Question 1

An increase in aggregate demand is most likely to result in

Accepted Answer

A) inflation. 
B) recession. 
C) economic stagnation. 
D) a decrease in real GDP. 
A) inflation. 
B) recession. 
C) economic stagnation. 
D) a decrease in real GDP.

Question 2

Gross Domestic Product represents the money value of all final goods and services produced in the domestic economy within the year.

Accepted Answer

A) True 
 B)False

Question 3

The term "stagflation" was invented in the 1970s to describe an economy experiencing both

Accepted Answer

A) deflation and economic stagnation. 
B) inflation and economic stagnation. 
C) high inflation and high employment. 
D) high inflation and high levels of economic growth. 
A) deflation and economic stagnation. 
B) inflation and economic stagnation. 
C) high inflation and high employment. 
D) high inflation and high levels of economic growth.

Question 4

Real GDP values current output of goods and services at their current prices.

Accepted Answer

A) True 
 B)False

Question 5

A product that is produced in 2015 and not sold until 2016 will be counted in the GDP for

Accepted Answer

A) both 2015 and 2016. 
B) neither 2015 nor 2016. 
C) 2015. 
D) 2016. 
A) both 2015 and 2016. 
B) neither 2015 nor 2016. 
C) 2015. 
D) 2016.

Question 6

When the Art Institute of Chicago purchases a painting by Mary Cassatt that she produced in Paris in 1885, this would not be included in the U.S.GDP for 2015.

Accepted Answer

A) True 
 B)False

Question 7

What is an aggregate?
 How is it used in macroeconomics?
 Give two examples of specific aggregates that are used in the study of macroeconomics.

Accepted Answer

An "aggregate" is an abstraction that ma

Question 8

Poor Asian countries may have per-capita GDP's that may be less than $250.Why is this somewhat misleading for comparative purposes?

Accepted Answer

A) Most rich country GDP is nonmarket activity. 
B) A significant amount of poor country GDP is nonmarket activity. 
C) Poor countries do not use dollars. 
D) Poor countries have few resources. 
A) Most rich country GDP is nonmarket activity. 
B) A significant amount of poor country GDP is nonmarket activity. 
C) Poor countries do not use dollars. 
D) Poor countries have few resources.

Question 9

Which of the following transactions would be included in GDP for 2015?

Accepted Answer

A) On January 5, 2015, Chris Carter sold 100 shares of stock in IBM Corporation. 
B) Bonita Delgado purchases a new 2015 Chevrolet on March 10, 2015. 
C) Nadav Daniel buys a used desk from the "Struggling Students Used Furniture" store on May 9, 2015. 
D) Levi Lathan purchases a 75-year-old penthouse on Lake Shore Drive in Chicago, Illinois, on June 23, 2015. 
A) On January 5, 2015, Chris Carter sold 100 shares of stock in IBM Corporation. 
B) Bonita Delgado purchases a new 2015 Chevrolet on March 10, 2015. 
C) Nadav Daniel buys a used desk from the "Struggling Students Used Furniture" store on May 9, 2015. 
D) Levi Lathan purchases a 75-year-old penthouse on Lake Shore Drive in Chicago, Illinois, on June 23, 2015.

Question 10

The Great Depression of the 1930s led to a revolution in macroeconomic thinking, following the work of

Accepted Answer

A) Arthur Laffer. 
B) Milton Friedman. 
C) Adam Smith. 
D) John Maynard Keynes. 
E) David Ricardo. 
A) Arthur Laffer. 
B) Milton Friedman. 
C) Adam Smith. 
D) John Maynard Keynes. 
E) David Ricardo.

Question 11

Production for war and environmental clean-up services are not included in GDP.

Accepted Answer

A) True 
 B)False

Question 12

Combining various goods and services into a convenient grouping is called

Accepted Answer

A) conglomeration. 
B) blending. 
C) congregation. 
D) agglomeration. 
E) aggregation. 
A) conglomeration. 
B) blending. 
C) congregation. 
D) agglomeration. 
E) aggregation.

Question 13

If hot dogs cost $2 this year and $3 next year, then 100 hotdogs will contribute

Accepted Answer

A) $200 to this year's nominal GDP and $166 to next year's nominal GDP. 
B) $200 to this year's real GDP and $300 to next year's real GDP. 
C) the same dollar amount to each year's nominal GDP because hotdogs are intermediate goods. 
D) $200 to this year's nominal GDP and $300 to next year's nominal GDP. 
A) $200 to this year's nominal GDP and $166 to next year's nominal GDP. 
B) $200 to this year's real GDP and $300 to next year's real GDP. 
C) the same dollar amount to each year's nominal GDP because hotdogs are intermediate goods. 
D) $200 to this year's nominal GDP and $300 to next year's nominal GDP.

