Question 1

Supply and demand provides the basic explanatory framework for constructing both microeconomic and macroeconomic models.

Accepted Answer

A) True 
 B)False

Question 2

Macroeconomics stresses

Accepted Answer

A)  resource allocation and income distribution. 
B)  inflation and unemployment. 
C)  resource allocation and inflation. 
D)  unemployment and income distribution. 
A)  resource allocation and income distribution. 
B)  inflation and unemployment. 
C)  resource allocation and inflation. 
D)  unemployment and income distribution.

Question 3

In terms of macroeconomic conditions, the 1930s were the "good old days."

Accepted Answer

A) True 
 B)False

Question 4

The economy in the period 1950 to 1998 behaved differently than the economy in the 1870 to 1940 time period.Economists explain this difference

Accepted Answer

A)  in part because of the use of stabilization policy. 
B)  because of increases in U.S.population due to the "baby boom." 
C)  in part because of the globalization of the economy. 
D)  in part because of the use of competition policy. 
A)  in part because of the use of stabilization policy. 
B)  because of increases in U.S.population due to the "baby boom." 
C)  in part because of the globalization of the economy. 
D)  in part because of the use of competition policy.

Question 5

In The General Theory of Employment, Interest, and Money, Keynes rejected the idea that

Accepted Answer

A)  a capitalist economy always gravitates toward high levels of employment. 
B)  budget deficits necessarily cause recessions and inflation. 
C)  the ultimate breakdown of the capitalist system is inevitable. 
D)  international trade always helps to achieve economic stability. 
A)  a capitalist economy always gravitates toward high levels of employment. 
B)  budget deficits necessarily cause recessions and inflation. 
C)  the ultimate breakdown of the capitalist system is inevitable. 
D)  international trade always helps to achieve economic stability.

Question 6

In the aggregate demand-aggregate supply model, economic growth can be illustrated by an

Accepted Answer

A)  outward shift of the aggregate demand curve. 
B)  inward shift of the aggregate demand curve. 
C)  inward shift of the aggregate supply curve. 
D)  All of the above. 
A)  outward shift of the aggregate demand curve. 
B)  inward shift of the aggregate demand curve. 
C)  inward shift of the aggregate supply curve. 
D)  All of the above.

Question 7

International per capita GDP comparisons are misleading when countries involved differ greatly in

Accepted Answer

A)  the type of economic system each country uses to solve its economic problem. 
B)  the freedom of their election processes. 
C)  the percentage of economic activity that is transacted in organized markets. 
D)  the quantity of human and natural resources they possess. 
A)  the type of economic system each country uses to solve its economic problem. 
B)  the freedom of their election processes. 
C)  the percentage of economic activity that is transacted in organized markets. 
D)  the quantity of human and natural resources they possess.

Question 8

The Italian government collects a smaller amount of the taxes it is owed than the U.S.government.Other things being equal,

Accepted Answer

A)  U.S.and Italian GDP should be equal. 
B)  U.S.GDP should be higher than Italian GDP. 
C)  U.S.GDP should be lower than Italian GDP. 
D)  U.S.residents are better off than Italian residents. 
A)  U.S.and Italian GDP should be equal. 
B)  U.S.GDP should be higher than Italian GDP. 
C)  U.S.GDP should be lower than Italian GDP. 
D)  U.S.residents are better off than Italian residents.

Question 9

When the Art Institute of Chicago purchases a painting by Mary Cassatt that she produced in Paris in 1885, this would not be included in the U.S.GDP for 2011.

Accepted Answer

A) True 
 B)False

Question 10

Real GDP differs from nominal GDP in that nominal GDP measures

Accepted Answer

A)  output adjusted for inflation. 
B)  real output of goods and services. 
C)  output of goods and services at current prices. 
D)  real income adjusted for changes in the price level. 
A)  output adjusted for inflation. 
B)  real output of goods and services. 
C)  output of goods and services at current prices. 
D)  real income adjusted for changes in the price level.

Question 11

In 2011, you buy a beautiful vintage 1965 Thunderbird convertible.This purchase would

Accepted Answer

A)  be included in the GDP for 2011. 
B)  not be included in the GDP for 2011. 
C)  be included in both the GDP for 1965 and 2011. 
D)  be in the GDP for 2011 at a depreciated value. 
A)  be included in the GDP for 2011. 
B)  not be included in the GDP for 2011. 
C)  be included in both the GDP for 1965 and 2011. 
D)  be in the GDP for 2011 at a depreciated value.

Exam 22: An Introduction to Macroeconomics

Supply and demand provides the basic explanatory framework for constructing both microeconomic and macroeconomic models.

Macroeconomics stresses

In terms of macroeconomic conditions, the 1930s were the "good old days."

The economy in the period 1950 to 1998 behaved differently than the economy in the 1870 to 1940 time period.Economists explain this difference

In The General Theory of Employment, Interest, and Money, Keynes rejected the idea that

In the aggregate demand-aggregate supply model, economic growth can be illustrated by an

International per capita GDP comparisons are misleading when countries involved differ greatly in

The Italian government collects a smaller amount of the taxes it is owed than the U.S.government.Other things being equal,

When the Art Institute of Chicago purchases a painting by Mary Cassatt that she produced in Paris in 1885, this would not be included in the U.S.GDP for 2011.

Real GDP differs from nominal GDP in that nominal GDP measures

In 2011, you buy a beautiful vintage 1965 Thunderbird convertible.This purchase would

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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