Exam 1: Introduction to Macroeconomics

Which of the following questions should a successful model predict? i. How do changes in government policies change the labor market? ii. How does money supply influence inflation? iii. What is the relationship between inflation and unemployment?

Income per person began at ________ in 1870 and ________ over a factor of 15 to ________ in 2012.

Consider the following model of the labor market: Labor supply: $L ^ { 5 } = 1 + w$ Labor demand: $L ^ { d } = 11 - w$ The value of the equilibrium quantity of labor, L, and wage, w, are:

In the long run, we are concerned about the causes of economic fluctuations.

An exogenous variable is one that is taken as given, that is, a parameter.

These four steps, and in the following order, are used to study macroeconomic behavior: (1) document the facts; (2) develop a model; (3) compare the predictions of the model to the original facts; (4) use the model to make other predictions that eventually may be tested.

Macroeconomics is the study of ________ while microeconomics studies ________.

Which of the following does macroeconomics endeavor to answer? i. Why is the typical person in the United States today more than ten times richer than the typical person a century ago? ii. Why has the unemployment rate been nearly twice as high in Europe as in the United States in recent years? iii. What determines the rate of inflation? What determines how rapidly the overall price level in an economy increases?

The three main variables we discuss in the short run are:

When we look at the ________ we are concerned with ________.

Which of the following lists the four steps we use to study macroeconomic behavior in the correct order?

Describe the differences between the long and short run.

Which of the following questions should a successful model predict? i. Why, in general, do Americans have higher incomes than Africans? ii. How much less unemployment is there during an economic expansion? iii. Why does the United States have a lower unemployment rate than Europe?

What are the steps macroeconomists use to analyze the economy?

When we look at the ________ we are concerned with the ________.