Question 1

Taxes,oil price changes,government spending,interest rate changes,new technologies,and disasters are examples of __________.

Accepted Answer

A) long-term economic shocks 
B) short-term economic shocks 
C) political unrest 
D) monetary policy 
E) fiscal policy 
A) long-term economic shocks 
B) short-term economic shocks 
C) political unrest 
D) monetary policy 
E) fiscal policy B

Question 2

You are a staff economist with the Federal Reserve.The chairman says to you,"The rate of change in inflation is too high and I think the Phillips curve is horizontal.What should we do to reduce these inflationary increases?" You respond with,

Accepted Answer

A) "Because the Phillips curve is flat,we can do nothing to change the rate of inflation,as it does not respond to changes in output." 
B) "Because the Phillips curve is flat,we need to increase interest rates a lot,as the change in inflation is not very responsive to changes in output." 
C) "Because the Phillips curve is flat,we need to decrease interest rates a lot,as the change in inflation is not very responsive to changes in output." 
D) "Because the Phillips curve is flat,we need to increase interest rates a lot,as the change in inflation is infinitely responsive to changes in output." 
E) "You are not giving me enough information." 
A) "Because the Phillips curve is flat,we can do nothing to change the rate of inflation,as it does not respond to changes in output." 
B) "Because the Phillips curve is flat,we need to increase interest rates a lot,as the change in inflation is not very responsive to changes in output." 
C) "Because the Phillips curve is flat,we need to decrease interest rates a lot,as the change in inflation is not very responsive to changes in output." 
D) "Because the Phillips curve is flat,we need to increase interest rates a lot,as the change in inflation is infinitely responsive to changes in output." 
E) "You are not giving me enough information." A

Question 3

If  
,the macroeconomy is:

Accepted Answer

A) at its potential level of output. 
B) in a recession. 
C) in an expansion. 
D) Not enough information is given. 
E) none of the above 
A) at its potential level of output. 
B) in a recession. 
C) in an expansion. 
D) Not enough information is given. 
E) none of the above A

Question 4

Which is responsible for dating business cycles?

Accepted Answer

A) Business Cycle Committee of the National Bureau of Economic Research 
B) Business Cycle Committee of the Department of Treasury 
C) Department of Treasury 
D) Commerce Department 
E) Board of Governors of the Federal Reserve System 
A) Business Cycle Committee of the National Bureau of Economic Research 
B) Business Cycle Committee of the Department of Treasury 
C) Department of Treasury 
D) Commerce Department 
E) Board of Governors of the Federal Reserve System

Question 5

Defining   
as current output,   
as potential output,and   
as short-run fluctuations,the text uses the following equation to measure the fluctuations component of output:

Accepted Answer

A) True 
 B)False

Question 6

If current output is  
Billion and potential output  
Billion,then the economy is in a __________ and  
Is about __________.

Accepted Answer

A) boom;-6.7 percent 
B) recession;- 6.7 percent 
C) recession;-6.2 percent 
D) boom;6.7 percent 
E) None of the above is correct. 
A) boom;-6.7 percent 
B) recession;- 6.7 percent 
C) recession;-6.2 percent 
D) boom;6.7 percent 
E) None of the above is correct.

Question 7

If  
,the macroeconomy is:

Accepted Answer

A) in a recession. 
B) in an expansion. 
C) at its potential level of output. 
D) Not enough information is given. 
E) none of the above 
A) in a recession. 
B) in an expansion. 
C) at its potential level of output. 
D) Not enough information is given. 
E) none of the above

Question 8

According to the text,which of the following can be used to approximate potential output?
i.Assume a perfectly smooth trend is passing through the quarter-to-quarter movements in the real GDP.
ii.Survey leading economists.
iii.Gather current data from statistical agencies,such as the Bureau of Economic Analysis.

Accepted Answer

A) i only 
B) ii only 
C) ii and iii 
D) i and ii 
E) iii only 
A) i only 
B) ii only 
C) ii and iii 
D) i and ii 
E) iii only

Question 9

Which is responsible for dating business cycles?

