Question 1

Which of the following describe an intermediate good?

Accepted Answer

A)  John buys a baseball bat to play with his son. 
B)  Jack buys a baseball bat for his professional baseball club. 
C)  Jerry buys a baseball bat as a gift for his friend. 
D)  Jeremy buys a baseball bat to play with his friends in the park. 
A)  John buys a baseball bat to play with his son. 
B)  Jack buys a baseball bat for his professional baseball club. 
C)  Jerry buys a baseball bat as a gift for his friend. 
D)  Jeremy buys a baseball bat to play with his friends in the park.

Question 2

Government purchases refer to purchases of goods and services by:

Accepted Answer

A)  the federal government. 
B)  by state governments. 
C)  by local governments. 
D)  All of the above. 
A)  the federal government. 
B)  by state governments. 
C)  by local governments. 
D)  All of the above.

Question 3

The business cycle consists of four phases: expansion, peak, contraction, and trough.

Accepted Answer

A) True 
 B)False

Question 4

Use the following diagram to answer the following questions.
  
-Refer to Real GDP. A technological advance is most likely to cause:

Accepted Answer

A)  a shift from AS₁ to AS₂. 
B)  a shift from AS₂ to AS₁. 
C)  a movement from point A to point B. 
D)  a movement from point B to point A. 
A)  a shift from AS₁ to AS₂. 
B)  a shift from AS₂ to AS₁. 
C)  a movement from point A to point B. 
D)  a movement from point B to point A.

Question 5

Monetary policy is conducted by:

Accepted Answer

A)  the Federal Reserve. 
B)  the federal government. 
C)  state governments. 
D)  all of the above. 
A)  the Federal Reserve. 
B)  the federal government. 
C)  state governments. 
D)  all of the above.

Question 6

Which of the following statements is correct?

Accepted Answer

A)  Real GDP holds quantity constant. 
B)  Real GDP holds prices constant. 
C)  Nominal GDP holds quantity constant. 
D)  Nominal GDP holds prices constant. 
A)  Real GDP holds quantity constant. 
B)  Real GDP holds prices constant. 
C)  Nominal GDP holds quantity constant. 
D)  Nominal GDP holds prices constant.

Question 7

Suppose the wage rate decreases. As a result we would expect:

Accepted Answer

A)  the entire aggregate supply curve to shift left. 
B)  the entire aggregate supply curve to shift right. 
C)  the positively sloped portion of the aggregate supply curve to shift left. 
D)  the positively sloped portion of the aggregate supply curve to shift right. 
A)  the entire aggregate supply curve to shift left. 
B)  the entire aggregate supply curve to shift right. 
C)  the positively sloped portion of the aggregate supply curve to shift left. 
D)  the positively sloped portion of the aggregate supply curve to shift right.

Question 8

Suppose nominal GDP for 1998 is $9,900 billion and the GDP deflator is 300. What is real GDP?

Accepted Answer

Real GDP =

Question 9

Which of the following is likely to lead to a decrease in aggregate demand?

Accepted Answer

A)  contractionary fiscal policy. 
B)  expansionary fiscal policy. 
C)  expansionary monetary policy. 
D)  the interest rate effect. 
A)  contractionary fiscal policy. 
B)  expansionary fiscal policy. 
C)  expansionary monetary policy. 
D)  the interest rate effect.

Question 10

Unemployment increases during the expansion phase of a business cycle.

Accepted Answer

A) True 
 B)False

Question 11

Fiscal policy refers to:

Accepted Answer

A)  changes in the money supply designed to achieve full employment. 
B)  changes in government regulations designed to achieve full employment. 
C)  special incentives given to businesses to hire groups with traditionally high unemployment rates. 
D)  changes in taxes and government spending designed to achieve full employment. 
A)  changes in the money supply designed to achieve full employment. 
B)  changes in government regulations designed to achieve full employment. 
C)  special incentives given to businesses to hire groups with traditionally high unemployment rates. 
D)  changes in taxes and government spending designed to achieve full employment.

Question 12

Use the following diagram to answer the following questions.
  
-Refer to Diagram 12-1. Suppose the price level in the above graph is currently P₁. In this instance, the economy would most likely be experiencing:

Accepted Answer

A)  a depression. 
B)  recession. 
C)  an excess supply of goods and services. 
D)  an excess demand for goods and services. 
A)  a depression. 
B)  recession. 
C)  an excess supply of goods and services. 
D)  an excess demand for goods and services.

Question 13

Which of the following would be considered an intermediate good?

Accepted Answer

A)  The pencil you are using to take this exam. 
B)  A computer in your instructor's office 
C)  The bricks used to construct a new home. 
D)  The automobile you drive. 
A)  The pencil you are using to take this exam. 
B)  A computer in your instructor's office 
C)  The bricks used to construct a new home. 
D)  The automobile you drive.

Question 14

The aggregate supply curve shows:

Accepted Answer

A)  the total quantity of resources that will be supplied at various price levels. 
B)  the total quantity of goods and services that will be supplied at various price levels. 
C)  the total quantity of final goods and services that will be supplied at various price levels. 
D)  the total quantity of consumer goods and services that will be supplied at various price levels. 
A)  the total quantity of resources that will be supplied at various price levels. 
B)  the total quantity of goods and services that will be supplied at various price levels. 
C)  the total quantity of final goods and services that will be supplied at various price levels. 
D)  the total quantity of consumer goods and services that will be supplied at various price levels.

Question 15

Suppose the economy is currently producing at its potential. The government enacts expansionary fiscal policy. How will this impact the economy?

Accepted Answer

Expansionary fiscal policy will result i

Question 16

The equilibrium level of real GDP occurs where the aggregate supply curve and the aggregate demand curve intersect.

