Question 1

The term inflation is used to describe a(n):

Accepted Answer

A)  rise in the value of money. 
B)  decline in nominal income. 
C)  sustained increase in the price level. 
D)  general reduction in prices. 
E)  economic problem faced only by the elderly population. 
A)  rise in the value of money. 
B)  decline in nominal income. 
C)  sustained increase in the price level. 
D)  general reduction in prices. 
E)  economic problem faced only by the elderly population.

Question 2

Which of these is assumed to be constant along an aggregate supply curve?

Accepted Answer

A)  The price level in an economy 
B)  The exchange rate between the domestic and a foreign currency 
C)  The state of technology used in production 
D)  The unemployment rate 
E)  The real GDP 
A)  The price level in an economy 
B)  The exchange rate between the domestic and a foreign currency 
C)  The state of technology used in production 
D)  The unemployment rate 
E)  The real GDP

Question 3

Which of the following describes an economy's price level?

Accepted Answer

A)  The cost of producing goods and services using domestically owned factors of production 
B)  The year-to-year change in nominal GDP 
C)  The year-to-year change in the price of consumer goods 
D)  The total price of aggregate output 
E)  The average price of aggregate output 
A)  The cost of producing goods and services using domestically owned factors of production 
B)  The year-to-year change in nominal GDP 
C)  The year-to-year change in the price of consumer goods 
D)  The total price of aggregate output 
E)  The average price of aggregate output

Question 4

Which of the following happened during the Great Depression?

Accepted Answer

A)  Unemployment and prices increased while output decreased. 
B)  Unemployment increased while output and prices decreased. 
C)  Unemployment and prices decreased while output increased. 
D)  Unemployment and output decreased while prices increased. 
E)  Unemployment and output increased while prices decreased. 
A)  Unemployment and prices increased while output decreased. 
B)  Unemployment increased while output and prices decreased. 
C)  Unemployment and prices decreased while output increased. 
D)  Unemployment and output decreased while prices increased. 
E)  Unemployment and output increased while prices decreased.

Question 5

An example of a flow variable in economics is:

Accepted Answer

A)  the total amount of bank loan taken by Emily. 
B)  the value of an apartment owned by Jerome. 
C)  the price of an antique painting used to decorate an office. 
D)  the earnings of Malaya from piano classes each month. 
E)  the total value of the U.S. treasury bonds held by China. 
A)  the total amount of bank loan taken by Emily. 
B)  the value of an apartment owned by Jerome. 
C)  the price of an antique painting used to decorate an office. 
D)  the earnings of Malaya from piano classes each month. 
E)  the total value of the U.S. treasury bonds held by China.

Question 6

The following table shows an aggregate demand schedule and an aggregate supply schedule. Which of the following is true?

Accepted Answer

A)  Equilibrium output is $1,000, and equilibrium price level is 25. 
B)  Equilibrium output is $800, and equilibrium price level is 50. 
C)  Equilibrium output is $200, and equilibrium price level is 125. 
D)  Equilibrium output is $400, and equilibrium price level is 25. 
E)  Equilibrium output is $600, and equilibrium price level is 75. 
A)  Equilibrium output is $1,000, and equilibrium price level is 25. 
B)  Equilibrium output is $800, and equilibrium price level is 50. 
C)  Equilibrium output is $200, and equilibrium price level is 125. 
D)  Equilibrium output is $400, and equilibrium price level is 25. 
E)  Equilibrium output is $600, and equilibrium price level is 75.

Question 7

In terms of the aggregate demand and aggregate supply framework, the Great Depression can be viewed as a:

Accepted Answer

A)  rightward shift of the aggregate demand curve. 
B)  rightward shift of the aggregate supply curve. 
C)  downward movement along the aggregate demand curve. 
D)  a leftward shift of the aggregate demand curve. 
E)  a leftward shift of the aggregate supply curve. 
A)  rightward shift of the aggregate demand curve. 
B)  rightward shift of the aggregate supply curve. 
C)  downward movement along the aggregate demand curve. 
D)  a leftward shift of the aggregate demand curve. 
E)  a leftward shift of the aggregate supply curve.

Question 8

By a leading economic indicator, economists mean:

Accepted Answer

A)  an indicator of future economic activity. 
B)  an indicator that reflects economic fluctuations as they occur. 
C)  a highly accurate indicator that is easily measured. 
D)  an indicator that predicts the level of inflation in an economy. 
E)  any variable that follows changes in economic activity. 
A)  an indicator of future economic activity. 
B)  an indicator that reflects economic fluctuations as they occur. 
C)  a highly accurate indicator that is easily measured. 
D)  an indicator that predicts the level of inflation in an economy. 
E)  any variable that follows changes in economic activity.

