Question 1

A decrease in the federal income tax is an example of ________ policy.

Accepted Answer

A) aggregation 
B) fiscal 
C) monetary 
D) structural 
A) aggregation 
B) fiscal 
C) monetary 
D) structural

Question 2

Which of the following would be considered an example of fiscal policy?

Accepted Answer

A) A broad government initiative to reduce the country's reliance on agriculture and promote high-technology industries. 
B) A reduction in income tax rates. 
C) Provision of additional cash to the banking system. 
D) Interest rate hikes generated by a reduction in the money supply. 
A) A broad government initiative to reduce the country's reliance on agriculture and promote high-technology industries. 
B) A reduction in income tax rates. 
C) Provision of additional cash to the banking system. 
D) Interest rate hikes generated by a reduction in the money supply.

Question 3

Aggregation allows economists to ________ at the cost of ________.

Accepted Answer

A) see the big picture; obscuring the details 
B) make positive statements; ignoring normative analysis 
C) make normative statements; ignoring positive analysis 
D) see the details; obscuring the big picture 
A) see the big picture; obscuring the details 
B) make positive statements; ignoring normative analysis 
C) make normative statements; ignoring positive analysis 
D) see the details; obscuring the big picture

Question 4

Macroeconomic policies are government policies designed to affect:

Accepted Answer

A) the environmental impact of all industries. 
B) the performance of the economy as a whole. 
C) the economic activity of the government. 
D) particular sectors of the economy. 
A) the environmental impact of all industries. 
B) the performance of the economy as a whole. 
C) the economic activity of the government. 
D) particular sectors of the economy.

Question 5

Among economists today, the most widely accepted cause of the Great Depression is:

Accepted Answer

A) poor economic policymaking. 
B) wild stock market speculation on Wall Street. 
C) globalization. 
D) Adolf Hitler's election as Chancellor of Germany. 
A) poor economic policymaking. 
B) wild stock market speculation on Wall Street. 
C) globalization. 
D) Adolf Hitler's election as Chancellor of Germany.

Question 6

All of the following are examples of positive statements EXCEPT:

Accepted Answer

A) Higher interest rates reduce construction activity. 
B) Higher interest rates are achieved by slowing the growth of the money supply. 
C) Economic output should not be allowed to increase too fast. 
D) Historically higher rates of money growth are associated with higher rates of inflation. 
A) Higher interest rates reduce construction activity. 
B) Higher interest rates are achieved by slowing the growth of the money supply. 
C) Economic output should not be allowed to increase too fast. 
D) Historically higher rates of money growth are associated with higher rates of inflation.

Question 7

All of the following are examples of normative statements EXCEPT:

Accepted Answer

A) High rates of economic growth are preferable to low rates. 
B) Output per person should increase at an average annual rate of 5 percent. 
C) Low unemployment is more desirable than low inflation. 
D) Output per person typically grows more slowly than output per worker. 
A) High rates of economic growth are preferable to low rates. 
B) Output per person should increase at an average annual rate of 5 percent. 
C) Low unemployment is more desirable than low inflation. 
D) Output per person typically grows more slowly than output per worker.

Question 8

In the United States decisions to increase interest rates are made by ________ and decisions to increase taxes are made by ________.

Accepted Answer

A) Congress; the Federal Reserve 
B) Congress; Congress 
C) the Federal Reserve; the Federal Reserve 
D) the Federal Reserve; Congress 
A) Congress; the Federal Reserve 
B) Congress; Congress 
C) the Federal Reserve; the Federal Reserve 
D) the Federal Reserve; Congress

Question 9

Which of the following is the most aggregated value?

Accepted Answer

A) Total output of a firm 
B) Total output of a country 
C) Total output of a city 
D) Total output of an industry 
A) Total output of a firm 
B) Total output of a country 
C) Total output of a city 
D) Total output of an industry

Question 10

Macroeconomics first developed as a new subfield of economics:

Accepted Answer

A) when Adolph Hitler ordered economists to learn more about national economies. 
B) following the oil price increases of the 1970s. 
C) as a result of Adam Smith's publication of The Wealth of Nations in 1776. 
D) in response to the severe economic hardships of the Great Depression. 
A) when Adolph Hitler ordered economists to learn more about national economies. 
B) following the oil price increases of the 1970s. 
C) as a result of Adam Smith's publication of The Wealth of Nations in 1776. 
D) in response to the severe economic hardships of the Great Depression.

Question 11

The unemployment rate in the United States:

Accepted Answer

A) falls to zero during expansions. 
B) never falls to zero. 
C) equals zero during booms. 
D) can be zero in both expansions and recessions. 
A) falls to zero during expansions. 
B) never falls to zero. 
C) equals zero during booms. 
D) can be zero in both expansions and recessions.

Question 12

The value of output was $1,000 billion in Northland and $2,000 billion in Southland. The population of Northland was 50 million and the population of Southland was 120 million. There were 30 million employed workers in Northland and 75 million employed workers in Southland. Average labor productivity was higher in ________ and the standard of living was ________.

