Question 1

Two of the most important macroeconomic issues are unemployment and inflation.

Accepted Answer

A) True 
 B)False

Question 2

The election campaign of George Bush to succeed Ronald Reagan as president was

Accepted Answer

A) hindered due to high levels of unemployment in 1988. 
B) hindered by the increasing inflationary problems of the late 1980s. 
C) helped by the budget surpluses generated in the last years of the Reagan administration. 
D) helped by the continuing low levels of unemployment and inflation in 1988. 
A) hindered due to high levels of unemployment in 1988. 
B) hindered by the increasing inflationary problems of the late 1980s. 
C) helped by the budget surpluses generated in the last years of the Reagan administration. 
D) helped by the continuing low levels of unemployment and inflation in 1988.

Question 3

Figure 5-2
  
-In Figure 5-2, an increase in government spending would cause

Accepted Answer

A) an outward shift in the aggregate supply curve and an increase in the price level. 
B) an outward shift in the aggregate demand curve and an increase in the price level. 
C) an inward shift of the aggregate demand curve and an increase in the price level. 
D) an inward shift of the aggregate demand curve and a decrease in the price level. 
A) an outward shift in the aggregate supply curve and an increase in the price level. 
B) an outward shift in the aggregate demand curve and an increase in the price level. 
C) an inward shift of the aggregate demand curve and an increase in the price level. 
D) an inward shift of the aggregate demand curve and a decrease in the price level.

Question 4

Which of the following is counted in GDP?

Accepted Answer

A) the cost of the reconstruction and cleanup following September 11, 2001. 
B) the value of leisure time 
C) the value of a househusband's work at home 
D) the value of your do-it-yourself work 
A) the cost of the reconstruction and cleanup following September 11, 2001. 
B) the value of leisure time 
C) the value of a househusband's work at home 
D) the value of your do-it-yourself work

Question 5

Phoebe and Rachel quit running in Central Park and join a health club to run on treadmills.This decision

Accepted Answer

A) has no effect on GDP. 
B) increases GDP. 
C) decreases GDP. 
D) increases nominal but not real GDP. 
A) has no effect on GDP. 
B) increases GDP. 
C) decreases GDP. 
D) increases nominal but not real GDP.

Question 6

Gross Domestic Product includes the sale of intermediate goods and services.

Accepted Answer

A) True 
 B)False

Question 7

When people smoke cigarettes, their friends and family members may become sick.This affects GDP by

Accepted Answer

A) reducing GDP by the amount of medical care needed. 
B) reducing GDP by the cost of the cigarettes purchased. 
C) increasing GDP by the cost of the medical care and the cost of the cigarettes purchased. 
D) decreasing GDP by the cost of the medical care and increasing GDP by the cost of the cigarettes purchased. 
A) reducing GDP by the amount of medical care needed. 
B) reducing GDP by the cost of the cigarettes purchased. 
C) increasing GDP by the cost of the medical care and the cost of the cigarettes purchased. 
D) decreasing GDP by the cost of the medical care and increasing GDP by the cost of the cigarettes purchased.

Question 8

In 2015, Richard buys a 2003 Chevrolet minivan from a neighbor.Will this be counted in the GDP for 2015?

Accepted Answer

A) Yes 
B) No 
C) Yes, if sales tax is paid 
D) No, because the purchase was from an individual not a dealer 
A) Yes 
B) No 
C) Yes, if sales tax is paid 
D) No, because the purchase was from an individual not a dealer

Question 9

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 economic conditions of the American economy in 2001?

Accepted Answer

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

Question 10

GDP consistently measures the output of goods and services in all countries.

Accepted Answer

A) True 
 B)False

Question 11

The Italian government collects a smaller amount of the taxes it is owed than the U.S.government.Other things being equal,

Accepted Answer

A) U.S.and Italian GDP should be equal. 
B) U.S.GDP should be higher than Italian GDP. 
C) U.S.GDP should be lower than Italian GDP. 
D) U.S.residents are better off than Italian residents. 
A) U.S.and Italian GDP should be equal. 
B) U.S.GDP should be higher than Italian GDP. 
C) U.S.GDP should be lower than Italian GDP. 
D) U.S.residents are better off than Italian residents.

Question 12

During economic fluctuations, individual markets usually move in different directions.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following would tend to increase the value of officially measured GDP?