Accepted Answer

A) Congressional Budget Office 
B) Business Cycle Committee of the National Bureau of Economic Research 
C) President's Council of Economic Advisors 
D) New York City Federal Reserve Bank president 
E) Board of Governors of the Federal Reserve System 
A) Congressional Budget Office 
B) Business Cycle Committee of the National Bureau of Economic Research 
C) President's Council of Economic Advisors 
D) New York City Federal Reserve Bank president 
E) Board of Governors of the Federal Reserve System

Question 10

The long-run model determines __________ and __________,while the short-run model determines __________ and __________.

Accepted Answer

A) potential output;long-run inflation;current output;current inflation 
B) potential output;unemployment;current output;long-run inflation 
C) current output;long-run inflation;unemployment;current inflation 
D) potential output;unemployment;unemployment;current inflation 
E) current output;unemployment;potential output;current inflation 
A) potential output;long-run inflation;current output;current inflation 
B) potential output;unemployment;current output;long-run inflation 
C) current output;long-run inflation;unemployment;current inflation 
D) potential output;unemployment;unemployment;current inflation 
E) current output;unemployment;potential output;current inflation

Question 11

According to the text,which of the following can be used to characterize potential output?
i.Assume a perfectly smooth trend is passing through the quarter-to-quarter movements in the real GDP.
ii.Take averages of the surrounding actual GDP numbers.
iii.Gather current data from statistical agencies,such as the Bureau of Economic Analysis.

Accepted Answer

A) i only 
B) ii only 
C) ii and iii 
D) i and ii 
E) iii only 
A) i only 
B) ii only 
C) ii and iii 
D) i and ii 
E) iii only

Question 12

New technology,oil price changes,pork-barrel spending,interest rate changes,changes in planned investment,and disasters are examples of __________.

Accepted Answer

A) long-term economic shocks 
B) short-term economic shocks 
C) political unrest 
D) monetary policy 
E) fiscal policy 
A) long-term economic shocks 
B) short-term economic shocks 
C) political unrest 
D) monetary policy 
E) fiscal policy

Question 13

-In Figure 9.5,area b represents an economic boom,and area a is a recession.

Accepted Answer

A) True 
 B)False

Question 14

Suppose an economy's natural rate of unemployment is 5 percent.If the unemployment rate is 7 percent,according to Okun's law,   
is 4 percent.

Accepted Answer

A) True 
 B)False

Question 15

-Consider the Phillips curve at  
In Figure 9.3.

Accepted Answer

A) The economy is booming. 
B) The economy is inflationary. 
C) The economy is at its potential output. 
D) The economy is in recession. 
E) Not enough information is given to determine. 
A) The economy is booming. 
B) The economy is inflationary. 
C) The economy is at its potential output. 
D) The economy is in recession. 
E) Not enough information is given to determine.

Question 16

Which of the following is not an example of a short term macroeconomic "shock"?

Accepted Answer

A) political unrest 
B) a change in the tax code 
C) a drought 
D) increased military spending 
E) none of the above 
A) political unrest 
B) a change in the tax code 
C) a drought 
D) increased military spending 
E) none of the above

Question 17

Defining u as the unemployment rate and  
As the natural rate of unemployment,Okun's law is given by the following equation:

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 18

If output is above potential,so that   
t is positive,the change in the inflation rate will be negative,so inflation will fall over time.

Accepted Answer

A) True 
 B)False

Question 19

The Phillips curve in the text shows the __________ relationship between __________ and __________.

Accepted Answer

A) positive;the change in inflation;short-term economic fluctuations 
B) negative;the change in inflation;short-term economic fluctuations 
C) positive;inflation;unemployment 
D) negative;inflation;unemployment 
E) negative;the change in inflation;unemployment 
A) positive;the change in inflation;short-term economic fluctuations 
B) negative;the change in inflation;short-term economic fluctuations 
C) positive;inflation;unemployment 
D) negative;inflation;unemployment 
E) negative;the change in inflation;unemployment

Question 20

One implication of the Keynes quote,"In the long run we are all dead," is __________.

