Exam 1: Introduction to Macroeconomics

What are the major factors affecting the long-term growth of the economy's output?

The two major reasons for the tremendous growth in output in the U.S.economy over the last 125 years are

Why were the U.S.government budget deficits of the 1980s and early 1990s so unusual from a historical point of view?

In analyzing macroeconomic data during the past year,you have discovered that average labor productivity fell,but total output increased.What was most likely to have caused this?

The unemployment rate is the

Equilibrium in the economy means

A set of ideas about the economy that have been organized in a logical framework is called

In 1993,the debate heated up in the United States about the North American Free Trade Agreement (NAFTA),which proposed to reduce barriers to trade (such as taxes on or limits to imports)among Canada,the United States,and Mexico.Some people opposed strongly the agreement,arguing that an influx of foreign goods under NAFTA would disrupt the U.S.economy,harm domestic industries,and throw American workers out of work.How might a classical economist respond to these concerns? Would you expect a Keynesian economist to be more or less sympathetic to these concerns than the classical economist? Why?

A country has a trade deficit when

Which of the statements below is primarily normative in nature?

The number of unemployed divided by the labor force equals

A closed economy is a national economy that

Before World War II,the average level of prices in the United States usually

A central bank is an institution that

Positive analysis of economic policy

A country is said to be experiencing inflation when

Determine whether each of the following is a positive or normative statement. (a)The Fed should lower interest rates to increase economic growth,because we're in a recession. (b)Higher government budget deficits cause higher interest rates. (c)The trade deficit should decline because of the fall in the value of the dollar. (d)Because of our high inflation rate,we must reduce the rate of money growth. (e)A generous unemployment insurance system is a primary cause of high unemployment in Europe. (f)Increased average labor productivity in a country should lead to faster growth. (g)Government budget deficits are too high in the United States and should be reduced.

Short-run contractions and expansions in economic activity are called

From 1800 to 1940,the price level in the United States

An economy that doesn't interact economically with the rest of the world is called ________ economy.