Question 1

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 2

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

Question 3

When output __________,employment is expected to __________.

Accepted Answer

A)  rises; rise 
B)  rises; fall 
C)  falls; rise 
D)  falls; remain constant 
E)  remains constant; fall 
A)  rises; rise 
B)  rises; fall 
C)  falls; rise 
D)  falls; remain constant 
E)  remains constant; fall

Question 4

The Wealth of Nations was written by

Accepted Answer

A)  John Maynard Keynes 
B)  Adam Smith 
C)  François Quesnay 
D)  Henry Ford 
E)  John D.Rockefeller 
A)  John Maynard Keynes 
B)  Adam Smith 
C)  François Quesnay 
D)  Henry Ford 
E)  John D.Rockefeller

Question 5

Which decade is known as the "Golden Age of Keynesian Economics"?

Accepted Answer

A)  the 1930s 
B)  the 1950s 
C)  the 1960s 
D)  the 1970s 
E)  the 1980s 
A)  the 1930s 
B)  the 1950s 
C)  the 1960s 
D)  the 1970s 
E)  the 1980s

Question 6

During the Great Depression,President Hoover

Accepted Answer

A)  correctly called for an increase in taxes 
B)  incorrectly called for an increase in taxes 
C)  incorrectly called for a decrease in taxes 
D)  correctly called for a decrease in government spending 
E)  incorrectly called for an increase in government spending 
A)  correctly called for an increase in taxes 
B)  incorrectly called for an increase in taxes 
C)  incorrectly called for a decrease in taxes 
D)  correctly called for a decrease in government spending 
E)  incorrectly called for an increase in government spending

Question 7

Keynes believed that the best method for ending the Great Depression was to reduce government spending and raise taxes,thereby reducing the federal budget deficit.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following explains why the aggregate demand curve slopes downward?

Accepted Answer

A)  If the price level increases,we feel poorer and therefore buy less. 
B)  If the price level increases,we feel richer and therefore buy more. 
C)  If domestic prices increase,we substitute domestic goods for imported ones. 
D)  If the price of a particular good increases,we substitute away from that good. 
E)  A decrease in the price of a particular good is like an increase in income and therefore we buy more. 
A)  If the price level increases,we feel poorer and therefore buy less. 
B)  If the price level increases,we feel richer and therefore buy more. 
C)  If domestic prices increase,we substitute domestic goods for imported ones. 
D)  If the price of a particular good increases,we substitute away from that good. 
E)  A decrease in the price of a particular good is like an increase in income and therefore we buy more.

Question 9

The distinction between recessions and depressions is that recessions are

Accepted Answer

A)  longer than depressions 
B)  more severe than depressions 
C)  accompanied by price increases,depressions by price decreases 
D)  shorter and less severe than depressions 
E)  accompanied by price decreases,depressions by price increases 
A)  longer than depressions 
B)  more severe than depressions 
C)  accompanied by price increases,depressions by price decreases 
D)  shorter and less severe than depressions 
E)  accompanied by price decreases,depressions by price increases

Question 10

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 11

Which of the following is not a flow variable?

Accepted Answer

A)  the amount of spending by consumers this holiday season 
B)  the number of times a dollar bill is spent in a day 
C)  the amount of sales taxes collected in a state per year 
D)  the number of shares of stock traded on Wall Street per week 
E)  the $100 Susan keeps in her purse,in case an emergency arises 
A)  the amount of spending by consumers this holiday season 
B)  the number of times a dollar bill is spent in a day 
C)  the amount of sales taxes collected in a state per year 
D)  the number of shares of stock traded on Wall Street per week 
E)  the $100 Susan keeps in her purse,in case an emergency arises

Question 12

An economic variable that is measured per unit of time,such as spending per year,is known as a(n)

Accepted Answer

A)  stock variable 
B)  periodic variable 
C)  expectations variable 
D)  flow variable 
E)  constant variable 
A)  stock variable 
B)  periodic variable 
C)  expectations variable 
D)  flow variable 
E)  constant variable

Question 13

One explanation of why the aggregate demand curve is downward sloping is that

Accepted Answer

A)  as prices fall,nominal income rises and so does the demand for real goods and services 
B)  rising prices reduce people's wealth and thereby reduce spending 
C)  with falling prices,government decides to spend less to increase the price level 
D)  businesses increase investment spending in response to higher interest rates caused by inflation 
E)  as prices fall,domestically produced goods become more expensive relative to foreign-produced products,which increases production 
A)  as prices fall,nominal income rises and so does the demand for real goods and services 
B)  rising prices reduce people's wealth and thereby reduce spending 
C)  with falling prices,government decides to spend less to increase the price level 
D)  businesses increase investment spending in response to higher interest rates caused by inflation 
E)  as prices fall,domestically produced goods become more expensive relative to foreign-produced products,which increases production

Question 14

Between 1929 and the depth of the Great Depression in 1933,the United States encountered the following:

Accepted Answer

A)  the aggregate supply curve shifted inward with no change in the aggregate demand curve 
B)  the aggregate demand curve shifted inward with no change in the aggregate supply curve 
C)  the aggregate demand curve shifted outward with no change in the aggregate supply curve 
D)  the aggregate supply curve shifted outward with no change in the aggregate demand curve 
E)  the aggregate supply and demand curves both shifted outward 
A)  the aggregate supply curve shifted inward with no change in the aggregate demand curve 
B)  the aggregate demand curve shifted inward with no change in the aggregate supply curve 
C)  the aggregate demand curve shifted outward with no change in the aggregate supply curve 
D)  the aggregate supply curve shifted outward with no change in the aggregate demand curve 
E)  the aggregate supply and demand curves both shifted outward

Question 15

The Keynesian approach to government economic policy

Accepted Answer

A)  has emphasized the role of individual self-interest as a powerful stabilizing force 
B)  has consistently failed to reduce fluctuations in economic activity 
C)  was ineffective during the 1960s 
D)  highlighted the role of aggregate demand 
E)  was rechristened supply-side economics around 1980 
A)  has emphasized the role of individual self-interest as a powerful stabilizing force 
B)  has consistently failed to reduce fluctuations in economic activity 
C)  was ineffective during the 1960s 
D)  highlighted the role of aggregate demand 
E)  was rechristened supply-side economics around 1980

Question 16

Keynes proposed that government should shock the economy out of the Great Depression by

Accepted Answer

A)  increasing aggregate supply 
B)  increasing aggregate demand 
C)  raising prices so that firms could earn higher profits and employ more people 
D)  reducing prices so that people could afford to buy more goods and services 
E)  subsidizing firms that wanted to buy stocks after the crash 
A)  increasing aggregate supply 
B)  increasing aggregate demand 
C)  raising prices so that firms could earn higher profits and employ more people 
D)  reducing prices so that people could afford to buy more goods and services 
E)  subsidizing firms that wanted to buy stocks after the crash

Question 17

Equilibrium of aggregate supply and aggregate demand is best described as a situation in which

Accepted Answer

A)  the slope of aggregate demand equals the slope of aggregate supply 
B)  quantity demanded exceeds quantity supplied 
C)  quantity demanded equals quantity supplied at a unique price level 
D)  quantity supplied exceeds quantity demanded at a unique price level 
E)  quantity supplied equals quantity demanded at all price levels 
A)  the slope of aggregate demand equals the slope of aggregate supply 
B)  quantity demanded exceeds quantity supplied 
C)  quantity demanded equals quantity supplied at a unique price level 
D)  quantity supplied exceeds quantity demanded at a unique price level 
E)  quantity supplied equals quantity demanded at all price levels

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

An increase in the price level will cause

Accepted Answer

A)  an increase in the quantity of aggregate output supplied 
B)  a decrease in the quantity of aggregate output supplied 
C)  a leftward shift of the aggregate supply curve 
D)  a rightward shift of the aggregate supply curve 
E)  a leftward or rightward shift of the aggregate supply curve,depending on the reason for the price change 
A)  an increase in the quantity of aggregate output supplied 
B)  a decrease in the quantity of aggregate output supplied 
C)  a leftward shift of the aggregate supply curve 
D)  a rightward shift of the aggregate supply curve 
E)  a leftward or rightward shift of the aggregate supply curve,depending on the reason for the price change

Question 20

If tax revenues increase more than government spending does,the price level will rise.

Accepted Answer

A) True 
 B)False

Exam 5: Introduction to Macroeconomics

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

In combating stagflation,a government-induced

When output __________,employment is expected to __________.

The Wealth of Nations was written by

Which decade is known as the "Golden Age of Keynesian Economics"?

During the Great Depression,President Hoover

Keynes believed that the best method for ending the Great Depression was to reduce government spending and raise taxes,thereby reducing the federal budget deficit.

Which of the following explains why the aggregate demand curve slopes downward?

The distinction between recessions and depressions is that recessions are

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

Which of the following is not a flow variable?

An economic variable that is measured per unit of time,such as spending per year,is known as a(n)

One explanation of why the aggregate demand curve is downward sloping is that

Between 1929 and the depth of the Great Depression in 1933,the United States encountered the following:

The Keynesian approach to government economic policy

Keynes proposed that government should shock the economy out of the Great Depression by

Equilibrium of aggregate supply and aggregate demand is best described as a situation in which

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

An increase in the price level will cause

If tax revenues increase more than government spending does,the price level will rise.

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Productivity and Growth

Tracking the US Economy

Unemployment and Inflation

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

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

International Finance

Developing and Transitional Economies

Understanding Graphs

National Income Accounts

Variable Net Exports

Variable Net Exports Revisited

The Algebra of Income and Expenditure

The Algebra of Demand-Side Equilibrium

Filters

When output ,employment is expected to .