Deck 4: Macroeconomics: the Birds-Eye View of the Economy

Question 1

If total output increases from $100 billion to $200 billion as population increases from 100 million to 150 million, then output per person:

A) doubles.
B) increases, but by less than 100 percent.
C) remains constant.
D) decreases

Answer 1

increases, but by less than 100 percent.

Question 2

The field of macroeconomics developed when economists looked for causes of:

A) the wealth of nations.
B) the Great Depression
C) World War I.
D) poverty and inflation.

Answer 2

the Great Depression

Question 3

When comparing the standard of living in two countries it is important to adjust total output for differences in:

A) geographic area
B) employment levels
C) political systems
D) population

Answer 3

population

Question 4

ALL of the following describe economic conditions during the Great Depression in the United States EXCEPT:

A) high rates of unemployment.
B) high rates of inflation.
C) low levels of production.
D) a sharp decline in stock prices.

Question 5

Government actions designed to affect the performance of the economy as a whole are called _______ policies.

A) global
B) microeconomic
C) macroeconomic
D) social

Question 6

If total output increases from $1 trillion to $2 trillion as population increases from 100 million to 200 million, then output per person:

A) doubles.
B) increases, but by less than 100 percent.
C) remains constant.
D) decreases

Question 7

The degree to which people have access to goods and services that make their lives easier, healthier, safer, and more enjoyable is called the:

A) microeconomic standard
B) global standard
C) scarcity standard
D) standard of living.

Question 8

The Great Depression:

A) occurred only in the United States.
B) resulted in the development of microeconomics.
C) was a period of low production and high unemployment.
D) ended a few months after the stock market crash of 1929.

Question 9

Among economists today, the most widely accepted cause of the Great Depression is:

A) poor economic policymaking.
B) wild stock market speculation on Wall Street.
C) globalization.
D) Adolf Hitler's election as Chancellor of Germany.

Question 10

Macroeconomics first developed as a new subfield of economics:

A) when Adolph Hitler ordered economists to learn more about national economies.
B) following the oil price increases of the 1970s.
C) as a result of Adam Smith's publication of The Wealth of Nations in 1776.
D) in response to the severe economic hardships of the Great Depression.

Question 11

If Country A and Country B have the same total output, then the standard of living in these two countries can be different depending on:

A) their respective political systems
B) their respective inflation rates
C) their relative geographic size
D) population size

Question 12

Most economists who have studied it believe that the Great Depression was caused by:

A) the stock market crash.
B) poor economic policymaking.
C) illegal immigration.
D) a sharp decline in average labor productivity.

Question 13

Macroeconomic policies are government policies designed to affect:

A) the environmental impact of all industries.
B) the performance of the economy as a whole.
C) the economic activity of the government.
D) particular sectors of the economy.

Question 14

Since 1950, the standard of living in the United States has:

A) increased when measured by output per person, but decreased when measured by total output.
B) increased when measured by both total output and output per person.
C) decreased when measured by output per person, but increased when measured by total output.
D) decreased when measured by both total output and output per person.

Question 15

If Country A and Country B have the same population size, then the standard of living in these two countries can still be different depending on:

A) their respective political systems
B) their respective inflation rates
C) their relative geographic size
D) the relative sizes of total output

Question 16

If total output increases from $1 trillion to $2 trillion as population increases from 100 million to 250 million, then output per person:

A) doubles.
B) increases, but by less than 100 percent.
C) remains constant.
D) decreases

Question 17

People who enjoy high standards of living usually have all of the following EXCEPT:

A) higher literacy rates.
B) longer life expectancies.
C) freedom from scarcity.
D) better general health.

Question 18

A key indicator of the hardship experienced during the Great Depression is the:

A) high rate of inflation.
B) high rate of unemployment.
C) large trade deficits.
D) large budget deficits.

Question 19

The standard of living in an economy is best measured by:

A) average labor productivity.
B) total output.
C) output per person.
D) the inflation rate.

Question 20

If living standards in a country, as measured by output per person, increase, then total output must have:

A) increased more rapidly than population increased.
B) increased at the same rate that population increased.
C) increased more slowly than population increased.
D) decreased more rapidly than population decreased.

