Question 1

In recent years,each 1 percent drop in output is associated with the loss of more than

Accepted Answer

A)  five million jobs 
B)  one million jobs 
C)  half a million jobs 
D)  two hundred thousand jobs 
E)  one hundred thousand jobs 
A)  five million jobs 
B)  one million jobs 
C)  half a million jobs 
D)  two hundred thousand jobs 
E)  one hundred thousand jobs C

Question 2

-Refer to Figure 5-1 above.If the economy moves from point B to C on the graph,it is going through a(n)

Accepted Answer

A)  peak 
B)  trough 
C)  expansion 
D)  slump 
E)  recession 
A)  peak 
B)  trough 
C)  expansion 
D)  slump 
E)  recession C

Question 3

The phase of the business cycle characterized by rising employment is called

Accepted Answer

A)  a recession 
B)  a low-tax phase 
C)  a high-inflation phase 
D)  an expansion 
E)  a depression 
A)  a recession 
B)  a low-tax phase 
C)  a high-inflation phase 
D)  an expansion 
E)  a depression D

Question 4

The U.S.economy experienced fluctuations in employment and output over the last half of the twentieth century.However,the length of the average recession has been about the same as the length of the average expansion.

Accepted Answer

A) True 
 B)False

Question 5

Macroeconomics studies the behavior of individual decision makers while microeconomics studies the overall economy.

Accepted Answer

A) True 
 B)False

Question 6

From 1929 to 1933,U.S.output dropped by about

Accepted Answer

A)  10 percent 
B)  20 percent 
C)  25 percent 
D)  50 percent 
E)  75 percent 
A)  10 percent 
B)  20 percent 
C)  25 percent 
D)  50 percent 
E)  75 percent

Question 7

If two economists disagree on an issue and their disagreement is based on personal value judgments,then this controversy is a normative one.

Accepted Answer

A) True 
 B)False

Question 8

Inflation has never been a major problem in the U.S.

Accepted Answer

A) True 
 B)False

Question 9

If the unemployment rate has reached an all-time high,the production of output is probably

Accepted Answer

A)  high 
B)  low 
C)  stable 
D)  fluctuating 
E)  equal to its potential 
A)  high 
B)  low 
C)  stable 
D)  fluctuating 
E)  equal to its potential

Question 10

The 1978 Full Employment and Balanced Growth Act called for a target unemployment rate of

Accepted Answer

A)  0 percent 
B)  5 percent 
C)  1 percent 
D)  2 percent 
E)  4 percent 
A)  0 percent 
B)  5 percent 
C)  1 percent 
D)  2 percent 
E)  4 percent

Question 11

During the 1990s and the first decade of the 2000s

Accepted Answer

A)  polls have shown that U.S.citizens are more concerned about inflation than any other national problem 
B)  the U.S.inflation rate reached double digits (10 percent or higher) 
C)  the U.S.economy consistently experienced deflation (a falling price level) 
D)  the U.S.inflation rate averaged about 8 percent per year 
E)  the U.S.inflation rate averaged less than 3 percent per year 
A)  polls have shown that U.S.citizens are more concerned about inflation than any other national problem 
B)  the U.S.inflation rate reached double digits (10 percent or higher) 
C)  the U.S.economy consistently experienced deflation (a falling price level) 
D)  the U.S.inflation rate averaged about 8 percent per year 
E)  the U.S.inflation rate averaged less than 3 percent per year

Question 12

During a recession,both output and unemployment fall.

Accepted Answer

A) True 
 B)False

Question 13

The difference between microeconomics and macroeconomics is that

Accepted Answer

A)  microeconomics deals with only small numbers while macroeconomics is always dealing with numbers in the billions and trillions 
B)  microeconomics deals with the economy as a whole while macroeconomics deals with individual firms 
C)  microeconomics is concerned with the behavior of individual decision-makers while macroeconomics is concerned with behavior of entire economies 
D)  microeconomics is only useful for small countries while macroeconomics is useful for large countries 
E)  microeconomics is only useful for large economies like the United States while macroeconomics is only useful for small economies 
A)  microeconomics deals with only small numbers while macroeconomics is always dealing with numbers in the billions and trillions 
B)  microeconomics deals with the economy as a whole while macroeconomics deals with individual firms 
C)  microeconomics is concerned with the behavior of individual decision-makers while macroeconomics is concerned with behavior of entire economies 
D)  microeconomics is only useful for small countries while macroeconomics is useful for large countries 
E)  microeconomics is only useful for large economies like the United States while macroeconomics is only useful for small economies

