Question 1

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 2

The aggregate demand curve shows the quantity of domestic product

Accepted Answer

A)  produced at each possible price level. 
B)  demanded and produced at each possible price level. 
C)  that is exported at each possible price level. 
D)  demanded at each possible price level. 
A)  produced at each possible price level. 
B)  demanded and produced at each possible price level. 
C)  that is exported at each possible price level. 
D)  demanded at each possible price level.

Question 3

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 4

The end of the housing boom of the early 2000s can be illustrated by a decline in aggregate demand.

Accepted Answer

A) True 
 B)False

Question 5

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 6

Poor Asian countries may have per capita GDPs that may be less than $250. Why is this somewhat misleading for comparative purposes?

Accepted Answer

A)  Most rich country's GDP is nonmarket activity. 
B)  A significant amount of poor country's GDP is nonmarket activity. 
C)  Poor countries do not use dollars. 
D)  Poor countries have few resources. 
A)  Most rich country's GDP is nonmarket activity. 
B)  A significant amount of poor country's GDP is nonmarket activity. 
C)  Poor countries do not use dollars. 
D)  Poor countries have few resources.

Question 7

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 favorable macroeconomy of the late 1990s?

Accepted Answer

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

Question 8

Figure 5-2
 
In Figure 5-2, if the aggregate demand curve shifts outward over time, the economy will

Accepted Answer

A)  experience inflation. 
B)  see a sustained decrease in the price level. 
C)  experience a significant decrease in unemployment. 
D)  experience economic recession. 
A)  experience inflation. 
B)  see a sustained decrease in the price level. 
C)  experience a significant decrease in unemployment. 
D)  experience economic recession.

Question 9

Stagflation is the simultaneous occurrence of inflation and high unemployment.

Accepted Answer

A) True 
 B)False

Question 10

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 11

Stagflation can be defined as a combination of ____.

Accepted Answer

A)  economic migration and inflation 
B)  economic aggregation and deflation 
C)  economic stagnation and inflation 
D)  economic aggregation and inflation 
A)  economic migration and inflation 
B)  economic aggregation and deflation 
C)  economic stagnation and inflation 
D)  economic aggregation and inflation

Question 12

During the Great Depression of the 1930s, unemployment peaked at _____ percent.

Accepted Answer

A)  5 
B)  10 
C)  20 
D)  25 
E)  30 percent 
A)  5 
B)  10 
C)  20 
D)  25 
E)  30 percent

Question 13

The supply-side policies of the Reagan and Bush administrations led to high levels of

Accepted Answer

A)  budget surpluses. 
B)  unemployment. 
C)  inflation. 
D)  budget deficits. 
A)  budget surpluses. 
B)  unemployment. 
C)  inflation. 
D)  budget deficits.

Question 14

If the government uses stabilization policies to reduce inflation, the economy may have to suffer

Accepted Answer

A)  higher rates of real GDP growth. 
B)  higher rates of unemployment. 
C)  lower rates of unemployment. 
D)  higher rates of price level growth. 
A)  higher rates of real GDP growth. 
B)  higher rates of unemployment. 
C)  lower rates of unemployment. 
D)  higher rates of price level growth.

Question 15

Since the end of World War II, the economy of the United States has been more influenced by stabilization policy. One of the undesirable side effects of this has been that the economy now has a greater tendency to suffer from

Accepted Answer

A)  more severe recessions and depressions. 
B)  higher levels of unemployment and lower rates of employment growth. 
C)  lower rates of growth in real and nominal GDP. 
D)  more persistent periods of inflation. 
A)  more severe recessions and depressions. 
B)  higher levels of unemployment and lower rates of employment growth. 
C)  lower rates of growth in real and nominal GDP. 
D)  more persistent periods of inflation.

Question 16

Aggregation involves adding together different products and services.

Accepted Answer

A) True 
 B)False

Question 17

Technological breakthroughs, such as the Internet, can be shown with a rightward shift of the aggregate supply curve.

Accepted Answer

A) True 
 B)False

Question 18

Gross domestic product is best described as the

Accepted Answer

A)  measure of a nation's total economic welfare. 
B)  national income, including nonmarket income. 
C)  sum of money values of all final output produced in the domestic economy within the year. 
D)  national output minus environmental damage. 
A)  measure of a nation's total economic welfare. 
B)  national income, including nonmarket income. 
C)  sum of money values of all final output produced in the domestic economy within the year. 
D)  national output minus environmental damage.

Question 19

Which of the following is a true measure of national output?

Accepted Answer

A)  GNP at market price 
B)  Nominal GNP 
C)  GDP in future dollars 
D)  GDP using base-year prices 
A)  GNP at market price 
B)  Nominal GNP 
C)  GDP in future dollars 
D)  GDP using base-year prices

Question 20

How does macroeconomics differ from microeconomics?

Accepted Answer

A)  The study of the opportunity cost of nations versus the opportunity cost of individuals 
B)  The underlying principles 
C)  The use of abstractions and models 
D)  The use of aggregate indicators over market resource allocation 
A)  The study of the opportunity cost of nations versus the opportunity cost of individuals 
B)  The underlying principles 
C)  The use of abstractions and models 
D)  The use of aggregate indicators over market resource allocation

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

The aggregate demand curve shows the quantity of domestic product

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

The end of the housing boom of the early 2000s can be illustrated by a decline in aggregate demand.

Gross domestic product is calculated by adding together

Poor Asian countries may have per capita GDPs that may be less than $250. Why is this somewhat misleading for comparative purposes?

Figure 5-2 In Figure 5-2, if the aggregate demand curve shifts outward over time, the economy will

Stagflation is the simultaneous occurrence of inflation and high unemployment.

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

Stagflation can be defined as a combination of ____.

During the Great Depression of the 1930s, unemployment peaked at _____ percent.

The supply-side policies of the Reagan and Bush administrations led to high levels of

If the government uses stabilization policies to reduce inflation, the economy may have to suffer

Since the end of World War II, the economy of the United States has been more influenced by stabilization policy. One of the undesirable side effects of this has been that the economy now has a greater tendency to suffer from

Aggregation involves adding together different products and services.

Technological breakthroughs, such as the Internet, can be shown with a rightward shift of the aggregate supply curve.

Gross domestic product is best described as the

Which of the following is a true measure of national output?

How does macroeconomics differ from microeconomics?

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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Exam 21: An Introduction to Macroeconomics

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

The aggregate demand curve shows the quantity of domestic product

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

The end of the housing boom of the early 2000s can be illustrated by a decline in aggregate demand.

Gross domestic product is calculated by adding together

Poor Asian countries may have per capita GDPs that may be less than $250. Why is this somewhat misleading for comparative purposes?

Figure 5-2 In Figure 5-2, if the aggregate demand curve shifts outward over time, the economy will

Stagflation is the simultaneous occurrence of inflation and high unemployment.

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

Stagflation can be defined as a combination of ____.

During the Great Depression of the 1930s, unemployment peaked at _____ percent.

The supply-side policies of the Reagan and Bush administrations led to high levels of

If the government uses stabilization policies to reduce inflation, the economy may have to suffer

Since the end of World War II, the economy of the United States has been more influenced by stabilization policy. One of the undesirable side effects of this has been that the economy now has a greater tendency to suffer from

Aggregation involves adding together different products and services.

Technological breakthroughs, such as the Internet, can be shown with a rightward shift of the aggregate supply curve.

Gross domestic product is best described as the

Which of the following is a true measure of national output?

How does macroeconomics differ from microeconomics?

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