Accepted Answer

A) True 
 B)False

Question 17

Use the following diagram to answer the following questions.
  
-Refer to GDP Deflator. A shift in aggregate demand from AD₂ to AD₁ would most likely be caused by:

Accepted Answer

A)  increased optimism about the future of the economy. 
B)  a decrease in taxes. 
C)  a decrease in the money supply. 
D)  an increase in the general price level. 
A)  increased optimism about the future of the economy. 
B)  a decrease in taxes. 
C)  a decrease in the money supply. 
D)  an increase in the general price level.

Question 18

Consumption is:

Accepted Answer

A)  the largest component of GDP. 
B)  a relatively stable component of GDP. 
C)  household purchases of both durable and nondurable goods and services. 
D)  All of the above. 
A)  the largest component of GDP. 
B)  a relatively stable component of GDP. 
C)  household purchases of both durable and nondurable goods and services. 
D)  All of the above.

Question 19

An increase in nominal GDP indicates that output has increased.

Accepted Answer

A) True 
 B)False

Question 20

The aggregate supply curve shows the total output of final goods and services that will be produced at each price level.

Accepted Answer

A) True 
 B)False

Which of the following describe an intermediate good?

Government purchases refer to purchases of goods and services by:

The business cycle consists of four phases: expansion, peak, contraction, and trough.

Use the following diagram to answer the following questions. -Refer to Real GDP. A technological advance is most likely to cause:

Monetary policy is conducted by:

Which of the following statements is correct?

Suppose the wage rate decreases. As a result we would expect:

Suppose nominal GDP for 1998 is $9,900 billion and the GDP deflator is 300. What is real GDP?

Which of the following is likely to lead to a decrease in aggregate demand?

Unemployment increases during the expansion phase of a business cycle.

Fiscal policy refers to:

Use the following diagram to answer the following questions. -Refer to Diagram 12-1. Suppose the price level in the above graph is currently P₁. In this instance, the economy would most likely be experiencing:

Which of the following would be considered an intermediate good?

The aggregate supply curve shows:

Suppose the economy is currently producing at its potential. The government enacts expansionary fiscal policy. How will this impact the economy?

The equilibrium level of real GDP occurs where the aggregate supply curve and the aggregate demand curve intersect.

Use the following diagram to answer the following questions. -Refer to GDP Deflator. A shift in aggregate demand from AD₂ to AD₁ would most likely be caused by:

Consumption is:

An increase in nominal GDP indicates that output has increased.

The aggregate supply curve shows the total output of final goods and services that will be produced at each price level.

Economic Growth: an Introduction to Scarcity and Choice

An Introduction to Economic Systems and the Workings of the Price System

Competitive Markets and Government Policy: Agriculture

Efficiency in Resource Allocation: How Much Do We Have How Much Do We Want

Market Power: Does It Help or Hurt the Economy

Air Pollution: Balancing Benefits and Costs

Health Care: How Much for Whom

Crime and Drugs: a Modern Dilemma

College Education: Is It Worth the Cost

Educational Reform: the Role of Incentives and Choice

Poverty: Old and New Approaches to a Persistent Problem

Unemployment: the Legacy of Recession, Technological Change, and Free Choice

Inflation: a Monetary Phenomenon

Sustained Budget Deficits: Is This Any Way to Run a Government

Social Security: Leading Issues and Approaches to Reform

International Trade: Beneficial, but Controversial

Financing Trade and the Trade Deficit

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Exam 12: Tracking and Explaining the Macroeconomy

Which of the following describe an intermediate good?

Government purchases refer to purchases of goods and services by:

The business cycle consists of four phases: expansion, peak, contraction, and trough.

Use the following diagram to answer the following questions. -Refer to Real GDP. A technological advance is most likely to cause:

Monetary policy is conducted by:

Which of the following statements is correct?

Suppose the wage rate decreases. As a result we would expect:

Suppose nominal GDP for 1998 is $9,900 billion and the GDP deflator is 300. What is real GDP?

Which of the following is likely to lead to a decrease in aggregate demand?

Unemployment increases during the expansion phase of a business cycle.

Fiscal policy refers to:

Use the following diagram to answer the following questions. -Refer to Diagram 12-1. Suppose the price level in the above graph is currently P₁. In this instance, the economy would most likely be experiencing:

Which of the following would be considered an intermediate good?

The aggregate supply curve shows:

Suppose the economy is currently producing at its potential. The government enacts expansionary fiscal policy. How will this impact the economy?

The equilibrium level of real GDP occurs where the aggregate supply curve and the aggregate demand curve intersect.

Use the following diagram to answer the following questions. -Refer to GDP Deflator. A shift in aggregate demand from AD₂ to AD₁ would most likely be caused by:

Consumption is:

An increase in nominal GDP indicates that output has increased.

The aggregate supply curve shows the total output of final goods and services that will be produced at each price level.

Economic Growth: an Introduction to Scarcity and Choice

An Introduction to Economic Systems and the Workings of the Price System

Competitive Markets and Government Policy: Agriculture

Efficiency in Resource Allocation: How Much Do We Have How Much Do We Want

Market Power: Does It Help or Hurt the Economy

Air Pollution: Balancing Benefits and Costs

Health Care: How Much for Whom

Crime and Drugs: a Modern Dilemma

College Education: Is It Worth the Cost

Educational Reform: the Role of Incentives and Choice

Poverty: Old and New Approaches to a Persistent Problem

Unemployment: the Legacy of Recession, Technological Change, and Free Choice

Inflation: a Monetary Phenomenon

Sustained Budget Deficits: Is This Any Way to Run a Government

Social Security: Leading Issues and Approaches to Reform

International Trade: Beneficial, but Controversial

Financing Trade and the Trade Deficit

Filters