Question 1

How does the distinction between flexible and sticky prices affect the study of macroeconomics?

Accepted Answer

A)  The study of flexible prices is confined to microeconomics,while macroeconomics focuses on sticky prices. 
B)  Macroeconomists use flexible prices to explain inflation and sticky prices to explain unemployment. 
C)  Flexible prices are typically assumed in the study of the long run,while sticky prices are assumed in the study of the short run. 
D)  Endogenous variables are measured using flexible prices,while exogenous variables are measured using sticky prices. 
A)  The study of flexible prices is confined to microeconomics,while macroeconomics focuses on sticky prices. 
B)  Macroeconomists use flexible prices to explain inflation and sticky prices to explain unemployment. 
C)  Flexible prices are typically assumed in the study of the long run,while sticky prices are assumed in the study of the short run. 
D)  Endogenous variables are measured using flexible prices,while exogenous variables are measured using sticky prices. C

Question 2

The assumption of continuous market clearing means that:

Accepted Answer

A)  sellers can sell all that they want at the going price. 
B)  buyers can buy all that they want at the going price. 
C)  in any given month,buyers can buy all that they want and sellers can sell all that they want at the going price. 
D)  at any given instant,buyers can buy all that they want and sellers can sell all that they want at the going price. 
A)  sellers can sell all that they want at the going price. 
B)  buyers can buy all that they want at the going price. 
C)  in any given month,buyers can buy all that they want and sellers can sell all that they want at the going price. 
D)  at any given instant,buyers can buy all that they want and sellers can sell all that they want at the going price. D

Question 3

Macroeconomics does not try to answer the question of:

Accepted Answer

A)  why do some countries experience rapid growth. 
B)  what is the rate of return on education. 
C)  why do some countries have high rates of inflation. 
D)  what causes recessions and depressions. 
A)  why do some countries experience rapid growth. 
B)  what is the rate of return on education. 
C)  why do some countries have high rates of inflation. 
D)  what causes recessions and depressions. B

Question 4

The assumption of flexible prices is a more plausible assumption when applied to price changes that occur:

Accepted Answer

A)  from minute to minute. 
B)  from year to year. 
C)  in the long run. 
D)  in the short run. 
A)  from minute to minute. 
B)  from year to year. 
C)  in the long run. 
D)  in the short run.

Question 5

Variables that a model takes as given are called:

Accepted Answer

A)  endogenous. 
B)  exogenous. 
C)  market clearing. 
D)  macroeconomic. 
A)  endogenous. 
B)  exogenous. 
C)  market clearing. 
D)  macroeconomic.

Question 6

A measure of how fast prices are rising is called the:

Accepted Answer

A)  growth rate of real GDP. 
B)  inflation rate. 
C)  unemployment rate. 
D)  market-clearing rate. 
A)  growth rate of real GDP. 
B)  inflation rate. 
C)  unemployment rate. 
D)  market-clearing rate.

Question 7

In the Canadian economy today,real GDP per person,compared with its level in 1900,is about:

Accepted Answer

A)  50 percent higher. 
B)  twice as high. 
C)  three times as high. 
D)  11 times as high. 
A)  50 percent higher. 
B)  twice as high. 
C)  three times as high. 
D)  11 times as high.

Question 8

The total income of everyone in the economy adjusted for the level of prices is called:

Accepted Answer

A)  a recession. 
B)  an inflation. 
C)  real GDP. 
D)  a business fluctuation. 
A)  a recession. 
B)  an inflation. 
C)  real GDP. 
D)  a business fluctuation.

Question 9

Which statement below best illustrates the "art," rather than the "science" of macroeconomics?

Accepted Answer

A)  Macroeconomic data provide the motivation for new macroeconomic theory. 
B)  Macroeconomic relationships can be expressed using symbols and equations. 
C)  Macroeconomists must determine which simplifying assumptions give misleading results. 
D)  Graphs and charts can be used to illustrate the history of macroeconomic variables. 
A)  Macroeconomic data provide the motivation for new macroeconomic theory. 
B)  Macroeconomic relationships can be expressed using symbols and equations. 
C)  Macroeconomists must determine which simplifying assumptions give misleading results. 
D)  Graphs and charts can be used to illustrate the history of macroeconomic variables.

