Question 1

Keynes believed that the best method for boosting an economy during a recession was to:​

Accepted Answer

A) increase money supply so that individuals would have more incentive to spend. 
B) cut government spending and increase taxes to reduce or even eliminate fiscal deficit. 
C) increase government spending and cut taxes so that consumers could spend more. 
D) cut both government spending and taxes to reduce government expenditure in the economy. 
E) increase both government spending and taxes to increase the role of government in the economy. 
A) increase money supply so that individuals would have more incentive to spend. 
B) cut government spending and increase taxes to reduce or even eliminate fiscal deficit. 
C) increase government spending and cut taxes so that consumers could spend more. 
D) cut both government spending and taxes to reduce government expenditure in the economy. 
E) increase both government spending and taxes to increase the role of government in the economy.

Question 2

Economic activities that signal forthcoming changes in the economy are referred to as:​

Accepted Answer

A) coincidental economic indicators. 
B) GDP implicit price deflators. 
C) lagging economic indicators. 
D) perfect economic indicators. 
E) leading economic indicators. 
A) coincidental economic indicators. 
B) GDP implicit price deflators. 
C) lagging economic indicators. 
D) perfect economic indicators. 
E) leading economic indicators.

Question 3

The term "fine-tuning the economy" implies:

Accepted Answer

A) making government economic policy more "people oriented". 
B) using government policies to adjust the economy and promote economic stability. 
C) solving microeconomic problems such as externalities and losing sight of the big picture. 
D) placing fewer regulations on the private sector,thereby eliminating the need for government intervention. 
E) designing policies based exclusively on leading economic indicators. 
A) making government economic policy more "people oriented". 
B) using government policies to adjust the economy and promote economic stability. 
C) solving microeconomic problems such as externalities and losing sight of the big picture. 
D) placing fewer regulations on the private sector,thereby eliminating the need for government intervention. 
E) designing policies based exclusively on leading economic indicators.

Question 4

Which of these is the most likely impact of an increase in the wealth of consumers?​

Accepted Answer

A) The aggregate supply curve shifts outward. 
B) The aggregate demand curve shifts outward. 
C) The aggregate demand curve shifts inward. 
D) The aggregate supply curve shifts inward. 
E) Both the aggregate demand and aggregate supply curves shift inward. 
A) The aggregate supply curve shifts outward. 
B) The aggregate demand curve shifts outward. 
C) The aggregate demand curve shifts inward. 
D) The aggregate supply curve shifts inward. 
E) Both the aggregate demand and aggregate supply curves shift inward.

Question 5

The period between two successive peaks in a business cycle is called a contraction.

Accepted Answer

A) True 
 B)False

Question 6

According to Keynes,if private sector demand is insufficient to maintain full employment,the government should:​

Accepted Answer

A) make the economy's natural transition to a lower level of employment as easy as possible. 
B) shock the economy with an increase in aggregate demand. 
C) reduce aggregate supply to reduce inflation. 
D) print money to promote consumer spending. 
E) take steps to increase aggregate supply in an economy. 
A) make the economy's natural transition to a lower level of employment as easy as possible. 
B) shock the economy with an increase in aggregate demand. 
C) reduce aggregate supply to reduce inflation. 
D) print money to promote consumer spending. 
E) take steps to increase aggregate supply in an economy.

Question 7

Economic fluctuations or business cycles:

Accepted Answer

A) measure changes in the total number of new businesses started during a year. 
B) are fluctuations in the Dow Jones industrial average relative to a long-term growth trend. 
C) look at the role played by business on the level of unemployment. 
D) are fluctuations in the level of economic activity relative to a long-term growth trend. 
E) are changes in government spending that occur over a period of time. 
A) measure changes in the total number of new businesses started during a year. 
B) are fluctuations in the Dow Jones industrial average relative to a long-term growth trend. 
C) look at the role played by business on the level of unemployment. 
D) are fluctuations in the level of economic activity relative to a long-term growth trend. 
E) are changes in government spending that occur over a period of time.

Question 8

According to Keynes,the adoption of an expansionary fiscal policy will cause:​

Accepted Answer

A) both equilibrium price level and equilibrium output to rise. 
B) equilibrium price level to rise and equilibrium output to fall. 
C) equilibrium price level to fall and equilibrium output to rise. 
D) both equilibrium price level and equilibrium output to fall. 
E) equilibrium price level to remain the same and equilibrium output to fall. 
A) both equilibrium price level and equilibrium output to rise. 
B) equilibrium price level to rise and equilibrium output to fall. 
C) equilibrium price level to fall and equilibrium output to rise. 
D) both equilibrium price level and equilibrium output to fall. 
E) equilibrium price level to remain the same and equilibrium output to fall.

