Question 1

The Iranian Revolution in 1979 led to another interruption of oil supplies to the United States.This caused the reoccurrence of

Accepted Answer

A)  deflation. 
B)  full-employment. 
C)  trade surpluses. 
D)  stagflation. 
A)  deflation. 
B)  full-employment. 
C)  trade surpluses. 
D)  stagflation. D

Question 2

In the United States, GDP has grown slower than the population since 1870.

Accepted Answer

A) True 
 B)False  False

Question 3

Cars produced by General Motors in Mexico would be included in U.S.Gross Domestic Product.

Accepted Answer

A) True 
 B)False  False

Question 4

In response to the "Great Depression" the Obama administration responded with more tax cuts, increased federal spending, and aid to state and local governments.

Accepted Answer

A) True 
 B)False

Question 5

If hot dogs cost $2 this year and $3 next year, then 100 hotdogs will contribute

Accepted Answer

A)  $200 to this year's nominal GDP and $166 to next year's nominal GDP. 
B)  $200 to this year's real GDP and $300 to next year's real GDP. 
C)  the same dollar amount to each year's nominal GDP because hotdogs are intermediate goods. 
D)  $200 to this year's nominal GDP and $300 to next year's nominal GDP. 
A)  $200 to this year's nominal GDP and $166 to next year's nominal GDP. 
B)  $200 to this year's real GDP and $300 to next year's real GDP. 
C)  the same dollar amount to each year's nominal GDP because hotdogs are intermediate goods. 
D)  $200 to this year's nominal GDP and $300 to next year's nominal GDP.

Question 6

Economic fluctuations in the United States have been less extreme since the 1950s.

Accepted Answer

A) True 
 B)False

Question 7

Gross Domestic Product is best described as the

Accepted Answer

A)  measure of a nation's total economic welfare. 
B)  national income, including nonmarket income. 
C)  sum of money values of all final output produced in the domestic economy within the year. 
D)  national output minus environmental damage. 
A)  measure of a nation's total economic welfare. 
B)  national income, including nonmarket income. 
C)  sum of money values of all final output produced in the domestic economy within the year. 
D)  national output minus environmental damage.

Question 8

General Motors Corporation (a U.S.-based firm) produces a Saab vehicle in Sweden, and sells it in the United States.In which country's GDP is it included?

Accepted Answer

A)  Sweden and the United States 
B)  The United States because it was sold there 
C)  The United States because GM is a U.S.company 
D)  Sweden because it was produced there 
A)  Sweden and the United States 
B)  The United States because it was sold there 
C)  The United States because GM is a U.S.company 
D)  Sweden because it was produced there

Question 9

If aggregate demand shifts inward over a long period of time, with aggregate supply held constant, the economy should experience

Accepted Answer

A)  unemployment. 
B)  recession. 
C)  stagflation. 
D)  inflation. 
E)  budget surpluses. 
A)  unemployment. 
B)  recession. 
C)  stagflation. 
D)  inflation. 
E)  budget surpluses.

Question 10

The supply-side policies of the Reagan and Bush administrations led to high levels of

Accepted Answer

A)  budget surpluses. 
B)  unemployment. 
C)  inflation. 
D)  budget deficits. 
A)  budget surpluses. 
B)  unemployment. 
C)  inflation. 
D)  budget deficits.

Question 11

In macroeconomics, the vertical axis in a supply-demand model measures the price level rather than a particular product's price.

Accepted Answer

A) True 
 B)False

Question 12

"Underground" economic activity can best be described as

Accepted Answer

A)  the construction of subway transportation. 
B)  the building of foundation structures for skyscrapers. 
C)  the mining and oil industries. 
D)  barter or cash activity that is not reported as income. 
A)  the construction of subway transportation. 
B)  the building of foundation structures for skyscrapers. 
C)  the mining and oil industries. 
D)  barter or cash activity that is not reported as income.

Question 13

Aneta has owned an Italian sports car for several years and now she wants to sell it.She paid $8,500 for it in 1993 and she has just sold it for $39,000 in 2011.How is this sale included in the GDP for 2011?

Accepted Answer

A)  $8,500 is included in 2011 GDP 
B)  $39,000 is included in 2011 GDP 
C)  The increase in value of $10,500 is included in 2011 GDP 
D)  It is not included in 2011 GDP 
A)  $8,500 is included in 2011 GDP 
B)  $39,000 is included in 2011 GDP 
C)  The increase in value of $10,500 is included in 2011 GDP 
D)  It is not included in 2011 GDP

Question 14

A good produced in 2009 and held in inventory until it is sold in 2010 would be included in which measure of GDP?