Question 9

Economic fluctuations or business cycles:

Accepted Answer

A)  measure changes in the total number of new businesses started during a year. 
B)  are fluctuations in the Dow Jones industrial average relative to a long-term growth trend. 
C)  look at the role played by business on the level of unemployment. 
D)  are fluctuations in the level of economic activity relative to a long-term growth trend. 
E)  are changes in government spending that occur over a period of time. 
A)  measure changes in the total number of new businesses started during a year. 
B)  are fluctuations in the Dow Jones industrial average relative to a long-term growth trend. 
C)  look at the role played by business on the level of unemployment. 
D)  are fluctuations in the level of economic activity relative to a long-term growth trend. 
E)  are changes in government spending that occur over a period of time.

Question 10

The term stagflation refers to:

Accepted Answer

A)  a simultaneous reduction in output and the price level. 
B)  a simultaneous increase in output and the price level. 
C)  a decline in the price level accompanied by increases in real output and employment. 
D)  an increase in the price level accompanied by decreases in real output and employment. 
E)  a simultaneous increase in both the trade deficit and the budget deficit. 
A)  a simultaneous reduction in output and the price level. 
B)  a simultaneous increase in output and the price level. 
C)  a decline in the price level accompanied by increases in real output and employment. 
D)  an increase in the price level accompanied by decreases in real output and employment. 
E)  a simultaneous increase in both the trade deficit and the budget deficit.

Question 11

The aggregate supply curve reflects the inverse relationship between the interest rate and the quantity of real GDP supplied.

Accepted Answer

A) True 
 B)False

Question 12

Which of these statements best describes a flow variable?

Accepted Answer

A)  An economic variable that measures something at a particular point in time 
B)  An economic variable whose value is determined by the market 
C)  An economic variable that is measured per unit of time 
D)  An economic variable whose value shows no change over time 
E)  An economic variable that remains static when other related variables change 
A)  An economic variable that measures something at a particular point in time 
B)  An economic variable whose value is determined by the market 
C)  An economic variable that is measured per unit of time 
D)  An economic variable whose value shows no change over time 
E)  An economic variable that remains static when other related variables change

Question 13

Which of the following would indicate the beginning of an expansionary phase in an economy?

Accepted Answer

A)  A minor increase in the number of new firms 
B)  A decline in stock market prices 
C)  An improvement in consumer confidence 
D)  A slowdown in housing construction 
E)  A decrease in the number of orders for new equipment 
A)  A minor increase in the number of new firms 
B)  A decline in stock market prices 
C)  An improvement in consumer confidence 
D)  A slowdown in housing construction 
E)  A decrease in the number of orders for new equipment

Question 14

Which of these partly accounts for the long-term growth in production in the U.S. economy?

Accepted Answer

A)  An increase in government spending 
B)  An increase in the availability of resources 
C)  A reduction in federal taxes 
D)  A gradual but consistent increase in the price level 
E)  A general optimism about the future and the pioneering spirit of America 
A)  An increase in government spending 
B)  An increase in the availability of resources 
C)  A reduction in federal taxes 
D)  A gradual but consistent increase in the price level 
E)  A general optimism about the future and the pioneering spirit of America

Question 15

According to Keynes, if private sector demand is insufficient to maintain full employment, the government should:

Accepted Answer

A)  make the economy's natural transition to a lower level of employment as easy as possible. 
B)  shock the economy with an increase in aggregate demand. 
C)  reduce aggregate supply to reduce inflation. 
D)  print money to promote consumer spending. 
E)  take steps to increase aggregate supply in an economy. 
A)  make the economy's natural transition to a lower level of employment as easy as possible. 
B)  shock the economy with an increase in aggregate demand. 
C)  reduce aggregate supply to reduce inflation. 
D)  print money to promote consumer spending. 
E)  take steps to increase aggregate supply in an economy.

Question 16

The Keynesian approach to government economic policy:

Accepted Answer

A)  has emphasized the role of individual self-interest as a powerful stabilizing force. 
B)  has consistently failed to reduce fluctuations in economic activity. 
C)  was ineffective during the 1960s. 
D)  highlighted the role of aggregate demand. 
E)  was rechristened supply-side economics around 1980. 
A)  has emphasized the role of individual self-interest as a powerful stabilizing force. 
B)  has consistently failed to reduce fluctuations in economic activity. 
C)  was ineffective during the 1960s. 
D)  highlighted the role of aggregate demand. 
E)  was rechristened supply-side economics around 1980.