Accepted Answer

A) the economy is always in its long-run equilibrium. 
B) we know with certainty what the long run is. 
C) the long run is made up of a sequence of short runs. 
D) there is no difference between the long and short runs. 
E) there is no short run. 
A) the economy is always in its long-run equilibrium. 
B) we know with certainty what the long run is. 
C) the long run is made up of a sequence of short runs. 
D) there is no difference between the long and short runs. 
E) there is no short run.

Taxes,oil price changes,government spending,interest rate changes,new technologies,and disasters are examples of __________.

You are a staff economist with the Federal Reserve.The chairman says to you,"The rate of change in inflation is too high and I think the Phillips curve is horizontal.What should we do to reduce these inflationary increases?" You respond with,

If ,the macroeconomy is:

Which is responsible for dating business cycles?

Defining as current output, as potential output,and as short-run fluctuations,the text uses the following equation to measure the fluctuations component of output:

If current output is Billion and potential output Billion,then the economy is in a and Is about .

If ,the macroeconomy is:

Which is responsible for dating business cycles?

The long-run model determines and ,while the short-run model determines and .

New technology,oil price changes,pork-barrel spending,interest rate changes,changes in planned investment,and disasters are examples of __________.

-In Figure 9.5,area b represents an economic boom,and area a is a recession.

Suppose an economy's natural rate of unemployment is 5 percent.If the unemployment rate is 7 percent,according to Okun's law, is 4 percent.

-Consider the Phillips curve at In Figure 9.3.

Which of the following is not an example of a short term macroeconomic "shock"?

Defining u as the unemployment rate and As the natural rate of unemployment,Okun's law is given by the following equation:

If output is above potential,so that t is positive,the change in the inflation rate will be negative,so inflation will fall over time.

The Phillips curve in the text shows the relationship between and __.

One implication of the Keynes quote,"In the long run we are all dead," is __________.

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long- Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market,wages,and Unemployment

Inflation

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

Exam 9: An Introduction to the Short Run

Taxes,oil price changes,government spending,interest rate changes,new technologies,and disasters are examples of __________.

You are a staff economist with the Federal Reserve.The chairman says to you,"The rate of change in inflation is too high and I think the Phillips curve is horizontal.What should we do to reduce these inflationary increases?" You respond with,

If ,the macroeconomy is:

Which is responsible for dating business cycles?

Defining as current output, as potential output,and as short-run fluctuations,the text uses the following equation to measure the fluctuations component of output:

If current output is Billion and potential output Billion,then the economy is in a __________ and Is about __________.

If ,the macroeconomy is:

Which is responsible for dating business cycles?

The long-run model determines __________ and __________,while the short-run model determines __________ and __________.

New technology,oil price changes,pork-barrel spending,interest rate changes,changes in planned investment,and disasters are examples of __________.

-In Figure 9.5,area b represents an economic boom,and area a is a recession.

Suppose an economy's natural rate of unemployment is 5 percent.If the unemployment rate is 7 percent,according to Okun's law, is 4 percent.

-Consider the Phillips curve at In Figure 9.3.

Which of the following is not an example of a short term macroeconomic "shock"?

Defining u as the unemployment rate and As the natural rate of unemployment,Okun's law is given by the following equation:

If output is above potential,so that t is positive,the change in the inflation rate will be negative,so inflation will fall over time.

The Phillips curve in the text shows the __________ relationship between __________ and __________.

One implication of the Keynes quote,"In the long run we are all dead," is __________.

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long- Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market,wages,and Unemployment

Inflation

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

If current output is Billion and potential output Billion,then the economy is in a and Is about .

The long-run model determines and ,while the short-run model determines and .

The Phillips curve in the text shows the relationship between and __.