Question 1

Since countries differ in the amount of economic activity that is transacted in organized markets,

Accepted Answer

A) some countries are more productive than others. 
B) persons live better in some countries than others. 
C) international comparisons of per capita GDP are often misleading. 
D) comparisons between countries are totally impossible. 
A) some countries are more productive than others. 
B) persons live better in some countries than others. 
C) international comparisons of per capita GDP are often misleading. 
D) comparisons between countries are totally impossible.

Question 2

According to the text, the government can use aggregate demand management policies to reduce unemployment rates.A byproduct of this policy will be

Accepted Answer

A) an increase in the price level. 
B) a decrease in real GDP. 
C) a decrease in the price level. 
D) an increase in the budget surplus. 
A) an increase in the price level. 
B) a decrease in real GDP. 
C) a decrease in the price level. 
D) an increase in the budget surplus.

Question 3

The existence of the "underground economy" causes measured GDP to overestimate actual output.

Accepted Answer

A) True 
 B)False

Question 4

An economist who studies the sales and profits of a large corporation would be classified as a(n)

Accepted Answer

A) macroeconomist. 
B) equity analyst. 
C) stock broker. 
D) microeconomist. 
E) social economist. 
A) macroeconomist. 
B) equity analyst. 
C) stock broker. 
D) microeconomist. 
E) social economist.

Question 5

If Volkswagen (a German-based firm) produces a car in Tennessee and exports it to Mexico, in which country's GDP will the car be counted?

Accepted Answer

A) Germany's, because Volkswagen is a German company 
B) Mexico, because that is where the car is purchased 
C) The United States, because that's where it was built 
D) Both Mexico and the United States 
A) Germany's, because Volkswagen is a German company 
B) Mexico, because that is where the car is purchased 
C) The United States, because that's where it was built 
D) Both Mexico and the United States

Question 6

Business cycles in the United States after World War II have been

Accepted Answer

A) more severe than before the war. 
B) less severe than before the war. 
C) the same as the prewar cycles. 
D) easier to predict than the prewar cycles. 
A) more severe than before the war. 
B) less severe than before the war. 
C) the same as the prewar cycles. 
D) easier to predict than the prewar cycles.

Question 7

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 8

The Great Depression of the 1930s led to a revolution in macroeconomic thinking, following the work of

Accepted Answer

A) Arthur Laffer. 
B) Milton Friedman. 
C) Adam Smith. 
D) John Maynard Keynes. 
E) David Ricardo. 
A) Arthur Laffer. 
B) Milton Friedman. 
C) Adam Smith. 
D) John Maynard Keynes. 
E) David Ricardo.

Question 9

In 2008, you buy a 1967 Shelby cobra.This purchase would

Accepted Answer

A) be included in the GDP for 2008. 
B) not be included in the GDP for 2008. 
C) be included in both the GDP for 1967 and 2008. 
D) be in the GDP for 2008 at a depreciated value. 
A) be included in the GDP for 2008. 
B) not be included in the GDP for 2008. 
C) be included in both the GDP for 1967 and 2008. 
D) be in the GDP for 2008 at a depreciated value.

Question 10

Cars produced by General Motors in Mexico would be included in U.S.Gross domestic product.

Accepted Answer

A) True 
 B)False

Question 11

John Maynard Keynes wrote The General Theory of Employment, Interest, and Money (1936) to

Accepted Answer

A) improve the gold supply balances of the British government. 
B) prove that the punitive nature of the Treaty of Versailles would ultimately lead to recession in Europe. 
C) prove that active government policy would produce unemployment and high rates of inflation. 
D) demonstrate that pessimistic consumers and businesspersons could reduce their spending and condemn the economy to long-run stagnation. 
A) improve the gold supply balances of the British government. 
B) prove that the punitive nature of the Treaty of Versailles would ultimately lead to recession in Europe. 
C) prove that active government policy would produce unemployment and high rates of inflation. 
D) demonstrate that pessimistic consumers and businesspersons could reduce their spending and condemn the economy to long-run stagnation.

Question 12

Nominal GDP includes the current value of services produced in the economy.

