Question 1

To understand how the economy works,economists could look at various data including:

Accepted Answer

A)  the number of new residential building permits. 
B)  the amount of new orders for capital goods. 
C)  the number of manufacturers' new orders for consumer goods. 
D)  all of the above. 
A)  the number of new residential building permits. 
B)  the amount of new orders for capital goods. 
C)  the number of manufacturers' new orders for consumer goods. 
D)  all of the above.

Question 2

Unemployment occurs when a person cannot get a job despite being willing to work and actively seeking work.

Accepted Answer

A) True 
 B)False

Question 3

If current prices are used to calculate the value of total output produced by a country during a specific period of time,the result is called:

Accepted Answer

A)  real GDP. 
B)  nominal GDP. 
C)  full employment GDP. 
D)  constant dollar GDP. 
A)  real GDP. 
B)  nominal GDP. 
C)  full employment GDP. 
D)  constant dollar GDP.

Question 4

Which of the following is not an economic investment?

Accepted Answer

A)  the purchase of machinery by ABC Manufacturing Company 
B)  the purchase of 50 shares of Aliant by a retired business executive 
C)  construction of a housing project for the homeless 
D)  the increase in the inventory on a grocer's shelf 
A)  the purchase of machinery by ABC Manufacturing Company 
B)  the purchase of 50 shares of Aliant by a retired business executive 
C)  construction of a housing project for the homeless 
D)  the increase in the inventory on a grocer's shelf

Question 5

Real GDP and nominal GDP differ because real GDP:

Accepted Answer

A)  is adjusted for changes in the nation's distribution of income. 
B)  includes the economic effects of international trade. 
C)  is equal to the nominal GDP minus the total tax payments. 
D)  has been adjusted for changes in the price level. 
A)  is adjusted for changes in the nation's distribution of income. 
B)  includes the economic effects of international trade. 
C)  is equal to the nominal GDP minus the total tax payments. 
D)  has been adjusted for changes in the price level.

Question 6

The official unemployment rate:

Accepted Answer

A)  reveals people over 21 years of age who are currently discouraged and are not looking for a job. 
B)  is the percentage of the labour force which is unemployed. 
C)  is the percentage of the labour force which is working part-time. 
D)  is the percentage of the total population which is not working. 
A)  reveals people over 21 years of age who are currently discouraged and are not looking for a job. 
B)  is the percentage of the labour force which is unemployed. 
C)  is the percentage of the labour force which is working part-time. 
D)  is the percentage of the total population which is not working.

Question 7

In response to an unexpected change in demand,if the prices are free to adjust quickly:

Accepted Answer

A)  a firm could always operate at its optimal output level. 
B)  a firm would experience a decline in its output and employment. 
C)  a firm would not be able to adjust its output according to the plan. 
D)  a firm would not be able to change its employment accordingly. 
A)  a firm could always operate at its optimal output level. 
B)  a firm would experience a decline in its output and employment. 
C)  a firm would not be able to adjust its output according to the plan. 
D)  a firm would not be able to change its employment accordingly.

Question 8

If the unexpected short-run fluctuations in demand begin to look permanent:

Accepted Answer

A)  the firms would allow their prices to change accordingly. 
B)  the firms would be hesitant to allow their prices to change accordingly. 
C)  the firms would not allow their prices to change. 
D)  the firms would change the quality of their products but not the prices. 
A)  the firms would allow their prices to change accordingly. 
B)  the firms would be hesitant to allow their prices to change accordingly. 
C)  the firms would not allow their prices to change. 
D)  the firms would change the quality of their products but not the prices.

Question 9

Economists believe that most short-run fluctuations are the result of:

Accepted Answer

A)  supply shocks. 
B)  demand shocks. 
C)  unexpected changes in the availability of imported resources. 
D)  negative supply shocks. 
A)  supply shocks. 
B)  demand shocks. 
C)  unexpected changes in the availability of imported resources. 
D)  negative supply shocks.

Question 10

To look at the health of the economy,economists would most probably look at indictors such as:

Accepted Answer

A)  real GDP,unemployment rate and,the inflation rate. 
B)  level of saving,nominal GDP and,the inflation rate. 
C)  nominal GDP,level of investment and,the general price level. 
D)  the general price level,employment rate and,level of saving. 
A)  real GDP,unemployment rate and,the inflation rate. 
B)  level of saving,nominal GDP and,the inflation rate. 
C)  nominal GDP,level of investment and,the general price level. 
D)  the general price level,employment rate and,level of saving.

Question 11

Economic growth is best defined as the:

Accepted Answer

A)  increase in consumption level as a percentage of GDP over time. 
B)  percentage increase in real GDP over time. 
C)  percentage increase in nominal GDP over time. 
D)  percentage decrease in the overall price levels over time. 
A)  increase in consumption level as a percentage of GDP over time. 
B)  percentage increase in real GDP over time. 
C)  percentage increase in nominal GDP over time. 
D)  percentage decrease in the overall price levels over time.

Question 12

Economic growth is defined as:

Accepted Answer

A)  an increase in either real GDP or real GDP per capita. 
B)  an increase in the nominal GDP. 
C)  an increase in the overall general price level. 
D)  an increase in the level of consumption. 
A)  an increase in either real GDP or real GDP per capita. 
B)  an increase in the nominal GDP. 
C)  an increase in the overall general price level. 
D)  an increase in the level of consumption.

Question 13

The financial institutions play an important role in transferring the savings of the individuals to the investments by businesses.Which of the following correctly states this transfer?

Accepted Answer

A)  banks collect the savings and invest it in the stock market. 
B)  banks collect the savings,rewarding the savings by interest and dividend payments and,lend the funds to businesses who in turn buy equipment,factories and capital goods. 
C)  banks collect the savings and lend the funds to the government who in turn redistribute it through different kinds of subsidies. 
D)  financial institutions do not have a major role in this process. 
A)  banks collect the savings and invest it in the stock market. 
B)  banks collect the savings,rewarding the savings by interest and dividend payments and,lend the funds to businesses who in turn buy equipment,factories and capital goods. 
C)  banks collect the savings and lend the funds to the government who in turn redistribute it through different kinds of subsidies. 
D)  financial institutions do not have a major role in this process.

Question 14

Modern economic growth in a country implies that output per person increases.

Accepted Answer

A) True 
 B)False

Question 15

To study macroeconomics,one needs various models with different assumptions about the flexibility and/or stickiness of price levels.This is because:

Accepted Answer

A)  the economy behaves similarly to demand shocks regardless of the length of time. 
B)  the price flexibility is a short-run phenomenon while,the price stickiness is a long-run phenomenon. 
C)  the economy behaves so differently depending on how much time has passed after a demand shock. 
D)  various government policies are useless to eliminate the effects of an unexpected demand shock. 
A)  the economy behaves similarly to demand shocks regardless of the length of time. 
B)  the price flexibility is a short-run phenomenon while,the price stickiness is a long-run phenomenon. 
C)  the economy behaves so differently depending on how much time has passed after a demand shock. 
D)  various government policies are useless to eliminate the effects of an unexpected demand shock.

Question 16

Commodities such as airline tickets,and gasoline have sticky prices.

Accepted Answer

A) True 
 B)False

Question 17

If the economy's output and income double in 35 years,we can:

Accepted Answer

A)  not say anything about the average annual rate of growth. 
B)  conclude that its average annual rate of growth is about 5.5 percent. 
C)  conclude that its average annual rate of growth is about 2 percent. 
D)  conclude that its average annual rate of growth is about 4 percent. 
A)  not say anything about the average annual rate of growth. 
B)  conclude that its average annual rate of growth is about 5.5 percent. 
C)  conclude that its average annual rate of growth is about 2 percent. 
D)  conclude that its average annual rate of growth is about 4 percent.

Question 18

A well functioning financial system helps to promote economic growth and stability.

Accepted Answer

A) True 
 B)False

To understand how the economy works,economists could look at various data including:

Unemployment occurs when a person cannot get a job despite being willing to work and actively seeking work.

If current prices are used to calculate the value of total output produced by a country during a specific period of time,the result is called:

Which of the following is not an economic investment?

Real GDP and nominal GDP differ because real GDP:

The official unemployment rate:

In response to an unexpected change in demand,if the prices are free to adjust quickly:

If the unexpected short-run fluctuations in demand begin to look permanent:

Economists believe that most short-run fluctuations are the result of:

To look at the health of the economy,economists would most probably look at indictors such as:

Economic growth is best defined as the:

Economic growth is defined as:

The financial institutions play an important role in transferring the savings of the individuals to the investments by businesses.Which of the following correctly states this transfer?

Modern economic growth in a country implies that output per person increases.

To study macroeconomics,one needs various models with different assumptions about the flexibility and/or stickiness of price levels.This is because:

Commodities such as airline tickets,and gasoline have sticky prices.

If the economy's output and income double in 35 years,we can:

A well functioning financial system helps to promote economic growth and stability.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Measuring the Economys Output

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, Surpluses, and Debt

Money, Banking, and Money Creation

Interest Rates and Monetary Policy

Long-Run Macroeconomic Adjustments

International Trade

Exchange Rates and the Balance of Payments

Filters

Exam 6: An Introduction to Macroeconomics

To understand how the economy works,economists could look at various data including:

Unemployment occurs when a person cannot get a job despite being willing to work and actively seeking work.

If current prices are used to calculate the value of total output produced by a country during a specific period of time,the result is called:

Which of the following is not an economic investment?

Real GDP and nominal GDP differ because real GDP:

The official unemployment rate:

In response to an unexpected change in demand,if the prices are free to adjust quickly:

If the unexpected short-run fluctuations in demand begin to look permanent:

Economists believe that most short-run fluctuations are the result of:

To look at the health of the economy,economists would most probably look at indictors such as:

Economic growth is best defined as the:

Economic growth is defined as:

The financial institutions play an important role in transferring the savings of the individuals to the investments by businesses.Which of the following correctly states this transfer?

Modern economic growth in a country implies that output per person increases.

To study macroeconomics,one needs various models with different assumptions about the flexibility and/or stickiness of price levels.This is because:

Commodities such as airline tickets,and gasoline have sticky prices.

If the economy's output and income double in 35 years,we can:

A well functioning financial system helps to promote economic growth and stability.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Measuring the Economys Output

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, Surpluses, and Debt

Money, Banking, and Money Creation

Interest Rates and Monetary Policy

Long-Run Macroeconomic Adjustments

International Trade

Exchange Rates and the Balance of Payments

Filters