Question 1

In macroeconomics,it is impossible to include many individual markets in a single data source.

Accepted Answer

A) True 
 B)False

Question 2

Output per person rises when

Accepted Answer

A)  the population increases faster than real GDP 
B)  real GDP rises faster than the number of employed workers 
C)  real GDP increases at the same rate as the population 
D)  real GDP rises slower than the population 
E)  real GDP rises faster than the population 
A)  the population increases faster than real GDP 
B)  real GDP rises faster than the number of employed workers 
C)  real GDP increases at the same rate as the population 
D)  real GDP rises slower than the population 
E)  real GDP rises faster than the population

Question 3

Since 1959,the U.S.has experienced severe recessions in which three periods?

Accepted Answer

A)  1964-65,1981-82,and 1990-91 
B)  1974-75,1981-82,and 2008-09 
C)  1960-61,1974-75,and 2008-09 
D)  1960-61,1981-82,and 2008-09 
E)  1969-70,1981-82,and 2008-09 
A)  1964-65,1981-82,and 1990-91 
B)  1974-75,1981-82,and 2008-09 
C)  1960-61,1974-75,and 2008-09 
D)  1960-61,1981-82,and 2008-09 
E)  1969-70,1981-82,and 2008-09

Question 4

"Output fell 2 percent last quarter" is an example of a positive economic statement.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)  peak 
B)  trough 
C)  expansion 
D)  business cycle 
E)  recession 
A)  peak 
B)  trough 
C)  expansion 
D)  business cycle 
E)  recession

Question 6

Classical economists believed that

Accepted Answer

A)  the government should play an active role in controlling the economy 
B)  the government can best help the economy by leaving it alone 
C)  the economy is controlled by the government 
D)  laissez faire will hurt the economy 
E)  economists should offer guidance to governmental leaders 
A)  the government should play an active role in controlling the economy 
B)  the government can best help the economy by leaving it alone 
C)  the economy is controlled by the government 
D)  laissez faire will hurt the economy 
E)  economists should offer guidance to governmental leaders

Question 7

Which of the following is a period of decreasing output that is severe and long lasting?

Accepted Answer

A)  business cycle 
B)  expansion 
C)  peak 
D)  recession 
E)  depression 
A)  business cycle 
B)  expansion 
C)  peak 
D)  recession 
E)  depression

Question 8

Economists monitor economic growth by keeping track of

Accepted Answer

A)  the stock market 
B)  population growth 
C)  the total quantity of goods and services produced in the United States each year 
D)  the inflation rate 
E)  the distribution of income among U.S.states 
A)  the stock market 
B)  population growth 
C)  the total quantity of goods and services produced in the United States each year 
D)  the inflation rate 
E)  the distribution of income among U.S.states

Question 9

In mid-2009,the unemployment rate stood at

Accepted Answer

A)  25 percent 
B)  5 percent 
C)  6 percent 
D)  9.5 percent 
E)  20 percent 
A)  25 percent 
B)  5 percent 
C)  6 percent 
D)  9.5 percent 
E)  20 percent

Question 10

The Great Depression provided significant evidence that

Accepted Answer

A)  the economy always worked well on its own 
B)  the economy always reached full employment on its own 
C)  the economy may not always do well on its own 
D)  the notion of laissez faire was correct 
E)  the supporters of the classical model were correct 
A)  the economy always worked well on its own 
B)  the economy always reached full employment on its own 
C)  the economy may not always do well on its own 
D)  the notion of laissez faire was correct 
E)  the supporters of the classical model were correct

Question 11

In macroeconomics,

Accepted Answer

A)  we study one market at a time 
B)  we try to understand how the entire economy behaves 
C)  we focus on large,important products and ignore the rest 
D)  we study one nation's economy only 
E)  we aggregate all national economies into a world economy 
A)  we study one market at a time 
B)  we try to understand how the entire economy behaves 
C)  we focus on large,important products and ignore the rest 
D)  we study one nation's economy only 
E)  we aggregate all national economies into a world economy

Question 12

Macroeconomics is best suited to answering questions such as

Accepted Answer

A)  what determines the unemployment rate among students on this campus 
B)  why rent is higher in big cities than in smaller ones 
C)  how fast the overall price level will rise next year 
D)  what determines the demand for public transportation in rural areas 
E)  why sales taxes in this area are increasing 
A)  what determines the unemployment rate among students on this campus 
B)  why rent is higher in big cities than in smaller ones 
C)  how fast the overall price level will rise next year 
D)  what determines the demand for public transportation in rural areas 
E)  why sales taxes in this area are increasing

Question 13

In only one of the following situations is a nation's standard of living certain to increase.Which one?