Accepted Answer

A)  Half the value in 2009 and half the value in 2010 
B)  In 2010 GDP 
C)  In both 2009 and 2010 GDP 
D)  In 2009 GDP 
A)  Half the value in 2009 and half the value in 2010 
B)  In 2010 GDP 
C)  In both 2009 and 2010 GDP 
D)  In 2009 GDP

Question 15

The basic organizing framework for both microeconomic and macroeconomic models is

Accepted Answer

A)  purely competitive markets. 
B)  government planning of the economy. 
C)  demand and supply. 
D)  democratic socialism. 
E)  all of the above. 
A)  purely competitive markets. 
B)  government planning of the economy. 
C)  demand and supply. 
D)  democratic socialism. 
E)  all of the above.

Question 16

Figure 5-2
  
-In Figure 5-2, if the aggregate demand curve moves to the right less rapidly than the aggregate supply curve, then

Accepted Answer

A)  the price level should decline over time. 
B)  the price level should remain stable. 
C)  the price level will tend to increase. 
D)  the level of real GDP should decrease. 
A)  the price level should decline over time. 
B)  the price level should remain stable. 
C)  the price level will tend to increase. 
D)  the level of real GDP should decrease.

Question 17

One major effect of the Great Depression was

Accepted Answer

A)  it reaffirmed everyone's faith that capitalism was a self-correcting system. 
B)  it encouraged voters to limit the role of government. 
C)  the creation of the rational expectations school of economic theory. 
D)  a decreased faith in the ability of economies to automatically correct major problems. 
A)  it reaffirmed everyone's faith that capitalism was a self-correcting system. 
B)  it encouraged voters to limit the role of government. 
C)  the creation of the rational expectations school of economic theory. 
D)  a decreased faith in the ability of economies to automatically correct major problems.

Question 18

During economic fluctuations, individual markets usually move in different directions.

Accepted Answer

A) True 
 B)False

Question 19

To fight recession, the government may

Accepted Answer

A)  decrease aggregate demand, which will also lead to lower unemployment rates. 
B)  increase aggregate demand, which will also lead to higher price levels. 
C)  increase aggregate demand, which will also lead to lower price levels. 
D)  decrease aggregate demand, which will also lead to higher unemployment rates. 
A)  decrease aggregate demand, which will also lead to lower unemployment rates. 
B)  increase aggregate demand, which will also lead to higher price levels. 
C)  increase aggregate demand, which will also lead to lower price levels. 
D)  decrease aggregate demand, which will also lead to higher unemployment rates.

Question 20

The movements of real GDP and inflation during the 1973-1975 recession can be best explained by a

Accepted Answer

A)  rightward shift of the aggregate demand curve. 
B)  leftward shift of the aggregate demand curve. 
C)  rightward shift of the aggregate supply curve. 
D)  leftward shift of the aggregate supply curve. 
A)  rightward shift of the aggregate demand curve. 
B)  leftward shift of the aggregate demand curve. 
C)  rightward shift of the aggregate supply curve. 
D)  leftward shift of the aggregate supply curve.

Exam 22: An Introduction to Macroeconomics

The Iranian Revolution in 1979 led to another interruption of oil supplies to the United States.This caused the reoccurrence of

In the United States, GDP has grown slower than the population since 1870.

Cars produced by General Motors in Mexico would be included in U.S.Gross Domestic Product.

In response to the "Great Depression" the Obama administration responded with more tax cuts, increased federal spending, and aid to state and local governments.

If hot dogs cost $2 this year and $3 next year, then 100 hotdogs will contribute

Economic fluctuations in the United States have been less extreme since the 1950s.

Gross Domestic Product is best described as the

General Motors Corporation (a U.S.-based firm) produces a Saab vehicle in Sweden, and sells it in the United States.In which country's GDP is it included?

If aggregate demand shifts inward over a long period of time, with aggregate supply held constant, the economy should experience

The supply-side policies of the Reagan and Bush administrations led to high levels of

In macroeconomics, the vertical axis in a supply-demand model measures the price level rather than a particular product's price.

"Underground" economic activity can best be described as

Aneta has owned an Italian sports car for several years and now she wants to sell it.She paid $8,500 for it in 1993 and she has just sold it for $39,000 in 2011.How is this sale included in the GDP for 2011?

A good produced in 2009 and held in inventory until it is sold in 2010 would be included in which measure of GDP?

The basic organizing framework for both microeconomic and macroeconomic models is

Figure 5-2 -In Figure 5-2, if the aggregate demand curve moves to the right less rapidly than the aggregate supply curve, then

One major effect of the Great Depression was

During economic fluctuations, individual markets usually move in different directions.

To fight recession, the government may

The movements of real GDP and inflation during the 1973-1975 recession can be best explained by a

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: The Importance of Marginal Analysis

Securities: Business Finance, and the Economy: The Tail that Wags the Dog?

The Firm and the Industry under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets I: The Price System

The Shortcomings of Free Markets

The Market's Prime Achievement: Innovation and Growth

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: The Human Inputs

Poverty, Inequality, and Discrimination

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

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