Question 1

When national output rises,the economy is said to be in

Accepted Answer

A) an expansion. 
B) a deflation. 
C) an inflation. 
D) a recession. 
A) an expansion. 
B) a deflation. 
C) an inflation. 
D) a recession.

Question 2

The primary factor that caused most economists to lose their faith in the classical approach to macroeconomic policy was

Accepted Answer

A) the high levels of unemployment that occurred during the Great Depression. 
B) the presence of both high unemployment and high inflation during the 1970s. 
C) the theoretical proof that classical ideas were invalid. 
D) the evidence that classical ideas were useful during economic booms, but not during economic recessions. 
A) the high levels of unemployment that occurred during the Great Depression. 
B) the presence of both high unemployment and high inflation during the 1970s. 
C) the theoretical proof that classical ideas were invalid. 
D) the evidence that classical ideas were useful during economic booms, but not during economic recessions.

Question 3

Keynes assumed that wages and prices were slow to adjust in order to explain

Accepted Answer

A) persistently high unemployment. 
B) high inflation. 
C) the high level of interest rates. 
D) why inflation fell in recessions. 
A) persistently high unemployment. 
B) high inflation. 
C) the high level of interest rates. 
D) why inflation fell in recessions.

Question 4

The two most comprehensive,widely accepted macroeconomic models are

Accepted Answer

A) the classical model and the supply-side model. 
B) the supply-side model and the real business cycle model. 
C) the classical model and the Keynesian model. 
D) the Austrian model and the Keynesian model. 
A) the classical model and the supply-side model. 
B) the supply-side model and the real business cycle model. 
C) the classical model and the Keynesian model. 
D) the Austrian model and the Keynesian model.

Question 5

Match each of the following jobs to its major area: forecasting,analysis,research,or data development.Explain your answers.
(a)Economist at university,testing theories about the efficient allocation of resources in the foreign exchange market
(b)Economist at Wall Street firm trying to predict the rate of inflation next year using past data
(c)Economist at auto firm looking at demand for new automobiles
(d)Economist at the International Trade Commission trying to determine whether foreign firms are dumping goods in the United States
(e)Economist at the Commerce Department developing new methods for calculating price indexes
(f)Economist consulting in Eastern Europe about how to set up free-market financial systems

Accepted Answer

(a)Research
(b)Forec

Question 6

The number of unemployed divided by the labor force equals

Accepted Answer

A) the inflation rate. 
B) the labor force participation rate. 
C) the unemployment rate. 
D) the misery index. 
A) the inflation rate. 
B) the labor force participation rate. 
C) the unemployment rate. 
D) the misery index.

Question 7

The two major reasons for the tremendous growth in output in the U.S.economy over the last 125 years are

Accepted Answer

A) population growth and low inflation. 
B) population growth and increased productivity. 
C) low unemployment and low inflation. 
D) low inflation and low trade deficits. 
A) population growth and low inflation. 
B) population growth and increased productivity. 
C) low unemployment and low inflation. 
D) low inflation and low trade deficits.

Question 8

Positive analysis of economic policy

Accepted Answer

A) examines the economic consequences of policies but does not address the question of whether those consequences are desirable. 
B) examines the economic consequences of policies and addresses the question of whether those consequences are desirable. 
C) generates less agreement among economists than normative analysis. 
D) is rare in questions of economic policy. 
A) examines the economic consequences of policies but does not address the question of whether those consequences are desirable. 
B) examines the economic consequences of policies and addresses the question of whether those consequences are desirable. 
C) generates less agreement among economists than normative analysis. 
D) is rare in questions of economic policy.

Question 9

In the United States,monetary policy is determined by

Accepted Answer

A) the Federal Reserve. 
B) the president. 
C) private citizens. 
D) the Treasury Department. 
A) the Federal Reserve. 
B) the president. 
C) private citizens. 
D) the Treasury Department.

Question 10

Compare and contrast the classical and Keynesian schools of thought for the following economic issues.
(a)The flexibility of wages and prices.
(b)The importance of macroeconomic policies.

Accepted Answer

(a)The flexibility of wages and prices i

Question 11

Using the CPI measure of the price level,which is 100 in the base year of 2007,calculate the annual inflation rates for
(a)2013,when the index is 103.7.
(b)2014,when the index is 105.5.
(c)2015,when the index is 107.7.

Accepted Answer

(a)Inflation in 2013 = (103.7

Question 12

The main goal of macroeconomic research is to

Accepted Answer

A) predict how the macroeconomy will perform in the future. 
B) analyze current macroeconomic data. 
C) develop new data that can be used to understand better the operation of the economy. 
D) make general statements about how the economy works. 
A) predict how the macroeconomy will perform in the future. 
B) analyze current macroeconomic data. 
C) develop new data that can be used to understand better the operation of the economy. 
D) make general statements about how the economy works.

Question 13

Which of the statements below is primarily normative in nature?

Accepted Answer

A) There is an unequal distribution of income in the United States. 
B) The distribution of income is more unequal in the United States than it is in Japan. 
C) The inequality of income that exists in the United States is partly caused by an unequal distribution of wealth. 
D) The distribution of income in the United States should be more equal than it is. 
A) There is an unequal distribution of income in the United States. 
B) The distribution of income is more unequal in the United States than it is in Japan. 
C) The inequality of income that exists in the United States is partly caused by an unequal distribution of wealth. 
D) The distribution of income in the United States should be more equal than it is.

Question 14

A central bank is an institution that

Accepted Answer

A) pays for government expenditures. 
B) controls a nation's monetary policy. 
C) runs a country's stock market. 
D) determines a nation's fiscal policy. 
A) pays for government expenditures. 
B) controls a nation's monetary policy. 
C) runs a country's stock market. 
D) determines a nation's fiscal policy.

Question 15

Average labor productivity is the

Accepted Answer

A) amount of workers per machine. 
B) amount of machines per worker. 
C) ratio of employed to unemployed workers. 
D) amount of output per worker. 
A) amount of workers per machine. 
B) amount of machines per worker. 
C) ratio of employed to unemployed workers. 
D) amount of output per worker.

Question 16

In analyzing macroeconomic data during the past year,you have discovered that average labor productivity fell,but total output increased.What was most likely to have caused this?

Accepted Answer

A) There is nothing unusual in this outcome because this is what normally occurs. 
B) The capital-output ratio probably rose. 
C) There was an increase in labor input. 
D) Unemployment probably increased. 
A) There is nothing unusual in this outcome because this is what normally occurs. 
B) The capital-output ratio probably rose. 
C) There was an increase in labor input. 
D) Unemployment probably increased.

Question 17

The main reason that the United States has such a high standard of living is

Accepted Answer

A) low unemployment. 
B) high average labor productivity. 
C) low inflation. 
D) high government budget deficits. 
A) low unemployment. 
B) high average labor productivity. 
C) low inflation. 
D) high government budget deficits.

Question 18

If a city has 3293 unemployed people and 73,177 in its labor force,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 19

The peak in U.S.government spending as a percent of GDP occurred during

Accepted Answer

A) World War II. 
B) the 1960s war on poverty. 
C) the Great Depression. 
D) the war against Iraq in the 2000s. 
A) World War II. 
B) the 1960s war on poverty. 
C) the Great Depression. 
D) the war against Iraq in the 2000s.

Question 20

Critics of the government's fiscal policies argued that government deficits

Accepted Answer

A) prevented capital from flowing into the United States. 
B) were linked to the excess of imports over exports that occurred in the 1980s. 
C) caused the level of unemployment in the United States to increase during the 1980s. 
D) had directly contributed to a decline in the level of demand in the American economy. 
A) prevented capital from flowing into the United States. 
B) were linked to the excess of imports over exports that occurred in the 1980s. 
C) caused the level of unemployment in the United States to increase during the 1980s. 
D) had directly contributed to a decline in the level of demand in the American economy.

When national output rises,the economy is said to be in

The primary factor that caused most economists to lose their faith in the classical approach to macroeconomic policy was

Keynes assumed that wages and prices were slow to adjust in order to explain

The two most comprehensive,widely accepted macroeconomic models are

The number of unemployed divided by the labor force equals

The two major reasons for the tremendous growth in output in the U.S.economy over the last 125 years are

Positive analysis of economic policy

In the United States,monetary policy is determined by

Compare and contrast the classical and Keynesian schools of thought for the following economic issues. (a)The flexibility of wages and prices. (b)The importance of macroeconomic policies.

Using the CPI measure of the price level,which is 100 in the base year of 2007,calculate the annual inflation rates for (a)2013,when the index is 103.7. (b)2014,when the index is 105.5. (c)2015,when the index is 107.7.

The main goal of macroeconomic research is to

Which of the statements below is primarily normative in nature?

A central bank is an institution that

Average labor productivity is the

In analyzing macroeconomic data during the past year,you have discovered that average labor productivity fell,but total output increased.What was most likely to have caused this?

The main reason that the United States has such a high standard of living is

If a city has 3293 unemployed people and 73,177 in its labor force,then the city's unemployment rate equals

The peak in U.S.government spending as a percent of GDP occurred during

Critics of the government's fiscal policies argued that government deficits

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

When national output rises,the economy is said to be in

The primary factor that caused most economists to lose their faith in the classical approach to macroeconomic policy was

Keynes assumed that wages and prices were slow to adjust in order to explain

The two most comprehensive,widely accepted macroeconomic models are

The number of unemployed divided by the labor force equals

The two major reasons for the tremendous growth in output in the U.S.economy over the last 125 years are

Positive analysis of economic policy

In the United States,monetary policy is determined by

Compare and contrast the classical and Keynesian schools of thought for the following economic issues. (a)The flexibility of wages and prices. (b)The importance of macroeconomic policies.

Using the CPI measure of the price level,which is 100 in the base year of 2007,calculate the annual inflation rates for (a)2013,when the index is 103.7. (b)2014,when the index is 105.5. (c)2015,when the index is 107.7.

The main goal of macroeconomic research is to

Which of the statements below is primarily normative in nature?

A central bank is an institution that

Average labor productivity is the

In analyzing macroeconomic data during the past year,you have discovered that average labor productivity fell,but total output increased.What was most likely to have caused this?

The main reason that the United States has such a high standard of living is

If a city has 3293 unemployed people and 73,177 in its labor force,then the city's unemployment rate equals

The peak in U.S.government spending as a percent of GDP occurred during

Critics of the government's fiscal policies argued that government deficits

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