Question 21

Average labor productivity equals:

A) average production per year.
B) total output.
C) output per person.
D) output per employed worker.

Question 22

Which of the following correctly ranks the amounts from smallest to largest?

A) output per person, average labor productivity, total output
B) output per person, total output, average labor productivity
C) total output, average labor productivity, output per person
D) total output, output per person, average labor productivity

Question 23

In Econland population and average labor productivity are constant. If a larger proportion of the population becomes employed workers, then total output will _____ and output per person will ______.

A) increase; increase
B) decrease; decrease
C) remain constant; remain constant
D) decrease; remain constant

Question 24

Average consumption in an economy is best measured by _____, while average productivity in an economy is best measured by _____.

A) total output; output per worker
B) output per worker; total output
C) output per person; output per worker
D) output per worker; output per person

Question 25

The country of Northland produced $1,000 billion of output in one year. The population of Northland was 50 million, of whom 30 million were employed. What was average labor productivity in Northland?

A) $20
B) $33
C) $20,000
D) $33,333

Question 26

Output per worker must be _____ output per person.

A) greater than or equal to
B) less than or equal to
C) no more than half the size of
D) equal to

Question 27

In Econland population and average labor productivity are constant. If a larger proportion of the population enters retirement, then total output will _____ and output per person will ______.

A) increase; increase
B) decrease; decrease
C) remain constant; remain constant
D) decrease; remain constant

Question 28

Output per employed worker is called:

A) total output.
B) average standard of living.
C) average labor productivity.
D) output per person.

Question 29

Compared to the 1950-1973 period, output per worker _____ in the 1974-1995 period.

A) increased more rapidly
B) increased more slowly
C) decreased more slowly
D) decreased more rapidly

Question 30

The value of output was $1,000 billion in Northland and $2,000 billion in Southland. The population of Northland was 50 million and the population of Southland was 120 million. There were 30 million employed workers in Northland and 75 million employed workers in Southland. Average labor productivity was higher in _________ and the standard of living was _______.

A) Northland; the same in both countries
B) Northland; higher in Northland
C) Southland; the same in both countries
D) Southland; higher in Southland

Question 31

Output per person must be _____ output per worker.

A) greater than or equal to
B) less than or equal to
C) no more than half the size of
D) equal to

Question 32

Compared to 1929, total output in the U.S. today is approximately ____ times larger.

A) 2
B) 5
C) 15
D) 25

Question 33

In Econland population increased from 1 million to 1. 1 million, the number of employed workers increased from 500,000 to 600,000, but average labor productivity decreased from $20,000 per worker per year to $19,000 per worker per year. Total output in Econland _____ and the average standard of living _____.

A) decreased; decreased
B) decreased; increased
C) increased; decreased
D) increased; increased

Question 34

In Econland population increased from 1 million to 1. 1 million, the number of employed workers increased from 500,000 to 600,000, but average labor productivity decreased from $20,000 per worker per year to $18,000 per worker per year. Total output in Econland _____ and the average standard of living _____.

A) decreased; decreased
B) decreased; increased
C) increased; decreased
D) increased; increased

Question 35

If living standards in a country, as measured by output per person, decrease, then total output must have:

A) increased more rapidly than population increased.
B) increased at the same rate that population increased.
C) increased more slowly than population increased.
D) decreased more slowly than population decreased.

Question 36

Compared to 1929, total output per person in the U.S. today is approximately ____ times larger.

A) 2
B) 5
C) 15
D) 25

Question 37

The country of Southland produced $2,000 billion of output in one year. The population of Southland was 100 million, of whom 60 million were employed. What was average labor productivity in Southland?

A) $20
B) $33
C) $20,000
D) $33,333

Question 38

The value of output was $100 billion in Northland and $200 billion in Southland. The population of Northland was 50 million and the population of Southland was 30 million. There were 30 million employed workers in Northland and 20 million employed workers in Southland.

