Question 1

When households increase their personal savings ________.

Accepted Answer

A) investment decreases 
B) they are better able to cope with severe economic downturns 
C) interest rates are likely to rise,as well 
D) all of the above 
E) none of the above 
A) investment decreases 
B) they are better able to cope with severe economic downturns 
C) interest rates are likely to rise,as well 
D) all of the above 
E) none of the above

Question 2

Macroeconomics is the study of ________ while microeconomics studies ________.

Accepted Answer

A) an individual firm;the overall economic performance of a nation 
B) the overall economic performance of the world;the economy of a single country 
C) the overall economic activity and prices;an individual firm,household,or market 
D) firm choices;market behavior 
E) consumer choices;government behavior 
A) an individual firm;the overall economic performance of a nation 
B) the overall economic performance of the world;the economy of a single country 
C) the overall economic activity and prices;an individual firm,household,or market 
D) firm choices;market behavior 
E) consumer choices;government behavior

Question 3

What explains the rise in income in the U.S.between 1900 and 2013?

Accepted Answer

A) business cycles 
B) economic growth 
C) recessions 
D) depressions 
E) the purchasing power of the dollar 
A) business cycles 
B) economic growth 
C) recessions 
D) depressions 
E) the purchasing power of the dollar

Question 4

By 2010,the U.S.economy had emerged from the recession that had begun in 2007.Despite an economic growth rate well above zero,unemployment showed little sign of declining much below ten percent.Focusing on the definition of the unemployment rate,explain how it is possible to have positive economic growth without declining unemployment.

Accepted Answer

To lower the unemployment rate,the numbe

Question 5

In the 2000s,the U.S.economy had both a ________ and a ________.

Accepted Answer

A) large trade deficit;large capital inflow 
B) large trade surplus;large capital inflow 
C) large trade deficit;high saving rate 
D) large capital inflow;high saving rate 
E) large capital inflow;small government budget deficit 
A) large trade deficit;large capital inflow 
B) large trade surplus;large capital inflow 
C) large trade deficit;high saving rate 
D) large capital inflow;high saving rate 
E) large capital inflow;small government budget deficit

Question 6

Nonactivists propose doing nothing in the face of economic hardship because ________.

Accepted Answer

A) markets can take quite a bit of time to self-correct 
B) excessive unemployment tends to disappear on its own accord 
C) while households feel the hardship,firms typically benefit 
D) all of the above 
E) none of the above 
A) markets can take quite a bit of time to self-correct 
B) excessive unemployment tends to disappear on its own accord 
C) while households feel the hardship,firms typically benefit 
D) all of the above 
E) none of the above

Question 7

Which of these is not among the principal determinants of economic growth?

Accepted Answer

A) institutions 
B) education 
C) research and development 
D) balanced trade 
E) saving and investment 
A) institutions 
B) education 
C) research and development 
D) balanced trade 
E) saving and investment

Question 8

Macroeconomic models particularly focus on the following three economic data series.

Accepted Answer

A) real GDP,the unemployment rate,and inflation 
B) endogenous variables,exogenous variables,and GDP per person 
C) inflation,recessions,and business cycles 
D) real GDP,the employment rate,and interest rates 
E) real GDP,the unemployment rate,and depressions 
A) real GDP,the unemployment rate,and inflation 
B) endogenous variables,exogenous variables,and GDP per person 
C) inflation,recessions,and business cycles 
D) real GDP,the employment rate,and interest rates 
E) real GDP,the unemployment rate,and depressions

Question 9

Activist policymakers,compared to nonactivists,are more likely to emphasize ________ considerations and to prefer ________.

Accepted Answer

A) short-run;rule-determined 
B) long-run;discretionary policy 
C) short-run;discretionary policy 
D) long-run;rule determined 
E) business;flexible plans 
A) short-run;rule-determined 
B) long-run;discretionary policy 
C) short-run;discretionary policy 
D) long-run;rule determined 
E) business;flexible plans

Question 10

Nonactivists propose doing nothing in the face of economic hardship because ________.

Accepted Answer

A) activist policies can kick in at the wrong time and be counterproductive 
B) "markets self-correct pretty rapidly anyway" 
C) in the face of high unemployment,activist policies would likely lead to surges in inflation 
D) all of the above 
E) none of the above 
A) activist policies can kick in at the wrong time and be counterproductive 
B) "markets self-correct pretty rapidly anyway" 
C) in the face of high unemployment,activist policies would likely lead to surges in inflation 
D) all of the above 
E) none of the above

Question 11

The U.S.personal saving rate ________.

Accepted Answer

A) is much higher than the percentage the Chinese citizens save 
B) is higher than the saving rate of most countries 
C) cannot fall below zero 
D) increased by a factor of five every year since the 1970s 
E) none of the above 
A) is much higher than the percentage the Chinese citizens save 
B) is higher than the saving rate of most countries 
C) cannot fall below zero 
D) increased by a factor of five every year since the 1970s 
E) none of the above

Question 12

From 1900 to 2013,real GDP per person has had two important attributes.

Accepted Answer

A) It has grown substantially over time and there are small differences from country to country. 
B) It has grown unevenly over time in the U.S.but it has grown substantially. 
C) It has grown evenly over time in the U.S.and there are huge differences from country to country. 
D) It has fluctuated around a trend in the U.S.but it has not grown much for all the Southeast Asian countries. 
E) It has doubled in the U.S.but there have been many recession periods. 
A) It has grown substantially over time and there are small differences from country to country. 
B) It has grown unevenly over time in the U.S.but it has grown substantially. 
C) It has grown evenly over time in the U.S.and there are huge differences from country to country. 
D) It has fluctuated around a trend in the U.S.but it has not grown much for all the Southeast Asian countries. 
E) It has doubled in the U.S.but there have been many recession periods.