Question 9

Which of these describes the real gross domestic product?​

Accepted Answer

A) Gross domestic product from which depreciation costs have been deducted 
B) Gross domestic product that has been adjusted for changes in the price level​ 
C) Gross domestic product from which taxes have been deducted​ 
D) Gross domestic product that has been adjusted for changes in exchange rate​ 
E) Gross domestic product that has been adjusted for changes in interest rates​ 
A) Gross domestic product from which depreciation costs have been deducted 
B) Gross domestic product that has been adjusted for changes in the price level​ 
C) Gross domestic product from which taxes have been deducted​ 
D) Gross domestic product that has been adjusted for changes in exchange rate​ 
E) Gross domestic product that has been adjusted for changes in interest rates​

Question 10

Stagflation in an economy can be effectively controlled by Keynesian demand management policies.

Accepted Answer

A) True 
 B)False

Question 11

The aim of supply-side economics is to:

Accepted Answer

A) increase government spending to stimulate aggregate supply. 
B) stimulate exports to increase the balance of payments. 
C) decrease wages to make production cheaper. 
D) lower taxes to increase the supply of resources. 
E) reduce both the inflation and unemployment problems through increases in taxes. 
A) increase government spending to stimulate aggregate supply. 
B) stimulate exports to increase the balance of payments. 
C) decrease wages to make production cheaper. 
D) lower taxes to increase the supply of resources. 
E) reduce both the inflation and unemployment problems through increases in taxes.

Question 12

The word stagflation describes a situation in which:

Accepted Answer

A) a higher price level occurs simultaneously with higher employment. 
B) a lower price level occurs simultaneously with economic growth. 
C) a higher price level occurs simultaneously with lower aggregate output. 
D) a lower price level occurs simultaneously with federal budget deficits. 
E) a higher price level occurs simultaneously with federal budget surpluses. 
A) a higher price level occurs simultaneously with higher employment. 
B) a lower price level occurs simultaneously with economic growth. 
C) a higher price level occurs simultaneously with lower aggregate output. 
D) a lower price level occurs simultaneously with federal budget deficits. 
E) a higher price level occurs simultaneously with federal budget surpluses.

Question 13

When economists refer to an economy's price level,they indicate:​

Accepted Answer

A) the rate of inflation in that economy. 
B) the prices of goods and services relative to consumers' incomes. 
C) a composite measure of prices of all goods and services. 
D) a period of level,or steady,prices in that economy. 
E) the price of a specific consumer good. 
A) the rate of inflation in that economy. 
B) the prices of goods and services relative to consumers' incomes. 
C) a composite measure of prices of all goods and services. 
D) a period of level,or steady,prices in that economy. 
E) the price of a specific consumer good.

Question 14

If all firms expect greater demand for their products or services,they will hire _____ resources like labor and capital and the economy will experience _____.

Accepted Answer

A) fewer; recession 
B) fewer; growth 
C) more; deflation 
D) more; recession 
E) more; growth 
A) fewer; recession 
B) fewer; growth 
C) more; deflation 
D) more; recession 
E) more; growth

Question 15

The Reagan administration's 1981 personal income tax changes were designed to:

Accepted Answer

A) stimulate aggregate demand and reduce unemployment. 
B) stimulate aggregate demand and increase economic growth. 
C) stimulate aggregate supply and increase economic growth. 
D) decrease aggregate demand in order to reduce inflation. 
E) increase tax revenues to reduce the federal budget deficit. 
A) stimulate aggregate demand and reduce unemployment. 
B) stimulate aggregate demand and increase economic growth. 
C) stimulate aggregate supply and increase economic growth. 
D) decrease aggregate demand in order to reduce inflation. 
E) increase tax revenues to reduce the federal budget deficit.

Question 16

When business leaders become pessimistic about future sales and profits and increase their spending on plant and equipment,their expectations are usually fulfilled.

Accepted Answer

A) True 
 B)False

Question 17

Which of these is assumed to be constant along an aggregate supply curve?​

Accepted Answer

A) The price level in an economy 
B) The exchange rate between the domestic and a foreign currency​ 
C) The state of technology used in production​ 
D) The unemployment rate​ 
E) The real GDP​ 
A) The price level in an economy 
B) The exchange rate between the domestic and a foreign currency​ 
C) The state of technology used in production​ 
D) The unemployment rate​ 
E) The real GDP​

Question 18

Which of these is a supply-side approach to increase growth?​

Accepted Answer

A) Spending on the construction and repair of state highways 
B) Providing tax benefits to start-up companies 
C) Investing in the production of arms and ammunitions 
D) Replacing old aircrafts with new fighter planes 
E) Increasing transfer payments to retirees 
A) Spending on the construction and repair of state highways 
B) Providing tax benefits to start-up companies 
C) Investing in the production of arms and ammunitions 
D) Replacing old aircrafts with new fighter planes 
E) Increasing transfer payments to retirees

Question 19

Which of these partly accounts for the long-term growth in production in the U.S.economy?

Accepted Answer

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

Question 20

Which of the following concepts is not included in the study of macroeconomics?

Accepted Answer

A) The unemployment level 
B) The inflation rate 
C) The real income 
D) The profit-maximizing condition 
E) The role of government 
A) The unemployment level 
B) The inflation rate 
C) The real income 
D) The profit-maximizing condition 
E) The role of government

Keynes believed that the best method for boosting an economy during a recession was to:

Economic activities that signal forthcoming changes in the economy are referred to as:

The term "fine-tuning the economy" implies:

Which of these is the most likely impact of an increase in the wealth of consumers?

The period between two successive peaks in a business cycle is called a contraction.

According to Keynes,if private sector demand is insufficient to maintain full employment,the government should:

Economic fluctuations or business cycles:

According to Keynes,the adoption of an expansionary fiscal policy will cause:

Which of these describes the real gross domestic product?

Stagflation in an economy can be effectively controlled by Keynesian demand management policies.

The aim of supply-side economics is to:

The word stagflation describes a situation in which:

When economists refer to an economy's price level,they indicate:

If all firms expect greater demand for their products or services,they will hire _ resources like labor and capital and the economy will experience _.

The Reagan administration's 1981 personal income tax changes were designed to:

When business leaders become pessimistic about future sales and profits and increase their spending on plant and equipment,their expectations are usually fulfilled.

Which of these is assumed to be constant along an aggregate supply curve?

Which of these is a supply-side approach to increase growth?

Which of these partly accounts for the long-term growth in production in the U.S.economy?

Which of the following concepts is not included in the study of macroeconomics?

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

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

Economic Development

Filters

Exam 5: Introduction to Macroeconomics

Keynes believed that the best method for boosting an economy during a recession was to:​

Economic activities that signal forthcoming changes in the economy are referred to as:​

The term "fine-tuning the economy" implies:

Which of these is the most likely impact of an increase in the wealth of consumers?​

The period between two successive peaks in a business cycle is called a contraction.

According to Keynes,if private sector demand is insufficient to maintain full employment,the government should:​

Economic fluctuations or business cycles:

According to Keynes,the adoption of an expansionary fiscal policy will cause:​

Which of these describes the real gross domestic product?​

Stagflation in an economy can be effectively controlled by Keynesian demand management policies.

The aim of supply-side economics is to:

The word stagflation describes a situation in which:

When economists refer to an economy's price level,they indicate:​

If all firms expect greater demand for their products or services,they will hire _____ resources like labor and capital and the economy will experience _____.

The Reagan administration's 1981 personal income tax changes were designed to:

When business leaders become pessimistic about future sales and profits and increase their spending on plant and equipment,their expectations are usually fulfilled.

Which of these is assumed to be constant along an aggregate supply curve?​

Which of these is a supply-side approach to increase growth?​

Which of these partly accounts for the long-term growth in production in the U.S.economy?

Which of the following concepts is not included in the study of macroeconomics?

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, supply, and Markets

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

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

Economic Development

Filters

Keynes believed that the best method for boosting an economy during a recession was to:

Economic activities that signal forthcoming changes in the economy are referred to as:

Which of these is the most likely impact of an increase in the wealth of consumers?

According to Keynes,if private sector demand is insufficient to maintain full employment,the government should:

According to Keynes,the adoption of an expansionary fiscal policy will cause:

Which of these describes the real gross domestic product?

When economists refer to an economy's price level,they indicate:

If all firms expect greater demand for their products or services,they will hire _ resources like labor and capital and the economy will experience _.

Which of these is assumed to be constant along an aggregate supply curve?

Which of these is a supply-side approach to increase growth?