Question 1

A household that spends more than it receives in income during a given period is

Accepted Answer

A)  saving. 
B)  dissaving. 
C)  running a deficit. 
D)  receiving transfer payments. 
A)  saving. 
B)  dissaving. 
C)  running a deficit. 
D)  receiving transfer payments.

Question 2

Fiscal policy includes changing the level of household taxes.

Accepted Answer

A) True 
 B)False

Question 3

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 4

It has become conventional to classify an economic downturn as a recession when aggregate output declines for

Accepted Answer

A)  three consecutive quarters. 
B)  two consecutive quarters. 
C)  a year. 
D)  six consecutive quarters. 
A)  three consecutive quarters. 
B)  two consecutive quarters. 
C)  a year. 
D)  six consecutive quarters.

Question 5

Economists define the unemployed as individuals who are

Accepted Answer

A)  working less than their desired amount of time. 
B)  not currently working. 
C)  working but looking for a different job. 
D)  not currently working but are actively looking for work. 
A)  working less than their desired amount of time. 
B)  not currently working. 
C)  working but looking for a different job. 
D)  not currently working but are actively looking for work.

Question 6

Unemployment implies that in the labor market there is

Accepted Answer

A)  an excess supply of available jobs. 
B)  a shortage in the demand for labor. 
C)  a shortage in the supply of labor. 
D)  an excess demand for labor. 
A)  an excess supply of available jobs. 
B)  a shortage in the demand for labor. 
C)  a shortage in the supply of labor. 
D)  an excess demand for labor.

Question 7

The government wants to encourage consumer spending through cutting income taxes. This is an example of

Accepted Answer

A)  an incomes policy. 
B)  a fiscal policy. 
C)  a supply-side policy. 
D)  a monetary policy. 
A)  an incomes policy. 
B)  a fiscal policy. 
C)  a supply-side policy. 
D)  a monetary policy.

Question 8

Refer to the information for this hypothetical economy provided in Table 5.1 below to answer the questions that follow.
Table 5.1
2014 2015 2016
  
-Refer to Table 5.1. Which of the following quarters can be associated with inflation?

Accepted Answer

A)  the second quarter of the year 2014 
B)  the first quarter of the year 2016 
C)  the second quarter of the year 2016 
D)  all of the above 
A)  the second quarter of the year 2014 
B)  the first quarter of the year 2016 
C)  the second quarter of the year 2016 
D)  all of the above

Question 9

According to Classical economists, if the quantity of labor demanded exceeds the quantity supplied, there is a

Accepted Answer

A)  surplus of labor and wages will rise. 
B)  shortage of labor and wages will fall. 
C)  shortage of labor and wages will rise. 
D)  surplus of labor and wages will fall. 
A)  surplus of labor and wages will rise. 
B)  shortage of labor and wages will fall. 
C)  shortage of labor and wages will rise. 
D)  surplus of labor and wages will fall.

Question 10

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 11

If 5 million workers are unemployed and 45 million workers are employed, then the unemployment rate is

Accepted Answer

A)  5%. 
B)  10%. 
C)  11.1%. 
D)  40%. 
A)  5%. 
B)  10%. 
C)  11.1%. 
D)  40%.

Question 12

The period in the business cycle from a ________ to a ________ is called a recession.

Accepted Answer

A)  peak; trough 
B)  trough; peak 
C)  peak; new peak 
D)  trough; new trough 
A)  peak; trough 
B)  trough; peak 
C)  peak; new peak 
D)  trough; new trough

Question 13

Since most economies, on average, ________ over time, business cycles show a ________ trend.

Accepted Answer

A)  sow down; negative 
B)  suffer recessions; negative 
C)  grow; positive 
D)  remain stable; zero 
A)  sow down; negative 
B)  suffer recessions; negative 
C)  grow; positive 
D)  remain stable; zero

Question 14

If the central bank increases the money supply, it is conducting

Accepted Answer

A)  fiscal policy. 
B)  supply-side policy. 
C)  monetary policy. 
D)  incomes policy. 
A)  fiscal policy. 
B)  supply-side policy. 
C)  monetary policy. 
D)  incomes policy.

Question 15

When the government changes taxes and spending, it is implementing

Accepted Answer

A)  supply-side policy. 
B)  fiscal policy. 
C)  incomes policy. 
D)  monetary policy. 
A)  supply-side policy. 
B)  fiscal policy. 
C)  incomes policy. 
D)  monetary policy.

