Question 1

As inflation rises,the real value of the national debt rises.

Accepted Answer

A) True 
 B)False

Question 2

The long-run Phillips curve:

Accepted Answer

A)  shows a tradeoff between inflation and unemployment. 
B)  graphs as an upward sloping curve. 
C)  is a horizontal line at the expected rate of inflation. 
D)  is a vertical line at the natural rate of unemployment. 
A)  shows a tradeoff between inflation and unemployment. 
B)  graphs as an upward sloping curve. 
C)  is a horizontal line at the expected rate of inflation. 
D)  is a vertical line at the natural rate of unemployment.

Question 3

Which of the following is NOT a factor that explains jobless recoveries?

Accepted Answer

A)  rising productivity 
B)  the increased use of temporary and part-time workers 
C)  lax labor laws 
D)  an increase in outsourcing 
A)  rising productivity 
B)  the increased use of temporary and part-time workers 
C)  lax labor laws 
D)  an increase in outsourcing

Question 4

Cite three factors that contributed to the joblessness of the recovery from the 2007-2009 recession.

Accepted Answer

First,increases in productivity allow fi

Question 5

(Figure: Understanding Economic Shifts)   The graph depicts:

Accepted Answer

A)  an expansion. 
B)  dropping unemployment rates. 
C)  stagflation. 
D)  deflation. 
A)  an expansion. 
B)  dropping unemployment rates. 
C)  stagflation. 
D)  deflation.

Question 6

Which of the following did President Reagan recommend to solve the problem of rising unemployment and rising inflation?

Accepted Answer

A)  reductions in government regulation 
B)  increases in government spending on jobs programs 
C)  wage-price controls 
D)  an increase in the money supply 
A)  reductions in government regulation 
B)  increases in government spending on jobs programs 
C)  wage-price controls 
D)  an increase in the money supply

Question 7

During the early 1970s,the Phillips curve:

Accepted Answer

A)  shifted inward as inflation rates fell. 
B)  shifted outward as inflation rates rose. 
C)  showed a long-run tradeoff between inflation and unemployment. 
D)  showed that moderate inflation rates (2% to 3% per year)were needed to keep the unemployment rate low. 
A)  shifted inward as inflation rates fell. 
B)  shifted outward as inflation rates rose. 
C)  showed a long-run tradeoff between inflation and unemployment. 
D)  showed that moderate inflation rates (2% to 3% per year)were needed to keep the unemployment rate low.

Question 8

Stagflation is the simultaneous occurrence of both inflation and unemployment.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following actions was NOT taken in response to the financial crisis?

Accepted Answer

A)  a bailout of Lehman Brothers 
B)  purchases of over $1 trillion in mortgage-backed securities by the Fed 
C)  an increase in the FDIC's guarantee on deposits from $100,000 to $250,000 per account 
D)  over $100 billion in loans by the Fed to AIG 
A)  a bailout of Lehman Brothers 
B)  purchases of over $1 trillion in mortgage-backed securities by the Fed 
C)  an increase in the FDIC's guarantee on deposits from $100,000 to $250,000 per account 
D)  over $100 billion in loans by the Fed to AIG

Question 10

The contractionary policies of the Fed under Paul Volcker to reduce inflationary pressures in the economy:

Accepted Answer

A)  took only about a year to work. 
B)  took nearly a decade to work. 
C)  kept interest rates below 5%. 
D)  kept unemployment rates below 5%. 
A)  took only about a year to work. 
B)  took nearly a decade to work. 
C)  kept interest rates below 5%. 
D)  kept unemployment rates below 5%.

Question 11

Use the following to answer questions 
Figure: Policy Changes in the Short Run  
-(Figure: Policy Changes in the Short Run)To move the economy in the short run from point a to point b,policymakers implement _______ monetary policy,thereby accepting _______ to reduce _______.

Accepted Answer

A)  expansionary;more unemployment;the rate of inflation 
B)  contractionary;a higher rate of inflation;unemployment 
C)  expansionary;a higher rate of inflation;unemployment 
D)  contractionary;more unemployment;the rate of inflation 
A)  expansionary;more unemployment;the rate of inflation 
B)  contractionary;a higher rate of inflation;unemployment 
C)  expansionary;a higher rate of inflation;unemployment 
D)  contractionary;more unemployment;the rate of inflation

Question 12

Empirical evidence shows that macroeconomic policies do have a real impact on the economy.

Accepted Answer

A) True 
 B)False

Question 13

Unemployment often keeps increasing after the economy begins to recover.

Accepted Answer

A) True 
 B)False

Question 14

New oversight on financial firms will probably include:

Accepted Answer

A)  lower capital requirements. 
B)  fewer restrictions on leverage. 
C)  higher returns on equity. 
D)  much tighter regulations. 
A)  lower capital requirements. 
B)  fewer restrictions on leverage. 
C)  higher returns on equity. 
D)  much tighter regulations.

Question 15

Briefly describe how the last credit crisis developed in the U.S.economy and how it precipitated the worldwide recession.

Accepted Answer

A global savings glut led to low interes

Question 16

A leveraged investment reduces the risk of losing money.

Accepted Answer

A) True 
 B)False

Question 17

Unanticipated inflation results in:

Accepted Answer

A)  real wages increasing. 
B)  nominal wages decreasing. 
C)  real wages decreasing. 
D)  nominal and real wages increasing. 
A)  real wages increasing. 
B)  nominal wages decreasing. 
C)  real wages decreasing. 
D)  nominal and real wages increasing.