Accepted Answer

A) True 
 B)False

Question 13

Gross domestic product is a monetary measure of

Accepted Answer

A) total consumption in the economy. 
B) the total value of all final goods and services. 
C) total industrial output. 
D) the total value of all foreign sales and purchases. 
A) total consumption in the economy. 
B) the total value of all final goods and services. 
C) total industrial output. 
D) the total value of all foreign sales and purchases.

Question 14

If aggregate demand shifts outward, the result will be inflation.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following would be counted in the U.S.GDP for 2015?

Accepted Answer

A) A 2015 Ford Fiesta made in Mexico 
B) The $5,000 an investor used to purchase stock in Home Depot in the Fall of 2015 
C) Ford buying tires from Goodyear for new Ford Mustangs 
D) Clothing produced at a boutique shop in LA for the Fall 2015 fashion week 
A) A 2015 Ford Fiesta made in Mexico 
B) The $5,000 an investor used to purchase stock in Home Depot in the Fall of 2015 
C) Ford buying tires from Goodyear for new Ford Mustangs 
D) Clothing produced at a boutique shop in LA for the Fall 2015 fashion week

Question 16

Aggregation involves adding together different products and services.

Accepted Answer

A) True 
 B)False

Question 17

If the aggregate demand curve shifts to the left and the aggregate supply curve shifts to the right, the result will be a

Accepted Answer

A) decrease in the level of output. 
B) decrease in the price level. 
C) higher price level. 
D) higher unemployment rate. 
A) decrease in the level of output. 
B) decrease in the price level. 
C) higher price level. 
D) higher unemployment rate.

Question 18

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

Accepted Answer

Inflation is frequently caused by aggreg

Question 19

The stagflation in the United States during the 1974-1975 period can be attributed to

Accepted Answer

A) increases in real GDP due to high levels of defense spending. 
B) tight monetary and fiscal policies of the Nixon-Ford administrations. 
C) rapid increases in petroleum prices, poor harvests, and the removal of wage and price controls. 
D) budget deficits by the federal government and increasing trade deficits by the United States. 
A) increases in real GDP due to high levels of defense spending. 
B) tight monetary and fiscal policies of the Nixon-Ford administrations. 
C) rapid increases in petroleum prices, poor harvests, and the removal of wage and price controls. 
D) budget deficits by the federal government and increasing trade deficits by the United States.

Question 20

The period from 1983 to 1990 was characterized by

Accepted Answer

A) decreasing budget deficits and increasing trade surpluses. 
B) persistently high inflation. 
C) below average rates of real GDP growth. 
D) consistent growth of real GDP and decreasing rates of inflation. 
A) decreasing budget deficits and increasing trade surpluses. 
B) persistently high inflation. 
C) below average rates of real GDP growth. 
D) consistent growth of real GDP and decreasing rates of inflation.

Exam 21: An Introduction to Macroeconomics

Since countries differ in the amount of economic activity that is transacted in organized markets,

According to the text, the government can use aggregate demand management policies to reduce unemployment rates.A byproduct of this policy will be

The existence of the "underground economy" causes measured GDP to overestimate actual output.

An economist who studies the sales and profits of a large corporation would be classified as a(n)

If Volkswagen (a German-based firm) produces a car in Tennessee and exports it to Mexico, in which country's GDP will the car be counted?

Business cycles in the United States after World War II have been

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

The Great Depression of the 1930s led to a revolution in macroeconomic thinking, following the work of

In 2008, you buy a 1967 Shelby cobra.This purchase would

Cars produced by General Motors in Mexico would be included in U.S.Gross domestic product.

John Maynard Keynes wrote The General Theory of Employment, Interest, and Money (1936) to

Nominal GDP includes the current value of services produced in the economy.

Gross domestic product is a monetary measure of

If aggregate demand shifts outward, the result will be inflation.

Which of the following would be counted in the U.S.GDP for 2015?

Aggregation involves adding together different products and services.

If the aggregate demand curve shifts to the left and the aggregate supply curve shifts to the right, the result will be a

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

The stagflation in the United States during the 1974-1975 period can be attributed to

The period from 1983 to 1990 was characterized by

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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