Question 1

An open economy is a national economy that

Accepted Answer

A) doesn't interact economically with the rest of the world. 
B) has a stock market that is open to traders from anywhere in the world. 
C) has extensive trading and financial relationships with other national economies. 
D) has established diplomatic relations with most other national economies. 
A) doesn't interact economically with the rest of the world. 
B) has a stock market that is open to traders from anywhere in the world. 
C) has extensive trading and financial relationships with other national economies. 
D) has established diplomatic relations with most other national economies.

Question 2

The two most comprehensive,widely accepted macroeconomic models are

Accepted Answer

A) the classical model and the supply-side model. 
B) the supply-side model and the real business cycle model. 
C) the classical model and the Keynesian model. 
D) the Austrian model and the Keynesian model. 
A) the classical model and the supply-side model. 
B) the supply-side model and the real business cycle model. 
C) the classical model and the Keynesian model. 
D) the Austrian model and the Keynesian model.

Question 3

What is meant by aggregation? Why is aggregation important for macroeconomic analysis?

Accepted Answer

Aggregation refers to the process of add

Question 4

John Maynard Keynes disagreed with the classical economists because he believed that

Accepted Answer

A) wages and prices adjust slowly. 
B) international trade plays a major role in the macroeconomy. 
C) government intervention in the economy cannot reduce business cycles. 
D) unemployment will be eliminated quickly by the invisible hand of the market. 
A) wages and prices adjust slowly. 
B) international trade plays a major role in the macroeconomy. 
C) government intervention in the economy cannot reduce business cycles. 
D) unemployment will be eliminated quickly by the invisible hand of the market.

Question 5

Critics of the government's fiscal policies argued that government deficits

Accepted Answer

A) prevented capital from flowing into the United States. 
B) were linked to the excess of imports over exports that occurred in the 1980s. 
C) caused the level of unemployment in the United States to increase during the 1980s. 
D) had directly contributed to a decline in the level of demand in the American economy. 
A) prevented capital from flowing into the United States. 
B) were linked to the excess of imports over exports that occurred in the 1980s. 
C) caused the level of unemployment in the United States to increase during the 1980s. 
D) had directly contributed to a decline in the level of demand in the American economy.

Question 6

A country has a trade surplus when

Accepted Answer

A) imports exceed exports. 
B) imports equal exports. 
C) exports exceed imports. 
D) imports equal zero. 
A) imports exceed exports. 
B) imports equal exports. 
C) exports exceed imports. 
D) imports equal zero.

Question 7

A country that has many well-trained macroeconomic analysts will not necessarily have more beneficial macroeconomic policies because

Accepted Answer

A) economists' understanding of the economy remains poor. 
B) there are few ways in which economists' complex models can be applied to the real world. 
C) economists agree on so few government policies. 
D) economic policy is usually made by politicians,not economists. 
A) economists' understanding of the economy remains poor. 
B) there are few ways in which economists' complex models can be applied to the real world. 
C) economists agree on so few government policies. 
D) economic policy is usually made by politicians,not economists.

Question 8

During recessions,the unemployment rate ________ and output ________.

Accepted Answer

A) rises; falls 
B) rises; rises 
C) falls; rises 
D) falls; falls 
A) rises; falls 
B) rises; rises 
C) falls; rises 
D) falls; falls

Question 9

Aggregation is the process of

Accepted Answer

A) calculating real GDP based on nominal GDP and the price index. 
B) summing individual economic variables to obtain economywide totals. 
C) forecasting the components of GDP. 
D) predicting when recessions will occur. 
A) calculating real GDP based on nominal GDP and the price index. 
B) summing individual economic variables to obtain economywide totals. 
C) forecasting the components of GDP. 
D) predicting when recessions will occur.

Question 10

In the 1980s,1990s,and 2000s,the United States has 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.

Question 11

Using the CPI measure of the price level,which is 100 in the base year of 2007,calculate the annual inflation rates for
(a)2008,when the index is 103.7.
(b)2009,when the index is 105.5.
(c)2010,when the index is 107.7.

Accepted Answer

(a)Inflation in 2008 = (103.7

Question 12

Briefly describe the following tasks of macroeconomists: forecasting; analysis; research; and data development.

Accepted Answer

(a)Forecasting.Macroeconomists develop m

Question 13

Why is macroeconomic forecasting so difficult? Does this difficulty mean economics is a worthless field of study?

Accepted Answer

Forecasting is difficult because our und

Question 14

Macroeconomic information for the economy of Anchovy is given below.   
(a)What was the growth rate of average labor productivity in Anchovy between Year 1 and Year 2?
(b)What was the inflation rate in Anchovy between Year 1 and Year 2?
(c)What was the unemployment rate in Year 1? In Year 2?

Accepted Answer

(a)Average labor productivity: Year 1: 8

Question 15

The primary factor that caused some economists to lose their faith in the Keynesian 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) theoretical proof that Keynes's ideas were invalid. 
D) evidence that Keynes's ideas were useful during economic recessions,but not during economic booms. 
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) theoretical proof that Keynes's ideas were invalid. 
D) evidence that Keynes's ideas were useful during economic recessions,but not during economic booms.