Accepted Answer

A) decriminalization of drugs such as marijuana and cocaine 
B) decriminalization of prostitution 
C) decriminalization of gambling on basketball and football 
D) all of the above 
A) decriminalization of drugs such as marijuana and cocaine 
B) decriminalization of prostitution 
C) decriminalization of gambling on basketball and football 
D) all of the above

Question 14

Figure 5-2
  
-In Figure 5-2, if the aggregate demand curve shifts outward over time, the economy will

Accepted Answer

A) experience inflation. 
B) see a sustained decrease in the price level. 
C) experience a significant decrease in unemployment. 
D) experience economic recession. 
A) experience inflation. 
B) see a sustained decrease in the price level. 
C) experience a significant decrease in unemployment. 
D) experience economic recession.

Question 15

The successes of the 1960s were ascribed to the effects of

Accepted Answer

A) classical policies from the 1800s. 
B) classical policies from the 1930s. 
C) classical policies from the 1950s. 
D) Keynesian policies from the 1930s. 
E) Keynesian policies from the 1950s. 
A) classical policies from the 1800s. 
B) classical policies from the 1930s. 
C) classical policies from the 1950s. 
D) Keynesian policies from the 1930s. 
E) Keynesian policies from the 1950s.

Question 16

Recessions

Accepted Answer

A) almost never occur in the American economy. 
B) follow a regular and predictable cycle. 
C) are common features of the American economy. 
D) have been abolished by wise macroeconomic policy. 
A) almost never occur in the American economy. 
B) follow a regular and predictable cycle. 
C) are common features of the American economy. 
D) have been abolished by wise macroeconomic policy.

Question 17

Combating recession may require the government to

Accepted Answer

A) decrease aggregate supply. 
B) increase aggregate demand. 
C) decrease aggregate demand. 
D) decrease government spending. 
A) decrease aggregate supply. 
B) increase aggregate demand. 
C) decrease aggregate demand. 
D) decrease government spending.

Question 18

General Motors Corporation (a U.S.-based firm) produces a Saab vehicle in Sweden, and sells it in the United States.In which country's GDP is it included?

Accepted Answer

A) Sweden and the United States 
B) The United States because it was sold there 
C) The United States because GM is a U.S.company 
D) Sweden because it was produced there 
A) Sweden and the United States 
B) The United States because it was sold there 
C) The United States because GM is a U.S.company 
D) Sweden because it was produced there

Question 19

Supply and demand provides the basic explanatory framework for constructing both microeconomic and macroeconomic models.

Accepted Answer

A) True 
 B)False

Question 20

What is Gross Domestic Product?
 What is included in this statistic?
 What is excluded?
 Give two examples of goods or services that are included in GDP and two examples of goods or services that are excluded.

Accepted Answer

Gross Domestic Product is an aggregate a

Exam 22: An Introduction to Macroeconomics

Two of the most important macroeconomic issues are unemployment and inflation.

The election campaign of George Bush to succeed Ronald Reagan as president was

Figure 5-2 -In Figure 5-2, an increase in government spending would cause

Which of the following is counted in GDP?

Phoebe and Rachel quit running in Central Park and join a health club to run on treadmills.This decision

Gross Domestic Product includes the sale of intermediate goods and services.

When people smoke cigarettes, their friends and family members may become sick.This affects GDP by

In 2015, Richard buys a 2003 Chevrolet minivan from a neighbor.Will this be counted in the GDP for 2015?

GDP consistently measures the output of goods and services in all countries.

The Italian government collects a smaller amount of the taxes it is owed than the U.S.government.Other things being equal,

During economic fluctuations, individual markets usually move in different directions.

Which of the following would tend to increase the value of officially measured GDP?

Figure 5-2 -In Figure 5-2, if the aggregate demand curve shifts outward over time, the economy will

The successes of the 1960s were ascribed to the effects of

Recessions

Combating recession may require the government to

General Motors Corporation (a U.S.-based firm) produces a Saab vehicle in Sweden, and sells it in the United States.In which country's GDP is it included?

Supply and demand provides the basic explanatory framework for constructing both microeconomic and macroeconomic models.

What is Gross Domestic Product? What is included in this statistic? What is excluded? Give two examples of goods or services that are included in GDP and two examples of goods or services that are excluded.

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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