Question 1

In cases of extreme annual inflation,such as in thousands of percent or higher,people are no longer willing to hold currency or accept it from others.

Accepted Answer

A) True 
 B)False

Question 2

If the unemployment rate is 6 percent,that means that 6 percent of

Accepted Answer

A)  the population is not working 
B)  potential workers do not have jobs 
C)  the workforce is searching for work but has not found a job at that time 
D)  the individuals who are looking for work cannot find jobs 
E)  the population is not looking for a job 
A)  the population is not working 
B)  potential workers do not have jobs 
C)  the workforce is searching for work but has not found a job at that time 
D)  the individuals who are looking for work cannot find jobs 
E)  the population is not looking for a job

Question 3

Since 1959,the U.S.has experienced severe recessions in which three periods?

Accepted Answer

A)  1964-65,1981-82,and 1990-91 
B)  1974-75,1981-82,and 2008-09 
C)  1960-61,1974-75,and 2008-09 
D)  1960-61,1981-82,and 2008-09 
E)  1969-70,1981-82,and 2008-09 
A)  1964-65,1981-82,and 1990-91 
B)  1974-75,1981-82,and 2008-09 
C)  1960-61,1974-75,and 2008-09 
D)  1960-61,1981-82,and 2008-09 
E)  1969-70,1981-82,and 2008-09

Question 4

-Refer to Figure 5-1 above.If the economy moves from point B to C on the graph,it is going through a(n)

Accepted Answer

A)  peak 
B)  trough 
C)  expansion 
D)  slump 
E)  recession 
A)  peak 
B)  trough 
C)  expansion 
D)  slump 
E)  recession

Question 5

Rapid economic growth,stable prices and __________ are the three important macroeconomic goals about which most economists agree.

Accepted Answer

A)  an unemployment rate of zero 
B)  zero inflation 
C)  full employment 
D)  a high exchange rate 
E)  low interest rates 
A)  an unemployment rate of zero 
B)  zero inflation 
C)  full employment 
D)  a high exchange rate 
E)  low interest rates

Question 6

For the average living standard of a nation to rise,the only thing that needs to happen is for nominal GDP to increase faster than the price level.

Accepted Answer

A) True 
 B)False

Question 7

The phase of the business cycle characterized by rising employment is called

Accepted Answer

A)  a recession 
B)  a low-tax phase 
C)  a high-inflation phase 
D)  an expansion 
E)  a depression 
A)  a recession 
B)  a low-tax phase 
C)  a high-inflation phase 
D)  an expansion 
E)  a depression

Question 8

The occurrence of the Great Depression offered evidence that supported

Accepted Answer

A)  the classical theory of economics 
B)  the need for the government to practice the policy of laissez faire 
C)  the need for the government to control prices 
D)  Congress to take action to stop rising prices 
E)  the Keynesian idea that the government needed to guide the economy 
A)  the classical theory of economics 
B)  the need for the government to practice the policy of laissez faire 
C)  the need for the government to control prices 
D)  Congress to take action to stop rising prices 
E)  the Keynesian idea that the government needed to guide the economy

Question 9

In cases of extreme annual inflation,the breakdown of the monetary system forces people to waste valuable time engaging in bartering.

Accepted Answer

A) True 
 B)False

Question 10

A laissez faire policy is one in which

Accepted Answer

A)  the government plays a major role in guiding economic activity 
B)  the government prefers to control taxes rather than spending 
C)  the government leaves things alone 
D)  individuals rely on the government for guidance but not for active intervention in the economy 
E)  businesses rely on the government for guidance but not for active intervention in the economy 
A)  the government plays a major role in guiding economic activity 
B)  the government prefers to control taxes rather than spending 
C)  the government leaves things alone 
D)  individuals rely on the government for guidance but not for active intervention in the economy 
E)  businesses rely on the government for guidance but not for active intervention in the economy

Question 11

The unemployment rate is usually zero except during recessions.

Accepted Answer

A) True 
 B)False

Question 12

The 1978 Full Employment and Balanced Growth Act called for a target unemployment rate of

Accepted Answer

A)  0 percent 
B)  5 percent 
C)  1 percent 
D)  2 percent 
E)  4 percent 
A)  0 percent 
B)  5 percent 
C)  1 percent 
D)  2 percent 
E)  4 percent

Question 13

The term laissez faire can be translated

Accepted Answer

A)  "leave it alone" 
B)  "make it equitable (fair)" 
C)  "take an active role" 
D)  "markets work" 
E)  "free of problems" 
A)  "leave it alone" 
B)  "make it equitable (fair)" 
C)  "take an active role" 
D)  "markets work" 
E)  "free of problems"

Question 14

Microeconomics involves the analysis of smaller,less developed economies while macroeconomics is concerned with the analysis of larger developed economies.

