Question 1

U.S.imports are goods and services

Accepted Answer

A) produced abroad and sold to Americans. 
B) produced in the United States and sold to Americans. 
C) produced abroad and sold to foreigners. 
D) produced in the United States and sold to foreigners. 
A) produced abroad and sold to Americans. 
B) produced in the United States and sold to Americans. 
C) produced abroad and sold to foreigners. 
D) produced in the United States and sold to foreigners. A

Question 2

The primary factor that caused most economists to lose their faith in the classical approach to macroeconomic policy was

Accepted Answer

A) the high levels of unemployment that occurred during the Great Depression. 
B) the presence of both high unemployment and high inflation during the 1970s. 
C) the theoretical proof that classical ideas were invalid. 
D) the evidence that classical ideas were useful during economic booms,but not during economic recessions. 
A) the high levels of unemployment that occurred during the Great Depression. 
B) the presence of both high unemployment and high inflation during the 1970s. 
C) the theoretical proof that classical ideas were invalid. 
D) the evidence that classical ideas were useful during economic booms,but not during economic recessions. A

Question 3

Following World War I and World War II,the United States had a

Accepted Answer

A) small trade surplus. 
B) small trade deficit. 
C) large trade deficit. 
D) large trade surplus. 
A) small trade surplus. 
B) small trade deficit. 
C) large trade deficit. 
D) large trade surplus. D

Question 4

The inflation rate is the

Accepted Answer

A) percent increase in the average level of prices over a year. 
B) percent increase in output over a year. 
C) percent increase in the unemployment rate over a year. 
D) price level divided by the level of output. 
A) percent increase in the average level of prices over a year. 
B) percent increase in output over a year. 
C) percent increase in the unemployment rate over a year. 
D) price level divided by the level of output.

Question 5

Match each of the following jobs to its major area: forecasting,analysis,research,or data development.Explain your answers.
(a)Economist at university,testing theories about the efficient allocation of resources in the foreign exchange market
(b)Economist at Wall Street firm trying to predict the rate of inflation next year using past data
(c)Economist at auto firm looking at demand for new automobiles
(d)Economist at the International Trade Commission trying to determine whether foreign firms are dumping goods in the United States
(e)Economist at the Commerce Department developing new methods for calculating price indexes
(f)Economist consulting in Eastern Europe about how to set up free-market financial systems.

Accepted Answer

(a)Research
(b)Forec

Question 6

Data on exports and imports for the United States over the period from 1890 to 2008 show that

Accepted Answer

A) the United States had large trade deficits throughout this entire period. 
B) the United States had large trade surpluses throughout this entire period. 
C) the percentage of total output exported by U.S.firms fell dramatically during World War I and World War II. 
D) a higher percentage of U.S.goods was exported in recent years than in earlier years. 
A) the United States had large trade deficits throughout this entire period. 
B) the United States had large trade surpluses throughout this entire period. 
C) the percentage of total output exported by U.S.firms fell dramatically during World War I and World War II. 
D) a higher percentage of U.S.goods was exported in recent years than in earlier years.

Question 7

The classical approach to macroeconomics assumes that

Accepted Answer

A) wages,but not prices,adjust quickly to balance quantities supplied and demanded in markets. 
B) wages and prices adjust quickly to balance quantities supplied and demanded in markets. 
C) prices,but not wages,adjust quickly to balance quantities supplied and demanded in markets. 
D) neither wages nor prices adjust quickly to balance quantities supplied and demanded in markets. 
A) wages,but not prices,adjust quickly to balance quantities supplied and demanded in markets. 
B) wages and prices adjust quickly to balance quantities supplied and demanded in markets. 
C) prices,but not wages,adjust quickly to balance quantities supplied and demanded in markets. 
D) neither wages nor prices adjust quickly to balance quantities supplied and demanded in markets.

Question 8

When national output rises,the economy is said to be in

Accepted Answer

A) an expansion. 
B) a deflation. 
C) an inflation. 
D) a recession. 
A) an expansion. 
B) a deflation. 
C) an inflation. 
D) a recession.

Question 9

If the theory behind an economic model fits the data poorly,you would probably want to

Accepted Answer

A) use the theory to predict what would happen if the economic setting or economic policies change. 
B) start from scratch with a new model. 
C) enrich the model with additional assumptions. 
D) restate the research question. 
A) use the theory to predict what would happen if the economic setting or economic policies change. 
B) start from scratch with a new model. 
C) enrich the model with additional assumptions. 
D) restate the research question.

Question 10

The main reason that the United States has such a high standard of living is

Accepted Answer

A) low unemployment. 
B) high average labor productivity. 
C) low inflation. 
D) high government budget deficits. 
A) low unemployment. 
B) high average labor productivity. 
C) low inflation. 
D) high government budget deficits.

Question 11

A country is said to be experiencing deflation when

Accepted Answer

A) prices of most goods and services are rising over time. 
B) prices of most goods and services are falling over time. 
C) total output is rising over time. 
D) total output is falling over time. 
A) prices of most goods and services are rising over time. 
B) prices of most goods and services are falling over time. 
C) total output is rising over time. 
D) total output is falling over time.

Question 12

If the price level was 100 in 2009 and 102 in 2010,the inflation rate was

Accepted Answer

A) 102%. 
B) 20%. 
C) 2%. 
D) 0)2%. 
A) 102%. 
B) 20%. 
C) 2%. 
D) 0)2%.

Question 13

During the Great Depression,the unemployment rate for the United States peaked at approximately

Accepted Answer

A) 10%. 
B) 70%. 
C) 45%. 
D) 25%. 
A) 10%. 
B) 70%. 
C) 45%. 
D) 25%.