Accepted Answer

A)  Real GDP rises faster than population. 
B)  Real GDP rises faster than the price level. 
C)  Real GDP rises. 
D)  Real GDP rises faster than the number of people employed. 
E)  Real GDP rises faster than the number of people unemployed. 
A)  Real GDP rises faster than population. 
B)  Real GDP rises faster than the price level. 
C)  Real GDP rises. 
D)  Real GDP rises faster than the number of people employed. 
E)  Real GDP rises faster than the number of people unemployed.

Question 14

During the expansion phase of a business cycle

Accepted Answer

A)  employment and output are both at a peak 
B)  employment and output are both rising 
C)  employment is falling and output is rising 
D)  unemployment is rising and output is falling 
E)  employment is rising and output is falling 
A)  employment and output are both at a peak 
B)  employment and output are both rising 
C)  employment is falling and output is rising 
D)  unemployment is rising and output is falling 
E)  employment is rising and output is falling

Question 15

An understanding of macroeconomics is valuable because it can help

Accepted Answer

A)  in making purchase decisions 
B)  us to understand the forces that determine how fast the economy grows 
C)  us to understand why some firms earn more economic profit than others 
D)  to minimize the amount of tax an individual owes 
E)  minimize the opportunity cost of making poor decisions 
A)  in making purchase decisions 
B)  us to understand the forces that determine how fast the economy grows 
C)  us to understand why some firms earn more economic profit than others 
D)  to minimize the amount of tax an individual owes 
E)  minimize the opportunity cost of making poor decisions

Question 16

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

Accepted Answer

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

Question 17

Macroeconomists are able to study the entire economy by

Accepted Answer

A)  ignoring much of the data available in order to reduce the number of markets that need to be studied 
B)  studying only a few markets at a time 
C)  simply adding up all the prices and quantities in individual markets 
D)  aggregation which reduces the number of markets that need to be studied 
E)  dividing total output by the number of markets 
A)  ignoring much of the data available in order to reduce the number of markets that need to be studied 
B)  studying only a few markets at a time 
C)  simply adding up all the prices and quantities in individual markets 
D)  aggregation which reduces the number of markets that need to be studied 
E)  dividing total output by the number of markets

Question 18

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

Accepted Answer

A)  high 
B)  low 
C)  fluctuating 
D)  stable 
E)  inefficient 
A)  high 
B)  low 
C)  fluctuating 
D)  stable 
E)  inefficient

Question 19

When we study macroeconomics,

Accepted Answer

A)  we model tens of thousands of individual supply and demand curves 
B)  we determine thousands of prices and quantities 
C)  we employ aggregation to reduce the number of markets we need to understand 
D)  we add up all the demand and supply curves that are obtained in microeconomics 
E)  we add up the prices of all goods and services produced in the economy 
A)  we model tens of thousands of individual supply and demand curves 
B)  we determine thousands of prices and quantities 
C)  we employ aggregation to reduce the number of markets we need to understand 
D)  we add up all the demand and supply curves that are obtained in microeconomics 
E)  we add up the prices of all goods and services produced in the economy

Question 20

Periodic fluctuations in real GDP are called

Accepted Answer

A)  business cycles 
B)  recessions 
C)  peaks 
D)  expansions 
E)  troughs 
A)  business cycles 
B)  recessions 
C)  peaks 
D)  expansions 
E)  troughs

Exam 17: What Macroeconomics Tries to Explain

In macroeconomics,it is impossible to include many individual markets in a single data source.

Output per person rises when

Since 1959,the U.S.has experienced severe recessions in which three periods?

"Output fell 2 percent last quarter" is an example of a positive economic statement.

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

Classical economists believed that

Which of the following is a period of decreasing output that is severe and long lasting?

Economists monitor economic growth by keeping track of

In mid-2009,the unemployment rate stood at

The Great Depression provided significant evidence that

In macroeconomics,

Macroeconomics is best suited to answering questions such as

In only one of the following situations is a nation's standard of living certain to increase.Which one?

During the expansion phase of a business cycle

An understanding of macroeconomics is valuable because it can help

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

Macroeconomists are able to study the entire economy by

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

When we study macroeconomics,

Periodic fluctuations in real GDP are called

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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