Accepted Answer

A) True 
 B)False

Question 15

Aggregation is important in macroeconomics because

Accepted Answer

A)  it is a basic tool of reasoning 
B)  we need a model with as much information as possible 
C)  it allows us to comprehend the entire economy in all its detail 
D)  it allows us to keep different markets separate in our minds 
E)  we need to consider the entire economy at once with a model as simple as possible 
A)  it is a basic tool of reasoning 
B)  we need a model with as much information as possible 
C)  it allows us to comprehend the entire economy in all its detail 
D)  it allows us to keep different markets separate in our minds 
E)  we need to consider the entire economy at once with a model as simple as possible

Question 16

During the expansion phase of a business cycle

Accepted Answer

A)  employment and output are both at a peak 
B)  employment and output are both rising 
C)  employment is falling and output is rising 
D)  unemployment is rising and output is falling 
E)  employment is rising and output is falling 
A)  employment and output are both at a peak 
B)  employment and output are both rising 
C)  employment is falling and output is rising 
D)  unemployment is rising and output is falling 
E)  employment is rising and output is falling

Question 17

An understanding of macroeconomics is valuable because it can help

Accepted Answer

A)  in making purchase decisions 
B)  us to understand the forces that determine how fast the economy grows 
C)  us to understand why some firms earn more economic profit than others 
D)  to minimize the amount of tax an individual owes 
E)  minimize the opportunity cost of making poor decisions 
A)  in making purchase decisions 
B)  us to understand the forces that determine how fast the economy grows 
C)  us to understand why some firms earn more economic profit than others 
D)  to minimize the amount of tax an individual owes 
E)  minimize the opportunity cost of making poor decisions

Question 18

If two economists disagree on an issue and their disagreement is based on personal value judgments,then this controversy is a normative one.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is a major macroeconomic goal?

Accepted Answer

A)  Low prices 
B)  Fair prices 
C)  Pure competition 
D)  Low unemployment 
E)  High prices 
A)  Low prices 
B)  Fair prices 
C)  Pure competition 
D)  Low unemployment 
E)  High prices

Question 20

Periodic fluctuations in GDP are called business cycles.

Accepted Answer

A) True 
 B)False

In cases of extreme annual inflation,such as in thousands of percent or higher,people are no longer willing to hold currency or accept it from others.

If the unemployment rate is 6 percent,that means that 6 percent of

Since 1959,the U.S.has experienced severe recessions in which three periods?

-Refer to Figure 5-1 above.If the economy moves from point B to C on the graph,it is going through a(n)

Rapid economic growth,stable prices and __________ are the three important macroeconomic goals about which most economists agree.

For the average living standard of a nation to rise,the only thing that needs to happen is for nominal GDP to increase faster than the price level.

The phase of the business cycle characterized by rising employment is called

The occurrence of the Great Depression offered evidence that supported

In cases of extreme annual inflation,the breakdown of the monetary system forces people to waste valuable time engaging in bartering.

A laissez faire policy is one in which

The unemployment rate is usually zero except during recessions.

The 1978 Full Employment and Balanced Growth Act called for a target unemployment rate of

The term laissez faire can be translated

Microeconomics involves the analysis of smaller,less developed economies while macroeconomics is concerned with the analysis of larger developed economies.

Aggregation is important in macroeconomics because

During the expansion phase of a business cycle

An understanding of macroeconomics is valuable because it can help

If two economists disagree on an issue and their disagreement is based on personal value judgments,then this controversy is a normative one.

Which of the following is a major macroeconomic goal?

Periodic fluctuations in GDP are called business cycles.

What is Economics?

Scarcity, Choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Production, Income, and Employment

The Price Level and Inflation

The Classical Long run Model

Economic Growth and Rising Living Standards

Economic Fluctuations

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters

Exam 5: What Macroeconomics Tries to Explain

In cases of extreme annual inflation,such as in thousands of percent or higher,people are no longer willing to hold currency or accept it from others.

If the unemployment rate is 6 percent,that means that 6 percent of

Since 1959,the U.S.has experienced severe recessions in which three periods?

-Refer to Figure 5-1 above.If the economy moves from point B to C on the graph,it is going through a(n)

Rapid economic growth,stable prices and __________ are the three important macroeconomic goals about which most economists agree.

For the average living standard of a nation to rise,the only thing that needs to happen is for nominal GDP to increase faster than the price level.

The phase of the business cycle characterized by rising employment is called

The occurrence of the Great Depression offered evidence that supported

In cases of extreme annual inflation,the breakdown of the monetary system forces people to waste valuable time engaging in bartering.

A laissez faire policy is one in which

The unemployment rate is usually zero except during recessions.

The 1978 Full Employment and Balanced Growth Act called for a target unemployment rate of

The term laissez faire can be translated

Microeconomics involves the analysis of smaller,less developed economies while macroeconomics is concerned with the analysis of larger developed economies.

Aggregation is important in macroeconomics because

During the expansion phase of a business cycle

An understanding of macroeconomics is valuable because it can help

If two economists disagree on an issue and their disagreement is based on personal value judgments,then this controversy is a normative one.

Which of the following is a major macroeconomic goal?

Periodic fluctuations in GDP are called business cycles.

What is Economics?

Scarcity, Choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Production, Income, and Employment

The Price Level and Inflation

The Classical Long run Model

Economic Growth and Rising Living Standards

Economic Fluctuations

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters