Question 1

A review of the performance of the economy during the Bush administration is the concern of:

Accepted Answer

Macroeconomics deals with the overall performance and behavior of the economy as a whole, including issues such as inflation, economic growth, and unemployment, which are all relevant to evaluating the performance of the economy during the Bush administration. Microeconomics, on the other hand, focuses on individual economic decisions and behavior of consumers, firms, and markets, which is less relevant to assessing the overall performance of the economy during a specific administration.

Question 2

Which of the following is included in the study of macroeconomics?

Accepted Answer

Macroeconomics deals with the study of the entire economy at a national or international level. Therefore, unemployment in the nation is a key macroeconomic variable that is closely monitored and analyzed. Salaries of college professors and silver prices are microeconomic variables that are not directly related to the performance of the overall economy. Computer prices can be a mix of both microeconomics and macroeconomics depending on how it affects the overall economy.

Question 3

Which of the following is a macroeconomics topic?

Accepted Answer

The economy's annual growth rate is a topic that falls under macroeconomics, which focuses on the broader issues of the economy, such as inflation, unemployment, and economic growth. Options A, B, D, and E are more focused on specific industries, products, or regions, and therefore are not considered macroeconomic topics.

Question 4

A model is defined as a:

Accepted Answer

A model is a simplified representation of reality used to understand and predict economic events. It is not a description of all variables affecting a situation or a positive analysis of all variables. While historical evidence may be used in the development of a model, a model itself is not a prediction based solely on historical evidence.

Question 5

Which of the following is a macroeconomic subject?

Accepted Answer

The unemployment rate in the nation is a macroeconomic subject as it deals with the overall performance of the labor market in the country. Shipping rates, price of corporate stock, and market price of Japanese cars are all microeconomic subjects as they are specific to individual industries or companies.

Question 6

The branch of economics that focuses on decision making for the economy as a whole is called:

Accepted Answer

Macroeconomics is the branch of economics that focuses on decision making for the economy as a whole, including factors such as economic growth, inflation, and unemployment. Normative economics focuses on making value judgments about economic policies, microeconomics focuses on decision making at the level of individual households and firms, and consumer economics specifically focuses on the behavior and decision making of consumers.

Question 7

An economist at the University of Alaska at Anchorage has been asked to explain why the price of Alaskan crude oil has fallen recently. In order to develop a model, the professor should take which steps?

Accepted Answer

The economist should first identify the problem of the falling price of Alaskan crude oil and develop a model based on simplifying assumptions. Then, the model should be tested to formulate a conclusion. This approach is the basic scientific method for analyzing economic issues. Gathering data on unrelated variables (B) and asking people why they are not purchasing oil (C) may be helpful in certain cases, but they are not the best approach for explaining a specific market phenomenon like the falling price of Alaskan crude oil. The statement in option D is incorrect, as prices in the oil industry are influenced by supply and demand and can be explained using economic theories.

Question 8

The branch of economics that focuses on economywide variables like inflation and unemployment is called:

Accepted Answer

The branch of economics that focuses on economywide variables like inflation and unemployment is called macroeconomics. Option B, microeconomics, focuses on individual economic agents, such as consumers and firms. Option C, free-market economics, is a particular perspective on how markets should operate, rather than a branch of economics. Option D, aggregate economics, is not a commonly used term in the field.

Question 9

Which of the following questions would not be studied by a microeconomist but would be studied by a macroeconomist?

Accepted Answer

Microeconomics deals with individual economic agents (such as households and firms), while macroeconomics deals with the overall performance of the economy, including topics like economic growth, inflation, and unemployment. The question about why national economies grow is a macroeconomic topic. The other three questions are more related to individual behavior and therefore fall under the scope of microeconomics.

Question 10

Macroeconomics deals with the analysis of all of the following questions except:

Accepted Answer

Macroecnomics deals with the analysis of the economy as a whole, including topics such as economic growth, inflation, and recessions. The pricing strategy of a specific company, such as Microsoft, is a microeconomic issue and does not fall under the purview of macroeconomics.

