Question 1

Consider the economic effects of the September 11, 2001 terrorist attacks.Which of the following statements is correct?

Accepted Answer

A) Reconstruction would lead to an increase in GDP. 
B) Increased government spending on relief efforts in the U.S.would decrease GDP. 
C) Lost items and buildings would lead to a decrease in GDP. 
D) U.S.well-being was improved, despite the loss in GDP. 
A) Reconstruction would lead to an increase in GDP. 
B) Increased government spending on relief efforts in the U.S.would decrease GDP. 
C) Lost items and buildings would lead to a decrease in GDP. 
D) U.S.well-being was improved, despite the loss in GDP.

Question 2

The period of 1973 to 1980 can best be described as a time of

Accepted Answer

A) deflation. 
B) reflation. 
C) unflation. 
D) stagflation. 
E) disflation. 
A) deflation. 
B) reflation. 
C) unflation. 
D) stagflation. 
E) disflation.

Question 3

Since the end of World War II, the economy of the United States has been more influenced by stabilization policy.One of the undesirable side effects of this has been that the economy now has a greater tendency to suffer from

Accepted Answer

A) more severe recessions and depressions. 
B) higher levels of unemployment and lower rates of employment growth. 
C) lower rates of growth in real and nominal GDP. 
D) more persistent periods of inflation. 
A) more severe recessions and depressions. 
B) higher levels of unemployment and lower rates of employment growth. 
C) lower rates of growth in real and nominal GDP. 
D) more persistent periods of inflation.

Question 4

E&S Cooling Co.installs air conditioning systems in new houses for homebuilders, and replacement systems for homeowners.Sales of which systems are included in this year's GDP?

Accepted Answer

A) Sales of replacement systems 
B) Sales of both systems 
C) Sales of systems in new houses 
D) Neither system would be included, because they are always intermediate goods. 
A) Sales of replacement systems 
B) Sales of both systems 
C) Sales of systems in new houses 
D) Neither system would be included, because they are always intermediate goods.

Question 5

According to the text, the government can use aggregate demand management policies to reduce unemployment rates.A byproduct of this policy will be

Accepted Answer

A) an increase in the price level. 
B) a decrease in real GDP. 
C) a decrease in the price level. 
D) an increase in the budget surplus. 
A) an increase in the price level. 
B) a decrease in real GDP. 
C) a decrease in the price level. 
D) an increase in the budget surplus.

Question 6

Which of the following items are included in GDP?
 For those items not included, explain why they are not included in GDP.a.Jane buys newly issued shares of stock in Macro.com, Inc.b.Ross buys a new pair of jeans at a local department store.c.Joey has his mustache trimmed at his hair salon.d.Rachel buys an antique chest at a resale shop.e.Monica makes her own pasta sauce in her apartment.f.Phoebe grows her own herbs on her apartment balcony.g.Michael travels to Austria and buys wine and cheese.

Accepted Answer

a.This is not included in GDP.No good or

Question 7

John Maynard Keynes wrote The General Theory of Employment, Interest, and Money (1936) to

Accepted Answer

A) improve the gold supply balances of the British government. 
B) prove that the punitive nature of the Treaty of Versailles would ultimately lead to recession in Europe. 
C) prove that active government policy would produce unemployment and high rates of inflation. 
D) demonstrate that pessimistic consumers and businesspersons could reduce their spending and condemn the economy to long-run stagnation. 
A) improve the gold supply balances of the British government. 
B) prove that the punitive nature of the Treaty of Versailles would ultimately lead to recession in Europe. 
C) prove that active government policy would produce unemployment and high rates of inflation. 
D) demonstrate that pessimistic consumers and businesspersons could reduce their spending and condemn the economy to long-run stagnation.

Question 8

You are a collector of antique coins.You purchase a silver dollar minted in 1898.Is this sale included in GDP for the current year?

Accepted Answer

A) Yes, provided the coin is in mint condition. 
B) No, it is not. 
C) No, unless the coin has been in circulation. 
D) Yes, it is. 
E) Only if it is part of the current money supply. 
A) Yes, provided the coin is in mint condition. 
B) No, it is not. 
C) No, unless the coin has been in circulation. 
D) Yes, it is. 
E) Only if it is part of the current money supply.

Question 9

Business cycles are a persistent feature of the U.S.economy.