Question 16

Microeconomic behavior is the sum of all the microeconomic decisions made by individual households and firms.

Accepted Answer

A) True 
 B)False

Question 17

The ________ can change the quantity of money in the economy.

Accepted Answer

A)  Treasury Department 
B)  Federal Reserve 
C)  Congress 
D)  Office of the Comptroller of the Currency 
A)  Treasury Department 
B)  Federal Reserve 
C)  Congress 
D)  Office of the Comptroller of the Currency

Question 18

Refer to the information for this hypothetical economy provided in Table 5.2 below to answer the questions that follow.
Table 5.2
2014 2015 2016
  
-Refer to Table 5.2. We would expect the period from after the fourth quarter of 2014 until before the third quarter of 2015 to be categorized as a period of

Accepted Answer

A)  low inflation. 
B)  low unemployment. 
C)  low production. 
D)  high unemployment. 
A)  low inflation. 
B)  low unemployment. 
C)  low production. 
D)  high unemployment.

Question 19

According to Keynes, the government's role during periods when private demand is low is to stimulate aggregate demand and, by so doing, lift the economy out of recession.

Accepted Answer

A) True 
 B)False

Question 20

The behavior of all households and firms together is called the business cycle.

Accepted Answer

A) True 
 B)False

A household that spends more than it receives in income during a given period is

Fiscal policy includes changing the level of household taxes.

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

It has become conventional to classify an economic downturn as a recession when aggregate output declines for

Economists define the unemployed as individuals who are

Unemployment implies that in the labor market there is

The government wants to encourage consumer spending through cutting income taxes. This is an example of

Refer to the information for this hypothetical economy provided in Table 5.1 below to answer the questions that follow. Table 5.1 2014 2015 2016 -Refer to Table 5.1. Which of the following quarters can be associated with inflation?

According to Classical economists, if the quantity of labor demanded exceeds the quantity supplied, there is a

According to the Classical economists, the economy

If 5 million workers are unemployed and 45 million workers are employed, then the unemployment rate is

The period in the business cycle from a to a is called a recession.

Since most economies, on average, over time, business cycles show a trend.

If the central bank increases the money supply, it is conducting

When the government changes taxes and spending, it is implementing

Microeconomic behavior is the sum of all the microeconomic decisions made by individual households and firms.

The ________ can change the quantity of money in the economy.

According to Keynes, the government's role during periods when private demand is low is to stimulate aggregate demand and, by so doing, lift the economy out of recession.

The behavior of all households and firms together is called the business cycle.

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

Money, the Federal Reserve, and the Interest Rate

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

Policy Effects and Cost 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 Economies

Critical Thinking About Research

Filters

Exam 5: Introduction to Macroeconomics

A household that spends more than it receives in income during a given period is

Fiscal policy includes changing the level of household taxes.

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

It has become conventional to classify an economic downturn as a recession when aggregate output declines for

Economists define the unemployed as individuals who are

Unemployment implies that in the labor market there is

The government wants to encourage consumer spending through cutting income taxes. This is an example of

Refer to the information for this hypothetical economy provided in Table 5.1 below to answer the questions that follow. Table 5.1 2014 2015 2016 -Refer to Table 5.1. Which of the following quarters can be associated with inflation?

According to Classical economists, if the quantity of labor demanded exceeds the quantity supplied, there is a

According to the Classical economists, the economy

If 5 million workers are unemployed and 45 million workers are employed, then the unemployment rate is

The period in the business cycle from a ________ to a ________ is called a recession.

Since most economies, on average, ________ over time, business cycles show a ________ trend.

If the central bank increases the money supply, it is conducting

When the government changes taxes and spending, it is implementing

Microeconomic behavior is the sum of all the microeconomic decisions made by individual households and firms.

The ________ can change the quantity of money in the economy.

According to Keynes, the government's role during periods when private demand is low is to stimulate aggregate demand and, by so doing, lift the economy out of recession.

The behavior of all households and firms together is called the business cycle.

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

Money, the Federal Reserve, and the Interest Rate

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

Policy Effects and Cost 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 Economies

Critical Thinking About Research

Filters

The period in the business cycle from a to a is called a recession.

Since most economies, on average, over time, business cycles show a trend.