Question 1

The significantly high rates of inflation in the 1970s occurred, in part,

Accepted Answer

A) because of increased petroleum prices. 
B) due to high unemployment. 
C) despite falling gasoline prices. 
D) due to restrictive monetary policies. 
A) because of increased petroleum prices. 
B) due to high unemployment. 
C) despite falling gasoline prices. 
D) due to restrictive monetary policies.

Question 2

GDP in 2015 would not include the resale of a house built in 2000.

Accepted Answer

A) True 
 B)False

Question 3

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

Question 4

Fiscal policy and monetary policy are economic stabilization policies designed to

Accepted Answer

A) prolong recessions. 
B) prolong inflation. 
C) stabilize prices. 
D) decrease employment. 
A) prolong recessions. 
B) prolong inflation. 
C) stabilize prices. 
D) decrease employment.

Question 5

Technological breakthroughs, such as the Internet, can be shown with a rightward shift of the aggregate supply curve.

Accepted Answer

A) True 
 B)False

Question 6

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 7

Which of the following is a true measure of national output?

Accepted Answer

A) GNP at market price 
B) Nominal GNP 
C) GDP in future dollars 
D) GDP using base-year prices 
A) GNP at market price 
B) Nominal GNP 
C) GDP in future dollars 
D) GDP using base-year prices

Question 8

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 2015.

Accepted Answer

A) True 
 B)False

Question 9

Compare and contrast the U.S.economic record prior to 1940 and after 1950.How do the two time periods differ? What best explains the differences according to a macroeconomist?

Accepted Answer

The economy experienced business cycles

Question 10

Real GDP values current output of goods and services at their current prices.

Accepted Answer

A) True 
 B)False

Question 11

Poor Asian countries may have per capita GDPs that may be less than $250.Why is this somewhat misleading for comparative purposes?

Accepted Answer

A) Most rich country's GDP is nonmarket activity. 
B) A significant amount of poor country's GDP is nonmarket activity. 
C) Poor countries do not use dollars. 
D) Poor countries have few resources. 
A) Most rich country's GDP is nonmarket activity. 
B) A significant amount of poor country's GDP is nonmarket activity. 
C) Poor countries do not use dollars. 
D) Poor countries have few resources.

Question 12

Figure 5-2
​  
-In Figure 5-2, an increase in government spending would cause

Accepted Answer

A) an outward shift in the aggregate supply curve and an increase in the price level. 
B) an outward shift in the aggregate demand curve and an increase in the price level. 
C) an inward shift of the aggregate demand curve and an increase in the price level. 
D) an inward shift of the aggregate demand curve and a decrease in the price level. 
A) an outward shift in the aggregate supply curve and an increase in the price level. 
B) an outward shift in the aggregate demand curve and an increase in the price level. 
C) an inward shift of the aggregate demand curve and an increase in the price level. 
D) an inward shift of the aggregate demand curve and a decrease in the price level.

Question 13

Illegal gambling on the NCAA Final Four would be included in GDP.

Accepted Answer

A) True 
 B)False

Question 14

Stabilization policy used during the Great Recession could be abstracted by a

Accepted Answer

A) decrease in aggregate demand. 
B) decrease in aggregate supply. 
C) increase in aggregate demand. 
D) increase in aggregate supply. 
A) decrease in aggregate demand. 
B) decrease in aggregate supply. 
C) increase in aggregate demand. 
D) increase in aggregate supply.

Question 15

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.

Question 16

Recessions

Accepted Answer

A) almost never occur in the American economy. 
B) follow a regular and predictable cycle. 
C) are common features of the American economy. 
D) have been abolished by wise macroeconomic policy. 
A) almost never occur in the American economy. 
B) follow a regular and predictable cycle. 
C) are common features of the American economy. 
D) have been abolished by wise macroeconomic policy.

Question 17

Gross domestic product includes

Accepted Answer

A) your purchase of 100 shares of Alibaba. 
B) your gift of $100 to your brother. 
C) your purchase of a gently used 1990 Porsche Carrera. 
D) your weekly paycheck as a server at Denny's. 
A) your purchase of 100 shares of Alibaba. 
B) your gift of $100 to your brother. 
C) your purchase of a gently used 1990 Porsche Carrera. 
D) your weekly paycheck as a server at Denny's.

Question 18

Keynes' great book offered the promise of ending depressions through

Accepted Answer

A) investors reacting to lower interest rates. 
B) consumers taking over the ownership of factories. 
C) government nationalizing key industries. 
D) government influencing aggregate demand. 
A) investors reacting to lower interest rates. 
B) consumers taking over the ownership of factories. 
C) government nationalizing key industries. 
D) government influencing aggregate demand.

Question 19

The election campaign of George Bush to succeed Ronald Reagan as president was

Accepted Answer

A) hindered due to high levels of unemployment in 1988. 
B) hindered by the increasing inflationary problems of the late 1980s. 
C) helped by the budget surpluses generated in the last years of the Reagan administration. 
D) helped by the continuing low levels of unemployment and inflation in 1988. 
A) hindered due to high levels of unemployment in 1988. 
B) hindered by the increasing inflationary problems of the late 1980s. 
C) helped by the budget surpluses generated in the last years of the Reagan administration. 
D) helped by the continuing low levels of unemployment and inflation in 1988.

Question 20

The first year of the Bush administration in 2001 could be represented as a(n)

Accepted Answer

A) increase in the aggregate demand curve. 
B) decrease in the aggregate demand curve. 
C) increase in the aggregate supply curve. 
D) decrease in the aggregate supply curve. 
A) increase in the aggregate demand curve. 
B) decrease in the aggregate demand curve. 
C) increase in the aggregate supply curve. 
D) decrease in the aggregate supply curve.

Exam 21: An Introduction to Macroeconomics

The significantly high rates of inflation in the 1970s occurred, in part,

GDP in 2015 would not include the resale of a house built in 2000.

Microeconomics focuses on ____; macroeconomics concentrates on ____.

Fiscal policy and monetary policy are economic stabilization policies designed to

Technological breakthroughs, such as the Internet, can be shown with a rightward shift of the aggregate supply curve.

Which of the following is a true measure of national output?

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 2015.

Compare and contrast the U.S.economic record prior to 1940 and after 1950.How do the two time periods differ? What best explains the differences according to a macroeconomist?

Real GDP values current output of goods and services at their current prices.

Poor Asian countries may have per capita GDPs that may be less than $250.Why is this somewhat misleading for comparative purposes?

Figure 5-2 ​ -In Figure 5-2, an increase in government spending would cause

Illegal gambling on the NCAA Final Four would be included in GDP.

Stabilization policy used during the Great Recession could be abstracted by a

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

Recessions

Gross domestic product includes

Keynes' great book offered the promise of ending depressions through

The election campaign of George Bush to succeed Ronald Reagan as president was

The first year of the Bush administration in 2001 could be represented as a(n)

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

Filters

Microeconomics focuses on ; macroeconomics concentrates on .

Figure 5-2 -In Figure 5-2, an increase in government spending would cause