Question 1

The inflation rate in the United States has always been positive.

Accepted Answer

A) True 
 B)False

Question 2

-Refer to Figure 5-2 above.When moving from point B to C on the graph,the economy is going through a(n)

Accepted Answer

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

Question 3

The Great Depression provided significant evidence that

Accepted Answer

A)  the economy always worked well on its own 
B)  the economy always reached full employment on its own 
C)  the economy may not always do well on its own 
D)  the notion of laissez faire was correct 
E)  the supporters of the classical model were correct 
A)  the economy always worked well on its own 
B)  the economy always reached full employment on its own 
C)  the economy may not always do well on its own 
D)  the notion of laissez faire was correct 
E)  the supporters of the classical model were correct

Question 4

One macroeconomic goal is to achieve an unemployment rate of zero.

Accepted Answer

A) True 
 B)False

Question 5

We could try to use a powerful computer to construct a macroeconomic model including tens of thousands of demand and supply curves,for every market in the economy.This would not be a useful undertaking because

Accepted Answer

A)  it would not be worth the increased level of complication and effort needed to collect all information 
B)  the model would be simplistic 
C)  the model would inevitably leave out important information 
D)  the suggested prices would inevitably be wrong in each market 
E)  the model would not be realistic 
A)  it would not be worth the increased level of complication and effort needed to collect all information 
B)  the model would be simplistic 
C)  the model would inevitably leave out important information 
D)  the suggested prices would inevitably be wrong in each market 
E)  the model would not be realistic

Question 6

If the unemployment rate has reached an all-time high,the production of output is probably

Accepted Answer

A)  high 
B)  low 
C)  stable 
D)  fluctuating 
E)  equal to its potential 
A)  high 
B)  low 
C)  stable 
D)  fluctuating 
E)  equal to its potential

Question 7

Macroeconomists are able to study the entire economy by

Accepted Answer

A)  ignoring much of the data available in order to reduce the number of markets that need to be studied 
B)  studying only a few markets at a time 
C)  simply adding up all the prices and quantities in individual markets 
D)  aggregation which reduces the number of markets that need to be studied 
E)  dividing total output by the number of markets 
A)  ignoring much of the data available in order to reduce the number of markets that need to be studied 
B)  studying only a few markets at a time 
C)  simply adding up all the prices and quantities in individual markets 
D)  aggregation which reduces the number of markets that need to be studied 
E)  dividing total output by the number of markets

Question 8

For the average living standard of a nation to __________,__________ must increase faster than the price level

Accepted Answer

A)  increase;nominal GDP 
B)  increase;real GDP 
C)  decrease;nominal GDP 
D)  remain constant;nominal GDP 
E)  decrease;real GDP 
A)  increase;nominal GDP 
B)  increase;real GDP 
C)  decrease;nominal GDP 
D)  remain constant;nominal GDP 
E)  decrease;real GDP

Question 9

One way to bring the inflation rate down is

Accepted Answer

A)  to reduce excessive competition 
B)  to increase government spending 
C)  to aggregate across markets 
D)  for the government to purposely cause a severe recession 
E)  to reduce taxes 
A)  to reduce excessive competition 
B)  to increase government spending 
C)  to aggregate across markets 
D)  for the government to purposely cause a severe recession 
E)  to reduce taxes

Question 10

What are the three important macroeconomic goals about which most economists,and society at large,agree?

Accepted Answer

A)  economic growth,full employment,and low interest rates 
B)  economic growth,full employment,and stable prices 
C)  economic growth,zero unemployment,and falling prices 
D)  economic growth,low unemployment,and a balanced budget 
E)  economic growth,a balanced budget,and balanced international trade 
A)  economic growth,full employment,and low interest rates 
B)  economic growth,full employment,and stable prices 
C)  economic growth,zero unemployment,and falling prices 
D)  economic growth,low unemployment,and a balanced budget 
E)  economic growth,a balanced budget,and balanced international trade

Question 11

From 1929 to 1993,the first four years of the Great Depression,U.S.output dropped by more than

Accepted Answer

A)  10 percent 
B)  80 percent 
C)  5 percent 
D)  50 percent 
E)  25 percent 
A)  10 percent 
B)  80 percent 
C)  5 percent 
D)  50 percent 
E)  25 percent

Question 12

Aggregation is important because it allows macroeconomists to divide a whole into its individual components.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not an important macroeconomic goal?

Accepted Answer

A)  Stable prices 
B)  Full employment 
C)  Rapid economic growth 
D)  Low interest rates 
E)  None of the above is an important macroeconomic goal 
A)  Stable prices 
B)  Full employment 
C)  Rapid economic growth 
D)  Low interest rates 
E)  None of the above is an important macroeconomic goal

Question 14

Macroeconomics studies the behavior of aggregates while microeconomics studies the behavior of individual decision-making units.

