Question 1

A set of ideas about the economy that have been organized in a logical framework is called

Accepted Answer

A) empirical analysis. 
B) a methodology. 
C) economic theory. 
D) data development. 
A) empirical analysis. 
B) a methodology. 
C) economic theory. 
D) data development.

Question 2

A country has a trade deficit when

Accepted Answer

A) imports exceed exports. 
B) imports equal exports. 
C) exports exceed imports. 
D) exports are zero. 
A) imports exceed exports. 
B) imports equal exports. 
C) exports exceed imports. 
D) exports are zero.

Question 3

The highest and most prolonged period of unemployment in the United States over the last 125 years occurred during

Accepted Answer

A) World War II. 
B) the 1890s Depression. 
C) the 1990-1991 recession. 
D) the Great Depression of the 1930s. 
A) World War II. 
B) the 1890s Depression. 
C) the 1990-1991 recession. 
D) the Great Depression of the 1930s.

Question 4

During recessions,the unemployment rate ________ and output ________.

Accepted Answer

A) rises; falls 
B) rises; rises 
C) falls; rises 
D) falls; falls 
A) rises; falls 
B) rises; rises 
C) falls; rises 
D) falls; falls

Question 5

The primary factor that caused most economists to lose their faith in the classical approach to macroeconomic policy was

Accepted Answer

A) the high levels of unemployment that occurred during the Great Depression. 
B) the presence of both high unemployment and high inflation during the 1970s. 
C) the theoretical proof that classical ideas were invalid. 
D) the evidence that classical ideas were useful during economic booms,but not during economic recessions. 
A) the high levels of unemployment that occurred during the Great Depression. 
B) the presence of both high unemployment and high inflation during the 1970s. 
C) the theoretical proof that classical ideas were invalid. 
D) the evidence that classical ideas were useful during economic booms,but not during economic recessions.

Question 6

The primary factor that caused some economists to lose their faith in the Keynesian approach to macroeconomic policy was

Accepted Answer

A) the high levels of unemployment that occurred during the Great Depression. 
B) the presence of both high unemployment and high inflation during the 1970s. 
C) theoretical proof that Keynes's ideas were invalid. 
D) evidence that Keynes's ideas were useful during economic recessions,but not during economic booms. 
A) the high levels of unemployment that occurred during the Great Depression. 
B) the presence of both high unemployment and high inflation during the 1970s. 
C) theoretical proof that Keynes's ideas were invalid. 
D) evidence that Keynes's ideas were useful during economic recessions,but not during economic booms.

Question 7

How did Keynes propose to solve the problem of high unemployment?

Accepted Answer

A) Increase the growth rate of the money supply. 
B) Allow wages to decline,so that firms will want to hire more workers. 
C) Put on wage and price controls,so wages won't rise and firms won't have to lay people off to cut costs. 
D) Have the government increase its demand for goods and services. 
A) Increase the growth rate of the money supply. 
B) Allow wages to decline,so that firms will want to hire more workers. 
C) Put on wage and price controls,so wages won't rise and firms won't have to lay people off to cut costs. 
D) Have the government increase its demand for goods and services.

Question 8

The most direct effect of an increase in the growth rate of average labor productivity would be an increase in

Accepted Answer

A) the inflation rate. 
B) the unemployment rate. 
C) the long-run economic growth rate. 
D) imported goods. 
A) the inflation rate. 
B) the unemployment rate. 
C) the long-run economic growth rate. 
D) imported goods.

Question 9

A country is said to be experiencing deflation when

Accepted Answer

A) prices of most goods and services are rising over time. 
B) prices of most goods and services are falling over time. 
C) total output is rising over time. 
D) total output is falling over time. 
A) prices of most goods and services are rising over time. 
B) prices of most goods and services are falling over time. 
C) total output is rising over time. 
D) total output is falling over time.

Question 10

Macroeconomic information for the economy of Anchovy is given below.   (a)What was the growth rate of average labor productivity in Anchovy between Year 1 and Year 2?
(b)What was the inflation rate in Anchovy between Year 1 and Year 2?
(c)What was the unemployment rate in Year 1? In Year 2?

Accepted Answer

(a)Average labor productivity: Year 1: 8

Question 11

A country that has many well-trained macroeconomic analysts will not necessarily have more beneficial macroeconomic policies because

Accepted Answer

A) economists' understanding of the economy remains poor. 
B) there are few ways in which economists' complex models can be applied to the real world. 
C) economists agree on so few government policies. 
D) economic policy is usually made by politicians,not economists. 
A) economists' understanding of the economy remains poor. 
B) there are few ways in which economists' complex models can be applied to the real world. 
C) economists agree on so few government policies. 
D) economic policy is usually made by politicians,not economists.

Question 12

U.S.imports are goods and services

Accepted Answer

A) produced abroad and sold to Americans. 
B) produced in the United States and sold to Americans. 
C) produced abroad and sold to foreigners. 
D) produced in the United States and sold to foreigners. 
A) produced abroad and sold to Americans. 
B) produced in the United States and sold to Americans. 
C) produced abroad and sold to foreigners. 
D) produced in the United States and sold to foreigners.

Question 13

The difference between microeconomics and macroeconomics is that

Accepted Answer

A) microeconomics looks at supply and demand for goods,macroeconomics looks at supply and demand for services. 
B) microeconomics looks at prices,macroeconomics looks at inflation. 
C) microeconomics looks at individual consumers,macroeconomics looks at national totals. 
D) microeconomics looks at national issues,macroeconomics looks at global issues. 
A) microeconomics looks at supply and demand for goods,macroeconomics looks at supply and demand for services. 
B) microeconomics looks at prices,macroeconomics looks at inflation. 
C) microeconomics looks at individual consumers,macroeconomics looks at national totals. 
D) microeconomics looks at national issues,macroeconomics looks at global issues.