Question 17

The term "fine-tuning the economy" implies:

Accepted Answer

A)  making government economic policy more "people oriented". 
B)  using government policies to adjust the economy and promote economic stability. 
C)  solving microeconomic problems such as externalities and losing sight of the big picture. 
D)  placing fewer regulations on the private sector, thereby eliminating the need for government intervention. 
E)  designing policies based exclusively on leading economic indicators. 
A)  making government economic policy more "people oriented". 
B)  using government policies to adjust the economy and promote economic stability. 
C)  solving microeconomic problems such as externalities and losing sight of the big picture. 
D)  placing fewer regulations on the private sector, thereby eliminating the need for government intervention. 
E)  designing policies based exclusively on leading economic indicators.

Question 18

Which of these describes the real gross domestic product?

Accepted Answer

A)  Gross domestic product from which depreciation costs have been deducted 
B)  Gross domestic product that has been adjusted for changes in the price level 
C)  Gross domestic product from which taxes have been deducted 
D)  Gross domestic product that has been adjusted for changes in exchange rate 
E)  Gross domestic product that has been adjusted for changes in interest rates 
A)  Gross domestic product from which depreciation costs have been deducted 
B)  Gross domestic product that has been adjusted for changes in the price level 
C)  Gross domestic product from which taxes have been deducted 
D)  Gross domestic product that has been adjusted for changes in exchange rate 
E)  Gross domestic product that has been adjusted for changes in interest rates

Question 19

Which of the following concepts is not included in the study of macroeconomics?

Accepted Answer

A)  The unemployment level 
B)  The inflation rate 
C)  The real income 
D)  The profit-maximizing condition 
E)  The role of government 
A)  The unemployment level 
B)  The inflation rate 
C)  The real income 
D)  The profit-maximizing condition 
E)  The role of government

Question 20

Confidence in Keynesian economics:

Accepted Answer

A)  diminished in the 1960s as the unemployment rate fell. 
B)  flourished in the 1960s despite two major recessions. 
C)  diminished in the 1960s as unemployment increased. 
D)  diminished in the 1970s as inflation occurred simultaneously with two recessions. 
E)  flourished through the 1980s despite Reagan's supply-side policies. 
A)  diminished in the 1960s as the unemployment rate fell. 
B)  flourished in the 1960s despite two major recessions. 
C)  diminished in the 1960s as unemployment increased. 
D)  diminished in the 1970s as inflation occurred simultaneously with two recessions. 
E)  flourished through the 1980s despite Reagan's supply-side policies.

The term inflation is used to describe a(n):

Which of these is assumed to be constant along an aggregate supply curve?

Which of the following describes an economy's price level?

Which of the following happened during the Great Depression?

An example of a flow variable in economics is:

The following table shows an aggregate demand schedule and an aggregate supply schedule. Which of the following is true?

In terms of the aggregate demand and aggregate supply framework, the Great Depression can be viewed as a:

By a leading economic indicator, economists mean:

Economic fluctuations or business cycles:

The term stagflation refers to:

The aggregate supply curve reflects the inverse relationship between the interest rate and the quantity of real GDP supplied.

Which of these statements best describes a flow variable?

Which of the following would indicate the beginning of an expansionary phase in an economy?

Which of these partly accounts for the long-term growth in production in the U.S. economy?

According to Keynes, if private sector demand is insufficient to maintain full employment, the government should:

The Keynesian approach to government economic policy:

The term "fine-tuning the economy" implies:

Which of these describes the real gross domestic product?

Which of the following concepts is not included in the study of macroeconomics?

Confidence in Keynesian economics:

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Exam 5: Introduction to Macroeconomics

The term inflation is used to describe a(n):

Which of these is assumed to be constant along an aggregate supply curve?

Which of the following describes an economy's price level?

Which of the following happened during the Great Depression?

An example of a flow variable in economics is:

The following table shows an aggregate demand schedule and an aggregate supply schedule. Which of the following is true?

In terms of the aggregate demand and aggregate supply framework, the Great Depression can be viewed as a:

By a leading economic indicator, economists mean:

Economic fluctuations or business cycles:

The term stagflation refers to:

The aggregate supply curve reflects the inverse relationship between the interest rate and the quantity of real GDP supplied.

Which of these statements best describes a flow variable?

Which of the following would indicate the beginning of an expansionary phase in an economy?

Which of these partly accounts for the long-term growth in production in the U.S. economy?

According to Keynes, if private sector demand is insufficient to maintain full employment, the government should:

The Keynesian approach to government economic policy:

The term "fine-tuning the economy" implies:

Which of these describes the real gross domestic product?

Which of the following concepts is not included in the study of macroeconomics?

Confidence in Keynesian economics:

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters