Question 1

Why is wage and price flexibility crucial to the idea of the "invisible hand?"

Accepted Answer

Wage and price flexibility is crucial because in a free-market system,changes in wages and prices are the signals that coordinate the actions of people and businesses in the economy.

Question 2

Briefly describe the following tasks of macroeconomists: forecasting; analysis; research; and data development.

Accepted Answer

(a)Forecasting.Macroeconomists develop models to predict the future values of macroeconomic variables in one or more markets.These models are usually based on economic theory but are statistical in form and estimated using macroeconomic data.
(b)Analysis.Macroeconomists analyze changes in macroeconomic policies as well as other changes in macroeconomic market conditions.This analysis is based on economic theory,uses analytic reasoning techniques,and may rely on forecasting models.
(c)Research.The goal of macroeconomic research is to make general statements about how the economy works.Research economists formulate and test theories.
(d)Data development.Macroeconomic data development provides the data needed in macroeconomic research,analysis,and forecasting.Most macroeconomic data are collected and published by the government.

Question 3

A country is said to be experiencing inflation when

Accepted Answer

A) prices of most goods and services are rising over time. 
B) prices of most goods and services are falling over time. 
C) total output is rising over time. 
D) total output is falling over time. 
A) prices of most goods and services are rising over time. 
B) prices of most goods and services are falling over time. 
C) total output is rising over time. 
D) total output is falling over time. A

Question 4

Classical economists argue that

Accepted Answer

A) the government should have an active role in the economy. 
B) government policies will be ineffective and counterproductive. 
C) the government should actively intervene in the economy to eliminate business cycles. 
D) wages and prices don't adjust quickly, so the economy is slow to return to equilibrium. 
A) the government should have an active role in the economy. 
B) government policies will be ineffective and counterproductive. 
C) the government should actively intervene in the economy to eliminate business cycles. 
D) wages and prices don't adjust quickly, so the economy is slow to return to equilibrium.

Question 5

If the price level was 100 in 2014 and 102 in 2015,the inflation rate was

Accepted Answer

A) 102%. 
B) 20%. 
C) 2%. 
D) 0)2%. 
A) 102%. 
B) 20%. 
C) 2%. 
D) 0)2%.

Question 6

The difference between microeconomics and macroeconomics is that

Accepted Answer

A) microeconomics looks at supply and demand for goods, macroeconomics looks at supply and demand for services. 
B) microeconomics looks at prices, macroeconomics looks at inflation. 
C) microeconomics looks at individual consumers, macroeconomics looks at national totals. 
D) microeconomics looks at national issues, macroeconomics looks at global issues. 
A) microeconomics looks at supply and demand for goods, macroeconomics looks at supply and demand for services. 
B) microeconomics looks at prices, macroeconomics looks at inflation. 
C) microeconomics looks at individual consumers, macroeconomics looks at national totals. 
D) microeconomics looks at national issues, macroeconomics looks at global issues.

Question 7

U.S.imports are goods and services

Accepted Answer

A) produced abroad and sold to Americans. 
B) produced in the United States and sold to Americans. 
C) produced abroad and sold to foreigners. 
D) produced in the United States and sold to foreigners. 
A) produced abroad and sold to Americans. 
B) produced in the United States and sold to Americans. 
C) produced abroad and sold to foreigners. 
D) produced in the United States and sold to foreigners.

Question 8

Macroeconomic information for the economy of Anchovy is given below.
   
(a)What was the growth rate of average labor productivity in Anchovy between Year 1 and Year 2?
(b)What was the inflation rate in Anchovy between Year 1 and Year 2?
(c)What was the unemployment rate in Year 1? In Year 2?

Accepted Answer

(a)Average labor productivity: Year 1: 8

Question 9

How did Keynes propose to solve the problem of high unemployment?

Accepted Answer

A) Increase the growth rate of the money supply. 
B) Allow wages to decline, so that firms will want to hire more workers. 
C) Put on wage and price controls, so wages won't rise and firms won't have to lay people off to cut costs. 
D) Have the government increase its demand for goods and services. 
A) Increase the growth rate of the money supply. 
B) Allow wages to decline, so that firms will want to hire more workers. 
C) Put on wage and price controls, so wages won't rise and firms won't have to lay people off to cut costs. 
D) Have the government increase its demand for goods and services.

Question 10

Data on exports and imports for the United States over the period from 1890 to 2008 show that

Accepted Answer

A) the United States had large trade deficits throughout this entire period. 
B) the United States had large trade surpluses throughout this entire period. 
C) the percentage of total output exported by U.S. firms fell dramatically during World War I and World War II. 
D) a higher percentage of U.S. goods was exported in recent years than in earlier years. 
A) the United States had large trade deficits throughout this entire period. 
B) the United States had large trade surpluses throughout this entire period. 
C) the percentage of total output exported by U.S. firms fell dramatically during World War I and World War II. 
D) a higher percentage of U.S. goods was exported in recent years than in earlier years.

Question 11

If a city has 3293 unemployed people and 69,884 employed people,then the city's unemployment rate equals

Accepted Answer

A) 45.0%. 
B) 4)5%. 
C) 4)3%. 
D) 0)45%. 
A) 45.0%. 
B) 4)5%. 
C) 4)3%. 
D) 0)45%.

Question 12

A set of ideas about the economy that have been organized in a logical framework is called

Accepted Answer

A) empirical analysis. 
B) a methodology. 
C) economic theory. 
D) data development. 
A) empirical analysis. 
B) a methodology. 
C) economic theory. 
D) data development.

Question 13

John Maynard Keynes disagreed with the classical economists because he believed that

Accepted Answer

A) wages and prices adjust slowly. 
B) international trade plays a major role in the macroeconomy. 
C) government intervention in the economy cannot reduce business cycles. 
D) unemployment will be eliminated quickly by the invisible hand of the market. 
A) wages and prices adjust slowly. 
B) international trade plays a major role in the macroeconomy. 
C) government intervention in the economy cannot reduce business cycles. 
D) unemployment will be eliminated quickly by the invisible hand of the market.

Question 14

The classical approach to macroeconomics assumes that

Accepted Answer

A) wages, but not prices, adjust quickly to balance quantities supplied and demanded in markets. 
B) wages and prices adjust quickly to balance quantities supplied and demanded in markets. 
C) prices, but not wages, adjust quickly to balance quantities supplied and demanded in markets. 
D) neither wages nor prices adjust quickly to balance quantities supplied and demanded in markets. 
A) wages, but not prices, adjust quickly to balance quantities supplied and demanded in markets. 
B) wages and prices adjust quickly to balance quantities supplied and demanded in markets. 
C) prices, but not wages, adjust quickly to balance quantities supplied and demanded in markets. 
D) neither wages nor prices adjust quickly to balance quantities supplied and demanded in markets.

Question 15

Why is macroeconomic forecasting so difficult? Does this difficulty mean economics is a worthless field of study?

Accepted Answer

Forecasting is difficult because our und

Question 16

From 1800 to 1940,the price level in the United States

Accepted Answer

A) trended neither upward nor downward. 
B) fluctuated wildly. 
C) declined slowly. 
D) increased slowly. 
A) trended neither upward nor downward. 
B) fluctuated wildly. 
C) declined slowly. 
D) increased slowly.

Question 17

The highest and most prolonged period of unemployment in the United States over the last 125 years occurred during

Accepted Answer

A) World War II. 
B) the 1890s Depression. 
C) the 1990-1991 recession. 
D) the Great Depression of the 1930s. 
A) World War II. 
B) the 1890s Depression. 
C) the 1990-1991 recession. 
D) the Great Depression of the 1930s.

Question 18

The most direct effect of an increase in the growth rate of average labor productivity would be an increase in

Accepted Answer

A) the inflation rate. 
B) the unemployment rate. 
C) the long-run economic growth rate. 
D) imported goods. 
A) the inflation rate. 
B) the unemployment rate. 
C) the long-run economic growth rate. 
D) imported goods.

