Question 1

Real GDP differs from nominal GDP in that nominal GDP measures

Accepted Answer

A)  output adjusted for inflation. 
B)  real output of goods and services. 
C)  output of goods and services at current prices. 
D)  real income adjusted for changes in the price level. 
A)  output adjusted for inflation. 
B)  real output of goods and services. 
C)  output of goods and services at current prices. 
D)  real income adjusted for changes in the price level.

Question 2

Real GDP

Accepted Answer

A)  is nominal GDP adjusted for changes in the price level. 
B)  is also called nominal GDP. 
C)  measures GDP minus depreciation of capital. 
D)  will always change when prices change. 
A)  is nominal GDP adjusted for changes in the price level. 
B)  is also called nominal GDP. 
C)  measures GDP minus depreciation of capital. 
D)  will always change when prices change.

Question 3

The existence of the "underground economy" causes measured GDP to overestimate actual output.

Accepted Answer

A) True 
 B)False

Question 4

The successes of the 1960s were ascribed to the effects of

Accepted Answer

A)  classical policies from the 1800s. 
B)  classical policies from the 1930s. 
C)  classical policies from the 1950s. 
D)  Keynesian policies from the 1930s. 
E)  Keynesian policies from the 1950s. 
A)  classical policies from the 1800s. 
B)  classical policies from the 1930s. 
C)  classical policies from the 1950s. 
D)  Keynesian policies from the 1930s. 
E)  Keynesian policies from the 1950s.

Question 5

A macroeconomist would concentrate on which of the following issues?

Accepted Answer

A)  the price of pizzas 
B)  the profits of the IBM Corporation 
C)  the unemployment rate in Germany 
D)  the market for hot dogs 
A)  the price of pizzas 
B)  the profits of the IBM Corporation 
C)  the unemployment rate in Germany 
D)  the market for hot dogs

Question 6

Phoebe and Rachel quit running in Central Park and join a health club to run on treadmills.This decision

Accepted Answer

A)  has no effect on GDP. 
B)  increases GDP. 
C)  decreases GDP. 
D)  increases nominal but not real GDP. 
A)  has no effect on GDP. 
B)  increases GDP. 
C)  decreases GDP. 
D)  increases nominal but not real GDP.

Question 7

During economic fluctuations,markets tend to move

Accepted Answer

A)  together. 
B)  in random directions. 
C)  in opposite directions. 
D)  in many different directions. 
A)  together. 
B)  in random directions. 
C)  in opposite directions. 
D)  in many different directions.

Question 8

Gross Domestic Product is a monetary measure of

Accepted Answer

A)  total consumption in the economy. 
B)  the total value of all final goods and services. 
C)  total industrial output. 
D)  the total value of all foreign sales and purchases. 
A)  total consumption in the economy. 
B)  the total value of all final goods and services. 
C)  total industrial output. 
D)  the total value of all foreign sales and purchases.

Question 9

Poor Asian countries may have per-capita GDP's that may be less than $250.Why is this somewhat misleading for comparative purposes?

Accepted Answer

A)  Most rich country GDP is nonmarket activity. 
B)  A significant amount of poor country GDP is nonmarket activity. 
C)  Poor countries do not use dollars. 
D)  Poor countries have few resources. 
A)  Most rich country GDP is nonmarket activity. 
B)  A significant amount of poor country GDP is nonmarket activity. 
C)  Poor countries do not use dollars. 
D)  Poor countries have few resources.

Question 10

A period in which the price level is rising is experiencing

Accepted Answer

A)  inflation. 
B)  reflation. 
C)  deflation. 
D)  deconstruction. 
A)  inflation. 
B)  reflation. 
C)  deflation. 
D)  deconstruction.

Question 11

In the aggregate demand-aggregate supply model,economic growth can be illustrated by an

Accepted Answer

A)  outward shift of the aggregate demand curve. 
B)  inward shift of the aggregate demand curve. 
C)  inward shift of the aggregate supply curve. 
D)  All of the above. 
A)  outward shift of the aggregate demand curve. 
B)  inward shift of the aggregate demand curve. 
C)  inward shift of the aggregate supply curve. 
D)  All of the above.

Question 12

Aggregation involves adding together different products and services.

Accepted Answer

A) True 
 B)False

Question 13

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 economic conditions of the American economy in 2001?

Accepted Answer

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

Question 14

Which of the following is included in GDP?

