Question 1

If hot dogs cost $2 this year and $3 next year,then 100 hotdogs will contribute

Accepted Answer

A)  $200 to this year's nominal GDP and $166 to next year's nominal GDP. 
B)  $200 to this year's real GDP and $300 to next year's real GDP. 
C)  the same dollar amount to each year's nominal GDP because hotdogs are intermediate goods. 
D)  $200 to this year's nominal GDP and $300 to next year's nominal GDP. 
A)  $200 to this year's nominal GDP and $166 to next year's nominal GDP. 
B)  $200 to this year's real GDP and $300 to next year's real GDP. 
C)  the same dollar amount to each year's nominal GDP because hotdogs are intermediate goods. 
D)  $200 to this year's nominal GDP and $300 to next year's nominal GDP.

Question 2

Nominal GDP is

Accepted Answer

A)  also called real GDP. 
B)  a more accurate measure than real GDP. 
C)  real GDP adjusted for changes in the price level. 
D)  GDP measured in current prices. 
A)  also called real GDP. 
B)  a more accurate measure than real GDP. 
C)  real GDP adjusted for changes in the price level. 
D)  GDP measured in current prices.

Question 3

You are a collector of antique coins.You purchase a silver dollar minted in 1898.Is this sale included in GDP for the current year?

Accepted Answer

A)  Yes, provided the coin is in mint condition. 
B)  No, it is not. 
C)  No, unless the coin has been in circulation. 
D)  Yes, it is. 
E)  Only if it is part of the current money supply. 
A)  Yes, provided the coin is in mint condition. 
B)  No, it is not. 
C)  No, unless the coin has been in circulation. 
D)  Yes, it is. 
E)  Only if it is part of the current money supply.

Question 4

For a macroeconomist,the case for aggregation is based on two principles―1)the composition of demand and supply may not matter for some purposes,and 2)

Accepted Answer

A)  during fluctuations markets normally move together. 
B)  individual markets allocate resources efficiently. 
C)  inflation, unemployment, and growth never go together. 
D)  individual markets distribute income efficiently. 
A)  during fluctuations markets normally move together. 
B)  individual markets allocate resources efficiently. 
C)  inflation, unemployment, and growth never go together. 
D)  individual markets distribute income efficiently.

Question 5

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 favorable macroeconomy of the late 1990s?

Accepted Answer

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

Question 6

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 7

Individuals live and work in both individual and aggregate economic entities.

Accepted Answer

A) True 
 B)False

Question 8

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 9

In The General Theory of Employment,Interest,and Money,Keynes rejected the idea that

Accepted Answer

A)  a capitalist economy always gravitates toward high levels of employment. 
B)  budget deficits necessarily cause recessions and inflation. 
C)  the ultimate breakdown of the capitalist system is inevitable. 
D)  international trade always helps to achieve economic stability. 
A)  a capitalist economy always gravitates toward high levels of employment. 
B)  budget deficits necessarily cause recessions and inflation. 
C)  the ultimate breakdown of the capitalist system is inevitable. 
D)  international trade always helps to achieve economic stability.

Question 10

Gross Domestic Product is best described as the

Accepted Answer

A)  measure of a nation's total economic welfare. 
B)  national income, including nonmarket income. 
C)  sum of money values of all final output produced in the domestic economy within the year. 
D)  national output minus environmental damage. 
A)  measure of a nation's total economic welfare. 
B)  national income, including nonmarket income. 
C)  sum of money values of all final output produced in the domestic economy within the year. 
D)  national output minus environmental damage.

Question 11

The tax cut of 2001 turned out to be well-timed because it caused a

Accepted Answer

A)  rightward shift of the aggregate demand curve. 
B)  rightward shift of the aggregate supply curve. 
C)  leftward shift of the aggregate demand curve. 
D)  leftward shift of the aggregate supply curve. 
A)  rightward shift of the aggregate demand curve. 
B)  rightward shift of the aggregate supply curve. 
C)  leftward shift of the aggregate demand curve. 
D)  leftward shift of the aggregate supply curve.

If hot dogs cost $2 this year and $3 next year,then 100 hotdogs will contribute

Nominal GDP is

You are a collector of antique coins.You purchase a silver dollar minted in 1898.Is this sale included in GDP for the current year?

For a macroeconomist,the case for aggregation is based on two principles―1)the composition of demand and supply may not matter for some purposes,and 2)

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

Individuals live and work in both individual and aggregate economic entities.

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

In The General Theory of Employment,Interest,and Money,Keynes rejected the idea that

Gross Domestic Product is best described as the

The tax cut of 2001 turned out to be well-timed because it caused a

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

Filters

Exam 5: An Introduction to Macroeconomics

If hot dogs cost $2 this year and $3 next year,then 100 hotdogs will contribute

Nominal GDP is

You are a collector of antique coins.You purchase a silver dollar minted in 1898.Is this sale included in GDP for the current year?

For a macroeconomist,the case for aggregation is based on two principles―1)the composition of demand and supply may not matter for some purposes,and 2)

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

Individuals live and work in both individual and aggregate economic entities.

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

In The General Theory of Employment,Interest,and Money,Keynes rejected the idea that

Gross Domestic Product is best described as the

The tax cut of 2001 turned out to be well-timed because it caused a

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

Filters