Question 1

The field of macroeconomics was considered an extension of microeconomics prior to the Great Depression.

Accepted Answer

A) True 
 B)False

Question 2

_____ are almost 70% of GDP, while _____ are about 17% of GDP.

Accepted Answer

A)  Personal consumption expenditures; government expenditures 
B)  Personal consumption expenditures; gross private domestic investments 
C)  Government expenditures; gross private domestic investments 
D)  Government expenditures; net exports

Question 3

Suppose the yield on a 3-month Treasury bill is 0.5% and the 10-year Treasury note yields 2.67%. State whether the slope of this yield curve indicates if the economy may be headed for a recession, and support your answer.

Accepted Answer

The answer of Suppose the yield on a 3-month Treasury...

Question 4

The national income and product accounts ignore nonmarket transactions, investments in human capital, and the use of people's leisure time.

Accepted Answer

A) True 
 B)False

Question 5

We are MOST likely to see a recession if interest rates on long-term bonds are _____, and interest rates on short-term bonds are _____.

Accepted Answer

A)  8%; 6% 
B)  5%; 5% 
C)  7%; 7% 
D)  2%; 4%

Question 6

When interest rates on short-term bonds exceed those on long-term bonds, a recession is likely to occur.

Accepted Answer

A) True 
 B)False

Question 7

Which statement is correct?

Accepted Answer

A)  Households supply both labor and nonlabor resources. 
B)  In the circular flow model, incomes and resources flow in the same direction. 
C)  The four main factors of production are water, land, entrepreneurial ability, and energy. 
D)  Owners of factors of production pay income to firms.

Question 8

A major reason to collect economic data for national income and product accounts is to guide the government in appropriate economic policy.

Accepted Answer

A) True 
 B)False

Question 9

The _____ is/are equal to the total market value of all final goods and services produced in the United States.

Accepted Answer

A)  national income and product accounts 
B)  GDP 
C)  consumer price index 
D)  the National Bureau of Economic Research

Question 10

Childcare provided by a nanny is not included in the GDP if the parents pay the nanny "under the table."

Accepted Answer

A) True 
 B)False

Question 11

We are MOST likely to see a recession if interest rates on long-term bonds are

Accepted Answer

A)  higher than interest rates on short-term bonds. 
B)  the same as interest rates on short-term bonds. 
C)  rising. 
D)  lower than interest rates on short-term bonds.

Question 12

If a business increases its inventories, the change is treated as an investment.

Accepted Answer

A) True 
 B)False

Question 13

A double-dip recession is a recession that is twice as bad as the one that preceded it.

Accepted Answer

A) True 
 B)False

Question 14

Developing countries tend to place a higher value on environmental quality than developed countries do.

Accepted Answer

A) True 
 B)False

Question 15

Which transaction would be included in the national income and product accounts?

Accepted Answer

A)  A community group prepares a meal for the homeless on Thanksgiving Day. 
B)  John pays Maria in cash for tutoring him in economics, but Maria does not report this income. 
C)  Residents of a city can take home the vegetables they grow in a community garden in exchange for working in the garden. 
D)  Jaslyn is paid for her work as coordinator at a women's shelter.

Question 16

The value of cars that the Ford Motor Company produces in a German plant is

Accepted Answer

A)  a part of U.S. GDP. 
B)  not a part of U.S. GNP. 
C)  a part of German GNP. 
D)  a part of German GDP.

Question 17

Simon Kuznets

Accepted Answer

A)  devised the gross national product as a way of measuring a nation's economic output. 
B)  set up the National Bureau of Economic Research. 
C)  was the Secretary of Treasury during World War II. 
D)  invented the hair net.

Question 18

The National Bureau of Economic Research is a government agency.

Accepted Answer

A) True 
 B)False

Question 19

The _____ is a weighted average of 85 indicators of aggregate economic performance, designed to pinpoint signs of a recession in a reasonable time frame.

Accepted Answer

A)  consumer price index 
B)  National Activity Index 
C)  producer price index 
D)  Dow Jones Industrial Index

Question 20

Whose analysis serves as the foundation of modern macroeconomics?

Accepted Answer

A)  Milton Friedman 
B)  John Maynard Keynes 
C)  Adam Smith 
D)  Joseph Schumpeter

Exam 5: Introduction to Macroeconomics

The field of macroeconomics was considered an extension of microeconomics prior to the Great Depression.

_ are almost 70% of GDP, while _ are about 17% of GDP.

Suppose the yield on a 3-month Treasury bill is 0.5% and the 10-year Treasury note yields 2.67%. State whether the slope of this yield curve indicates if the economy may be headed for a recession, and support your answer.

The national income and product accounts ignore nonmarket transactions, investments in human capital, and the use of people's leisure time.

We are MOST likely to see a recession if interest rates on long-term bonds are _, and interest rates on short-term bonds are _.

When interest rates on short-term bonds exceed those on long-term bonds, a recession is likely to occur.

Which statement is correct?

A major reason to collect economic data for national income and product accounts is to guide the government in appropriate economic policy.

The _____ is/are equal to the total market value of all final goods and services produced in the United States.

Childcare provided by a nanny is not included in the GDP if the parents pay the nanny "under the table."

We are MOST likely to see a recession if interest rates on long-term bonds are

If a business increases its inventories, the change is treated as an investment.

A double-dip recession is a recession that is twice as bad as the one that preceded it.

Developing countries tend to place a higher value on environmental quality than developed countries do.

Which transaction would be included in the national income and product accounts?

The value of cars that the Ford Motor Company produces in a German plant is

Simon Kuznets

The National Bureau of Economic Research is a government agency.

The _____ is a weighted average of 85 indicators of aggregate economic performance, designed to pinpoint signs of a recession in a reasonable time frame.

Whose analysis serves as the foundation of modern macroeconomics?