Question 16

The peak in U.S.government spending as a percent of GDP occurred during

Accepted Answer

A) World War II. 
B) the 1960s war on poverty. 
C) the Great Depression. 
D) the war against Iraq in the 2000s. 
A) World War II. 
B) the 1960s war on poverty. 
C) the Great Depression. 
D) the war against Iraq in the 2000s.

Question 17

Average labor productivity is the

Accepted Answer

A) amount of workers per machine. 
B) amount of machines per worker. 
C) ratio of employed to unemployed workers. 
D) amount of output per worker. 
A) amount of workers per machine. 
B) amount of machines per worker. 
C) ratio of employed to unemployed workers. 
D) amount of output per worker.

Question 18

The main goal of macroeconomic research is to

Accepted Answer

A) predict how the macroeconomy will perform in the future. 
B) analyze current macroeconomic data. 
C) develop new data that can be used to understand better the operation of the economy. 
D) make general statements about how the economy works. 
A) predict how the macroeconomy will perform in the future. 
B) analyze current macroeconomic data. 
C) develop new data that can be used to understand better the operation of the economy. 
D) make general statements about how the economy works.

Question 19

Assumptions for economic theories and models should be

Accepted Answer

A) rejected if they are not totally realistic. 
B) logical rather than empirically testable. 
C) simple and reasonable rather than complex. 
D) maintained until overwhelming evidence to the contrary occurs. 
A) rejected if they are not totally realistic. 
B) logical rather than empirically testable. 
C) simple and reasonable rather than complex. 
D) maintained until overwhelming evidence to the contrary occurs.

Question 20

Compare and contrast the classical and Keynesian schools of thought for the following economic issues.
(a)The flexibility of wages and prices.
(b)The importance of macroeconomic policies.

Accepted Answer

(a)The flexibility of wages and prices i

An open economy is a national economy that

The two most comprehensive,widely accepted macroeconomic models are

What is meant by aggregation? Why is aggregation important for macroeconomic analysis?

John Maynard Keynes disagreed with the classical economists because he believed that

Critics of the government's fiscal policies argued that government deficits

A country has a trade surplus when

A country that has many well-trained macroeconomic analysts will not necessarily have more beneficial macroeconomic policies because

During recessions,the unemployment rate and output .

Aggregation is the process of

In the 1980s,1990s,and 2000s,the United States has had a

Using the CPI measure of the price level,which is 100 in the base year of 2007,calculate the annual inflation rates for (a)2008,when the index is 103.7. (b)2009,when the index is 105.5. (c)2010,when the index is 107.7.

Briefly describe the following tasks of macroeconomists: forecasting; analysis; research; and data development.

Why is macroeconomic forecasting so difficult? Does this difficulty mean economics is a worthless field of study?

Macroeconomic information for the economy of Anchovy is given below. (a)What was the growth rate of average labor productivity in Anchovy between Year 1 and Year 2? (b)What was the inflation rate in Anchovy between Year 1 and Year 2? (c)What was the unemployment rate in Year 1? In Year 2?

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

The peak in U.S.government spending as a percent of GDP occurred during

Average labor productivity is the

The main goal of macroeconomic research is to

Assumptions for economic theories and models should be

Compare and contrast the classical and Keynesian schools of thought for the following economic issues. (a)The flexibility of wages and prices. (b)The importance of macroeconomic policies.

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

An open economy is a national economy that

The two most comprehensive,widely accepted macroeconomic models are

What is meant by aggregation? Why is aggregation important for macroeconomic analysis?

John Maynard Keynes disagreed with the classical economists because he believed that

Critics of the government's fiscal policies argued that government deficits

A country has a trade surplus when

A country that has many well-trained macroeconomic analysts will not necessarily have more beneficial macroeconomic policies because

During recessions,the unemployment rate ________ and output ________.

Aggregation is the process of

In the 1980s,1990s,and 2000s,the United States has had a

Using the CPI measure of the price level,which is 100 in the base year of 2007,calculate the annual inflation rates for (a)2008,when the index is 103.7. (b)2009,when the index is 105.5. (c)2010,when the index is 107.7.

Briefly describe the following tasks of macroeconomists: forecasting; analysis; research; and data development.

Why is macroeconomic forecasting so difficult? Does this difficulty mean economics is a worthless field of study?

Macroeconomic information for the economy of Anchovy is given below. (a)What was the growth rate of average labor productivity in Anchovy between Year 1 and Year 2? (b)What was the inflation rate in Anchovy between Year 1 and Year 2? (c)What was the unemployment rate in Year 1? In Year 2?

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

The peak in U.S.government spending as a percent of GDP occurred during

Average labor productivity is the

The main goal of macroeconomic research is to

Assumptions for economic theories and models should be

Compare and contrast the classical and Keynesian schools of thought for the following economic issues. (a)The flexibility of wages and prices. (b)The importance of macroeconomic policies.

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

During recessions,the unemployment rate and output .