Question 10

A severe recession is called a(n):

Accepted Answer

A)  depression. 
B)  deflation. 
C)  exogenous event. 
D)  market-clearing assumption. 
A)  depression. 
B)  deflation. 
C)  exogenous event. 
D)  market-clearing assumption.

Question 11

In an economic model:

Accepted Answer

A)  exogenous variables and endogenous variables are both determined outside the model. 
B)  endogenous variables and exogenous variables are both determined within the model. 
C)  endogenous variables affect exogenous variables. 
D)  exogenous variables affect endogenous variables. 
A)  exogenous variables and endogenous variables are both determined outside the model. 
B)  endogenous variables and exogenous variables are both determined within the model. 
C)  endogenous variables affect exogenous variables. 
D)  exogenous variables affect endogenous variables.

Question 12

The inflation rate is a measure of how fast:

Accepted Answer

A)  the total income of the economy is growing. 
B)  unemployment in the economy is increasing. 
C)  prices in the economy are rising. 
D)  the number of jobs in the economy is expanding. 
A)  the total income of the economy is growing. 
B)  unemployment in the economy is increasing. 
C)  prices in the economy are rising. 
D)  the number of jobs in the economy is expanding.

Question 13

Macroeconomics is the study of the:

Accepted Answer

A)  activities of individual units of the economy. 
B)  decision-making by households and firms. 
C)  economy as a whole. 
D)  interaction of firms and households in the marketplace. 
A)  activities of individual units of the economy. 
B)  decision-making by households and firms. 
C)  economy as a whole. 
D)  interaction of firms and households in the marketplace.

Question 14

In the relationship expressed in functional form,Y = G(K,L),Y stands for real GDP,K stands for the amount of capital in the economy,and L stands for the amount of labour in the economy.In this case G( ):

Accepted Answer

A)  is the growth rate of real GDP when the amount of capital and labour in the economy is fixed. 
B)  indicates that the variables inside the parentheses are endogenous variables in the model. 
C)  is the symbol that stands for government input into the production process. 
D)  is the function telling how the variables in the parentheses determine real GDP. 
A)  is the growth rate of real GDP when the amount of capital and labour in the economy is fixed. 
B)  indicates that the variables inside the parentheses are endogenous variables in the model. 
C)  is the symbol that stands for government input into the production process. 
D)  is the function telling how the variables in the parentheses determine real GDP.

Question 15

Macroeconomic models are used to explain how ______ variables influence ______ variables.

Accepted Answer

A)  endogenous; exogenous 
B)  exogenous; endogenous 
C)  microeconomic; macroeconomic 
D)  macroeconomic; microeconomic 
A)  endogenous; exogenous 
B)  exogenous; endogenous 
C)  microeconomic; macroeconomic 
D)  macroeconomic; microeconomic

Question 16

The study of the economy as a whole is called:

Accepted Answer

A)  household economics. 
B)  business economics. 
C)  microeconomics. 
D)  macroeconomics. 
A)  household economics. 
B)  business economics. 
C)  microeconomics. 
D)  macroeconomics.

Question 17

An assumption of _______ is more plausible for studying the short-run behaviour of the economy,while an assumption of ______ is more plausible for studying the long-run,equilibrium behaviour of the economy.

Accepted Answer

A)  deflation; inflation 
B)  inflation; deflation 
C)  flexible prices; sticky prices 
D)  sticky prices; flexible prices 
A)  deflation; inflation 
B)  inflation; deflation 
C)  flexible prices; sticky prices 
D)  sticky prices; flexible prices

Question 18

Two striking features of a graph of Canadian real GDP per capita over the twentieth century are the:

Accepted Answer

A)  overall upward trend interrupted by downturns in the 1920s and the 1930s. 
B)  nearly constant level,with a large downturn in the 1930s. 
C)  downward trend in the first half of the century followed by the upward trend in the second half. 
D)  constant level in the first half of the century followed by the upward trend in the second half. 
A)  overall upward trend interrupted by downturns in the 1920s and the 1930s. 
B)  nearly constant level,with a large downturn in the 1930s. 
C)  downward trend in the first half of the century followed by the upward trend in the second half. 
D)  constant level in the first half of the century followed by the upward trend in the second half.