Question 14

The inflation rate is the

Accepted Answer

A) percent increase in the average level of prices over a year. 
B) percent increase in output over a year. 
C) percent increase in the unemployment rate over a year. 
D) price level divided by the level of output. 
A) percent increase in the average level of prices over a year. 
B) percent increase in output over a year. 
C) percent increase in the unemployment rate over a year. 
D) price level divided by the level of output.

Question 15

Aggregation is the process of

Accepted Answer

A) calculating real GDP based on nominal GDP and the price index. 
B) summing individual economic variables to obtain economy-wide totals. 
C) forecasting the components of GDP. 
D) predicting when recessions will occur. 
A) calculating real GDP based on nominal GDP and the price index. 
B) summing individual economic variables to obtain economy-wide totals. 
C) forecasting the components of GDP. 
D) predicting when recessions will occur.

Question 16

A closed economy is a national economy that

Accepted Answer

A) doesn't interact economically with the rest of the world. 
B) has a stock market that is not open to traders from outside the country. 
C) has extensive trading and financial relationships with other national economies. 
D) has not established diplomatic relations with other national economies. 
A) doesn't interact economically with the rest of the world. 
B) has a stock market that is not open to traders from outside the country. 
C) has extensive trading and financial relationships with other national economies. 
D) has not established diplomatic relations with other national economies.

Question 17

If the price level was 100 in 2009 and 102 in 2010,the inflation rate was

Accepted Answer

A) 102%. 
B) 20%. 
C) 2%. 
D) 0.2%. 
A) 102%. 
B) 20%. 
C) 2%. 
D) 0.2%.

Question 18

Before World War II,the average level of prices in the United States usually

Accepted Answer

A) fell during wartime and rose during peacetime. 
B) fell during wartime and fell during peacetime. 
C) rose during wartime and fell during peacetime. 
D) rose during wartime and rose during peacetime. 
A) fell during wartime and rose during peacetime. 
B) fell during wartime and fell during peacetime. 
C) rose during wartime and fell during peacetime. 
D) rose during wartime and rose during peacetime.

Question 19

In the United States,monetary policy is determined by

Accepted Answer

A) the Federal Reserve. 
B) the president. 
C) private citizens. 
D) the Treasury Department. 
A) the Federal Reserve. 
B) the president. 
C) private citizens. 
D) the Treasury Department.

A set of ideas about the economy that have been organized in a logical framework is called

A country has a trade deficit when

The highest and most prolonged period of unemployment in the United States over the last 125 years occurred during

During recessions,the unemployment rate and output .

The primary factor that caused most economists to lose their faith in the classical approach to macroeconomic policy was

The primary factor that caused some economists to lose their faith in the Keynesian approach to macroeconomic policy was

How did Keynes propose to solve the problem of high unemployment?

The most direct effect of an increase in the growth rate of average labor productivity would be an increase in

A country is said to be experiencing deflation when

Macroeconomic information for the economy of Anchovy is given below. (a)What was the growth rate of average labor productivity in Anchovy between Year 1 and Year 2? (b)What was the inflation rate in Anchovy between Year 1 and Year 2? (c)What was the unemployment rate in Year 1? In Year 2?

A country that has many well-trained macroeconomic analysts will not necessarily have more beneficial macroeconomic policies because

U.S.imports are goods and services

The difference between microeconomics and macroeconomics is that

The inflation rate is the

Aggregation is the process of

A closed economy is a national economy that

If the price level was 100 in 2009 and 102 in 2010,the inflation rate was

Before World War II,the average level of prices in the United States usually

In the United States,monetary policy is determined by

The Measurement and Structure of the National Economy

Productivity, Output, and Employment

Consumption, Saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, Money, and Prices

Business Cycles

The Is-Lmad-As Model

Classical Business Cycle Analysis

Keynesianism: The Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates,business Cycles,and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters

Exam 1: Introduction to Macroeconomics

A set of ideas about the economy that have been organized in a logical framework is called

A country has a trade deficit when

The highest and most prolonged period of unemployment in the United States over the last 125 years occurred during

During recessions,the unemployment rate ________ and output ________.

The primary factor that caused most economists to lose their faith in the classical approach to macroeconomic policy was

The primary factor that caused some economists to lose their faith in the Keynesian approach to macroeconomic policy was

How did Keynes propose to solve the problem of high unemployment?

The most direct effect of an increase in the growth rate of average labor productivity would be an increase in

A country is said to be experiencing deflation when

Macroeconomic information for the economy of Anchovy is given below. (a)What was the growth rate of average labor productivity in Anchovy between Year 1 and Year 2? (b)What was the inflation rate in Anchovy between Year 1 and Year 2? (c)What was the unemployment rate in Year 1? In Year 2?

A country that has many well-trained macroeconomic analysts will not necessarily have more beneficial macroeconomic policies because

U.S.imports are goods and services

The difference between microeconomics and macroeconomics is that

The inflation rate is the

Aggregation is the process of

A closed economy is a national economy that

If the price level was 100 in 2009 and 102 in 2010,the inflation rate was

Before World War II,the average level of prices in the United States usually

In the United States,monetary policy is determined by

The Measurement and Structure of the National Economy

Productivity, Output, and Employment

Consumption, Saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, Money, and Prices

Business Cycles

The Is-Lmad-As Model

Classical Business Cycle Analysis

Keynesianism: The Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates,business Cycles,and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters

During recessions,the unemployment rate and output .