Question 1

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. B

Question 2

The definition of gross domestic product is

Accepted Answer

A)  the total value of all sales in the economy. 
B)  the total value of production in the domestic economy plus the production of domestic firms in foreign countries. 
C)  the total value of all sales of final and intermediate goods in the domestic economy. 
D)  the total of the money values of all final goods and services produced in the domestic economy within a specific time period. 
A)  the total value of all sales in the economy. 
B)  the total value of production in the domestic economy plus the production of domestic firms in foreign countries. 
C)  the total value of all sales of final and intermediate goods in the domestic economy. 
D)  the total of the money values of all final goods and services produced in the domestic economy within a specific time period. D

Question 3

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. D

Question 4

In the 1960s, U.S. economy experienced

Accepted Answer

A)  a substantial decline in real GDP but limited inflation. 
B)  a substantial decline in real GDP coupled with significant inflation. 
C)  substantial real GDP growth coupled with significant inflation. 
D)  substantial real GDP growth with limited inflation. 
A)  a substantial decline in real GDP but limited inflation. 
B)  a substantial decline in real GDP coupled with significant inflation. 
C)  substantial real GDP growth coupled with significant inflation. 
D)  substantial real GDP growth with limited inflation.

Question 5

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 6

Stabilization policy often faces a trade-off between inflation and unemployment.

Accepted Answer

A) True 
 B)False

Question 7

The Great Depression of the 1930s

Accepted Answer

A)  confirmed the value of a "hands off" policy for governments. 
B)  was exacerbated by an expansionary monetary policy. 
C)  was a worldwide event. 
D)  continued throughout the 1940s without any interruption. 
A)  confirmed the value of a "hands off" policy for governments. 
B)  was exacerbated by an expansionary monetary policy. 
C)  was a worldwide event. 
D)  continued throughout the 1940s without any interruption.

Question 8

What are the two basic principles of aggregation?

Accepted Answer

The two principles are the following: 
1

Question 9

Real GDP differs from nominal GDP in that nominal GDP measures

Accepted Answer

A)  output adjusted for inflation. 
B)  real output of goods and services. 
C)  output of goods and services at current prices. 
D)  real income adjusted for changes in the price level. 
A)  output adjusted for inflation. 
B)  real output of goods and services. 
C)  output of goods and services at current prices. 
D)  real income adjusted for changes in the price level.

Question 10

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 11

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 12

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

Accepted Answer

Inflation is frequently caused by aggreg

Question 13

Stabilization policy describes

Accepted Answer

A)  government programs designed to prevent or shorten recessions and counteract inflation. 
B)  legislation that redistributes income. 
C)  policy that removes price controls. 
D)  policy that follows natural disasters. 
A)  government programs designed to prevent or shorten recessions and counteract inflation. 
B)  legislation that redistributes income. 
C)  policy that removes price controls. 
D)  policy that follows natural disasters.

Question 14

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 15

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 16

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 17

The major difference between nominal GDP and real GDP is that

Accepted Answer

A)  real GDP is the absolute value of goods and services and nominal GDP is a relative value. 
B)  real GDP refers to products made in the United States and nominal GDP refers to both exports and imports. 
C)  nominal GDP is the market value and real GDP has been adjusted for inflation. 
D)  real GDP is a relative value and nominal GDP is an absolute value. 
A)  real GDP is the absolute value of goods and services and nominal GDP is a relative value. 
B)  real GDP refers to products made in the United States and nominal GDP refers to both exports and imports. 
C)  nominal GDP is the market value and real GDP has been adjusted for inflation. 
D)  real GDP is a relative value and nominal GDP is an absolute value.

Question 18

The key characteristic of macroeconomics is the process of aggregation.

Accepted Answer

A) True 
 B)False

Question 19

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 20

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.

Exam 21: An Introduction to Macroeconomics

Macroeconomists are concerned with

The definition of gross domestic product is

Gross domestic product is a dollar measure of

In the 1960s, U.S. economy experienced

Which of the following is counted in GDP?

Stabilization policy often faces a trade-off between inflation and unemployment.

The Great Depression of the 1930s

What are the two basic principles of aggregation?

Real GDP differs from nominal GDP in that nominal GDP measures

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.

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

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

Stabilization policy describes

A macroeconomist would concentrate on which of the following issues?

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

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?

The major difference between nominal GDP and real GDP is that

The key characteristic of macroeconomics is the process of aggregation.

Nominal GDP is

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

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

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 Us Economy

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