Question 1

Contractionary fiscal policy includes raising taxes.

Accepted Answer

A) True 
 B)False

Question 2

Unemployment generally ________ during recessions and ________ during expansions.

Accepted Answer

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

Question 3

If the labor force is 50 million and 48 million are employed then the unemployment rate is

Accepted Answer

A) 2%. 
B) 4%. 
C) 5%. 
D) 52%. 
A) 2%. 
B) 4%. 
C) 5%. 
D) 52%.

Question 4

The Federal Reserve affecting the supply of money is known as

Accepted Answer

A) fiscal policy. 
B) monetary policy. 
C) growth policy. 
D) supply side policy. 
A) fiscal policy. 
B) monetary policy. 
C) growth policy. 
D) supply side policy.

Question 5

A corporate bond is a promissory note issued by a firm when it borrows money.

Accepted Answer

A) True 
 B)False

Question 6

A transfer payment is the tax one pays when transferring real estate.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is a CORRECT statement?

Accepted Answer

A) Companies issue shares but don't issue bonds. 
B) The government issues both bonds and shares. 
C) Bondholders earn dividends but shareholders don't. 
D) Shareholders earn dividends but bondholders don't. 
A) Companies issue shares but don't issue bonds. 
B) The government issues both bonds and shares. 
C) Bondholders earn dividends but shareholders don't. 
D) Shareholders earn dividends but bondholders don't.

Question 8

Since 1970,the U.S.economy has experienced 2 recessions.

Accepted Answer

A) True 
 B)False

Question 9

Mike purchased a 1968 Chevy Corvette in 2009 for $30,000 and a year later he sold it for $36,000.Due to these transactions

Accepted Answer

A) Mike earned a capital loss of $6,000. 
B) Mike earned a dividend of $36,000. 
C) Mike earned a dividend of $600. 
D) Mike earned a capital gain of $6,000. 
A) Mike earned a capital loss of $6,000. 
B) Mike earned a dividend of $36,000. 
C) Mike earned a dividend of $600. 
D) Mike earned a capital gain of $6,000.

Question 10

The period in the business cycle from a peak to a trough is a(n)

Accepted Answer

A) recession. 
B) boom. 
C) expansion. 
D) inflation. 
A) recession. 
B) boom. 
C) expansion. 
D) inflation.

Question 11

According to Keynes,aggregate supply determines the level of economic activities in the economy.

Accepted Answer

A) True 
 B)False

Question 12

According to Classical models,the level of employment is determined primarily by

Accepted Answer

A) the level of aggregate demand for goods and services. 
B) prices and wages. 
C) government taxation. 
D) government spending. 
A) the level of aggregate demand for goods and services. 
B) prices and wages. 
C) government taxation. 
D) government spending.

Question 13

According to the Classical economists,the economy

Accepted Answer

A) requires fine-tuning to reach full employment. 
B) has sticky prices in many industries. 
C) is self-correcting. 
D) will never be at full employment. 
A) requires fine-tuning to reach full employment. 
B) has sticky prices in many industries. 
C) is self-correcting. 
D) will never be at full employment.

Question 14

A period during which aggregate output rises is known as a(n)

Accepted Answer

A) recession. 
B) inflation. 
C) hyperinflation. 
D) expansion. 
A) recession. 
B) inflation. 
C) hyperinflation. 
D) expansion.

Question 15

The demanders in the goods-and-services market are

Accepted Answer

A) households and business firms. 
B) households,the government,and the rest of the world. 
C) the government and business firms. 
D) households,the government,business firms,and the rest of the world. 
A) households and business firms. 
B) households,the government,and the rest of the world. 
C) the government and business firms. 
D) households,the government,business firms,and the rest of the world.

Question 16

Classical economists believed that economic slowdowns are self-correcting.

Accepted Answer

A) True 
 B)False

Question 17

Hyperinflation and stagflation are two different names which refer to identical economic conditions.

Accepted Answer

A) True 
 B)False

Question 18

The demand for corn has increased in May without any change in supply.Eight months later there still has been no change in corn prices.This is an example of a

Accepted Answer

A) price floor. 
B) price control. 
C) sticky price. 
D) macroeconomic price. 
A) price floor. 
B) price control. 
C) sticky price. 
D) macroeconomic price.

Question 19

If 20 million workers are unemployed and 180 million workers are employed,then the unemployment rate is

Accepted Answer

A) 10%. 
B) 11.1%. 
C) 18%. 
D) 80%. 
A) 10%. 
B) 11.1%. 
C) 18%. 
D) 80%.

Question 20

In the circular flow diagram,firms ________ labor and households ________ goods and services.

Accepted Answer

A) demand;supply 
B) demand;demand 
C) supply;demand 
D) supply;supply 
A) demand;supply 
B) demand;demand 
C) supply;demand 
D) supply;supply

Exam 5: Introduction to Macroeconomics

Contractionary fiscal policy includes raising taxes.

Unemployment generally ________ during recessions and ________ during expansions.

If the labor force is 50 million and 48 million are employed then the unemployment rate is

The Federal Reserve affecting the supply of money is known as

A corporate bond is a promissory note issued by a firm when it borrows money.

A transfer payment is the tax one pays when transferring real estate.

Which of the following is a CORRECT statement?

Since 1970,the U.S.economy has experienced 2 recessions.

Mike purchased a 1968 Chevy Corvette in 2009 for $30,000 and a year later he sold it for $36,000.Due to these transactions

The period in the business cycle from a peak to a trough is a(n)

According to Keynes,aggregate supply determines the level of economic activities in the economy.

According to Classical models,the level of employment is determined primarily by

According to the Classical economists,the economy

A period during which aggregate output rises is known as a(n)

The demanders in the goods-and-services market are

Classical economists believed that economic slowdowns are self-correcting.

Hyperinflation and stagflation are two different names which refer to identical economic conditions.

The demand for corn has increased in May without any change in supply.Eight months later there still has been no change in corn prices.This is an example of a

If 20 million workers are unemployed and 180 million workers are employed,then the unemployment rate is

In the circular flow diagram,firms ________ labor and households ________ goods and services.

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand,supply,and Market Equilibrium

Demand and Supply Applications

Measuring National Output and National Income

Unemployment, inflation, and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

The Money Supply and the Federal Reserve System

Money Demand and the Equilibrium Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Costs Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade,comparative Advantage,and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing and Transitional Economies

Filters

Unemployment generally during recessions and during expansions.

In the circular flow diagram,firms labor and households goods and services.