Question 1

Intermediate goods, like milk sold by a farmer to a supermarket, are

Accepted Answer

A) included in GDP. 
B) included in GDP at market value. 
C) included if it is imported. 
D) are not included in GDP. 
A) included in GDP. 
B) included in GDP at market value. 
C) included if it is imported. 
D) are not included in GDP.

Question 2

Technically speaking, in what year did the "Great Recession" end?

Accepted Answer

A) 1933 
B) 1935 
C) 2007 
D) 2009 
E) It had not ended as of 2011. 
A) 1933 
B) 1935 
C) 2007 
D) 2009 
E) It had not ended as of 2011.

Question 3

If the government uses stabilization policies to reduce inflation, the economy may have to suffer

Accepted Answer

A) higher rates of real GDP growth. 
B) higher rates of unemployment. 
C) lower rates of unemployment. 
D) higher rates of price level growth. 
A) higher rates of real GDP growth. 
B) higher rates of unemployment. 
C) lower rates of unemployment. 
D) higher rates of price level growth.

Question 4

The vertical axis of the aggregate demand-aggregate supply model measures the amount of

Accepted Answer

A) total employment. 
B) total final output. 
C) the price level. 
D) net exports. 
A) total employment. 
B) total final output. 
C) the price level. 
D) net exports.

Question 5

Both the Bush and Obama administrations used tax cuts as a remedy to the housing "bubble."

Accepted Answer

A) True 
 B)False

Question 6

You can generally distinguish an aggregate supply-caused recession from an aggregate demand-caused recession because

Accepted Answer

A) real GDP will rise in an aggregate supply recession. 
B) the price level will fall in an aggregate supply recession. 
C) the price level will fall in an aggregate demand recession. 
D) real GDP will rise in an aggregate demand recession. 
A) real GDP will rise in an aggregate supply recession. 
B) the price level will fall in an aggregate supply recession. 
C) the price level will fall in an aggregate demand recession. 
D) real GDP will rise in an aggregate demand recession.

Question 7

If the price of pizza is $10 this year and $15 next year, then 200 pizzas would contribute

Accepted Answer

A) $2,000 to this year's GDP and $2,000 to next year's nominal GDP. 
B) $3,000 to this year's nominal GDP and $3,000 to next year's nominal GDP. 
C) $2,000 to this year's nominal GDP and $3,000 to next year's nominal GDP. 
D) $3,000 to this year's GDP and $2,000 to next year's GDP. 
A) $2,000 to this year's GDP and $2,000 to next year's nominal GDP. 
B) $3,000 to this year's nominal GDP and $3,000 to next year's nominal GDP. 
C) $2,000 to this year's nominal GDP and $3,000 to next year's nominal GDP. 
D) $3,000 to this year's GDP and $2,000 to next year's GDP.

Question 8

Does GDP for a particular year include items produced in a previous year?

Accepted Answer

A) Nominal GDP will not and real GDP will 
B) Real GDP will and nominal GDP will not 
C) Yes for both nominal and real GDP 
D) No for both nominal and real GDP 
A) Nominal GDP will not and real GDP will 
B) Real GDP will and nominal GDP will not 
C) Yes for both nominal and real GDP 
D) No for both nominal and real GDP

Question 9

When people smoke cigarettes, their friends and family members may become sick.This affects GDP by

Accepted Answer

A) reducing GDP by the amount of medical care needed. 
B) reducing GDP by the cost of the cigarettes purchased. 
C) increasing GDP by the cost of the medical care and the cost of the cigarettes purchased. 
D) decreasing GDP by the cost of the medical care and increasing GDP by the cost of the cigarettes purchased. 
A) reducing GDP by the amount of medical care needed. 
B) reducing GDP by the cost of the cigarettes purchased. 
C) increasing GDP by the cost of the medical care and the cost of the cigarettes purchased. 
D) decreasing GDP by the cost of the medical care and increasing GDP by the cost of the cigarettes purchased.

Question 10

Mitsubishi Corporation of America builds a car in Normal, Illinois, and ships it to Japan for sale.In which country's GDP is this production included?

Accepted Answer

A) Japan 
B) Both Japan and the United States 
C) In Japan as retail value and the United States as wholesale value 
D) Half the value in Japan and half in the United States 
E) The United States 
A) Japan 
B) Both Japan and the United States 
C) In Japan as retail value and the United States as wholesale value 
D) Half the value in Japan and half in the United States 
E) The United States

Question 11

What was not an effect of the Great Depression?

