Question 1

The macroeconomic conditions during the mid-1990s confounded many economists because of the simultaneous occurrence of

Accepted Answer

A) low unemployment and decreasing inflation rates. 
B) low unemployment and increasing budget deficits. 
C) low unemployment and increasing interest rates. 
D) high unemployment and increasing inflation rates. 
A) low unemployment and decreasing inflation rates. 
B) low unemployment and increasing budget deficits. 
C) low unemployment and increasing interest rates. 
D) high unemployment and increasing inflation rates.

Question 2

Stabilization policy is the name given to government economic policies designed to

Accepted Answer

A) stabilize the price level. 
B) shorten and/or prevent recessions. 
C) diminish unemployment. 
D) All of the above are correct. 
A) stabilize the price level. 
B) shorten and/or prevent recessions. 
C) diminish unemployment. 
D) All of the above are correct.

Question 3

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 4

A rightward shift in the aggregate demand curve is most likely to result in

Accepted Answer

A) inflation. 
B) recession. 
C) economic growth. 
D) an increase in real GDP. 
A) inflation. 
B) recession. 
C) economic growth. 
D) an increase in real GDP.

Question 5

The price controls on consumer goods during World War II led to

Accepted Answer

A) permanent surpluses. 
B) stable long-term prices. 
C) a burst of inflation when they were ended. 
D) increased production of consumer goods to satisfy demand. 
A) permanent surpluses. 
B) stable long-term prices. 
C) a burst of inflation when they were ended. 
D) increased production of consumer goods to satisfy demand.

Question 6

Nominal GDP is calculated by using

Accepted Answer

A) prices set in a base year. 
B) average prices in all major cities. 
C) current prices 
D) prices charged by initial producers. 
A) prices set in a base year. 
B) average prices in all major cities. 
C) current prices 
D) prices charged by initial producers.

Question 7

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 8

Dissatisfaction with public school education has led many parents to try home schooling for their children.If parents cut back on their jobs outside the home in order to spend time teaching their children at home, how will this affect GDP?

Accepted Answer

A) GDP will increase. 
B) Real GDP will increase and nominal GDP will decrease. 
C) Both real and nominal GDP will increase. 
D) GDP will decrease. 
A) GDP will increase. 
B) Real GDP will increase and nominal GDP will decrease. 
C) Both real and nominal GDP will increase. 
D) GDP will decrease.

Question 9

Compare and contrast the U.S.economic record prior to 1940 and after 1950.How do the two time periods differ?
 What best explains the differences according to a macroeconomist?

Accepted Answer

The economy experienced business cycles

Question 10

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 11

You can generally distinguish an aggregate supply-caused recession from an aggregate demand-caused recession because

Accepted Answer

A) real GDP will rise in an aggregate supply recession. 
B) the price level will fall in an aggregate supply recession. 
C) the price level will fall in an aggregate demand recession. 
D) real GDP will rise in an aggregate demand recession. 
A) real GDP will rise in an aggregate supply recession. 
B) the price level will fall in an aggregate supply recession. 
C) the price level will fall in an aggregate demand recession. 
D) real GDP will rise in an aggregate demand recession.

Question 12

If the aggregate demand curve shifts to the left and the aggregate supply curve shifts to the right, the result will be a

Accepted Answer

A) decrease in the level of output. 
B) decrease in the price level. 
C) higher price level. 
D) higher unemployment rate. 
A) decrease in the level of output. 
B) decrease in the price level. 
C) higher price level. 
D) higher unemployment rate.

Question 13

The key characteristic of macroeconomics is the process of aggregation.

Accepted Answer

A) True 
 B)False

Question 14

Amazon.com, an Internet retailer of books, buys a shipment of economics textbooks from a publisher.Is this included in GDP?

Accepted Answer

A) Yes 
B) No 
C) It depends on how the payment is made 
D) Yes, in real but not nominal GDP 
E) Yes, in nominal but not real GDP 
A) Yes 
B) No 
C) It depends on how the payment is made 
D) Yes, in real but not nominal GDP 
E) Yes, in nominal but not real GDP

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Macroeconomists think that

Accepted Answer

A) most questions about individual markets are more important than the overall economy. 
B) questions of overall unemployment are less important than the jobs of particular workers. 
C) the details of resource allocation and individual market prices are less important than the amount of national output. 
D) the causes of unemployment usually lie with the personalities of individual workers. 
E) the price of particular products is more important than the overall price level. 
A) most questions about individual markets are more important than the overall economy. 
B) questions of overall unemployment are less important than the jobs of particular workers. 
C) the details of resource allocation and individual market prices are less important than the amount of national output. 
D) the causes of unemployment usually lie with the personalities of individual workers. 
E) the price of particular products is more important than the overall price level.