Question 19

In a simple model of the supply and demand for pizza,the endogenous variables are:

Accepted Answer

A)  the price of pizza and the price of cheese. 
B)  aggregate income and the quantity of pizza sold. 
C)  aggregate income and the price of cheese. 
D)  the price of pizza and the quantity of pizza sold. 
A)  the price of pizza and the price of cheese. 
B)  aggregate income and the quantity of pizza sold. 
C)  aggregate income and the price of cheese. 
D)  the price of pizza and the quantity of pizza sold.

Question 20

Variables that a model tries to explain are called:

Accepted Answer

A)  endogenous. 
B)  exogenous. 
C)  market clearing. 
D)  fixed. 
A)  endogenous. 
B)  exogenous. 
C)  market clearing. 
D)  fixed.

How does the distinction between flexible and sticky prices affect the study of macroeconomics?

The assumption of continuous market clearing means that:

Macroeconomics does not try to answer the question of:

The assumption of flexible prices is a more plausible assumption when applied to price changes that occur:

Variables that a model takes as given are called:

A measure of how fast prices are rising is called the:

In the Canadian economy today,real GDP per person,compared with its level in 1900,is about:

The total income of everyone in the economy adjusted for the level of prices is called:

Which statement below best illustrates the "art," rather than the "science" of macroeconomics?

A severe recession is called a(n):

In an economic model:

The inflation rate is a measure of how fast:

Macroeconomics is the study of the:

In the relationship expressed in functional form,Y = G(K,L),Y stands for real GDP,K stands for the amount of capital in the economy,and L stands for the amount of labour in the economy.In this case G( ):

Macroeconomic models are used to explain how variables influence variables.

The study of the economy as a whole is called:

An assumption of _ is more plausible for studying the short-run behaviour of the economy,while an assumption of is more plausible for studying the long-run,equilibrium behaviour of the economy.

Two striking features of a graph of Canadian real GDP per capita over the twentieth century are the:

In a simple model of the supply and demand for pizza,the endogenous variables are:

Variables that a model tries to explain are called:

The Data of Macroeconomics

The Open Economy

Unemployment

Economic Growth I

Economic Growth II

Introduction to Economic Fluctuations

Aggregate Demand I

Aggregate Supply and the Short-Run

Stabilization Policy

Government Debt and Budget Deficits

Investment

Money Supply and Money Demand

The Financial System

Filters

Exam 1: The Science of Macroeconomics

How does the distinction between flexible and sticky prices affect the study of macroeconomics?

The assumption of continuous market clearing means that:

Macroeconomics does not try to answer the question of:

The assumption of flexible prices is a more plausible assumption when applied to price changes that occur:

Variables that a model takes as given are called:

A measure of how fast prices are rising is called the:

In the Canadian economy today,real GDP per person,compared with its level in 1900,is about:

The total income of everyone in the economy adjusted for the level of prices is called:

Which statement below best illustrates the "art," rather than the "science" of macroeconomics?

A severe recession is called a(n):

In an economic model:

The inflation rate is a measure of how fast:

Macroeconomics is the study of the:

In the relationship expressed in functional form,Y = G(K,L),Y stands for real GDP,K stands for the amount of capital in the economy,and L stands for the amount of labour in the economy.In this case G( ):

Macroeconomic models are used to explain how ______ variables influence ______ variables.

The study of the economy as a whole is called:

An assumption of _______ is more plausible for studying the short-run behaviour of the economy,while an assumption of ______ is more plausible for studying the long-run,equilibrium behaviour of the economy.

Two striking features of a graph of Canadian real GDP per capita over the twentieth century are the:

In a simple model of the supply and demand for pizza,the endogenous variables are:

Variables that a model tries to explain are called:

The Data of Macroeconomics

The Open Economy

Unemployment

Economic Growth I

Economic Growth II

Introduction to Economic Fluctuations

Aggregate Demand I

Aggregate Supply and the Short-Run

Stabilization Policy

Government Debt and Budget Deficits

Investment

Money Supply and Money Demand

The Financial System

Filters

Macroeconomic models are used to explain how variables influence variables.

An assumption of _ is more plausible for studying the short-run behaviour of the economy,while an assumption of is more plausible for studying the long-run,equilibrium behaviour of the economy.