Question 1

In contrast to the typical Republican Party laissez-faire policies, President Richard Nixon in 1971 introduced

Accepted Answer

A)  mandatory drug testing of cabinet officers. 
B)  monetary targets for the Federal Reserve Board. 
C)  wage and price controls. 
D)  mandatory gold purchases by the U.S.Treasury. 
A)  mandatory drug testing of cabinet officers. 
B)  monetary targets for the Federal Reserve Board. 
C)  wage and price controls. 
D)  mandatory gold purchases by the U.S.Treasury.

Question 2

From the end of World War II until the present, the price level has

Accepted Answer

A)  slowly fallen over time. 
B)  fluctuated around a downward trend. 
C)  remained stable throughout the period. 
D)  fluctuated around an upward trend. 
A)  slowly fallen over time. 
B)  fluctuated around a downward trend. 
C)  remained stable throughout the period. 
D)  fluctuated around an upward trend.

Question 3

The period of 1973 to 1980 can best be described as a time of

Accepted Answer

A)  deflation. 
B)  reflation. 
C)  unflation. 
D)  stagflation. 
E)  disflation. 
A)  deflation. 
B)  reflation. 
C)  unflation. 
D)  stagflation. 
E)  disflation.

Question 4

Production for war and environmental clean-up services are not included in GDP.

Accepted Answer

A) True 
 B)False

Question 5

The main reason that President Clinton was forced to revise his campaign promise to cut taxes was that, in 1993, he faced a large

Accepted Answer

A)  balance of payments surplus. 
B)  balance of payments deficit. 
C)  federal budget deficit. 
D)  federal budget surplus. 
A)  balance of payments surplus. 
B)  balance of payments deficit. 
C)  federal budget deficit. 
D)  federal budget surplus.

Question 6

The aggregate demand curve shows the quantity of domestic product

Accepted Answer

A)  produced at each possible price level. 
B)  demanded and produced at each possible price level. 
C)  that is exported at each possible price level. 
D)  demanded at each possible price level. 
A)  produced at each possible price level. 
B)  demanded and produced at each possible price level. 
C)  that is exported at each possible price level. 
D)  demanded at each possible price level.

Question 7

What are intermediate goods? Why do economists exclude the value of intermediate goods while calculating national income?

Accepted Answer

Intermediate goods are goods used as inp

Question 8

If Honda (a Japan-based firm) produces a car in Ohio and exports it to Japan, in which country's GDP will the car be counted?

Accepted Answer

A)  Japan's, because Honda is a Japanese company 
B)  Japan's because that is where the car is purchased 
C)  The GDP of the United States because that is where it was built 
D)  Both Japan and the United States 
A)  Japan's, because Honda is a Japanese company 
B)  Japan's because that is where the car is purchased 
C)  The GDP of the United States because that is where it was built 
D)  Both Japan and the United States

Question 9

Two of the most important macroeconomic issues are unemployment and inflation.

Accepted Answer

A) True 
 B)False

Question 10

During the first year of the Bush administration in 2001, the American economy

Accepted Answer

A)  increased its already rapid growth rate. 
B)  experienced high levels of inflation. 
C)  slowed in its rate of economic growth. 
D)  experienced a decrease in the rate of unemployment. 
A)  increased its already rapid growth rate. 
B)  experienced high levels of inflation. 
C)  slowed in its rate of economic growth. 
D)  experienced a decrease in the rate of unemployment.

Question 11

Combating recession may require the government to

Accepted Answer

A)  decrease aggregate supply. 
B)  increase aggregate demand. 
C)  decrease aggregate demand. 
D)  decrease government spending. 
A)  decrease aggregate supply. 
B)  increase aggregate demand. 
C)  decrease aggregate demand. 
D)  decrease government spending.

Question 12

If the prices of all goods and services rise during the year,

Accepted Answer

A)  real GDP may fall. 
B)  nominal GDP must rise. 
C)  nominal GDP may increase. 
D)  real GDP must rise. 
A)  real GDP may fall. 
B)  nominal GDP must rise. 
C)  nominal GDP may increase. 
D)  real GDP must rise.

Question 13

If aggregate demand keeps shifting rightward month after month and aggregate supply remains constant, the economy will experience a recession.

