Question 1

Gross Domestic Product is an economic aggregate that represents the

Accepted Answer

A) potential output of a country. 
B) total product of a nation's economy. 
C) total income earned from all sales. 
D) total product that a country exports. 
A) potential output of a country. 
B) total product of a nation's economy. 
C) total income earned from all sales. 
D) total product that a country exports.

Question 2

Figure 5-2
  
-In Figure 5-2, if the aggregate demand curve moves to the right less rapidly than the aggregate supply curve, then

Accepted Answer

A) the price level should decline over time. 
B) the price level should remain stable. 
C) the price level will tend to increase. 
D) the level of real GDP should decrease. 
A) the price level should decline over time. 
B) the price level should remain stable. 
C) the price level will tend to increase. 
D) the level of real GDP should decrease.

Question 3

To fight recession, the government may

Accepted Answer

A) decrease aggregate demand, which will also lead to lower unemployment rates. 
B) increase aggregate demand, which will also lead to higher price levels. 
C) increase aggregate demand, which will also lead to lower price levels. 
D) decrease aggregate demand, which will also lead to higher unemployment rates. 
A) decrease aggregate demand, which will also lead to lower unemployment rates. 
B) increase aggregate demand, which will also lead to higher price levels. 
C) increase aggregate demand, which will also lead to lower price levels. 
D) decrease aggregate demand, which will also lead to higher unemployment rates.

Question 4

International per capita GDP comparisons are misleading when countries involved differ greatly in

Accepted Answer

A) the type of economic system each country uses to solve its economic problem. 
B) the freedom of their election processes. 
C) the percentage of economic activity that is transacted in organized markets. 
D) the quantity of human and natural resources they possess. 
A) the type of economic system each country uses to solve its economic problem. 
B) the freedom of their election processes. 
C) the percentage of economic activity that is transacted in organized markets. 
D) the quantity of human and natural resources they possess.

Question 5

The Great Depression of the 1930s

Accepted Answer

A) confirmed the value of a "hands off" policy for governments. 
B) was exacerbated by an expansionary monetary policy. 
C) was a worldwide event. 
D) continued throughout the 1940s without any interruption. 
A) confirmed the value of a "hands off" policy for governments. 
B) was exacerbated by an expansionary monetary policy. 
C) was a worldwide event. 
D) continued throughout the 1940s without any interruption.

Question 6

The Great Depression ended in the United States when

Accepted Answer

A) the New Deal reforms were initiated by President Roosevelt. 
B) deficit spending ended in 1937. 
C) the United States returned to the gold standard in 1940. 
D) the United States began to mobilize for war in the early 1940s. 
E) the German economy suffered hyperinflation in the 1920s. 
A) the New Deal reforms were initiated by President Roosevelt. 
B) deficit spending ended in 1937. 
C) the United States returned to the gold standard in 1940. 
D) the United States began to mobilize for war in the early 1940s. 
E) the German economy suffered hyperinflation in the 1920s.

Question 7

What are the two basic principles of aggregation?

Accepted Answer

The two principles are: 1.Although the c

Question 8

Someone who studies the pricing policies of the Microsoft Corporation would be a microeconomist.

Accepted Answer

A) True 
 B)False

Question 9

Why do price levels increase when government adopts fiscal or monetary policy to correct the economy when it faces a recession and high unemployment?

Accepted Answer

Recession and unemployment are often cau

Question 10

The Great Depression changed the prevailing thinking about economics.

Accepted Answer

A) True 
 B)False

Question 11

In response to significant economic problems, the Obama administration recommended

Accepted Answer

A) more tax cuts. 
B) increased government spending. 
C) substantial aid to state and local governments. 
D) all of the above 
A) more tax cuts. 
B) increased government spending. 
C) substantial aid to state and local governments. 
D) all of the above

Question 12

Gross Domestic Product is a monetary measure of

Accepted Answer

A) total consumption in the economy. 
B) the total value of all final goods and services. 
C) total industrial output. 
D) the total value of all foreign sales and purchases. 
A) total consumption in the economy. 
B) the total value of all final goods and services. 
C) total industrial output. 
D) the total value of all foreign sales and purchases.