Accepted Answer

A)  the value of illegally produced goods 
B)  the value of housework by a stay-at-home dad 
C)  the value of volunteer work done at a local homeless shelter 
D)  the cost of government-provided social services 
A)  the value of illegally produced goods 
B)  the value of housework by a stay-at-home dad 
C)  the value of volunteer work done at a local homeless shelter 
D)  the cost of government-provided social services

Question 15

Macroeconomics stresses

Accepted Answer

A)  resource allocation and income distribution. 
B)  inflation and unemployment. 
C)  resource allocation and inflation. 
D)  unemployment and income distribution. 
A)  resource allocation and income distribution. 
B)  inflation and unemployment. 
C)  resource allocation and inflation. 
D)  unemployment and income distribution.

Question 16

In contrast to the post-World War II period,before 1940 the government

Accepted Answer

A)  actively intervened in the economy for stabilization purposes. 
B)  used aggregate demand management to avoid recessions. 
C)  rarely intervened in the economy to influence inflation or unemployment rates. 
D)  used government ownership to guarantee full employment. 
A)  actively intervened in the economy for stabilization purposes. 
B)  used aggregate demand management to avoid recessions. 
C)  rarely intervened in the economy to influence inflation or unemployment rates. 
D)  used government ownership to guarantee full employment.

Question 17

Abstract terms like "cost of living" and "price level" are meaningless to ordinary individuals.

Accepted Answer

A) True 
 B)False

Question 18

The term "stagflation" was invented in the 1970s to describe an economy experiencing both

Accepted Answer

A)  deflation and economic stagnation. 
B)  inflation and economic stagnation. 
C)  high inflation and high employment. 
D)  high inflation and high levels of economic growth. 
A)  deflation and economic stagnation. 
B)  inflation and economic stagnation. 
C)  high inflation and high employment. 
D)  high inflation and high levels of economic growth.

Question 19

Why do price levels increase when government adopts fiscal or monetary policy to correct the economy when it faces a recession and high unemployment?

Accepted Answer

Recession and unemployment are often cau

Question 20

Gross Domestic Product is calculated by adding together

Accepted Answer

A)  the number of goods and services produced in the economy. 
B)  money value of final goods and services. 
C)  number of workers employed in national production. 
D)  all commodities but not services produced in the economy. 
A)  the number of goods and services produced in the economy. 
B)  money value of final goods and services. 
C)  number of workers employed in national production. 
D)  all commodities but not services produced in the economy.

Real GDP differs from nominal GDP in that nominal GDP measures

Real GDP

The existence of the "underground economy" causes measured GDP to overestimate actual output.

The successes of the 1960s were ascribed to the effects of

A macroeconomist would concentrate on which of the following issues?

Phoebe and Rachel quit running in Central Park and join a health club to run on treadmills.This decision

During economic fluctuations,markets tend to move

Gross Domestic Product is a monetary measure of

Poor Asian countries may have per-capita GDP's that may be less than $250.Why is this somewhat misleading for comparative purposes?

A period in which the price level is rising is experiencing

In the aggregate demand-aggregate supply model,economic growth can be illustrated by an

Aggregation involves adding together different products and services.

Which of the following is included in GDP?

Macroeconomics stresses

In contrast to the post-World War II period,before 1940 the government

Abstract terms like "cost of living" and "price level" are meaningless to ordinary individuals.

The term "stagflation" was invented in the 1970s to describe an economy experiencing both

Why do price levels increase when government adopts fiscal or monetary policy to correct the economy when it faces a recession and high unemployment?

Gross Domestic Product is calculated by adding together

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

Real GDP differs from nominal GDP in that nominal GDP measures

Real GDP

The existence of the "underground economy" causes measured GDP to overestimate actual output.

The successes of the 1960s were ascribed to the effects of

A macroeconomist would concentrate on which of the following issues?

Phoebe and Rachel quit running in Central Park and join a health club to run on treadmills.This decision

During economic fluctuations,markets tend to move

Gross Domestic Product is a monetary measure of

Poor Asian countries may have per-capita GDP's that may be less than $250.Why is this somewhat misleading for comparative purposes?

A period in which the price level is rising is experiencing

In the aggregate demand-aggregate supply model,economic growth can be illustrated by an

Aggregation involves adding together different products and services.

Which of the following is included in GDP?

Macroeconomics stresses

In contrast to the post-World War II period,before 1940 the government

Abstract terms like "cost of living" and "price level" are meaningless to ordinary individuals.

The term "stagflation" was invented in the 1970s to describe an economy experiencing both

Why do price levels increase when government adopts fiscal or monetary policy to correct the economy when it faces a recession and high unemployment?

Gross Domestic Product is calculated by adding together

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