Question 1

The devastation of Hurricane Sandy reduced GDP.

Accepted Answer

A) True 
 B)False

Question 2

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 3

The most severe depression in the United States was the 30 percent decrease in real GDP that occurred between

Accepted Answer

A)  1899 and 1913. 
B)  1929 and 1933. 
C)  1959 and 1963. 
D)  1979 and 1983. 
A)  1899 and 1913. 
B)  1929 and 1933. 
C)  1959 and 1963. 
D)  1979 and 1983.

Question 4

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 5

In macroeconomics, the vertical axis in a supply-demand model measures the price level rather than a particular product's price.

Accepted Answer

A) True 
 B)False

Question 6

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 7

Aneta has owned an Italian sports car for several years and now she wants to sell it. She paid $8,500 for it in 1993 and she has just sold it for $39,000 in 2015. How is this sale included in the GDP for 2015?

Accepted Answer

A)  $8,500 is included in 2015 GDP. 
B)  $39,000 is included in 2015 GDP. 
C)  The increase in value of $10,500 is included in 2015 GDP. 
D)  It is not included in 2015 GDP. 
A)  $8,500 is included in 2015 GDP. 
B)  $39,000 is included in 2015 GDP. 
C)  The increase in value of $10,500 is included in 2015 GDP. 
D)  It is not included in 2015 GDP.

Question 8

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 9

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 10

The movements of real GDP and inflation during the 1973-1975 recession can be best explained by a

Accepted Answer

A)  rightward shift of the aggregate demand curve. 
B)  leftward shift of the aggregate demand curve. 
C)  rightward shift of the aggregate supply curve. 
D)  leftward shift of the aggregate supply curve. 
A)  rightward shift of the aggregate demand curve. 
B)  leftward shift of the aggregate demand curve. 
C)  rightward shift of the aggregate supply curve. 
D)  leftward shift of the aggregate supply curve.

Question 11

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 12

Real GDP is another term for

Accepted Answer

A)  current dollar GDP. 
B)  actual GDP. 
C)  constant dollar GDP. 
D)  tangible GDP. 
A)  current dollar GDP. 
B)  actual GDP. 
C)  constant dollar GDP. 
D)  tangible GDP.

Question 13

The Great Recession is remembered by most economists as a period of

Accepted Answer

A)  hyperinflation. 
B)  high rates of unemployment. 
C)  price controls and low inflation. 
D)  the inability of the Federal Reserve to assist the financial system. 
A)  hyperinflation. 
B)  high rates of unemployment. 
C)  price controls and low inflation. 
D)  the inability of the Federal Reserve to assist the financial system.

Question 14

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 15

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 16

To fight recession, the government may

Accepted Answer

A)  decrease aggregate demand, which will also lead to lower unemployment rates. 
B)  increase aggregate demand, which will also lead to higher price levels. 
C)  increase aggregate demand, which will also lead to lower price levels. 
D)  decrease aggregate demand, which will also lead to higher unemployment rates. 
A)  decrease aggregate demand, which will also lead to lower unemployment rates. 
B)  increase aggregate demand, which will also lead to higher price levels. 
C)  increase aggregate demand, which will also lead to lower price levels. 
D)  decrease aggregate demand, which will also lead to higher unemployment rates.

Question 17

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 18

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

Accepted Answer

A) True 
 B)False

Question 19

The clearest sign of economic growth is a(n)

Accepted Answer

A)  increase in nominal GDP. 
B)  increase in real GDP. 
C)  decrease in nominal GDP. 
A)  increase in nominal GDP. 
B)  increase in real GDP. 
C)  decrease in nominal GDP.

Question 20

The period of 1973 to 1980 can best be described as a time of

Accepted Answer

A)  deflation. 
B)  reflation. 
C)  unflation. 
D)  stagflation. 
E)  disflation. 
A)  deflation. 
B)  reflation. 
C)  unflation. 
D)  stagflation. 
E)  disflation.

Exam 21: An Introduction to Macroeconomics

The devastation of Hurricane Sandy reduced GDP.

Combining various goods and services into a convenient grouping is called

The most severe depression in the United States was the 30 percent decrease in real GDP that occurred between

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

In macroeconomics, the vertical axis in a supply-demand model measures the price level rather than a particular product's price.

Recessions

Aneta has owned an Italian sports car for several years and now she wants to sell it. She paid $8,500 for it in 1993 and she has just sold it for $39,000 in 2015. How is this sale included in the GDP for 2015?

Which of the following would be measured in GDP?

Keynes' great book offered the promise of ending depressions through

The movements of real GDP and inflation during the 1973-1975 recession can be best explained by a

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

Real GDP is another term for

The Great Recession is remembered by most economists as a period of

Gross domestic product is the

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

To fight recession, the government may

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

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

The clearest sign of economic growth is a(n)

The period of 1973 to 1980 can best be described as a time 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

Filters