Question 14

The most direct effect of an increase in the growth rate of average labor productivity would be an increase in

Accepted Answer

A) the inflation rate. 
B) the unemployment rate. 
C) the long-run economic growth rate. 
D) imported goods. 
A) the inflation rate. 
B) the unemployment rate. 
C) the long-run economic growth rate. 
D) imported goods.

Question 15

Keynes was motivated to create a macroeconomic theory different from classical theory because

Accepted Answer

A) he believed in government intervention in the economy. 
B) he believed in the idea of the invisible hand. 
C) monetary policy was more important than the classicals acknowledged. 
D) classical theory was inconsistent with the data in the Great Depression. 
A) he believed in government intervention in the economy. 
B) he believed in the idea of the invisible hand. 
C) monetary policy was more important than the classicals acknowledged. 
D) classical theory was inconsistent with the data in the Great Depression.

Question 16

Why is wage and price flexibility crucial to the idea of the "invisible hand?"

Accepted Answer

Wage and price flexibility is

Question 17

Testing a theory by comparing the theory's implications with data obtained in the real world is called

Accepted Answer

A) empirical analysis. 
B) descriptive calibration. 
C) historical variance analysis. 
D) univariate analysis. 
A) empirical analysis. 
B) descriptive calibration. 
C) historical variance analysis. 
D) univariate analysis.

Question 18

Adam Smith's idea of the "invisible hand" says that given a country's resources and its initial distribution of wealth,the use of markets will

Accepted Answer

A) insulate a nation from the effects of political instability. 
B) eliminate problems of hunger and dissatisfaction. 
C) eliminate inequalities between the rich and the poor. 
D) make people as economically well off as possible. 
A) insulate a nation from the effects of political instability. 
B) eliminate problems of hunger and dissatisfaction. 
C) eliminate inequalities between the rich and the poor. 
D) make people as economically well off as possible.

Question 19

In the United States,monetary policy is determined by

Accepted Answer

A) the Federal Reserve. 
B) the president. 
C) private citizens. 
D) the Treasury Department. 
A) the Federal Reserve. 
B) the president. 
C) private citizens. 
D) the Treasury Department.

Question 20

The difference between microeconomics and macroeconomics is that

Accepted Answer

A) microeconomics looks at supply and demand for goods,macroeconomics looks at supply and demand for services. 
B) microeconomics looks at prices,macroeconomics looks at inflation. 
C) microeconomics looks at individual consumers,macroeconomics looks at national totals. 
D) microeconomics looks at national issues,macroeconomics looks at global issues. 
A) microeconomics looks at supply and demand for goods,macroeconomics looks at supply and demand for services. 
B) microeconomics looks at prices,macroeconomics looks at inflation. 
C) microeconomics looks at individual consumers,macroeconomics looks at national totals. 
D) microeconomics looks at national issues,macroeconomics looks at global issues.

U.S.imports are goods and services

The primary factor that caused most economists to lose their faith in the classical approach to macroeconomic policy was

Following World War I and World War II,the United States had a

The inflation rate is the

Data on exports and imports for the United States over the period from 1890 to 2008 show that

The classical approach to macroeconomics assumes that

When national output rises,the economy is said to be in

If the theory behind an economic model fits the data poorly,you would probably want to

The main reason that the United States has such a high standard of living is

A country is said to be experiencing deflation when

If the price level was 100 in 2009 and 102 in 2010,the inflation rate was

During the Great Depression,the unemployment rate for the United States peaked at approximately

The most direct effect of an increase in the growth rate of average labor productivity would be an increase in

Keynes was motivated to create a macroeconomic theory different from classical theory because

Why is wage and price flexibility crucial to the idea of the "invisible hand?"

Testing a theory by comparing the theory's implications with data obtained in the real world is called

Adam Smith's idea of the "invisible hand" says that given a country's resources and its initial distribution of wealth,the use of markets will

In the United States,monetary policy is determined by

The difference between microeconomics and macroeconomics is that

The Measurement and Structure of the National Economy

Productivity, Output, and Employment

Consumption, Saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, Money, and Prices

Business Cycles

The IS-LM/AD-AS Model

Classical Business Cycle Analysis

Keynesianism: The Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates,Business Cycles,and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters

Exam 1: Introduction to Macroeconomics

U.S.imports are goods and services

The primary factor that caused most economists to lose their faith in the classical approach to macroeconomic policy was

Following World War I and World War II,the United States had a

The inflation rate is the

Data on exports and imports for the United States over the period from 1890 to 2008 show that

The classical approach to macroeconomics assumes that

When national output rises,the economy is said to be in

If the theory behind an economic model fits the data poorly,you would probably want to

The main reason that the United States has such a high standard of living is

A country is said to be experiencing deflation when

If the price level was 100 in 2009 and 102 in 2010,the inflation rate was

During the Great Depression,the unemployment rate for the United States peaked at approximately

The most direct effect of an increase in the growth rate of average labor productivity would be an increase in

Keynes was motivated to create a macroeconomic theory different from classical theory because

Why is wage and price flexibility crucial to the idea of the "invisible hand?"

Testing a theory by comparing the theory's implications with data obtained in the real world is called

Adam Smith's idea of the "invisible hand" says that given a country's resources and its initial distribution of wealth,the use of markets will

In the United States,monetary policy is determined by

The difference between microeconomics and macroeconomics is that

The Measurement and Structure of the National Economy

Productivity, Output, and Employment

Consumption, Saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, Money, and Prices

Business Cycles

The IS-LM/AD-AS Model

Classical Business Cycle Analysis

Keynesianism: The Macroeconomics of Wage and Price Rigidity

Unemployment and Inflation

Exchange Rates,Business Cycles,and Macroeconomic Policy in the Open Economy

Monetary Policy and the Federal Reserve System

Government Spending and Its Financing

Filters