Accepted Answer

A) True 
 B)False

Question 15

If real GDP is increasing at a 2 percent annual rate while the unemployment rate is 7 percent,the economy is

Accepted Answer

A)  not achieving full economic potential 
B)  experiencing an increase of 2 percent in real annual per capita GDP 
C)  experiencing a slump 
D)  experiencing high prices and low inflation 
E)  producing along its production possibilities frontier 
A)  not achieving full economic potential 
B)  experiencing an increase of 2 percent in real annual per capita GDP 
C)  experiencing a slump 
D)  experiencing high prices and low inflation 
E)  producing along its production possibilities frontier

Question 16

In the early 1990s,some ________________ experienced inflation rates in the triple digits.

Accepted Answer

A)  of the newly emerging nations of Central Europe and the former Soviet Union 
B)  East African nations 
C)  Latin American nations 
D)  Asian nations 
E)  West African nations 
A)  of the newly emerging nations of Central Europe and the former Soviet Union 
B)  East African nations 
C)  Latin American nations 
D)  Asian nations 
E)  West African nations

Question 17

In macroeconomics,

Accepted Answer

A)  we study one market at a time 
B)  we try to understand how the entire economy behaves 
C)  we focus on large,important products and ignore the rest 
D)  we study one nation's economy only 
E)  we aggregate all national economies into a world economy 
A)  we study one market at a time 
B)  we try to understand how the entire economy behaves 
C)  we focus on large,important products and ignore the rest 
D)  we study one nation's economy only 
E)  we aggregate all national economies into a world economy

Question 18

Over the past 90 years or so,the inflation rate has

Accepted Answer

A)  generally increased 
B)  been positive in most years 
C)  stayed low 
D)  been negative in most years 
E)  dramatically increased 
A)  generally increased 
B)  been positive in most years 
C)  stayed low 
D)  been negative in most years 
E)  dramatically increased

Question 19

During the Great Depression,the economist who raised the loudest objections against the classical model was

Accepted Answer

A)  Milton Friedman 
B)  John Nash 
C)  Adam Smith 
D)  Ben Bernanke 
E)  John Maynard Keynes 
A)  Milton Friedman 
B)  John Nash 
C)  Adam Smith 
D)  Ben Bernanke 
E)  John Maynard Keynes

Question 20

In macroeconomics,it is impossible to include many individual markets in a single data source.

Accepted Answer

A) True 
 B)False

The inflation rate in the United States has always been positive.

-Refer to Figure 5-2 above.When moving from point B to C on the graph,the economy is going through a(n)

The Great Depression provided significant evidence that

One macroeconomic goal is to achieve an unemployment rate of zero.

We could try to use a powerful computer to construct a macroeconomic model including tens of thousands of demand and supply curves,for every market in the economy.This would not be a useful undertaking because

If the unemployment rate has reached an all-time high,the production of output is probably

Macroeconomists are able to study the entire economy by

For the average living standard of a nation to , must increase faster than the price level

One way to bring the inflation rate down is

What are the three important macroeconomic goals about which most economists,and society at large,agree?

From 1929 to 1993,the first four years of the Great Depression,U.S.output dropped by more than

Aggregation is important because it allows macroeconomists to divide a whole into its individual components.

Which of the following is not an important macroeconomic goal?

Macroeconomics studies the behavior of aggregates while microeconomics studies the behavior of individual decision-making units.

If real GDP is increasing at a 2 percent annual rate while the unemployment rate is 7 percent,the economy is

In the early 1990s,some ________________ experienced inflation rates in the triple digits.

In macroeconomics,

Over the past 90 years or so,the inflation rate has

During the Great Depression,the economist who raised the loudest objections against the classical model was

In macroeconomics,it is impossible to include many individual markets in a single data source.

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

The inflation rate in the United States has always been positive.

-Refer to Figure 5-2 above.When moving from point B to C on the graph,the economy is going through a(n)

The Great Depression provided significant evidence that

One macroeconomic goal is to achieve an unemployment rate of zero.

We could try to use a powerful computer to construct a macroeconomic model including tens of thousands of demand and supply curves,for every market in the economy.This would not be a useful undertaking because

If the unemployment rate has reached an all-time high,the production of output is probably

Macroeconomists are able to study the entire economy by

For the average living standard of a nation to __________,__________ must increase faster than the price level

One way to bring the inflation rate down is

What are the three important macroeconomic goals about which most economists,and society at large,agree?

From 1929 to 1993,the first four years of the Great Depression,U.S.output dropped by more than

Aggregation is important because it allows macroeconomists to divide a whole into its individual components.

Which of the following is not an important macroeconomic goal?

Macroeconomics studies the behavior of aggregates while microeconomics studies the behavior of individual decision-making units.

If real GDP is increasing at a 2 percent annual rate while the unemployment rate is 7 percent,the economy is

In the early 1990s,some ________________ experienced inflation rates in the triple digits.

In macroeconomics,

Over the past 90 years or so,the inflation rate has

During the Great Depression,the economist who raised the loudest objections against the classical model was

In macroeconomics,it is impossible to include many individual markets in a single data source.

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

For the average living standard of a nation to , must increase faster than the price level