Question 1

The concept of "invisible hand" introduced by Adam Smith explains:

Accepted Answer

A)  why people act in their own best interests. 
B)  why the government intervenes to overcome failures in private markets. 
C)  how people, acting out of self-interest, unintentionally promote the general good. 
D)  how comparative advantage and specialization promote international trade. 
E)  how the creation of goods and services generates its own demand by creating employment and income. 
A)  why people act in their own best interests. 
B)  why the government intervenes to overcome failures in private markets. 
C)  how people, acting out of self-interest, unintentionally promote the general good. 
D)  how comparative advantage and specialization promote international trade. 
E)  how the creation of goods and services generates its own demand by creating employment and income.

Question 2

An economic policy that is based on a flawed theory can, at times, provide a desired outcome.

Accepted Answer

A) True 
 B)False

Question 3

Macroeconomics simply focuses on the annual performance of a particular national economy and ignores its interactions with other national economies around the world.

Accepted Answer

A) True 
 B)False

Question 4

Which of these is a likely impact of a decrease in the price level in an economy on the aggregate supply in the economy?

Accepted Answer

A)  An increase in the quantity of real GDP supplied 
B)  A decrease in the quantity of real GDP supplied 
C)  A leftward shift of the aggregate supply curve 
D)  A rightward shift of the aggregate supply curve 
E)  An increase in the slope of the aggregate supply curve 
A)  An increase in the quantity of real GDP supplied 
B)  A decrease in the quantity of real GDP supplied 
C)  A leftward shift of the aggregate supply curve 
D)  A rightward shift of the aggregate supply curve 
E)  An increase in the slope of the aggregate supply curve

Question 5

Given an aggregate supply curve, a decrease in aggregate demand will:

Accepted Answer

A)  increase the real interest rate. 
B)  increase real GDP. 
C)  increase the price level. 
D)  decrease the real exchange rate. 
E)  decrease real GDP. 
A)  increase the real interest rate. 
B)  increase real GDP. 
C)  increase the price level. 
D)  decrease the real exchange rate. 
E)  decrease real GDP.

Question 6

Identify an example of a flow variable.

Accepted Answer

A)  The volume of the federal government's debt 
B)  The population of a country in a particular year 
C)  The total amount of an individual's wealth 
D)  The amount of sales tax collected per year 
E)  The total amount of unemployment in an economy 
A)  The volume of the federal government's debt 
B)  The population of a country in a particular year 
C)  The total amount of an individual's wealth 
D)  The amount of sales tax collected per year 
E)  The total amount of unemployment in an economy

Question 7

The recession that set in after December 2007 can be attributed to:

Accepted Answer

A)  an increase in expenditure on war. 
B)  a decline in home prices and an increase in foreclosures. 
C)  an increase in terrorist activities. 
D)  crop failures around the world. 
E)  an increase in oil prices in the international market. 
A)  an increase in expenditure on war. 
B)  a decline in home prices and an increase in foreclosures. 
C)  an increase in terrorist activities. 
D)  crop failures around the world. 
E)  an increase in oil prices in the international market.

Question 8

A period of sustained decline in output in an economy is known as a(n) _____.

Accepted Answer

A)  expansion 
B)  stagnation 
C)  peak 
D)  trough 
E)  contraction 
A)  expansion 
B)  stagnation 
C)  peak 
D)  trough 
E)  contraction

Question 9

The failure of the mercantilism policy and the tax policy during the Great Depression proves that economic policies are meaningless and they do more harm than good.

Accepted Answer

A) True 
 B)False

Question 10

Identify an example of a stock variable.

Accepted Answer

A)  The growth in investment in an economy 
B)  The change in the price level in an economy over the years 
C)  The number of unemployed people in an economy in a particular year 
D)  The increase in the money supply in an economy 
E)  The fall in consumer spending during two consecutive years 
A)  The growth in investment in an economy 
B)  The change in the price level in an economy over the years 
C)  The number of unemployed people in an economy in a particular year 
D)  The increase in the money supply in an economy 
E)  The fall in consumer spending during two consecutive years

Question 11

Which of the following factors can partly explain the long-term growth in production in the U.S. economy?

Accepted Answer

A)  Trade surpluses and accumulation of precious metals 
B)  A gradual but consistent increase in the price level 
C)  Growth in population 
D)  Improvements in technology 
E)  Federal government budget deficits 
A)  Trade surpluses and accumulation of precious metals 
B)  A gradual but consistent increase in the price level 
C)  Growth in population 
D)  Improvements in technology 
E)  Federal government budget deficits

The concept of "invisible hand" introduced by Adam Smith explains:

An economic policy that is based on a flawed theory can, at times, provide a desired outcome.

Macroeconomics simply focuses on the annual performance of a particular national economy and ignores its interactions with other national economies around the world.

Which of these is a likely impact of a decrease in the price level in an economy on the aggregate supply in the economy?

Given an aggregate supply curve, a decrease in aggregate demand will:

Identify an example of a flow variable.

The recession that set in after December 2007 can be attributed to:

A period of sustained decline in output in an economy is known as a(n) _____.

The failure of the mercantilism policy and the tax policy during the Great Depression proves that economic policies are meaningless and they do more harm than good.

Identify an example of a stock variable.

Which of the following factors can partly explain the long-term growth in production in the U.S. economy?

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 concept of "invisible hand" introduced by Adam Smith explains:

An economic policy that is based on a flawed theory can, at times, provide a desired outcome.

Macroeconomics simply focuses on the annual performance of a particular national economy and ignores its interactions with other national economies around the world.

Which of these is a likely impact of a decrease in the price level in an economy on the aggregate supply in the economy?

Given an aggregate supply curve, a decrease in aggregate demand will:

Identify an example of a flow variable.

The recession that set in after December 2007 can be attributed to:

A period of sustained decline in output in an economy is known as a(n) _____.

The failure of the mercantilism policy and the tax policy during the Great Depression proves that economic policies are meaningless and they do more harm than good.

Identify an example of a stock variable.

Which of the following factors can partly explain the long-term growth in production in the U.S. economy?

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