Question 1

Between the Troubled Asset Relief Program and the American Recovery and Reinvestment Act, the Federal budget deficit

Accepted Answer

A) doubled 
B) tripled 
C) stayed the same 
D) was cut in half 
E) quadrupled 
A) doubled 
B) tripled 
C) stayed the same 
D) was cut in half 
E) quadrupled B

Question 2

As the price level rises, individuals feel richer. Therefore, they will spend more.

Accepted Answer

A) True 
 B)False  False

Question 3

In combating stagflation, a government-induced

Accepted Answer

A) increase in aggregate demand would help reduce inflation but aggravate unemployment 
B) decrease in aggregate demand would help reduce unemployment but aggravate inflation 
C) increase in aggregate demand would help reduce unemployment but aggravate inflation 
D) decrease in aggregate demand would help reduce both unemployment and inflation 
E) increase in aggregate demand would help reduce both unemployment and inflation 
A) increase in aggregate demand would help reduce inflation but aggravate unemployment 
B) decrease in aggregate demand would help reduce unemployment but aggravate inflation 
C) increase in aggregate demand would help reduce unemployment but aggravate inflation 
D) decrease in aggregate demand would help reduce both unemployment and inflation 
E) increase in aggregate demand would help reduce both unemployment and inflation C

Question 4

The aggregate demand curve reflects the direct relationship between the price level and the quantity of aggregate output demanded.

Accepted Answer

A) True 
 B)False

Question 5

On an aggregate demand and aggregate supply graph, the stagflation of the 1970s can be represented as a

Accepted Answer

A) leftward shift of the aggregate supply curve 
B) rightward shift of the aggregate supply curve 
C) rise in the price level that caused an excess demand for output 
D) rightward shift of the aggregate demand curve 
E) decrease in the price level that caused an excess supply of output 
A) leftward shift of the aggregate supply curve 
B) rightward shift of the aggregate supply curve 
C) rise in the price level that caused an excess demand for output 
D) rightward shift of the aggregate demand curve 
E) decrease in the price level that caused an excess supply of output

Question 6

Long-term growth in production can be partially explained by

Accepted Answer

A) increases in government spending 
B) increases in availability of resources 
C) reductions in federal taxes 
D) a gradual but consistent increase in the price level 
E) general optimism about the future and the pioneering spirit of America 
A) increases in government spending 
B) increases in availability of resources 
C) reductions in federal taxes 
D) a gradual but consistent increase in the price level 
E) general optimism about the future and the pioneering spirit of America

Question 7

As the price level increases, the amount of goods and services that consumers, businesses, and governments desire to purchase will change. How will this be illustrated?

Accepted Answer

A) a leftward movement of the aggregate demand curve 
B) a rightward movement of the aggregate demand curve 
C) a movement upward along the aggregate demand curve 
D) a movement downward along the aggregate demand curve 
E) the price level change causes the aggregate supply curve to shift, bringing the economy back into equilibrium 
A) a leftward movement of the aggregate demand curve 
B) a rightward movement of the aggregate demand curve 
C) a movement upward along the aggregate demand curve 
D) a movement downward along the aggregate demand curve 
E) the price level change causes the aggregate supply curve to shift, bringing the economy back into equilibrium

Question 8

Confidence in Keynesian economics

Accepted Answer

A) diminished in the 1960s as the unemployment rate fell 
B) flourished in the 1960s despite two major recessions 
C) diminished in the 1960s as unemployment increased 
D) diminished in the 1970s as inflation occurred simultaneously with two recessions 
E) flourished through the 1980s despite Reagan's supply-side policies 
A) diminished in the 1960s as the unemployment rate fell 
B) flourished in the 1960s despite two major recessions 
C) diminished in the 1960s as unemployment increased 
D) diminished in the 1970s as inflation occurred simultaneously with two recessions 
E) flourished through the 1980s despite Reagan's supply-side policies

Question 9

Who wrote The General Theory of Employment, Interest, and Money?

Accepted Answer

A) Adam Smith 
B) Jean Baptiste Say 
C) François Quesnay 
D) John Maynard Keynes 
E) Alfred Marshall 
A) Adam Smith 
B) Jean Baptiste Say 
C) François Quesnay 
D) John Maynard Keynes 
E) Alfred Marshall

Question 10

During a given period in the economy, aggregate output is the

Accepted Answer

A) total amount of goods and services produced 
B) total amount of goods only produced 
C) relationship between the price level and the quantity of output demanded 
D) price level 
E) relationship between the price level and the quantity of output supplied 
A) total amount of goods and services produced 
B) total amount of goods only produced 
C) relationship between the price level and the quantity of output demanded 
D) price level 
E) relationship between the price level and the quantity of output supplied

Question 11

The longest U.S. expansion on record lasted ten years, from

Accepted Answer

A) April 1854 to April 1864 
B) March 1991 to March 2001 
C) December 1997 to December 2007 
D) September 1929 to September 1939 
E) February 1961 to February 1971 
A) April 1854 to April 1864 
B) March 1991 to March 2001 
C) December 1997 to December 2007 
D) September 1929 to September 1939 
E) February 1961 to February 1971

Question 12

The aggregate supply curve reflects the direct relationship between the price level and the quantity of aggregate output supplied.

