Question 1

Economic analysis is useful in resolving all of the following types of issues EXCEPT:

Accepted Answer

A) monetary policy. 
B) fiscal policy. 
C) normative. 
D) positive. 
A) monetary policy. 
B) fiscal policy. 
C) normative. 
D) positive.

Question 2

A decision to join a free trade association, such as NAFTA, is an example of ________ policy.

Accepted Answer

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

Question 3

Compared to the 1950-1973 period, output per worker ________ in the 1974-1995 period.

Accepted Answer

A) increased more rapidly 
B) increased more slowly 
C) decreased more rapidly 
D) decreased more slowly 
A) increased more rapidly 
B) increased more slowly 
C) decreased more rapidly 
D) decreased more slowly

Question 4

Output per employed worker is called:

Accepted Answer

A) total output. 
B) average standard of living. 
C) average labor productivity. 
D) output per person. 
A) total output. 
B) average standard of living. 
C) average labor productivity. 
D) output per person.

Question 5

ALL of the following describe economic conditions during the Great Depression in the United States EXCEPT:

Accepted Answer

A) high rates of unemployment. 
B) high rates of inflation. 
C) low levels of production. 
D) a sharp decline in stock prices. 
A) high rates of unemployment. 
B) high rates of inflation. 
C) low levels of production. 
D) a sharp decline in stock prices.

Question 6

A government is running a budget deficit 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 7

In Econland population and average labor productivity are constant. If a larger proportion of the population enters retirement, then total output will ________ and output per person will ________.

Accepted Answer

A) increase; increase 
B) decrease; decrease 
C) remain constant; remain constant 
D) decrease; remain constant 
A) increase; increase 
B) decrease; decrease 
C) remain constant; remain constant 
D) decrease; remain constant

Question 8

Over the entire period since 1950, average labor productivity in the United States has ________ although between 1973 and 1995 the rate of change ________.

Accepted Answer

A) increased; slowed 
B) decreased; accelerated 
C) increased; accelerated 
D) decreased; slowed 
A) increased; slowed 
B) decreased; accelerated 
C) increased; accelerated 
D) decreased; slowed

Question 9

Since 1950, the standard of living in the United States has:

Accepted Answer

A) increased when measured by output per person, but decreased when measured by total output. 
B) increased when measured by both total output and output per person. 
C) decreased when measured by output per person, but increased when measured by total output. 
D) decreased when measured by both total output and output per person. 
A) increased when measured by output per person, but decreased when measured by total output. 
B) increased when measured by both total output and output per person. 
C) decreased when measured by output per person, but increased when measured by total output. 
D) decreased when measured by both total output and output per person.

Question 10

In Econland exports equal 25 percent of total output, while imports equal 20 percent of total output. Econland has a:

Accepted Answer

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

Question 11

Inflation is the increase in:

Accepted Answer

A) total output. 
B) imports relative to exports. 
C) total output per worker. 
D) the general level of prices. 
A) total output. 
B) imports relative to exports. 
C) total output per worker. 
D) the general level of prices.

Question 12

Which of the following would be considered an example of monetary 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) A decision by a developing country to reduce government control of the economy and to become more market-oriented. 
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) A decision by a developing country to reduce government control of the economy and to become more market-oriented.

Question 13

If total output increases from $1 trillion to $2 trillion as population increases from 100 million to 200 million, then output per person:

Accepted Answer

A) doubles. 
B) increases, but by less than 100 percent. 
C) remains constant. 
D) decreases. 
A) doubles. 
B) increases, but by less than 100 percent. 
C) remains constant. 
D) decreases.

Question 14

Analysis that aims at determining only the economic consequences of a particular policy is called ________ analysis.

Accepted Answer

A) monetary 
B) fiscal 
C) positive 
D) normative 
A) monetary 
B) fiscal 
C) positive 
D) normative

Question 15

Which of the following statements is positive?

Accepted Answer

A) Tax increases tend to discourage saving. 
B) Large budget surpluses should be avoided. 
C) Higher taxes are needed to support education. 
D) A tax cut that benefits high-income households is acceptable. 
A) Tax increases tend to discourage saving. 
B) Large budget surpluses should be avoided. 
C) Higher taxes are needed to support education. 
D) A tax cut that benefits high-income households is acceptable.

Question 16

"The plan to create private accounts in Social Security will reduce benefits for some workers," is an example of a ________ statement, while "Social Security will be better if the private accounts are allowed" is an example of a ________ statement.

Accepted Answer

A) monetary policy; fiscal policy 
B) positive; normative 
C) structural policy; fiscal policy 
D) normative; positive 
A) monetary policy; fiscal policy 
B) positive; normative 
C) structural policy; fiscal policy 
D) normative; positive

Question 17

Major macroeconomic issues include differences across countries in all of the following EXCEPT:

Accepted Answer

A) infant mortality rates. 
B) inflation rates. 
C) unemployment rates. 
D) economic growth rates. 
A) infant mortality rates. 
B) inflation rates. 
C) unemployment rates. 
D) economic growth rates.

Question 18

The fraction of people who would like to be employed, but can't find work is called the:

Accepted Answer

A) inflation rate. 
B) average labor productivity rate. 
C) unemployment rate. 
D) participation rate. 
A) inflation rate. 
B) average labor productivity rate. 
C) unemployment rate. 
D) participation rate.

Question 19

Macroeconomic issues include all of the following EXCEPT:

Accepted Answer

A) economic interdependence among nations. 
B) regulation of natural monopolies. 
C) inflation. 
D) economic growth and living standards. 
A) economic interdependence among nations. 
B) regulation of natural monopolies. 
C) inflation. 
D) economic growth and living standards.

Question 20

When a government moves from a centrally planned economy to a market economy, this is an example of ________ policy.

Accepted Answer

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

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

Economic analysis is useful in resolving all of the following types of issues EXCEPT:

A decision to join a free trade association, such as NAFTA, is an example of ________ policy.

Compared to the 1950-1973 period, output per worker ________ in the 1974-1995 period.

Output per employed worker is called:

ALL of the following describe economic conditions during the Great Depression in the United States EXCEPT:

A government is running a budget deficit if:

In Econland population and average labor productivity are constant. If a larger proportion of the population enters retirement, then total output will ________ and output per person will ________.

Over the entire period since 1950, average labor productivity in the United States has ________ although between 1973 and 1995 the rate of change ________.

Since 1950, the standard of living in the United States has:

In Econland exports equal 25 percent of total output, while imports equal 20 percent of total output. Econland has a:

Inflation is the increase in:

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

If total output increases from $1 trillion to $2 trillion as population increases from 100 million to 200 million, then output per person:

Analysis that aims at determining only the economic consequences of a particular policy is called ________ analysis.

Which of the following statements is positive?

"The plan to create private accounts in Social Security will reduce benefits for some workers," is an example of a ________ statement, while "Social Security will be better if the private accounts are allowed" is an example of a ________ statement.

Major macroeconomic issues include differences across countries in all of the following EXCEPT:

The fraction of people who would like to be employed, but can't find work is called the:

Macroeconomic issues include all of the following EXCEPT:

When a government moves from a centrally planned economy to a market economy, this is an example of ________ policy.

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

In Econland population and average labor productivity are constant. If a larger proportion of the population enters retirement, then total output will and output per person will .

Over the entire period since 1950, average labor productivity in the United States has although between 1973 and 1995 the rate of change .

"The plan to create private accounts in Social Security will reduce benefits for some workers," is an example of a statement, while "Social Security will be better if the private accounts are allowed" is an example of a statement.