A) Northland; the same in both countries
B) Northland; higher in Northland
C) Southland; the same in both countries
D) Southland; higher in Southland

Question 39

The process of steady increase in the quantity and quality of goods and services the economy can produce is called:

A) aggregation..
B) globalization.
C) production.
D) economic growth.

Question 40

Which of the following correctly ranks the amounts from largest to smallest?

A) average labor productivity, output per person, total output
B) output per person, total output, average labor productivity
C) total output, average labor productivity, output per person
D) total output, output per person, average labor productivity

Question 41

After increasing at more than 2 percent per year between 1950 and 1973, the growth rate of average labor productivity _____ between 1973 and 1995, and ____ between 1996 to 2007.

A) slowed; decreased even more
B) speeded up; accelerated even more
C) slowed; picked up
D) speeded up; slowed

Question 42

Over the entire period since 1950, average labor productivity in the United States has _______ although between 1973 and 1995 the rate of change ________.

A) increased; slowed
B) decreased; accelerated
C) increased; accelerated
D) decreased; slowed

Question 43

In both Gamma and Delta average labor productivity is $20,000 per worker per year. The population of Gamma is 200,000 and the population of Delta is 400,000. Sixty percent of the population in each country is employed. Total output in Gamma is _____ and total output in Delta is _____.

A) $2.4 billion; $4.8 billion
B) $8 billion; $4 billion
C) $120,000; $800,000
D) $4 billion; $8 billion

Question 44

A particularly strong expansion is called a(n):

A) output excess.
B) boom.
C) growth recession.
D) bonanza.

Question 45

The growth of total output in the United States since 1929 has been:

A) rapid and smooth d.
B) slow with fluctuations
C) slow and steady
D) rapid but with fluctuations

Question 46

A particularly severe recession is called a(n):

A) super recession.
B) lull.
C) growth recession.
D) depression.

Question 47

The fraction of people who would like to be employed, but can't find work is called the:

A) inflation rate.
B) average labor productivity rate
C) unemployment rate.
D) Participation rate

Question 48

When jobs are hard to find, profits are low, few wage increases are given, and many companies go out of business, the economy is most likely in a(n):

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

Question 49

If average labor productivity increases while population and the number of employed workers remain constant, then output per person:

A) increases.
B) decreases.
C) remains constant.
D) may increase or decrease.

Question 50

If average labor productivity increases while population and the number of employed workers remain constant, then total output:

A) increases.
B) decreases.
C) remains constant.
D) may increase or decrease.

Question 51

If average labor productivity decreases while population and the number of employed workers remain constant, then output per person:

A) increases.
B) decreases.
C) remains constant.
D) may increase or decrease.

Question 52

If average labor productivity increases, then the same number of employed workers will always produce:

A) more total output.
B) more output per person.
C) less total output.
D) less output per person.

Question 53

In both Gamma and Delta average labor productivity is $40,000 per worker per year. The population of Gamma is 200,000 and the population of Delta is 400,000. Fifty percent of the population in each country is employed. Total output in Gamma is _____ and total output in Delta is _____.

A) $2. 4 billion; $4. 8 billion
B) $4 billion; $8 billion
C) $100,000; $200,000
D) $8 billion; $16 billion

Question 54

When jobs are easy to find, wage increases are frequently given, and businesses are doing well, the economy is most likely in a(n):

A) expansion.
B) depression.
C) recession.
D) surplus.

Question 55

In Econland total output is $8 billion, population equals 500,000 people, and, of these, 400,000 are employed workers. Output per person in Econland equals _______ and average labor productivity equals ______.

A) $20,000; $16,000
B) $16,000; $20,000
C) $20,000; $20,000
D) $16,000; $16,000

Question 56

The largest change in the unemployment rate from the beginning of a recession to the peak unemployment rate occurred during the recession beginning in:

A) 1929.
B) 1973.
C) 1980.
D) 2007

Question 57

If average labor productivity decreases while population and the number of employed workers remain constant, then total output:

A) increases.
B) decreases.
C) remains constant.
D) may increase or decrease.

Question 58

In Econland total output is $6 billion, population equals 250,000 people, and, of these, 200,000 are employed workers. Output per person in Econland equals _______ and average labor productivity equals ______.