Accepted Answer

A) Policy makers recommended boots in government spending after recessions. 
B) Policy makers believed reductions in taxes would promote growth. 
C) The government limited its role in correcting the economy. 
D) The Federal Reserve increased its role in correcting the economy. 
A) Policy makers recommended boots in government spending after recessions. 
B) Policy makers believed reductions in taxes would promote growth. 
C) The government limited its role in correcting the economy. 
D) The Federal Reserve increased its role in correcting the economy.

Question 12

Since the end of World War II, the economy of the United States has been more influenced by stabilization policy.One of the undesirable side effects of this has been that the economy now has a greater tendency to suffer from

Accepted Answer

A) more severe recessions and depressions. 
B) higher levels of unemployment and lower rates of employment growth. 
C) lower rates of growth in real and nominal GDP. 
D) more persistent periods of inflation. 
A) more severe recessions and depressions. 
B) higher levels of unemployment and lower rates of employment growth. 
C) lower rates of growth in real and nominal GDP. 
D) more persistent periods of inflation.

Question 13

The clearest sign of economic growth is a(n)

Accepted Answer

A) increase in nominal GDP. 
B) increase in real GDP. 
C) decrease in nominal GDP. 
D) increase in nominal GDP 
A) increase in nominal GDP. 
B) increase in real GDP. 
C) decrease in nominal GDP. 
D) increase in nominal GDP

Question 14

Business cycles are a persistent feature of the U.S.economy.

Accepted Answer

A) True 
 B)False

Question 15

Stagflation can be defined as a combination of ____.

Accepted Answer

A) economic migration and inflation 
B) economic aggregation and deflation 
C) economic stagnation and inflation 
D) economic aggregation and inflation 
A) economic migration and inflation 
B) economic aggregation and deflation 
C) economic stagnation and inflation 
D) economic aggregation and inflation

Question 16

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 17

GDP consistently measures the output of goods and services in all countries.

Accepted Answer

A) True 
 B)False

Question 18

Nominal GDP is

Accepted Answer

A) also called real GDP. 
B) a more accurate measure than real GDP. 
C) real GDP adjusted for changes in the price level. 
D) GDP measured in current prices. 
A) also called real GDP. 
B) a more accurate measure than real GDP. 
C) real GDP adjusted for changes in the price level. 
D) GDP measured in current prices.

Question 19

The most severe depression in the United States was the 30 percent decrease in real GDP that occurred between

Accepted Answer

A) 1899 and 1913. 
B) 1929 and 1933. 
C) 1959 and 1963. 
D) 1979 and 1983. 
A) 1899 and 1913. 
B) 1929 and 1933. 
C) 1959 and 1963. 
D) 1979 and 1983.

Question 20

Individuals live and work in both individual and aggregate economic entities.

Accepted Answer

A) True 
 B)False

Exam 21: An Introduction to Macroeconomics

Intermediate goods, like milk sold by a farmer to a supermarket, are

Technically speaking, in what year did the "Great Recession" end?

If the government uses stabilization policies to reduce inflation, the economy may have to suffer

The vertical axis of the aggregate demand-aggregate supply model measures the amount of

Both the Bush and Obama administrations used tax cuts as a remedy to the housing "bubble."

You can generally distinguish an aggregate supply-caused recession from an aggregate demand-caused recession because

If the price of pizza is $10 this year and $15 next year, then 200 pizzas would contribute

Does GDP for a particular year include items produced in a previous year?

When people smoke cigarettes, their friends and family members may become sick.This affects GDP by

Mitsubishi Corporation of America builds a car in Normal, Illinois, and ships it to Japan for sale.In which country's GDP is this production included?

What was not an effect of the Great Depression?

Since the end of World War II, the economy of the United States has been more influenced by stabilization policy.One of the undesirable side effects of this has been that the economy now has a greater tendency to suffer from

The clearest sign of economic growth is a(n)

Business cycles are a persistent feature of the U.S.economy.

Stagflation can be defined as a combination of ____.

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

GDP consistently measures the output of goods and services in all countries.

Nominal GDP is

The most severe depression in the United States was the 30 percent decrease in real GDP that occurred between

Individuals live and work in both individual and aggregate economic entities.

What Is Economics

The Economony: 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

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

The Economics of 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

Contemporary Issues in the Useconomy

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