Question 13

Develop a simple model of inflation by identifying at least two exogenous variables and describing,briefly,how the value of these exogenous variables will impact the rate of increase in the overall level of prices in the economy.

Accepted Answer

Answers will vary.The most appropriate e

Question 14

From 1929 to 2013,the unemployment rate in the U.S.________.

Accepted Answer

A) has continued to grow but has always remained well above zero 
B) has fluctuated around zero 
C) has gone up and down but has always remained well above zero 
D) has decreased in most recessions 
E) has grown by a factor of four 
A) has continued to grow but has always remained well above zero 
B) has fluctuated around zero 
C) has gone up and down but has always remained well above zero 
D) has decreased in most recessions 
E) has grown by a factor of four

Question 15

Since World War II the U.S.________.

Accepted Answer

A) has seen a substantial increase in the inflation rate 
B) has seen less frequent periods of deflation 
C) has seen a significant upward trend in real GDP 
D) all of the above 
E) none of the above 
A) has seen a substantial increase in the inflation rate 
B) has seen less frequent periods of deflation 
C) has seen a significant upward trend in real GDP 
D) all of the above 
E) none of the above

Question 16

What explains the rise in income in the U.S.between 1900 and 2013?

Accepted Answer

A) business cycles 
B) inflation 
C) recessions 
D) depressions 
E) none of the above 
A) business cycles 
B) inflation 
C) recessions 
D) depressions 
E) none of the above

Question 17

The percentage of income that Americans save each year ________.

Accepted Answer

A) is much higher than the percentage the Chinese citizens save 
B) is higher than the saving rate of most industrialized countries 
C) is lower than the saving rate of most industrialized countries 
D) increased by a factor of five every year since the 1970s 
E) none of the above 
A) is much higher than the percentage the Chinese citizens save 
B) is higher than the saving rate of most industrialized countries 
C) is lower than the saving rate of most industrialized countries 
D) increased by a factor of five every year since the 1970s 
E) none of the above

Question 18

Financial crises are typically ________.

Accepted Answer

A) characterized by sharp declines in asset prices 
B) associated with increases in business failures 
C) accompanied by sharp economic downturns 
D) all of the above 
E) none of the above 
A) characterized by sharp declines in asset prices 
B) associated with increases in business failures 
C) accompanied by sharp economic downturns 
D) all of the above 
E) none of the above

Question 19

Since World War II the U.S.________.

Accepted Answer

A) has seen a substantial decrease in the inflation rate 
B) has seen frequent periods of deflation 
C) has seen a significant upward trend in unemployment 
D) has seen a significant upward trend in real GDP 
E) none of the above 
A) has seen a substantial decrease in the inflation rate 
B) has seen frequent periods of deflation 
C) has seen a significant upward trend in unemployment 
D) has seen a significant upward trend in real GDP 
E) none of the above

Question 20

Up until World War II inflation in the U.S.________.

Accepted Answer

A) remained around zero on average 
B) rose and remained quite high for an extended period of time 
C) has gone up and down but has always remained well above zero 
D) increased by a factor of four every year 
E) decreased by 30% every year 
A) remained around zero on average 
B) rose and remained quite high for an extended period of time 
C) has gone up and down but has always remained well above zero 
D) increased by a factor of four every year 
E) decreased by 30% every year

Exam 1: The Policy and Practice of Macroeconomics

When households increase their personal savings ________.

Macroeconomics is the study of ________ while microeconomics studies ________.

What explains the rise in income in the U.S.between 1900 and 2013?

In the 2000s,the U.S.economy had both a ________ and a ________.

Nonactivists propose doing nothing in the face of economic hardship because ________.

Which of these is not among the principal determinants of economic growth?

Macroeconomic models particularly focus on the following three economic data series.

Activist policymakers,compared to nonactivists,are more likely to emphasize ________ considerations and to prefer ________.

Nonactivists propose doing nothing in the face of economic hardship because ________.

The U.S.personal saving rate ________.

From 1900 to 2013,real GDP per person has had two important attributes.

Develop a simple model of inflation by identifying at least two exogenous variables and describing,briefly,how the value of these exogenous variables will impact the rate of increase in the overall level of prices in the economy.

From 1929 to 2013,the unemployment rate in the U.S.________.

Since World War II the U.S.________.

What explains the rise in income in the U.S.between 1900 and 2013?

The percentage of income that Americans save each year ________.

Financial crises are typically ________.

Since World War II the U.S.________.

Up until World War II inflation in the U.S.________.

Measuring Macroeconomic Data

Aggregate Production and Productivity

Saving and Investment in Closed and Open Economies

Money and Inflation

The Sources of Growth and the Solow Model

Drivers of Growth: Technology, policy, and Institutions

Business Cycles: an Introduction

The Is Curve

Monetary Policy and Aggregate Demand

Aggregate Supply and the Phillips Curve

The Aggregate Demand and Supply Model

Macroeconomic Policy and Aggregate Demand and Supply Analysis

The Financial System and Economic Growth

Financial Crises and the Economy

Fiscal Policy and the Government Budget

Exchange Rates and International Economic Policy

Consumption and Saving

Investment

The Labor Market, employment, and Unemployment

The Role of Expectations in Macroeconomic Policy

Modern Business Cycle Theory

Filters

Macroeconomics is the study of while microeconomics studies .

In the 2000s,the U.S.economy had both a and a .

Activist policymakers,compared to nonactivists,are more likely to emphasize considerations and to prefer .