Accepted Answer

A) True 
 B)False

Question 14

John Maynard Keynes wrote that economies can suffer recession or depression for many years if the government does not intervene.

Accepted Answer

A) True 
 B)False

Question 15

Government policy to reduce unemployment and increase national output can be illustrated by an

Accepted Answer

A)  outward shift of the aggregate demand curve caused by an increase in government spending. 
B)  outward shift of the aggregate supply curve caused by a reduction in government spending. 
C)  inward shift of the aggregate demand curve caused by an increase in government spending. 
D)  inward shift of the aggregate supply curve caused by a reduction in government spending. 
A)  outward shift of the aggregate demand curve caused by an increase in government spending. 
B)  outward shift of the aggregate supply curve caused by a reduction in government spending. 
C)  inward shift of the aggregate demand curve caused by an increase in government spending. 
D)  inward shift of the aggregate supply curve caused by a reduction in government spending.

Question 16

Describe some of the steps used to combat inflation.What are their side-effects?

Accepted Answer

Inflation is frequently caused by aggreg

Question 17

The successes of the 1960s were ascribed to the effects of

Accepted Answer

A)  classical policies from the 1800s. 
B)  classical policies from the 1930s. 
C)  classical policies from the 1950s. 
D)  Keynesian policies from the 1930s. 
E)  Keynesian policies from the 1950s. 
A)  classical policies from the 1800s. 
B)  classical policies from the 1930s. 
C)  classical policies from the 1950s. 
D)  Keynesian policies from the 1930s. 
E)  Keynesian policies from the 1950s.

Question 18

Aggregate demand and supply curves have been widely used to analyze the performance of the macroeconomy.Figure 5-3 shows four diagrams that represent different changes in the macroeconomy.Choose the diagram that best represents the situations described in the following questions.
Figure 5-3
  
-Which graph in Figure 5-3 best represents the favorable macroeconomy of the late 1990s?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 19

Aggregate demand and supply curves have been widely used to analyze the performance of the macroeconomy.Figure 5-3 shows four diagrams that represent different changes in the macroeconomy.Choose the diagram that best represents the situations described in the following questions.
Figure 5-3
  
-Which graph in Figure 5-3 best represents the supply-side shock of the 1970s oil crisis?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 20

Microeconomics focuses on ____; macroeconomics concentrates on ____.

Accepted Answer

A)  the basic tools of analysis; the use of abstractions and models 
B)  the economies of various countries; the decisions of individual companies 
C)  the decisions of individual units; the behavior of entire economies 
D)  the economic aggregates; the decisions of individual units 
A)  the basic tools of analysis; the use of abstractions and models 
B)  the economies of various countries; the decisions of individual companies 
C)  the decisions of individual units; the behavior of entire economies 
D)  the economic aggregates; the decisions of individual units

Exam 22: An Introduction to Macroeconomics

In contrast to the typical Republican Party laissez-faire policies, President Richard Nixon in 1971 introduced

From the end of World War II until the present, the price level has

The period of 1973 to 1980 can best be described as a time of

Production for war and environmental clean-up services are not included in GDP.

The main reason that President Clinton was forced to revise his campaign promise to cut taxes was that, in 1993, he faced a large

The aggregate demand curve shows the quantity of domestic product

What are intermediate goods? Why do economists exclude the value of intermediate goods while calculating national income?

If Honda (a Japan-based firm) produces a car in Ohio and exports it to Japan, in which country's GDP will the car be counted?

Two of the most important macroeconomic issues are unemployment and inflation.

During the first year of the Bush administration in 2001, the American economy

Combating recession may require the government to

If the prices of all goods and services rise during the year,

If aggregate demand keeps shifting rightward month after month and aggregate supply remains constant, the economy will experience a recession.

John Maynard Keynes wrote that economies can suffer recession or depression for many years if the government does not intervene.

Government policy to reduce unemployment and increase national output can be illustrated by an

Describe some of the steps used to combat inflation.What are their side-effects?

The successes of the 1960s were ascribed to the effects of

Microeconomics focuses on ____; macroeconomics concentrates on ____.

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

Filters

Microeconomics focuses on ; macroeconomics concentrates on .