Accepted Answer

A) Northland; the same in both countries 
B) Northland; higher in Northland 
C) Southland; the same in both countries 
D) Southland; higher in Southland 
A) Northland; the same in both countries 
B) Northland; higher in Northland 
C) Southland; the same in both countries 
D) Southland; higher in Southland

Question 13

A government is running a budget surplus if:

Accepted Answer

A) government revenue exceeds government spending. 
B) government revenue is less than government spending. 
C) exports exceed imports. 
D) imports exceed exports. 
A) government revenue exceeds government spending. 
B) government revenue is less than government spending. 
C) exports exceed imports. 
D) imports exceed exports.

Question 14

If average labor productivity increases while population and the number of employed workers remain constant, then total output:

Accepted Answer

A) increases. 
B) decreases. 
C) remains constant. 
D) may increase or decrease. 
A) increases. 
B) decreases. 
C) remains constant. 
D) may increase or decrease.

Question 15

The rate at which prices in general are increasing is called the:

Accepted Answer

A) inflation rate. 
B) standard of living. 
C) unemployment rate. 
D) trade balance. 
A) inflation rate. 
B) standard of living. 
C) unemployment rate. 
D) trade balance.

Question 16

Which of the following would not be studied by macroeconomists?

Accepted Answer

A) The worldwide operations of General Motors 
B) Factors affecting average wages in the U.S. economy 
C) Inflation in developing countries 
D) The effects of tax cuts on consumer spending 
A) The worldwide operations of General Motors 
B) Factors affecting average wages in the U.S. economy 
C) Inflation in developing countries 
D) The effects of tax cuts on consumer spending

Question 17

If its exports are greater than its imports, then a country has a:

Accepted Answer

A) government budget deficit. 
B) trade surplus. 
C) government budget surplus. 
D) trade deficit. 
A) government budget deficit. 
B) trade surplus. 
C) government budget surplus. 
D) trade deficit.

Question 18

Macroeconomic issues include all of the following EXCEPT:

Accepted Answer

A) productivity. 
B) economic growth. 
C) energy reserves. 
D) recessions and expansions. 
A) productivity. 
B) economic growth. 
C) energy reserves. 
D) recessions and expansions.

Question 19

Inflation was a major problem in the United States during the:

Accepted Answer

A) 1950s. 
B) 1960s. 
C) 1970s. 
D) 2000s. 
A) 1950s. 
B) 1960s. 
C) 1970s. 
D) 2000s.

Question 20

The degree to which people have access to goods and services that make their lives easier, healthier, safer, and more enjoyable is called the:

Accepted Answer

A) microeconomic standard. 
B) global standard. 
C) scarcity standard. 
D) standard of living. 
A) microeconomic standard. 
B) global standard. 
C) scarcity standard. 
D) standard of living.

Exam 16: Macroeconomics: The Birds Eye View of the Economy

A decrease in the federal income tax is an example of ________ policy.

Which of the following would be considered an example of fiscal policy?

Aggregation allows economists to ________ at the cost of ________.

Macroeconomic policies are government policies designed to affect:

Among economists today, the most widely accepted cause of the Great Depression is:

All of the following are examples of positive statements EXCEPT:

All of the following are examples of normative statements EXCEPT:

In the United States decisions to increase interest rates are made by ________ and decisions to increase taxes are made by ________.

Which of the following is the most aggregated value?

Macroeconomics first developed as a new subfield of economics:

The unemployment rate in the United States:

A government is running a budget surplus if:

If average labor productivity increases while population and the number of employed workers remain constant, then total output:

The rate at which prices in general are increasing is called the:

Which of the following would not be studied by macroeconomists?

If its exports are greater than its imports, then a country has a:

Macroeconomic issues include all of the following EXCEPT:

Inflation was a major problem in the United States during the:

The degree to which people have access to goods and services that make their lives easier, healthier, safer, and more enjoyable is called the:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Elasticity

Demand

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Monopoly, Oligopoly, and Monopolistic Competition

Games and Strategic Behavior

An Introduction to Behavioral Economics

Externalities, Property Rights, and the Environment

The Economics of Information

Labor Markets, Poverty, and Income Distribution

Public Goods and Tax Policy

International Trade and Trade Policy

Measuring Economic Activity: GDP and Unemployment

Measuring the Price Level and Inflation

Economic Growth, Productivity, and Living Standards

The Labor Market: Workers, Wages, and Unemployment

Saving and Capital Formation

Money Prices and the Federal Reserve

Financial Markets and International Capital Flows

Short-Term Economic Fluctuations: An Introduction

Spending and Output in the Short Run

Stabilizing the Economy: The Role of the Fed

Aggregate Demand, Aggregate Supply, and Inflation

Exchange Rates and the Open Economy

Filters

Aggregation allows economists to at the cost of .

In the United States decisions to increase interest rates are made by and decisions to increase taxes are made by .