Y stands for real GDP, K stands for the amount of capital in the economy, and L stands for the amount of labor in the economy. In this case G( ):

Accepted Answer

A) is the growth rate of real GDP when the amount of capital and labor in the economy is fixed. 
B) indicates that the variables inside the parentheses are endogenous variables in the model. 
C) is the symbol that stands for government input into the production process. 
D) is the function telling how the variables in the parentheses determine real GDP. 
A) is the growth rate of real GDP when the amount of capital and labor in the economy is fixed. 
B) indicates that the variables inside the parentheses are endogenous variables in the model. 
C) is the symbol that stands for government input into the production process. 
D) is the function telling how the variables in the parentheses determine real GDP.

Question 7

Compared with a recession, real GDP during a depression:

Accepted Answer

A) increases more rapidly. 
B) increases at approximately the same rate. 
C) decreases at approximately the same rate. 
D) decreases more severely. 
A) increases more rapidly. 
B) increases at approximately the same rate. 
C) decreases at approximately the same rate. 
D) decreases more severely.

Question 8

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 9

In a simple model of the supply and demand for pizza, when the price of cheese increases, the price of pizza _ and the quantity purchased _ _.

Accepted Answer

A) increases; increases 
B) decreases; increases 
C) decreases; decreases 
D) increases; decreases 
A) increases; increases 
B) decreases; increases 
C) decreases; decreases 
D) increases; decreases

Question 10

A measure of how fast prices are rising is called the:

Accepted Answer

A) growth rate of real GDP. 
B) inflation rate. 
C) unemploymentrateD.market-clearing rate. 
A) growth rate of real GDP. 
B) inflation rate. 
C) unemploymentrateD.market-clearing rate.

Question 11

In a simple graphical model of the supply and demand for pizza with the price of pizza measured vertically and the quantity of pizza measured horizontally:

Accepted Answer

A) the supply curve slopes upward and to the right. 
B) the demand curve slopes upward and to the right. 
C) the supply curve slopes downward and to the right. 
D) at the equilibrium price, the supply of pizza exceeds the demand for pizza. 
A) the supply curve slopes upward and to the right. 
B) the demand curve slopes upward and to the right. 
C) the supply curve slopes downward and to the right. 
D) at the equilibrium price, the supply of pizza exceeds the demand for pizza.

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

In an economic model:

In a simple model of the supply and demand for pizza, the endogenous variables are:

Variables that a model tries to explain are called:

In the relationship expressed in functional form, Y = G(K, L), Y stands for real GDP, K stands for the amount of capital in the economy, and L stands for the amount of labor in the economy. In this case G( ):

Compared with a recession, real GDP during a depression:

A period of falling prices is called:

In a simple model of the supply and demand for pizza, when the price of cheese increases, the price of pizza _ and the quantity purchased _ _.

A measure of how fast prices are rising is called the:

In a simple graphical model of the supply and demand for pizza with the price of pizza measured vertically and the quantity of pizza measured horizontally:

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

The Open Economy Revisited: the Mundell-Fleming Model and the Exchange-Rate Regime

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Exam 1: The Science of Macroeconomics

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

In an economic model:

In a simple model of the supply and demand for pizza, the endogenous variables are:

Variables that a model tries to explain are called:

In the relationship expressed in functional form, Y = G(K, L), Y stands for real GDP, K stands for the amount of capital in the economy, and L stands for the amount of labor in the economy. In this case G( ):

Compared with a recession, real GDP during a depression:

A period of falling prices is called:

In a simple model of the supply and demand for pizza, when the price of cheese increases, the price of pizza _ and the quantity purchased _ _.

A measure of how fast prices are rising is called the:

In a simple graphical model of the supply and demand for pizza with the price of pizza measured vertically and the quantity of pizza measured horizontally:

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

The Open Economy Revisited: the Mundell-Fleming Model and the Exchange-Rate Regime

Filters