Question 1

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 2

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 economic conditions of the American economy in 2001?

Accepted Answer

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

Question 3

Technological change, such as the information technology revolution of the 1990s can shift the aggregate supply curve outward.If, at the same time, the government is decreasing spending, the most likely outcome of these two factors is a(n)

Accepted Answer

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

Question 4

Growth in GDP systematically understates the growth in national well-being because

Accepted Answer

A) ecological costs are netted out of GDP. 
B) "bads" as well as "goods" get included in GDP. 
C) investment is not included in GDP. 
D) as a country gets richer, leisure time increases. 
A) ecological costs are netted out of GDP. 
B) "bads" as well as "goods" get included in GDP. 
C) investment is not included in GDP. 
D) as a country gets richer, leisure time increases.

Question 5

How does the calculation of GDP include the costs of natural resource depletion that occurs when output is produced?

Accepted Answer

A) The value of resource depletion is added to GDP. 
B) The cost of resource depletion is not measured in GDP. 
C) The cost of resource depletion is added to real but not nominal GDP. 
D) Resource depletion causes GDP to overstate well-being. 
A) The value of resource depletion is added to GDP. 
B) The cost of resource depletion is not measured in GDP. 
C) The cost of resource depletion is added to real but not nominal GDP. 
D) Resource depletion causes GDP to overstate well-being.

Question 6

Figure 5-1
​  
-Figure 5-1 plots potential and real output for a hypothetical economy.Based on this graph, the recession occurred

Accepted Answer

A) between years 1 and 2. 
B) between years 2 and 3. 
C) between years 3 and 4. 
D) after year 4. 
A) between years 1 and 2. 
B) between years 2 and 3. 
C) between years 3 and 4. 
D) after year 4.

Question 7

In 1981, the Reagan administration employed a policy that included tax ____ while at the same time the Federal Reserve's strategy was to combat ____.

Accepted Answer

A) cuts; unemployment 
B) cuts; inflation 
C) hikes; unemployment 
D) hikes; inflation 
A) cuts; unemployment 
B) cuts; inflation 
C) hikes; unemployment 
D) hikes; inflation

Question 8

Macroeconomics is best described as a study of ____ and microeconomics as a study of ____.

Accepted Answer

A) financial markets, specific markets 
B) nations, individuals 
C) the stars, solar system 
D) abstract, concrete 
A) financial markets, specific markets 
B) nations, individuals 
C) the stars, solar system 
D) abstract, concrete

Question 9

In contrast to the post-World War II period, before 1940 the government

Accepted Answer

A) actively intervened in the economy for stabilization purposes. 
B) used aggregate demand management to avoid recessions. 
C) rarely intervened in the economy to influence inflation or unemployment rates. 
D) used government ownership to guarantee full employment. 
A) actively intervened in the economy for stabilization purposes. 
B) used aggregate demand management to avoid recessions. 
C) rarely intervened in the economy to influence inflation or unemployment rates. 
D) used government ownership to guarantee full employment.

Question 10

What is an aggregate? How is it used in macroeconomics? Give two examples of specific aggregates that are used in the study of macroeconomics.

Accepted Answer

An "aggregate" is an abstraction that ma

Question 11

Gross domestic product is a dollar measure of

Accepted Answer

A) total gross investment in an economy. 
B) total industrial sales in a particular time period. 
C) the total physical product of the economy. 
D) the value of all final goods and services produced in one time period. 
A) total gross investment in an economy. 
B) total industrial sales in a particular time period. 
C) the total physical product of the economy. 
D) the value of all final goods and services produced in one time period.

Question 12

Economic terms like "cost of living" and "price level" are important to ordinary individuals.

Accepted Answer

A) True 
 B)False

Question 13

Macroeconomists are concerned with

Accepted Answer

A) most questions about individual markets than the overall economy. 
B) the causes of unemployment than with the personalities of individual workers. 
C) the details of resource allocation and individual market prices than the size of national output. 
D) the price of particular products than the overall price level. 
A) most questions about individual markets than the overall economy. 
B) the causes of unemployment than with the personalities of individual workers. 
C) the details of resource allocation and individual market prices than the size of national output. 
D) the price of particular products than the overall price level.

Question 14

Which of the following is counted in GDP?

Accepted Answer

A) The cost of the reconstruction and cleanup following September 11, 2001 
B) The value of leisure time 
C) The value of a househusband's work at home 
D) The value of your do-it-yourself work 
A) The cost of the reconstruction and cleanup following September 11, 2001 
B) The value of leisure time 
C) The value of a househusband's work at home 
D) The value of your do-it-yourself work

Question 15

During a recession, markets will

Accepted Answer

A) decline. 
B) increase. 
C) increase then decrease. 
D) move in many different directions. 
A) decline. 
B) increase. 
C) increase then decrease. 
D) move in many different directions.

Question 16

Macroeconomics does not study this aggregate

Accepted Answer

A) GDP. 
B) inflation. 
C) happiness. 
D) unemployment. 
A) GDP. 
B) inflation. 
C) happiness. 
D) unemployment.

Question 17

Contrast the economic performance of the American economy of 2001 with the economic performance of the 1996 to 2001 period.Use the appropriate aggregate demand and aggregate supply curves to distinguish the differing economic condition of the two periods.

Accepted Answer

The economic performance of the 1996 to

Question 18

An increase in aggregate demand will result in inflation.

Accepted Answer

A) True 
 B)False

Question 19

Gross domestic product is the

Accepted Answer

A) most comprehensive measure of production of a nation's resources. 
B) total of goods and services purchased by consumers. 
C) most comprehensive measure of total output in the United States. 
D) most defined measure of net exports. 
A) most comprehensive measure of production of a nation's resources. 
B) total of goods and services purchased by consumers. 
C) most comprehensive measure of total output in the United States. 
D) most defined measure of net exports.

Question 20

Changes in nominal GDP always reflect changes in real output.

Accepted Answer

A) True 
 B)False

Exam 21: An Introduction to Macroeconomics

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

Technological change, such as the information technology revolution of the 1990s can shift the aggregate supply curve outward.If, at the same time, the government is decreasing spending, the most likely outcome of these two factors is a(n)

Growth in GDP systematically understates the growth in national well-being because

How does the calculation of GDP include the costs of natural resource depletion that occurs when output is produced?

Figure 5-1 ​ -Figure 5-1 plots potential and real output for a hypothetical economy.Based on this graph, the recession occurred

In 1981, the Reagan administration employed a policy that included tax ____ while at the same time the Federal Reserve's strategy was to combat ____.

Macroeconomics is best described as a study of ____ and microeconomics as a study of ____.

In contrast to the post-World War II period, before 1940 the government

What is an aggregate? How is it used in macroeconomics? Give two examples of specific aggregates that are used in the study of macroeconomics.

Gross domestic product is a dollar measure of

Economic terms like "cost of living" and "price level" are important to ordinary individuals.

Macroeconomists are concerned with

Which of the following is counted in GDP?

During a recession, markets will

Macroeconomics does not study this aggregate

Contrast the economic performance of the American economy of 2001 with the economic performance of the 1996 to 2001 period.Use the appropriate aggregate demand and aggregate supply curves to distinguish the differing economic condition of the two periods.

An increase in aggregate demand will result in inflation.

Gross domestic product is the

Changes in nominal GDP always reflect changes in real output.

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

Figure 5-1 -Figure 5-1 plots potential and real output for a hypothetical economy.Based on this graph, the recession occurred

In 1981, the Reagan administration employed a policy that included tax while at the same time the Federal Reserve's strategy was to combat .

Macroeconomics is best described as a study of and microeconomics as a study of .