Question 14

The human consequences of the Great Depression included

Accepted Answer

A) homeless families. 
B) closed factories. 
C) bankrupt farmers. 
D) soup lines. 
E) all of the above conditions. 
A) homeless families. 
B) closed factories. 
C) bankrupt farmers. 
D) soup lines. 
E) all of the above conditions.

Question 15

Technological change, such as the information technology revolution of the 1990s can shift the aggregate supply curve outward.If, at the same time, the government is decreasing spending, the most likely outcome of these two factors is a(n)

Accepted Answer

A) increase in the price level. 
B) decrease in the price level. 
C) increase in real GDP. 
D) decrease in real GDP. 
A) increase in the price level. 
B) decrease in the price level. 
C) increase in real GDP. 
D) decrease in real GDP.

Question 16

If aggregate demand keeps shifting rightward month after month and aggregate supply remains constant, the economy will experience a recession.

Accepted Answer

A) True 
 B)False

Question 17

The clearest sign of inflation would be a(n)

Accepted Answer

A) increase in the price level. 
B) increase in the quantity of total final output. 
C) decrease in the quantity of total final output. 
D) simultaneous increase in both output and prices. 
A) increase in the price level. 
B) increase in the quantity of total final output. 
C) decrease in the quantity of total final output. 
D) simultaneous increase in both output and prices.

Question 18

In 2015, you buy a beautiful vintage 1965 Thunderbird convertible.This purchase would

Accepted Answer

A) be included in the GDP for 2015. 
B) not be included in the GDP for 2015. 
C) be included in both the GDP for 1965 and 2015. 
D) be in the GDP for 2015 at a depreciated value. 
A) be included in the GDP for 2015. 
B) not be included in the GDP for 2015. 
C) be included in both the GDP for 1965 and 2015. 
D) be in the GDP for 2015 at a depreciated value.

Question 19

How does the calculation of GDP include the costs of natural resource depletion that occurs when output is produced?

Accepted Answer

A) The value of resource depletion is added to GDP. 
B) The cost of resource depletion is not measured in GDP. 
C) The cost of resource depletion is added to real but not nominal GDP. 
D) Resource depletion causes GDP to overstate well being. 
A) The value of resource depletion is added to GDP. 
B) The cost of resource depletion is not measured in GDP. 
C) The cost of resource depletion is added to real but not nominal GDP. 
D) Resource depletion causes GDP to overstate well being.

Question 20

Macroeconomic models use abstract concepts such as "price level" and "national income" that are calculated by combining many markets into one.This process is known as

Accepted Answer

A) analysis and synthesis. 
B) integration and derivation. 
C) conceptualization. 
D) aggregation. 
A) analysis and synthesis. 
B) integration and derivation. 
C) conceptualization. 
D) aggregation.

Exam 22: An Introduction to Macroeconomics

An increase in aggregate demand is most likely to result in

Gross Domestic Product represents the money value of all final goods and services produced in the domestic economy within the year.

The term "stagflation" was invented in the 1970s to describe an economy experiencing both

Real GDP values current output of goods and services at their current prices.

A product that is produced in 2015 and not sold until 2016 will be counted in the GDP for

When the Art Institute of Chicago purchases a painting by Mary Cassatt that she produced in Paris in 1885, this would not be included in the U.S.GDP for 2015.

What is an aggregate? How is it used in macroeconomics? Give two examples of specific aggregates that are used in the study of macroeconomics.

Poor Asian countries may have per-capita GDP's that may be less than $250.Why is this somewhat misleading for comparative purposes?

Which of the following transactions would be included in GDP for 2015?

The Great Depression of the 1930s led to a revolution in macroeconomic thinking, following the work of

Production for war and environmental clean-up services are not included in GDP.

Combining various goods and services into a convenient grouping is called

If hot dogs cost $2 this year and $3 next year, then 100 hotdogs will contribute

The human consequences of the Great Depression included

Technological change, such as the information technology revolution of the 1990s can shift the aggregate supply curve outward.If, at the same time, the government is decreasing spending, the most likely outcome of these two factors is a(n)

If aggregate demand keeps shifting rightward month after month and aggregate supply remains constant, the economy will experience a recession.

The clearest sign of inflation would be a(n)

In 2015, you buy a beautiful vintage 1965 Thunderbird convertible.This purchase would

How does the calculation of GDP include the costs of natural resource depletion that occurs when output is produced?

Macroeconomic models use abstract concepts such as "price level" and "national income" that are calculated by combining many markets into one.This process is known as

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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