Question 18

If the interest rate on a mortgage changes with the market interest rate,then the mortgage is:

Accepted Answer

A)  a 30-year fixed mortgage. 
B)  a collateralized debt obligation. 
C)  an adjustable-rate mortgage. 
D)  a credit default swap. 
A)  a 30-year fixed mortgage. 
B)  a collateralized debt obligation. 
C)  an adjustable-rate mortgage. 
D)  a credit default swap.

Question 19

Which of the following was NOT a factor leading to the financial crisis of 2008?

Accepted Answer

A)  Low interest rates encouraged a housing boom. 
B)  Policymakers underestimated the level of risk inherent in the mortgage market. 
C)  The public lacked faith in the ability of the U.S.Treasury to pay on government bonds. 
D)  Investors borrowed heavily to purchase securitized mortgages. 
A)  Low interest rates encouraged a housing boom. 
B)  Policymakers underestimated the level of risk inherent in the mortgage market. 
C)  The public lacked faith in the ability of the U.S.Treasury to pay on government bonds. 
D)  Investors borrowed heavily to purchase securitized mortgages.

Question 20

An efficiency wage is:

Accepted Answer

A)  equal to the market-clearing level. 
B)  above the market-clearing level. 
C)  below the market-clearing level. 
D)  equal to marginal productivity of labor. 
A)  equal to the market-clearing level. 
B)  above the market-clearing level. 
C)  below the market-clearing level. 
D)  equal to marginal productivity of labor.

As inflation rises,the real value of the national debt rises.

The long-run Phillips curve:

Which of the following is NOT a factor that explains jobless recoveries?

Cite three factors that contributed to the joblessness of the recovery from the 2007-2009 recession.

(Figure: Understanding Economic Shifts) The graph depicts:

Which of the following did President Reagan recommend to solve the problem of rising unemployment and rising inflation?

During the early 1970s,the Phillips curve:

Stagflation is the simultaneous occurrence of both inflation and unemployment.

Which of the following actions was NOT taken in response to the financial crisis?

The contractionary policies of the Fed under Paul Volcker to reduce inflationary pressures in the economy:

Use the following to answer questions Figure: Policy Changes in the Short Run -(Figure: Policy Changes in the Short Run)To move the economy in the short run from point a to point b,policymakers implement ___ monetary policy,thereby accepting _ to reduce _____.

Empirical evidence shows that macroeconomic policies do have a real impact on the economy.

Unemployment often keeps increasing after the economy begins to recover.

New oversight on financial firms will probably include:

Briefly describe how the last credit crisis developed in the U.S.economy and how it precipitated the worldwide recession.

A leveraged investment reduces the risk of losing money.

Unanticipated inflation results in:

If the interest rate on a mortgage changes with the market interest rate,then the mortgage is:

Which of the following was NOT a factor leading to the financial crisis of 2008?

An efficiency wage is:

Exploring Economics

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Introduction to Macroeconomics

Measuring Inflation and Unemployment

Economic Growth

Aggregate Expenditures

Aggregate Demand and Supply

Fiscal Policy and Debt

Saving, Investment, and the Financial System

Money Creation and the Federal Reserve

Monetary Policy

International Trade

Open Economy Macroeconomic

Filters

Exam 14: Macroeconomic Policy: Challenges in a Global Economy

As inflation rises,the real value of the national debt rises.

The long-run Phillips curve:

Which of the following is NOT a factor that explains jobless recoveries?

Cite three factors that contributed to the joblessness of the recovery from the 2007-2009 recession.

(Figure: Understanding Economic Shifts) The graph depicts:

Which of the following did President Reagan recommend to solve the problem of rising unemployment and rising inflation?

During the early 1970s,the Phillips curve:

Stagflation is the simultaneous occurrence of both inflation and unemployment.

Which of the following actions was NOT taken in response to the financial crisis?

The contractionary policies of the Fed under Paul Volcker to reduce inflationary pressures in the economy:

Use the following to answer questions Figure: Policy Changes in the Short Run -(Figure: Policy Changes in the Short Run)To move the economy in the short run from point a to point b,policymakers implement _______ monetary policy,thereby accepting _______ to reduce _______.

Empirical evidence shows that macroeconomic policies do have a real impact on the economy.

Unemployment often keeps increasing after the economy begins to recover.

New oversight on financial firms will probably include:

Briefly describe how the last credit crisis developed in the U.S.economy and how it precipitated the worldwide recession.

A leveraged investment reduces the risk of losing money.

Unanticipated inflation results in:

If the interest rate on a mortgage changes with the market interest rate,then the mortgage is:

Which of the following was NOT a factor leading to the financial crisis of 2008?

An efficiency wage is:

Exploring Economics

Production, Economic Growth, and Trade

Supply and Demand

Markets and Government

Introduction to Macroeconomics

Measuring Inflation and Unemployment

Economic Growth

Aggregate Expenditures

Aggregate Demand and Supply

Fiscal Policy and Debt

Saving, Investment, and the Financial System

Money Creation and the Federal Reserve

Monetary Policy

International Trade

Open Economy Macroeconomic

Filters

Use the following to answer questions Figure: Policy Changes in the Short Run -(Figure: Policy Changes in the Short Run)To move the economy in the short run from point a to point b,policymakers implement ___ monetary policy,thereby accepting _ to reduce _____.