Question 17

In her book on the American work week, economist Juliet Schorr argues that Americans work too much.Her argument may be interpreted as concluding that this behavior

Accepted Answer

A) increases GDP but decreases well being. 
B) increases GDP and increases well-being. 
C) decreases GDP and decreases well being. 
D) decreases GDP but increases well being. 
A) increases GDP but decreases well being. 
B) increases GDP and increases well-being. 
C) decreases GDP and decreases well being. 
D) decreases GDP but increases well being.

Question 18

In contrast to the typical Republican Party laissez-faire policies, President Richard Nixon in 1971 introduced

Accepted Answer

A) mandatory drug testing of cabinet officers. 
B) monetary targets for the Federal Reserve Board. 
C) wage and price controls. 
D) mandatory gold purchases by the U.S.Treasury. 
A) mandatory drug testing of cabinet officers. 
B) monetary targets for the Federal Reserve Board. 
C) wage and price controls. 
D) mandatory gold purchases by the U.S.Treasury.

Question 19

A real estate salesperson sells a house in 2015 that was built in 2005.How does this transaction get counted in the GDP statistics?

Accepted Answer

A) The price of the house and the real estate salesperson's commission are both included in 2015's GDP. 
B) Neither the price of the house or the commission is included in 2015's GDP. 
C) The real estate salesperson's commission but not the price of the house is included in 2015's GDP. 
D) The price of the house would be included in both 2005's GDP and the GDP for 2015. 
A) The price of the house and the real estate salesperson's commission are both included in 2015's GDP. 
B) Neither the price of the house or the commission is included in 2015's GDP. 
C) The real estate salesperson's commission but not the price of the house is included in 2015's GDP. 
D) The price of the house would be included in both 2005's GDP and the GDP for 2015.

Question 20

Macroeconomists are distinguished from microeconomists because macroeconomists are more interested in

Accepted Answer

A) inflation and unemployment than in individual markets. 
B) large corporations rather than small businesses. 
C) inflation in the United States rather than inflation in Costa Rica. 
D) the demand for oil rather than the demand for corn. 
A) inflation and unemployment than in individual markets. 
B) large corporations rather than small businesses. 
C) inflation in the United States rather than inflation in Costa Rica. 
D) the demand for oil rather than the demand for corn.

Exam 22: An Introduction to Macroeconomics

The macroeconomic conditions during the mid-1990s confounded many economists because of the simultaneous occurrence of

Stabilization policy is the name given to government economic policies designed to

Which of the following is included in GDP?

A rightward shift in the aggregate demand curve is most likely to result in

The price controls on consumer goods during World War II led to

Nominal GDP is calculated by using

Real GDP differs from nominal GDP in that nominal GDP measures

Dissatisfaction with public school education has led many parents to try home schooling for their children.If parents cut back on their jobs outside the home in order to spend time teaching their children at home, how will this affect GDP?

Compare and contrast the U.S.economic record prior to 1940 and after 1950.How do the two time periods differ? What best explains the differences according to a macroeconomist?

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

You can generally distinguish an aggregate supply-caused recession from an aggregate demand-caused recession because

If the aggregate demand curve shifts to the left and the aggregate supply curve shifts to the right, the result will be a

The key characteristic of macroeconomics is the process of aggregation.

Amazon.com, an Internet retailer of books, buys a shipment of economics textbooks from a publisher.Is this included in GDP?

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

Macroeconomists think that

In her book on the American work week, economist Juliet Schorr argues that Americans work too much.Her argument may be interpreted as concluding that this behavior

In contrast to the typical Republican Party laissez-faire policies, President Richard Nixon in 1971 introduced

A real estate salesperson sells a house in 2015 that was built in 2005.How does this transaction get counted in the GDP statistics?

Macroeconomists are distinguished from microeconomists because macroeconomists are more interested in

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

Securities: Business Finance and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets: the Price System

The Shortcomings of Free Markets

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

Is Useconomic Leadership Threatened

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

He 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

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