Question 1

Modern economic growth refers to countries that have experienced an increase in:

Accepted Answer

A)  real GDP over time. 
B)  nominal GDP over time. 
C)  real output spread evenly across all sectors of the economy. 
D)  real output per person. 
A)  real GDP over time. 
B)  nominal GDP over time. 
C)  real output spread evenly across all sectors of the economy. 
D)  real output per person.

Question 2

From 1995 until the start of the recession in 2007,the U.S.economy grew at the same rate as the economy of Japan.

Accepted Answer

A) True 
 B)False

Question 3

The three statistics that are the main focus for those measuring macroeconomic health are:

Accepted Answer

A)  real GDP,inflation,and unemployment. 
B)  real GDP,nominal GDP,and inflation. 
C)  nominal GDP,unemployment,and inflation. 
D)  real GDP,nominal GDP,and unemployment. 
A)  real GDP,inflation,and unemployment. 
B)  real GDP,nominal GDP,and inflation. 
C)  nominal GDP,unemployment,and inflation. 
D)  real GDP,nominal GDP,and unemployment.

Question 4

A nation that realizes a 3 percent increase in its output per person is experiencing modern economic growth.

Accepted Answer

A) True 
 B)False

Question 5

When economists refer to "investment," they are describing a situation where:

Accepted Answer

A)  people are buying shares of corporate stock. 
B)  resources are devoted to increasing future output. 
C)  money is saved in a bank account. 
D)  financial assets are purchased in the hope of a monetary gain. 
A)  people are buying shares of corporate stock. 
B)  resources are devoted to increasing future output. 
C)  money is saved in a bank account. 
D)  financial assets are purchased in the hope of a monetary gain.

Question 6

Economists believe that most short-run fluctuations in output are the result of supply shocks.

Accepted Answer

A) True 
 B)False

Question 7

Savings are generated whenever:

Accepted Answer

A)  prices are rising. 
B)  current spending exceeds current income. 
C)  current income exceeds current spending. 
D)  real GDP exceeds nominal GDP. 
A)  prices are rising. 
B)  current spending exceeds current income. 
C)  current income exceeds current spending. 
D)  real GDP exceeds nominal GDP.

Question 8

A sometimes short,sometimes extended period of declining output and living standards is referred to as a recession.

Accepted Answer

A) True 
 B)False

Question 9

Harry's Pepperoni Pizza Parlor produced 10,000 large pepperoni pizzas last year that sold for $10 each.This year Harry's again produced 10,000 large pepperoni pizzas (identical to last year's pizzas)but sold them for $12 each.Based on this information we can conclude that Harry's production of large pepperoni pizzas:

Accepted Answer

A)  increased both nominal and real GDP from last year. 
B)  increased nominal GDP from last year,but real GDP was unaffected. 
C)  increased real GDP from last year,but nominal GDP was unaffected. 
D)  did not change either nominal or real GDP from last year. 
A)  increased both nominal and real GDP from last year. 
B)  increased nominal GDP from last year,but real GDP was unaffected. 
C)  increased real GDP from last year,but nominal GDP was unaffected. 
D)  did not change either nominal or real GDP from last year.

Question 10

Which of the following statements best describes how firms respond to demand shocks under conditions of inflexible prices?

Accepted Answer

A)  Firms respond to shorter-term demand shocks by adjusting production levels;more persistent changes in demand result in changes in inventories. 
B)  Firms respond to shorter-term demand shocks by adjusting inventories;more persistent changes in demand result in changes in production levels. 
C)  Firms are reluctant to adjust inventory levels because the costs are higher than changing the quantity of output produced. 
D)  Firms are quick to let go of workers when negative demand shocks occur. 
A)  Firms respond to shorter-term demand shocks by adjusting production levels;more persistent changes in demand result in changes in inventories. 
B)  Firms respond to shorter-term demand shocks by adjusting inventories;more persistent changes in demand result in changes in production levels. 
C)  Firms are reluctant to adjust inventory levels because the costs are higher than changing the quantity of output produced. 
D)  Firms are quick to let go of workers when negative demand shocks occur.

Question 11

Prices tend to be stickier in the shorter run than in the longer run.

Accepted Answer

A) True 
 B)False

Question 12

Why are high rates of unemployment of concern to economists?

Accepted Answer

A)  Higher rates of unemployment generally lead to higher inflation rates. 
B)  Environmental destruction is more prevalent when unemployment rates are high. 
C)  There is lost output that could have been produced if the unemployed had been working. 
D)  All of these options are reasons why economists are concerned about high unemployment rates. 
A)  Higher rates of unemployment generally lead to higher inflation rates. 
B)  Environmental destruction is more prevalent when unemployment rates are high. 
C)  There is lost output that could have been produced if the unemployed had been working. 
D)  All of these options are reasons why economists are concerned about high unemployment rates.

Question 13

Output per person has grown steadily since the beginning of the Roman Empire.

Accepted Answer

A) True 
 B)False

Question 14

In making international comparisons of living standards using GDP,which of the following is not adjusted for in the calculation?