Question 14

At the peak of a business cycle,employment and GDP are

Accepted Answer

A)  at their lowest 
B)  at their highest 
C)  rising 
D)  falling 
E)  it is impossible to state for certain what is happening to employment and GDP 
A)  at their lowest 
B)  at their highest 
C)  rising 
D)  falling 
E)  it is impossible to state for certain what is happening to employment and GDP

Question 15

The inflation rate

Accepted Answer

A)  explains how prices are reacting to economic policies 
B)  indicates the level of prices charged by all firms in the economy 
C)  measures the annual percent increase in the average level of prices 
D)  measures how fast wages and incomes are rising 
E)  determines the prices that firms will offer to customers 
A)  explains how prices are reacting to economic policies 
B)  indicates the level of prices charged by all firms in the economy 
C)  measures the annual percent increase in the average level of prices 
D)  measures how fast wages and incomes are rising 
E)  determines the prices that firms will offer to customers

Question 16

We could try to use a powerful computer to construct a macroeconomic model including tens of thousands of demand and supply curves,for every market in the economy.This would not be a useful undertaking because

Accepted Answer

A)  it would not be worth the increased level of complication and effort needed to collect all information 
B)  the model would be simplistic 
C)  the model would inevitably leave out important information 
D)  the suggested prices would inevitably be wrong in each market 
E)  the model would not be realistic 
A)  it would not be worth the increased level of complication and effort needed to collect all information 
B)  the model would be simplistic 
C)  the model would inevitably leave out important information 
D)  the suggested prices would inevitably be wrong in each market 
E)  the model would not be realistic

Question 17

Microeconomics involves the analysis of smaller,less developed economies while macroeconomics is concerned with the analysis of larger developed economies.

Accepted Answer

A) True 
 B)False

Question 18

If the rate of economic growth is positive,then everyone becomes better off.

Accepted Answer

A) True 
 B)False

Question 19

A measure that economists use in order to keep track of employment is

Accepted Answer

A)  the price level 
B)  real GDP per person 
C)  real GDP 
D)  the growth rate of output 
E)  the unemployment rate 
A)  the price level 
B)  real GDP per person 
C)  real GDP 
D)  the growth rate of output 
E)  the unemployment rate

Question 20

Why do policymakers have the goal of stable prices?

Accepted Answer

A)  Stables prices always keep the economy in expansion 
B)  Firms make too much money when prices are rising 
C)  Inflation is always associated with wars 
D)  Inflation imposes costs on society 
E)  Inflation is always associated with trade deficits 
A)  Stables prices always keep the economy in expansion 
B)  Firms make too much money when prices are rising 
C)  Inflation is always associated with wars 
D)  Inflation imposes costs on society 
E)  Inflation is always associated with trade deficits

Exam 17: What Macroeconomics Tries to Explain

In recent years,each 1 percent drop in output is associated with the loss of more than

-Refer to Figure 5-1 above.If the economy moves from point B to C on the graph,it is going through a(n)

The phase of the business cycle characterized by rising employment is called

The U.S.economy experienced fluctuations in employment and output over the last half of the twentieth century.However,the length of the average recession has been about the same as the length of the average expansion.

Macroeconomics studies the behavior of individual decision makers while microeconomics studies the overall economy.

From 1929 to 1933,U.S.output dropped by about

If two economists disagree on an issue and their disagreement is based on personal value judgments,then this controversy is a normative one.

Inflation has never been a major problem in the U.S.

If the unemployment rate has reached an all-time high,the production of output is probably

The 1978 Full Employment and Balanced Growth Act called for a target unemployment rate of

During the 1990s and the first decade of the 2000s

During a recession,both output and unemployment fall.

The difference between microeconomics and macroeconomics is that

At the peak of a business cycle,employment and GDP are

The inflation rate

We could try to use a powerful computer to construct a macroeconomic model including tens of thousands of demand and supply curves,for every market in the economy.This would not be a useful undertaking because

Microeconomics involves the analysis of smaller,less developed economies while macroeconomics is concerned with the analysis of larger developed economies.

If the rate of economic growth is positive,then everyone becomes better off.

A measure that economists use in order to keep track of employment is

Why do policymakers have the goal of stable prices?

What Is Economics

Scarcity,choice,and Economic Systems

Scarcity, choice, and Economic Systems: Part A

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

Perfect Competition: Part A

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets

labor Markets: Part A

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Production, income, and Employment

The Price Level and Inflation

The Classical Long-Run Model

Part A: The Classical Model in an Open Economy

Economic Growth and Rising Living Standards

Economic Fluctuations

The Short-Run Macro Model

Fiscal Policy

Money,banks,and the Federal Reserve

The Money Market and Monetary Policy

Feedback Effects From GDP to the Money Market

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Appendix-finding Equilibrium GDP Algebraically

Appendix: Capital and Leverage

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