Accepted Answer

A) True 
 B)False

Question 13

Since 1947,

Accepted Answer

A) the U.S. price level has fallen while real GDP rose 
B) U.S. real GDP has grown at about the same rate as nominal GDP 
C) U.S. employment increased while utilization of capital declined 
D) the U.S. price level has doubled, despite eight recessions 
E) U.S. real GDP has quintupled, despite eight recessions 
A) the U.S. price level has fallen while real GDP rose 
B) U.S. real GDP has grown at about the same rate as nominal GDP 
C) U.S. employment increased while utilization of capital declined 
D) the U.S. price level has doubled, despite eight recessions 
E) U.S. real GDP has quintupled, despite eight recessions

Question 14

According to Keynes, the policy of incurring budget surpluses will cause the equilibrium price level to __________ and equilibrium output to __________.

Accepted Answer

A) rise; rise 
B) rise; fall 
C) fall; rise 
D) fall; fall 
E) remain the same; remain the same 
A) rise; rise 
B) rise; fall 
C) fall; rise 
D) fall; fall 
E) remain the same; remain the same

Question 15

The Reagan tax cut of 1981 was an attempt at supply-side economics.

Accepted Answer

A) True 
 B)False

Question 16

The policy that a nation's economic vitality would spring from the stock of precious metals accumulated in the public treasury is called monetarism.

Accepted Answer

A) True 
 B)False

Question 17

If the U.S. price level increased relative to price levels in foreign countries, what would be the impact on domestic aggregate supply and aggregate demand curves?

Accepted Answer

A) the aggregate supply curve would shift outward and the aggregate demand curve would remain unchanged 
B) the aggregate supply curve would shift inward and the aggregate demand curve would remain unchanged 
C) the aggregate demand curve would shift outward and the aggregate supply curve would remain unchanged 
D) the aggregate demand curve would shift inward and the aggregate supply curve would remain unchanged 
E) the domestic aggregate demand and supply curves would remain unchanged 
A) the aggregate supply curve would shift outward and the aggregate demand curve would remain unchanged 
B) the aggregate supply curve would shift inward and the aggregate demand curve would remain unchanged 
C) the aggregate demand curve would shift outward and the aggregate supply curve would remain unchanged 
D) the aggregate demand curve would shift inward and the aggregate supply curve would remain unchanged 
E) the domestic aggregate demand and supply curves would remain unchanged

Question 18

Exhibit 5-2  
-Refer to Exhibit 5-2. Which line or point represents real GDP?

Accepted Answer

A) line a 
B) line b 
C) line c 
D) line d 
E) point e 
A) line a 
B) line b 
C) line c 
D) line d 
E) point e

Question 19

Which of the following statements regarding Gross Domestic Product is not true?

Accepted Answer

A) It is a stock variable. 
B) It is measured for a particular time period, usually one year. 
C) It is perhaps the most effective means of viewing the same economy over time. 
D) It is a measure of the economy's performance. 
E) It is a flow variable, not a stock variable. 
A) It is a stock variable. 
B) It is measured for a particular time period, usually one year. 
C) It is perhaps the most effective means of viewing the same economy over time. 
D) It is a measure of the economy's performance. 
E) It is a flow variable, not a stock variable.

Question 20

If both aggregate demand and aggregate supply increase, then employment will increase.

Accepted Answer

A) True 
 B)False

Exam 5: Introduction to Macroeconomics

Between the Troubled Asset Relief Program and the American Recovery and Reinvestment Act, the Federal budget deficit

As the price level rises, individuals feel richer. Therefore, they will spend more.

In combating stagflation, a government-induced

The aggregate demand curve reflects the direct relationship between the price level and the quantity of aggregate output demanded.

On an aggregate demand and aggregate supply graph, the stagflation of the 1970s can be represented as a

Long-term growth in production can be partially explained by

As the price level increases, the amount of goods and services that consumers, businesses, and governments desire to purchase will change. How will this be illustrated?

Confidence in Keynesian economics

Who wrote The General Theory of Employment, Interest, and Money?

During a given period in the economy, aggregate output is the

The longest U.S. expansion on record lasted ten years, from

The aggregate supply curve reflects the direct relationship between the price level and the quantity of aggregate output supplied.

Since 1947,

According to Keynes, the policy of incurring budget surpluses will cause the equilibrium price level to __________ and equilibrium output to __________.

The Reagan tax cut of 1981 was an attempt at supply-side economics.

The policy that a nation's economic vitality would spring from the stock of precious metals accumulated in the public treasury is called monetarism.

If the U.S. price level increased relative to price levels in foreign countries, what would be the impact on domestic aggregate supply and aggregate demand curves?

Exhibit 5-2 -Refer to Exhibit 5-2. Which line or point represents real GDP?

Which of the following statements regarding Gross Domestic Product is not true?

If both aggregate demand and aggregate supply increase, then employment will increase.

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand Supply and Markets

Tracking the Us Economy

Unemployment and Inflation

Productivity and Growth

Aggregate Expenditure

Aggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

The Algebra of Income and Expenditure

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

The Algebra of Demand-Side Equilibrium

International Trade

International Finance

Economic Development

National Income Accounts

Understanding Graphs

Variable Net Exports

Variable Net Exports Revisited

Filters

According to Keynes, the policy of incurring budget surpluses will cause the equilibrium price level to and equilibrium output to .