Question 19

An economy that doesn't interact economically with the rest of the world is called ________ economy.

Accepted Answer

A) a closed 
B) an open 
C) a surplus 
D) an authoritarian 
A) a closed 
B) an open 
C) a surplus 
D) an authoritarian

Question 20

During the Great Depression,the unemployment rate for the United States peaked at approximately

Accepted Answer

A) 10%. 
B) 70%. 
C) 45%. 
D) 25%. 
A) 10%. 
B) 70%. 
C) 45%. 
D) 25%.

Why is wage and price flexibility crucial to the idea of the "invisible hand?"

Briefly describe the following tasks of macroeconomists: forecasting; analysis; research; and data development.

A country is said to be experiencing inflation when

Classical economists argue that

If the price level was 100 in 2014 and 102 in 2015,the inflation rate was

The difference between microeconomics and macroeconomics is that

U.S.imports are goods and services

Macroeconomic information for the economy of Anchovy is given below. (a)What was the growth rate of average labor productivity in Anchovy between Year 1 and Year 2? (b)What was the inflation rate in Anchovy between Year 1 and Year 2? (c)What was the unemployment rate in Year 1? In Year 2?

How did Keynes propose to solve the problem of high unemployment?

Data on exports and imports for the United States over the period from 1890 to 2008 show that

If a city has 3293 unemployed people and 69,884 employed people,then the city's unemployment rate equals

A set of ideas about the economy that have been organized in a logical framework is called

John Maynard Keynes disagreed with the classical economists because he believed that

The classical approach to macroeconomics assumes that

Why is macroeconomic forecasting so difficult? Does this difficulty mean economics is a worthless field of study?

From 1800 to 1940,the price level in the United States

The highest and most prolonged period of unemployment in the United States over the last 125 years occurred during

The most direct effect of an increase in the growth rate of average labor productivity would be an increase in

An economy that doesn't interact economically with the rest of the world is called ________ economy.

During the Great Depression,the unemployment rate for the United States peaked at approximately

The Measurement and Structure of the National Economy

Productivity, output, and Employment

Consumption, saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, money, and Prices

Business Cycles

The Is-Lmad-As Model

Classical Business Cycle Analysis

Keynesianism: the Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates, business Cycles, and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters

Exam 1: Introduction to Macroeconomics

Why is wage and price flexibility crucial to the idea of the "invisible hand?"

Briefly describe the following tasks of macroeconomists: forecasting; analysis; research; and data development.

A country is said to be experiencing inflation when

Classical economists argue that

If the price level was 100 in 2014 and 102 in 2015,the inflation rate was

The difference between microeconomics and macroeconomics is that

U.S.imports are goods and services

Macroeconomic information for the economy of Anchovy is given below. (a)What was the growth rate of average labor productivity in Anchovy between Year 1 and Year 2? (b)What was the inflation rate in Anchovy between Year 1 and Year 2? (c)What was the unemployment rate in Year 1? In Year 2?

How did Keynes propose to solve the problem of high unemployment?

Data on exports and imports for the United States over the period from 1890 to 2008 show that

If a city has 3293 unemployed people and 69,884 employed people,then the city's unemployment rate equals

A set of ideas about the economy that have been organized in a logical framework is called

John Maynard Keynes disagreed with the classical economists because he believed that

The classical approach to macroeconomics assumes that

Why is macroeconomic forecasting so difficult? Does this difficulty mean economics is a worthless field of study?

From 1800 to 1940,the price level in the United States

The highest and most prolonged period of unemployment in the United States over the last 125 years occurred during

The most direct effect of an increase in the growth rate of average labor productivity would be an increase in

An economy that doesn't interact economically with the rest of the world is called ________ economy.

During the Great Depression,the unemployment rate for the United States peaked at approximately

The Measurement and Structure of the National Economy

Productivity, output, and Employment

Consumption, saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, money, and Prices

Business Cycles

The Is-Lmad-As Model

Classical Business Cycle Analysis

Keynesianism: the Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates, business Cycles, and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters