Question 1

When national output declines,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

Aggregation is the process of

Accepted Answer

A) calculating real GDP based on nominal GDP and the price index. 
B) summing individual economic variables to obtain economywide totals. 
C) forecasting the components of GDP. 
D) predicting when recessions will occur. 
A) calculating real GDP based on nominal GDP and the price index. 
B) summing individual economic variables to obtain economywide totals. 
C) forecasting the components of GDP. 
D) predicting when recessions will occur.

Question 3

Assumptions for economic theories and models should be

Accepted Answer

A) rejected if they are not totally realistic. 
B) logical rather than empirically testable. 
C) simple and reasonable rather than complex. 
D) maintained until overwhelming evidence to the contrary occurs. 
A) rejected if they are not totally realistic. 
B) logical rather than empirically testable. 
C) simple and reasonable rather than complex. 
D) maintained until overwhelming evidence to the contrary occurs.

Question 4

The inflation rate is the

Accepted Answer

A) percent increase in the average level of prices over a year. 
B) percent increase in output over a year. 
C) percent increase in the unemployment rate over a year. 
D) price level divided by the level of output. 
A) percent increase in the average level of prices over a year. 
B) percent increase in output over a year. 
C) percent increase in the unemployment rate over a year. 
D) price level divided by the level of output.

Question 5

Short-run contractions and expansions in economic activity are called

Accepted Answer

A) recessions. 
B) expansions. 
C) deficits. 
D) the business cycle. 
A) recessions. 
B) expansions. 
C) deficits. 
D) the business cycle.

Question 6

The primary factor that caused some economists to lose their faith in the Keynesian 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) theoretical proof that Keynes's ideas were invalid. 
D) evidence that Keynes's ideas were useful during economic recessions, but not during economic booms. 
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) theoretical proof that Keynes's ideas were invalid. 
D) evidence that Keynes's ideas were useful during economic recessions, but not during economic booms.

Question 7

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.

Question 8

A country is said to be experiencing deflation 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.

Question 9

Which of the following factors are most important for determining the economic growth of a country?

Accepted Answer

A) The country's level of resources 
B) The independence of the country's central bank 
C) The country's rates of saving and investment 
D) The level of sophistication of a country's financial markets 
A) The country's level of resources 
B) The independence of the country's central bank 
C) The country's rates of saving and investment 
D) The level of sophistication of a country's financial markets

Question 10

U.S.exports 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 11

A country has a trade surplus when

Accepted Answer

A) imports exceed exports. 
B) imports equal exports. 
C) exports exceed imports. 
D) imports equal zero. 
A) imports exceed exports. 
B) imports equal exports. 
C) exports exceed imports. 
D) imports equal zero.

Question 12

A closed economy is a national economy that

Accepted Answer

A) doesn't interact economically with the rest of the world. 
B) has a stock market that is not open to traders from outside the country. 
C) has extensive trading and financial relationships with other national economies. 
D) has not established diplomatic relations with other national economies. 
A) doesn't interact economically with the rest of the world. 
B) has a stock market that is not open to traders from outside the country. 
C) has extensive trading and financial relationships with other national economies. 
D) has not established diplomatic relations with other national economies.

Question 13

Testing a theory by comparing the theory's implications with data obtained in the real world is called

Accepted Answer

A) empirical analysis. 
B) descriptive calibration. 
C) historical variance analysis. 
D) univariate analysis. 
A) empirical analysis. 
B) descriptive calibration. 
C) historical variance analysis. 
D) univariate analysis.

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

Aggregation is the process of

Assumptions for economic theories and models should be

The inflation rate is the

Short-run contractions and expansions in economic activity are called

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

A country is said to be experiencing inflation when

A country is said to be experiencing deflation when

Which of the following factors are most important for determining the economic growth of a country?

U.S.exports are goods and services

A country has a trade surplus when

A closed economy is a national economy that

Testing a theory by comparing the theory's implications with data obtained in the real world is called

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 declines,the economy is said to be in

Aggregation is the process of

Assumptions for economic theories and models should be

The inflation rate is the

Short-run contractions and expansions in economic activity are called

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

A country is said to be experiencing inflation when

A country is said to be experiencing deflation when

Which of the following factors are most important for determining the economic growth of a country?

U.S.exports are goods and services

A country has a trade surplus when

A closed economy is a national economy that

Testing a theory by comparing the theory's implications with data obtained in the real world is called

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