A) $30,000; $24,000
B) $24,000; $30,000
C) $24,000; $24,000
D) $30,000; $30,000

Question 59

If average labor productivity decreases, then the same number of employed workers will always produce:

A) more total output.
B) more output per person.
C) less total output.
D) less output per person.

Question 60

Unemployment typically _______ during a recession.

A) only exist
B) rises
C) falls
D) remains constant

Question 61

A trade deficit occurs when:

A) government spending exceeds government revenue.
B) government revenue exceeds government spending.
C) exports exceed imports.
D) exports are less than imports.

Question 62

Major macroeconomic questions include all of the following EXCEPT:

A) What causes economic growth?
B) What causes differences in wages between men and women?
C) Why does inflation vary over time and across countries?
D) What are the causes of unemployment?

Question 63

A trade imbalance occurs when:

A) exports from and imports to a country suddenly decline.
B) the quantity of imports equals the quantity of exports, but are large relative to total output.
C) a country does not import or export any goods or services.
D) the quantity of a country's exports differs significantly from the quantity of imports.

Question 64

The United States imports approximately ____ percent of all goods and services produced in the country.

A) 3.
B) 8.
C) 13.
D) 16.

Question 65

Inflation was a major problem in the United States during the:

A) 1950s.
B) 1960s.
C) 1970s.
D) 2000s.

Question 66

In Econland exports equal 25% of total output, while imports equal 20% of total output. Econland has:

A) a budget surplus.
B) a budget deficit.
C) a trade surplus.
D) a trade deficit.

Question 67

Major macroeconomic issues include differences across countries in all of the following EXCEPT:

A) infant mortality rates
B) inflation rates
C) unemployment rates
D) economic growth rates

Question 68

Before 1970 the United States generally had a trade _____ and since 1970 the United States has generally run a trade _____.

A) surplus; surplus
B) surplus; deficit
C) deficit; deficit
D) deficit; surplus

Question 69

The unemployment rate in the United States:

A) falls to zero during expansions.
B) never falls to zero.
C) equals zero during booms.
D) can be zero in both expansions and recessions.

Question 70

If its exports are greater than its imports, then a country has a:

A) government budget deficit.
B) trade surplus.
C) government budget surplus.
D) trade deficit.

Question 71

The rate at which prices in general are increasing is called:

A) the inflation rate.
B) the standard of living.
C) the unemployment rate.
D) the trade balance.

Question 72

In the 1950's and 1960's the European unemployment rate tended to be ______ the U.S. unemployment rate, while in the 1990's the European unemployment rate tended to be ____ the U.S. unemployment rate.

A) higher than; higher than
B) lower than; higher than
C) higher than ; lower than
D) lower than; lower than

Question 73

Inflation is the increase in:

A) total output.
B) imports relative to exports.
C) total output per worker.
D) the general level of prices.

Question 74

If the unemployment rate increases from 4 percent to 10 percent, then the economy is mostly likely in a(n):

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

Question 75

Major macroeconomic questions include all of the following EXCEPT:

A) Are free trade agreements beneficial?
B) Can inflation be reduced without generating additional unemployment?
C) What causes slowdowns in productivity growth?
D) How do monopoly firms set prices and determine quantities to produce?

Question 76

The unemployment rate in the United States at the peak of the Great Depression was _____ percent.

A) 5
B) 10
C) 20
D) 25

Question 77

The unemployment rate is the:

A) number of workers unemployed.
B) number of workers in the labor force.
C) percentage of the population that is out of work.
D) percentage of the labor force that is out of work.

Question 78

The United States exports approximately ____ percent of all goods and services produced in the country.

A) 3.
B) 8.
C) 13.
D) 16.

Question 79

In Econland exports equal 15% of total output, while imports equal 20% of total output. Econland has:

A) a budget surplus.
B) a budget deficit.
C) a trade surplus.
D) a trade deficit.

Question 80

A trade surplus occurs when:

A) government spending exceeds government revenue.
B) government revenue exceeds government spending.
C) exports exceed imports.
D) exports are less than imports.