Question 13

In periods of generally rising prices,

Accepted Answer

A) real GDP will grow faster than nominal GDP. 
B) nominal GDP will grow slower than real GDP. 
C) real GDP will grow slower than nominal GDP. 
D) real GDP and nominal GDP will grow at the same rate. 
A) real GDP will grow faster than nominal GDP. 
B) nominal GDP will grow slower than real GDP. 
C) real GDP will grow slower than nominal GDP. 
D) real GDP and nominal GDP will grow at the same rate.

Question 14

Figure 5-1
  
-Figure 5-1 plots potential and real output for a hypothetical economy.Based on this graph, the recession occurred

Accepted Answer

A) between years 1 and 2. 
B) between years 2 and 3. 
C) between years 3 and 4. 
D) after year 4. 
A) between years 1 and 2. 
B) between years 2 and 3. 
C) between years 3 and 4. 
D) after year 4.

Question 15

In the United States during the period from 1870 to 1940, the price level was most likely to

Accepted Answer

A) fluctuate. 
B) increase. 
C) decrease. 
D) trend generally upward. 
A) fluctuate. 
B) increase. 
C) decrease. 
D) trend generally upward.

Question 16

From 2000 to 2001, the U.S.economy's annual growth rate slowed down abruptly.

Accepted Answer

A) True 
 B)False

Question 17

The name given to government programs implemented to prevent or shorten recessions and counteract inflation is

Accepted Answer

A) supply-side economics. 
B) contractionary policy. 
C) monetary policy. 
D) stabilization policy. 
A) supply-side economics. 
B) contractionary policy. 
C) monetary policy. 
D) stabilization policy.

Question 18

It might be useful to think of macroeconomics as a study of ____ and microeconomics as a study of ____.

Accepted Answer

A) big corporations, small businesses 
B) oceans, fish 
C) the long run, the short run 
D) abstract, concrete 
E) theory, reality 
A) big corporations, small businesses 
B) oceans, fish 
C) the long run, the short run 
D) abstract, concrete 
E) theory, reality

Question 19

Aggregate demand and supply curves have been widely used to analyze the performance of the macroeconomy.Figure 5-3 shows four diagrams that represent different changes in the macroeconomy.Choose the diagram that best represents the situations described in the following questions.??Figure 5-3
  
-Which graph in Figure 5-3 best represents the supply-side shock of the 1970s oil crisis?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 20

During the first year of the Bush administration in 2001, the American economy

Accepted Answer

A) increased its already rapid growth rate. 
B) experienced high levels of inflation. 
C) slowed in its rate of economic growth. 
D) experienced a decrease in the rate of unemployment. 
A) increased its already rapid growth rate. 
B) experienced high levels of inflation. 
C) slowed in its rate of economic growth. 
D) experienced a decrease in the rate of unemployment.

Exam 22: An Introduction to Macroeconomics

Gross Domestic Product is an economic aggregate that represents the

Figure 5-2 -In Figure 5-2, if the aggregate demand curve moves to the right less rapidly than the aggregate supply curve, then

To fight recession, the government may

International per capita GDP comparisons are misleading when countries involved differ greatly in

The Great Depression of the 1930s

The Great Depression ended in the United States when

What are the two basic principles of aggregation?

Someone who studies the pricing policies of the Microsoft Corporation would be a microeconomist.

Why do price levels increase when government adopts fiscal or monetary policy to correct the economy when it faces a recession and high unemployment?

The Great Depression changed the prevailing thinking about economics.

In response to significant economic problems, the Obama administration recommended

Gross Domestic Product is a monetary measure of

In periods of generally rising prices,

Figure 5-1 -Figure 5-1 plots potential and real output for a hypothetical economy.Based on this graph, the recession occurred

In the United States during the period from 1870 to 1940, the price level was most likely to

From 2000 to 2001, the U.S.economy's annual growth rate slowed down abruptly.

The name given to government programs implemented to prevent or shorten recessions and counteract inflation is

It might be useful to think of macroeconomics as a study of ____ and microeconomics as a study of ____.

During the first year of the Bush administration in 2001, the American economy

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

Filters

It might be useful to think of macroeconomics as a study of and microeconomics as a study of .