Question 11

Which of the following is included in the study of macroeconomics?

Accepted Answer

Macroeconomics focuses on the overall performance and behavior of the economy as a whole, including factors such as unemployment, inflation, and economic growth. A and B are more focused on microeconomics, which looks at individual markets and consumer behavior. D is related to finance and the stock market, not macroeconomics.

Question 12

Policies to lower the price level of goods in the nation are a concern of:

Accepted Answer

Lowering the price level of goods in the nation is a concern of macroeconomics as it deals with the overall economy, including inflation and the general price level. Microeconomics, on the other hand, deals with individual markets and how prices are determined in those markets.

Question 13

A sub-discipline of economics that looks at the economy as a whole is:

Accepted Answer

Macroeconomics is the sub-discipline of economics that studies the performance and behavior of the economy as a whole, including national income, inflation, unemployment, and economic growth. It focuses on the aggregate level of economic activity, rather than on individual markets or firms.

Question 14

The basic purpose of economic models is to:

Accepted Answer

Economic models are constructed to explain and predict the relationships between variables in the real world. While they may involve simplifying assumptions, the goal is not to fully capture the complexity of reality but rather to provide useful insights and understanding. Controlled experiments are not typically carried out in economics, as the field is largely observational rather than experimental.

Question 15

Economists use models to:

Accepted Answer

Economists use models to abstract from the complexities of the world, understand economic behavior, and explain and help predict human behavior. Thus, the best choice is D: do all of these.

Question 16

Which of the following markets is closely related to macroeconomics?

Accepted Answer

Macroeconomics deals with the overall performance and behavior of the entire economy, including factors such as inflation, GDP, and employment. The nation's unemployment rate is directly related to macroeconomics as it reflects the overall level of employment in the economy.

Question 17

Microeconomics deals with the analysis of all the following questions except how:

Accepted Answer

Microeconomics focuses on the behavior and decision-making of individuals and firms with regards to the allocation of scarce resources. It does not analyze macroeconomic trends such as unemployment, which falls under the purview of macroeconomics.

Question 18

Which of the following is a microeconomics topic?

Accepted Answer

A price of a new home is a microeconomics topic because it focuses on the specific market of new homes and how supply and demand factors affect the price.

Question 19

The television network newscaster reports that the national inflation rate the past year equaled 4 percent. This report would be of particular interest to a ____.

Accepted Answer

Macroeconomists study aggregate economic variables, such as inflation, GDP, and unemployment at the national or global level. Therefore, a report on national inflation rates would be of particular interest to a macroeconomist.

Question 20

Policies to create jobs in the nation are the concern of:

Accepted Answer

Macroeconomics deals with the economy as a whole, including national employment levels and job creation policies.

Quiz 1: Introducing the Economic Way of Thinking

A review of the performance of the economy during the Bush administration is the concern of:

Which of the following is included in the study of macroeconomics?

Which of the following is a macroeconomics topic?

A model is defined as a:

Which of the following is a macroeconomic subject?

The branch of economics that focuses on decision making for the economy as a whole is called:

An economist at the University of Alaska at Anchorage has been asked to explain why the price of Alaskan crude oil has fallen recently. In order to develop a model, the professor should take which steps?

The branch of economics that focuses on economywide variables like inflation and unemployment is called:

Which of the following questions would not be studied by a microeconomist but would be studied by a macroeconomist?

Macroeconomics deals with the analysis of all of the following questions except:

Which of the following is included in the study of macroeconomics?

Policies to lower the price level of goods in the nation are a concern of:

A sub-discipline of economics that looks at the economy as a whole is:

The basic purpose of economic models is to:

Economists use models to:

Which of the following markets is closely related to macroeconomics?

Microeconomics deals with the analysis of all the following questions except how:

Which of the following is a microeconomics topic?

The television network newscaster reports that the national inflation rate the past year equaled 4 percent. This report would be of particular interest to a ____.

Policies to create jobs in the nation are the concern of: