Question 1

A recession is a period during which

Accepted Answer

A) aggregate demand, production, and unemployment rise. 
B) aggregate demand, production, and unemployment fall. 
C) aggregate demand, production, and unemployment remain the same. 
D) aggregate demand and production rise while unemployment remains the same. 
E) aggregate demand and production fall while unemployment rises. 
A) aggregate demand, production, and unemployment rise. 
B) aggregate demand, production, and unemployment fall. 
C) aggregate demand, production, and unemployment remain the same. 
D) aggregate demand and production rise while unemployment remains the same. 
E) aggregate demand and production fall while unemployment rises.

Question 2

Consider the economic impact of Hurricane Florence in 2018.Which of the following statements is correct?

Accepted Answer

A) Spending toward reconstruction would lead to an increase in GDP. 
B) Increased government spending on relief efforts in the United States would decrease GDP. 
C) Damaged buildings and looting would lead to a decrease in GDP. 
D) U.S.well-being improves the more reconstruction efforts are needed, following the decline in GDP. 
A) Spending toward reconstruction would lead to an increase in GDP. 
B) Increased government spending on relief efforts in the United States would decrease GDP. 
C) Damaged buildings and looting would lead to a decrease in GDP. 
D) U.S.well-being improves the more reconstruction efforts are needed, following the decline in GDP.

Question 3

In the years after the Great Recession, the inflation rate has been

Accepted Answer

A) volatile. 
B) diminishing over time. 
C) stabilized at 0. 
D) relatively low. 
A) volatile. 
B) diminishing over time. 
C) stabilized at 0. 
D) relatively low.

Question 4

During the summer months, many families go hiking, camping, and fishing at national parks.This is an example of

Accepted Answer

A) aggregate demand for the outdoors. 
B) the incentive to work hard, play hard. 
C) underground economic activity. 
D) the implicit value of leisure time. 
A) aggregate demand for the outdoors. 
B) the incentive to work hard, play hard. 
C) underground economic activity. 
D) the implicit value of leisure time.

Question 5

Define and distinguish between real and nominal GDP.Explain why the distinction is important to economists.

Accepted Answer

Real GDP (or GDP in constant dollars) is

Question 6

What was suggested by Keynes to move the economy out of a depressed state?

Accepted Answer

A) The invisible hand 
B) The price mechanism 
C) Monetary and fiscal policy 
D) Zero government intervention 
A) The invisible hand 
B) The price mechanism 
C) Monetary and fiscal policy 
D) Zero government intervention

Question 7

The Great Depression ended in the United States when

Accepted Answer

A) the New Deal reforms were initiated by President Roosevelt. 
B) deficit spending ended in 1937. 
C) the United States returned to the gold standard in 1940. 
D) the United States began to mobilize for war in the early 1940s. 
E) the German economy suffered hyperinflation in the 1920s. 
A) the New Deal reforms were initiated by President Roosevelt. 
B) deficit spending ended in 1937. 
C) the United States returned to the gold standard in 1940. 
D) the United States began to mobilize for war in the early 1940s. 
E) the German economy suffered hyperinflation in the 1920s.

Question 8

A macroeconomist would concentrate on which of the following issues?

Accepted Answer

A) The price of pizzas 
B) The profits of the IBM Corporation 
C) The unemployment rate in Germany 
D) The market for hotdogs 
A) The price of pizzas 
B) The profits of the IBM Corporation 
C) The unemployment rate in Germany 
D) The market for hotdogs

Question 9

Which of the following would be measured in GDP?

Accepted Answer

A) The time you spend vacationing off the coast of California 
B) The purchase of illegal drugs 
C) The money you use to buy into a Fantasy Football league with your friends 
D) The medical care expenses you incur as a result of the car accident you were in last week. 
A) The time you spend vacationing off the coast of California 
B) The purchase of illegal drugs 
C) The money you use to buy into a Fantasy Football league with your friends 
D) The medical care expenses you incur as a result of the car accident you were in last week.

Question 10

Amazon.com, an Internet retailer of books, buys a shipment of economics textbooks from a publisher.Is this included in GDP?

Accepted Answer

A) Yes 
B) No 
C) It depends on how the payment is made 
D) Yes, in real but not nominal GDP 
E) Yes, in nominal but not real GDP 
A) Yes 
B) No 
C) It depends on how the payment is made 
D) Yes, in real but not nominal GDP 
E) Yes, in nominal but not real GDP

Question 11

Combining various goods and services into a convenient grouping is called

Accepted Answer

A) conglomeration. 
B) blending. 
C) congregation. 
D) agglomeration. 
E) aggregation. 
A) conglomeration. 
B) blending. 
C) congregation. 
D) agglomeration. 
E) aggregation.

Question 12

Economist John Maynard Keynes wrote that recessions can be prolonged and interminable; therefore, government action is needed to jump-start the economy.

Accepted Answer

A) True 
 B)False

Question 13

Gross domestic product is calculated by adding together

Accepted Answer

A) the number of goods and services produced in the economy. 
B) money value of final goods and services. 
C) number of workers employed in national production. 
D) all commodities but not services produced in the economy. 
A) the number of goods and services produced in the economy. 
B) money value of final goods and services. 
C) number of workers employed in national production. 
D) all commodities but not services produced in the economy.

Question 14

A product that is produced in 2015 and not sold until 2016 will be counted in the GDP for

Accepted Answer

A) both 2015 and 2016. 
B) neither 2015 nor 2016. 
C) 2015 
D) 2016 
A) both 2015 and 2016. 
B) neither 2015 nor 2016. 
C) 2015 
D) 2016

Question 15

The term "stagflation" was invented in the 1970s to describe an economy experiencing both

Accepted Answer

A) deflation and economic stagnation. 
B) inflation and economic stagnation. 
C) high inflation and high employment. 
D) high inflation and high levels of economic growth. 
A) deflation and economic stagnation. 
B) inflation and economic stagnation. 
C) high inflation and high employment. 
D) high inflation and high levels of economic growth.

Question 16

Part of the good economic performance of the United States in the 1990s can be explained by a rightward-shifting aggregate supply curve.

Accepted Answer

A) True 
 B)False

Question 17

The primary benefit to the macroeconomy of increasing government spending is a(n)

Accepted Answer

A) decrease in the price level. 
B) decrease in real GDP. 
C) increase in the price level. 
D) decrease in the unemployment rate. 
A) decrease in the price level. 
B) decrease in real GDP. 
C) increase in the price level. 
D) decrease in the unemployment rate.

Question 18

The devastation of Hurricane Sandy reduced GDP.

Accepted Answer

A) True 
 B)False

Question 19

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 20

In The General Theory of Employment, Interest, and Money, Keynes

Accepted Answer

A) recommended international trade to increase economic stability after recessions. 
B) encouraged government actions to shorten the recovery time of recessions.. 
C) supported free markets. 
D) observed budget surpluses were necessary fixes following budget deficits. 
A) recommended international trade to increase economic stability after recessions. 
B) encouraged government actions to shorten the recovery time of recessions.. 
C) supported free markets. 
D) observed budget surpluses were necessary fixes following budget deficits.

Exam 21: An Introduction to Macroeconomics

A recession is a period during which

Consider the economic impact of Hurricane Florence in 2018.Which of the following statements is correct?

In the years after the Great Recession, the inflation rate has been

During the summer months, many families go hiking, camping, and fishing at national parks.This is an example of

Define and distinguish between real and nominal GDP.Explain why the distinction is important to economists.

What was suggested by Keynes to move the economy out of a depressed state?

The Great Depression ended in the United States when

A macroeconomist would concentrate on which of the following issues?

Which of the following would be measured in GDP?

Amazon.com, an Internet retailer of books, buys a shipment of economics textbooks from a publisher.Is this included in GDP?

Combining various goods and services into a convenient grouping is called

Economist John Maynard Keynes wrote that recessions can be prolonged and interminable; therefore, government action is needed to jump-start the economy.

Gross domestic product is calculated by adding together

A product that is produced in 2015 and not sold until 2016 will be counted in the GDP for

The term "stagflation" was invented in the 1970s to describe an economy experiencing both

Part of the good economic performance of the United States in the 1990s can be explained by a rightward-shifting aggregate supply curve.

The primary benefit to the macroeconomy of increasing government spending is a(n)

The devastation of Hurricane Sandy reduced GDP.

Macroeconomics stresses

In The General Theory of Employment, Interest, and Money, Keynes

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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