Question 1

The Italian government collects a smaller amount of the taxes it is owed than the U.S. government. Other things being equal,

Accepted Answer

A)  U.S. and Italian GDP should be equal. 
B)  U.S. GDP may be higher than Italian GDP. 
C)  U.S. GDP should be lower than Italian GDP. 
D)  U.S. residents are better off than Italian residents. 
A)  U.S. and Italian GDP should be equal. 
B)  U.S. GDP may be higher than Italian GDP. 
C)  U.S. GDP should be lower than Italian GDP. 
D)  U.S. residents are better off than Italian residents.

Question 2

Corrected for inflation, the real GDP was only about _____ times greater in 2014 than in 1959.

Accepted Answer

A)  3.1 
B)  5.3 
C)  6.7 
D)  11.2 
A)  3.1 
B)  5.3 
C)  6.7 
D)  11.2

Question 3

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 4

One of the initial problems facing the newly elected President Clinton was a large budget deficit.

Accepted Answer

A) True 
 B)False

Question 5

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 6

The price controls on consumer goods during World War II led to

Accepted Answer

A)  permanent surpluses. 
B)  stable long-term prices. 
C)  a burst of inflation when they were ended. 
D)  increased production of consumer goods to satisfy demand. 
A)  permanent surpluses. 
B)  stable long-term prices. 
C)  a burst of inflation when they were ended. 
D)  increased production of consumer goods to satisfy demand.

Question 7

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 8

Gross domestic product includes

Accepted Answer

A)  your purchase of 100 shares of Alibaba. 
B)  your gift of $100 to your brother. 
C)  your purchase of a gently used 1990 Porsche Carrera. 
D)  your weekly paycheck as a server at Denny's. 
A)  your purchase of 100 shares of Alibaba. 
B)  your gift of $100 to your brother. 
C)  your purchase of a gently used 1990 Porsche Carrera. 
D)  your weekly paycheck as a server at Denny's.

Question 9

What was suggested by Keynes to move the economy out of a depressed state?

Accepted Answer

A)  The invisible hand 
B)  The price mechanism 
C)  Monetary and fiscal policy 
D)  Zero government intervention 
A)  The invisible hand 
B)  The price mechanism 
C)  Monetary and fiscal policy 
D)  Zero government intervention

Question 10

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 11

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 aggregate demand-induced Great Depression of the 1930s?

Accepted Answer

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

Question 12

The Iranian Revolution in 1979 led to another interruption of oil supplies to the United States. This caused the reoccurrence of

Accepted Answer

A)  deflation. 
B)  full employment. 
C)  trade surpluses. 
D)  stagflation. 
A)  deflation. 
B)  full employment. 
C)  trade surpluses. 
D)  stagflation.

Question 13

Dissatisfaction with public school education has led many parents to try home schooling for their children. If parents reduce their work from a full-time to a part-time load in order to spend time teaching their children at home, how will this affect GDP?

Accepted Answer

A)  GDP will stay the same. 
B)  Real GDP will increase and nominal GDP will decrease. 
C)  Both real and nominal GDP will increase. 
D)  GDP will decrease. 
A)  GDP will stay the same. 
B)  Real GDP will increase and nominal GDP will decrease. 
C)  Both real and nominal GDP will increase. 
D)  GDP will decrease.

Question 14

An increase in aggregate demand will result in inflation.

Accepted Answer

A) True 
 B)False

Question 15

Define and distinguish between real and nominal GDP. Explain why the distinction is important to economists.

Accepted Answer

Real GDP (or GDP in constant dollars) is

Question 16

If the prices of all goods and services rise during the year,

Accepted Answer

A)  real GDP may fall. 
B)  nominal GDP must rise. 
C)  nominal GDP may increase. 
D)  real GDP must rise. 
A)  real GDP may fall. 
B)  nominal GDP must rise. 
C)  nominal GDP may increase. 
D)  real GDP must rise.

Question 17

Business cycles are a persistent feature of the U.S. economy.

Accepted Answer

A) True 
 B)False

Question 18

According to Keynes, a pessimistic outlook causes consumers and businesspersons to ____, and a recession could occur.

Accepted Answer

A)  increase planned investment 
B)  decrease planned spending 
C)  increase exports 
D)  decrease imports 
E)  decrease saving 
A)  increase planned investment 
B)  decrease planned spending 
C)  increase exports 
D)  decrease imports 
E)  decrease saving

Question 19

Does GDP for a particular year include items produced in a previous year?

Accepted Answer

A)  Nominal GDP will not and real GDP will 
B)  Real GDP will and nominal GDP will not 
C)  Yes for both nominal and real GDP 
D)  No for both nominal and real GDP 
A)  Nominal GDP will not and real GDP will 
B)  Real GDP will and nominal GDP will not 
C)  Yes for both nominal and real GDP 
D)  No for both nominal and real GDP

Question 20

Technically speaking, in what year did the "Great Recession" end?

Accepted Answer

A)  1933 
B)  1935 
C)  2007 
D)  2009 
E)  It had not ended as of 2011. 
A)  1933 
B)  1935 
C)  2007 
D)  2009 
E)  It had not ended as of 2011.

The Italian government collects a smaller amount of the taxes it is owed than the U.S. government. Other things being equal,

Corrected for inflation, the real GDP was only about _____ times greater in 2014 than in 1959.

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

One of the initial problems facing the newly elected President Clinton was a large budget deficit.

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

The price controls on consumer goods during World War II led to

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

Gross domestic product includes

What was suggested by Keynes to move the economy out of a depressed state?

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

The Iranian Revolution in 1979 led to another interruption of oil supplies to the United States. This caused the reoccurrence of

Dissatisfaction with public school education has led many parents to try home schooling for their children. If parents reduce their work from a full-time to a part-time load in order to spend time teaching their children at home, how will this affect GDP?

An increase in aggregate demand will result in inflation.

Define and distinguish between real and nominal GDP. Explain why the distinction is important to economists.

If the prices of all goods and services rise during the year,

Business cycles are a persistent feature of the U.S. economy.

According to Keynes, a pessimistic outlook causes consumers and businesspersons to ____, and a recession could occur.

Does GDP for a particular year include items produced in a previous year?

Technically speaking, in what year did the "Great Recession" end?

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

Exam 21: An Introduction to Macroeconomics

The Italian government collects a smaller amount of the taxes it is owed than the U.S. government. Other things being equal,

Corrected for inflation, the real GDP was only about _____ times greater in 2014 than in 1959.

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

One of the initial problems facing the newly elected President Clinton was a large budget deficit.

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

The price controls on consumer goods during World War II led to

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

Gross domestic product includes

What was suggested by Keynes to move the economy out of a depressed state?

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

The Iranian Revolution in 1979 led to another interruption of oil supplies to the United States. This caused the reoccurrence of

Dissatisfaction with public school education has led many parents to try home schooling for their children. If parents reduce their work from a full-time to a part-time load in order to spend time teaching their children at home, how will this affect GDP?

An increase in aggregate demand will result in inflation.

Define and distinguish between real and nominal GDP. Explain why the distinction is important to economists.

If the prices of all goods and services rise during the year,

Business cycles are a persistent feature of the U.S. economy.

According to Keynes, a pessimistic outlook causes consumers and businesspersons to ____, and a recession could occur.

Does GDP for a particular year include items produced in a previous year?

Technically speaking, in what year did the "Great Recession" end?

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

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