Accepted Answer

A)  Purchasing power parity. 
B)  The quantity of resources available to the economy. 
C)  Population size. 
D)  Different currency values. 
A)  Purchasing power parity. 
B)  The quantity of resources available to the economy. 
C)  Population size. 
D)  Different currency values.

Question 15

Demand shocks:

Accepted Answer

A)  refer to unexpected changes in the desires of households and businesses to buy goods and services. 
B)  refer to unexpected changes in the ability of firms to produce and sell goods and services. 
C)  always have a negative impact on the economy. 
D)  cause fewer short-run fluctuations than supply shocks. 
A)  refer to unexpected changes in the desires of households and businesses to buy goods and services. 
B)  refer to unexpected changes in the ability of firms to produce and sell goods and services. 
C)  always have a negative impact on the economy. 
D)  cause fewer short-run fluctuations than supply shocks.

Question 16

Milk prices tend to be stickier than gasoline prices.

Accepted Answer

A) True 
 B)False

Question 17

Inflation is defined as:

Accepted Answer

A)  an increase in the overall level of prices. 
B)  the rate of growth in nominal GDP. 
C)  a situation where all prices in the economy rise simultaneously. 
D)  the growth phase of the business cycle. 
A)  an increase in the overall level of prices. 
B)  the rate of growth in nominal GDP. 
C)  a situation where all prices in the economy rise simultaneously. 
D)  the growth phase of the business cycle.

Question 18

Which of the following is used to measure directly the average standard of living across countries?

Accepted Answer

A)  Real GDP. 
B)  Nominal GDP. 
C)  Purchasing power parity. 
D)  GDP per person. 
A)  Real GDP. 
B)  Nominal GDP. 
C)  Purchasing power parity. 
D)  GDP per person.

Question 19

Prices are particularly sticky:

Accepted Answer

A)  when there are widespread macroeconomic and monetary disturbances in the economy. 
B)  in the long run. 
C)  when markets are highly competitive. 
D)  when the economy is at full employment and positive demand shocks are occurring. 
A)  when there are widespread macroeconomic and monetary disturbances in the economy. 
B)  in the long run. 
C)  when markets are highly competitive. 
D)  when the economy is at full employment and positive demand shocks are occurring.

Question 20

A demand shock occurs when large numbers of consumers unexpectedly reduce their purchases of goods and services.

Accepted Answer

A) True 
 B)False

Modern economic growth refers to countries that have experienced an increase in:

From 1995 until the start of the recession in 2007,the U.S.economy grew at the same rate as the economy of Japan.

The three statistics that are the main focus for those measuring macroeconomic health are:

A nation that realizes a 3 percent increase in its output per person is experiencing modern economic growth.

When economists refer to "investment," they are describing a situation where:

Economists believe that most short-run fluctuations in output are the result of supply shocks.

Savings are generated whenever:

A sometimes short,sometimes extended period of declining output and living standards is referred to as a recession.

Which of the following statements best describes how firms respond to demand shocks under conditions of inflexible prices?

Prices tend to be stickier in the shorter run than in the longer run.

Why are high rates of unemployment of concern to economists?

Output per person has grown steadily since the beginning of the Roman Empire.

In making international comparisons of living standards using GDP,which of the following is not adjusted for in the calculation?

Demand shocks:

Milk prices tend to be stickier than gasoline prices.

Inflation is defined as:

Which of the following is used to measure directly the average standard of living across countries?

Prices are particularly sticky:

A demand shock occurs when large numbers of consumers unexpectedly reduce their purchases of goods and services.

Income Inequality Poverty and Discrimination

Health Care

Immigration

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

The Balance of Payments, Exchange Rates, and Trade Deficits

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

The United States and the Global Economy

Filters

Exam 25: An Introduction to Macroeconomics

Modern economic growth refers to countries that have experienced an increase in:

From 1995 until the start of the recession in 2007,the U.S.economy grew at the same rate as the economy of Japan.

The three statistics that are the main focus for those measuring macroeconomic health are:

A nation that realizes a 3 percent increase in its output per person is experiencing modern economic growth.

When economists refer to "investment," they are describing a situation where:

Economists believe that most short-run fluctuations in output are the result of supply shocks.

Savings are generated whenever:

A sometimes short,sometimes extended period of declining output and living standards is referred to as a recession.

Which of the following statements best describes how firms respond to demand shocks under conditions of inflexible prices?

Prices tend to be stickier in the shorter run than in the longer run.

Why are high rates of unemployment of concern to economists?

Output per person has grown steadily since the beginning of the Roman Empire.

In making international comparisons of living standards using GDP,which of the following is not adjusted for in the calculation?

Demand shocks:

Milk prices tend to be stickier than gasoline prices.

Inflation is defined as:

Which of the following is used to measure directly the average standard of living across countries?

Prices are particularly sticky:

A demand shock occurs when large numbers of consumers unexpectedly reduce their purchases of goods and services.

Income Inequality Poverty and Discrimination

Health Care

Immigration

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

The Balance of Payments, Exchange Rates, and Trade Deficits

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

The United States and the Global Economy

Filters