Accepted Answer

A) True 
 B)False

Question 10

Keynes' great book offered the promise of ending depressions through

Accepted Answer

A) investors reacting to lower interest rates. 
B) consumers taking over the ownership of factories. 
C) government nationalizing key industries. 
D) government influencing aggregate demand. 
A) investors reacting to lower interest rates. 
B) consumers taking over the ownership of factories. 
C) government nationalizing key industries. 
D) government influencing aggregate demand.

Question 11

Describe some of the steps used to combat inflation.What are their side-effects?

Accepted Answer

Inflation is frequently caused by aggreg

Question 12

Business cycles in the United States after World War II have been

Accepted Answer

A) more severe than before the war. 
B) less severe than before the war. 
C) the same as the pre-war cycles. 
D) easier to predict than the pre-war cycles. 
A) more severe than before the war. 
B) less severe than before the war. 
C) the same as the pre-war cycles. 
D) easier to predict than the pre-war cycles.

Question 13

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 14

The major difference between nominal GDP and real GDP is that

Accepted Answer

A) real GDP is the absolute value of goods and services and nominal GDP is a relative value. 
B) real GDP refers to products made in the United States and nominal GDP refers to both exports and imports. 
C) nominal GDP is the market value and real GDP has been adjusted for inflation. 
D) real GDP is a relative value and nominal GDP is an absolute value. 
A) real GDP is the absolute value of goods and services and nominal GDP is a relative value. 
B) real GDP refers to products made in the United States and nominal GDP refers to both exports and imports. 
C) nominal GDP is the market value and real GDP has been adjusted for inflation. 
D) real GDP is a relative value and nominal GDP is an absolute value.

Question 15

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.

Question 16

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 17

The main reason that President Clinton was forced to revise his campaign promise to cut taxes was that, in 1993, he faced a large

Accepted Answer

A) balance of payments surplus. 
B) balance of payments deficit. 
C) federal budget deficit. 
D) federal budget surplus. 
A) balance of payments surplus. 
B) balance of payments deficit. 
C) federal budget deficit. 
D) federal budget surplus.

Question 18

Corrected for inflation, the real GDP was only about _____ times greater in 2014 than in 1959.

Accepted Answer

A) ​3.1 
B) ​5.3 
C) ​6.7 
D) ​11.2 
A) ​3.1 
B) ​5.3 
C) ​6.7 
D) ​11.2

Question 19

The significantly high rates of inflation in the 1970s occurred, in part,

Accepted Answer

A) because of increased petroleum prices. 
B) due to high unemployment. 
C) despite falling gasoline prices. 
D) due to restrictive monetary policies. 
A) because of increased petroleum prices. 
B) due to high unemployment. 
C) despite falling gasoline prices. 
D) due to restrictive monetary policies.

Question 20

From the end of World War II until the present, the price level has

Accepted Answer

A) slowly fallen over time. 
B) fluctuated around a downward trend. 
C) remained stable throughout the period. 
D) fluctuated around an upward trend. 
A) slowly fallen over time. 
B) fluctuated around a downward trend. 
C) remained stable throughout the period. 
D) fluctuated around an upward trend.

Exam 22: An Introduction to Macroeconomics

Consider the economic effects of the September 11, 2001 terrorist attacks.Which of the following statements is correct?

The period of 1973 to 1980 can best be described as a time of

Since the end of World War II, the economy of the United States has been more influenced by stabilization policy.One of the undesirable side effects of this has been that the economy now has a greater tendency to suffer from

E&S Cooling Co.installs air conditioning systems in new houses for homebuilders, and replacement systems for homeowners.Sales of which systems are included in this year's GDP?

According to the text, the government can use aggregate demand management policies to reduce unemployment rates.A byproduct of this policy will be

John Maynard Keynes wrote The General Theory of Employment, Interest, and Money (1936) to

You are a collector of antique coins.You purchase a silver dollar minted in 1898.Is this sale included in GDP for the current year?

Business cycles are a persistent feature of the U.S.economy.

Keynes' great book offered the promise of ending depressions through

Describe some of the steps used to combat inflation.What are their side-effects?

Business cycles in the United States after World War II have been

During economic fluctuations, markets tend to move

The major difference between nominal GDP and real GDP is that

Gross Domestic Product is calculated by adding together

A period in which the price level is rising is experiencing

The main reason that President Clinton was forced to revise his campaign promise to cut taxes was that, in 1993, he faced a large

Corrected for inflation, the real GDP was only about _____ times greater in 2014 than in 1959.

The significantly high rates of inflation in the 1970s occurred, in part,

From the end of World War II until the present, the price level has

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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