Question 1

A measure that economists use in order to keep track of employment is

Accepted Answer

The unemployment rate is a measure used by economists to track employment. It measures the percentage of the labor force that is unemployed but actively seeking employment.

Question 2

During the 1990s and the first decade of the 2000s

Accepted Answer

The statement mentions "U.S. citizens are more concerned about inflation than any other national problem" but does not indicate that the concern was due to high inflation rates. Additionally, it does not mention the occurrence of deflation. The statement only indicates that the inflation rate averaged less than 3 percent per year during the given time period.

Question 3

-Refer to Figure 5-1 above.If the economy moves from point B to C on the graph,it is going through a(n)

Accepted Answer

Moving from point B to C on a graph typically indicates an expansion, as it suggests an increase in economic activity or growth.

Question 4

Since 1959,the U.S.has experienced severe recessions in which three periods?

Accepted Answer

The severe recessions that the U.S. has experienced since 1959 occurred in 1974-75, 1981-82, and 2008-09. Option A is incorrect as 1964-65 was not a severe recession. Option C is incorrect as 1960-61 was not a severe recession. Option D is incorrect as 1960-61 was repeated in this option and 1974-75 was omitted. Option E is incorrect as 1969-70 was not a severe recession.

Question 5

Inflation has never been a major problem in the U.S.

Accepted Answer

While inflation has not always been a major problem in the U.S., there have been significant periods of high inflation such as the 1970s and early 1980s. Inflation remains a concern for the U.S. economy and the Federal Reserve's monetary policy is aimed, in part, at keeping inflation under control.

Question 6

Microeconomics involves the analysis of smaller,less developed economies while macroeconomics is concerned with the analysis of larger developed economies.

Accepted Answer

The statement is false. Microeconomics is concerned with individual economic units such as households and firms, while macroeconomics focuses on the economy as a whole, typically on a national or even global scale. The level of development of the economy is not a factor in determining whether the analysis is micro or macro.

Question 7

Over the past 90 years or so,the inflation rate has

Accepted Answer

The statement "been positive in most years" is true. While there have been periods of high inflation and periods of low inflation, the overall trend has been a positive inflation rate.

Question 8

The inflation rate

Accepted Answer

The inflation rate measures the annual percent increase in the average level of prices, which means it provides information about how prices are changing over time. It is not directly related to the prices charged by all firms in the economy, nor does it determine the prices that firms will offer to customers. Additionally, while inflation can influence wages and incomes, it does not directly measure how fast they are rising.

Question 9

Aggregation is important in macroeconomics because

Accepted Answer

Aggregation is important in macroeconomics because it simplifies the complex economy into manageable models, allowing economists to analyze the entire economy as a whole rather than focusing on individual markets or details.

Question 10

-Refer to Figure 5-1 above.If the economy moves from point A to B on the graph,it is going through a(n)

Accepted Answer

The answer of 
-Refer to Figure 5-1 above.If the economy...

Question 11

We could try to use a powerful computer to construct a macroeconomic model including tens of thousands of demand and supply curves,for every market in the economy.This would not be a useful undertaking because

Accepted Answer

Constructing such a detailed model would require immense effort and complexity, and the benefits would not justify the resources needed to gather and process all the necessary information.

Question 12

Aggregation is important because it allows macroeconomists to divide a whole into its individual components.

Accepted Answer

Aggregation in macroeconomics is the process of combining individual economic units into a single whole, not dividing a whole into individual components.

Question 13

In macroeconomics,

Accepted Answer

Macroeconomics is the study of the entire economy as a whole, including aggregates like national income, unemployment rates, inflation rates, and economic growth. It seeks to understand how the economy behaves as a whole and how different factors, such as government policies or international trade, affect the overall performance of the economy. Macroeconomics looks at the economy as a system, rather than focusing on individual markets or products.

Question 14

When we study macroeconomics,

Accepted Answer

In macroeconomics, we employ the technique of aggregation to reduce the number of markets we need to understand. This means that we group similar markets together and study them as a single entity, such as the labor market or the housing market, to analyze the overall behavior of the economy as a whole. This is more efficient than modeling tens of thousands of individual supply and demand curves or determining thousands of prices and quantities.

Question 15

-Refer to Figure 5-1 above.If the economy reaches point B on the graph,it is going through a(n)

Accepted Answer

The answer of 
-Refer to Figure 5-1 above.If the economy...

Question 16

Why is inflation considered a problem?

Accepted Answer

Inflation is considered a problem because it leads to rising prices of goods and services, which reduces the purchasing power of consumers, especially those with fixed incomes. This can lead to a decrease in consumption, reduced economic growth, and increased social inequality. Additionally, inflation can lead to rising interest rates, which can increase the cost of borrowing and reduce investment, leading to a slowdown in economic activity. All of these factors combine to make inflation a costly problem for society.

Question 17

Which of the following is a period of decreasing output that is severe and long lasting?

Accepted Answer

A depression is a severe and long-lasting period of decreasing output, characterized by high unemployment, low incomes, and a lack of economic growth. It is more severe than a recession, which is also a period of decreasing output but typically lasts for a shorter period of time.

Question 18

During the expansion phase of a business cycle

Accepted Answer

During the expansion phase of a business cycle, both employment and output are rising. This means that businesses are experiencing growth, creating more jobs and producing more goods and services. This is often accompanied by a time of low inflation and increased consumer confidence.

Question 19

-Refer to Figure 5-1 above.If the economy goes from point A to point C on the graph,it is going through a(n)

Accepted Answer

The answer of 
-Refer to Figure 5-1 above.If the economy...

Question 20

Aggregation is the process of combining different things into a single category.

Accepted Answer

Aggregation involves combining different items, data, or information into a single unit or category for analysis or further processing.

Quiz 5: What Macroeconomics Tries to Explain

A measure that economists use in order to keep track of employment is

During the 1990s and the first decade of the 2000s

-Refer to Figure 5-1 above.If the economy moves from point B to C on the graph,it is going through a(n)

Since 1959,the U.S.has experienced severe recessions in which three periods?

Inflation has never been a major problem in the U.S.

Microeconomics involves the analysis of smaller,less developed economies while macroeconomics is concerned with the analysis of larger developed economies.

Over the past 90 years or so,the inflation rate has

The inflation rate

Aggregation is important in macroeconomics because

-Refer to Figure 5-1 above.If the economy moves from point A to B on the graph,it is going through a(n)

We could try to use a powerful computer to construct a macroeconomic model including tens of thousands of demand and supply curves,for every market in the economy.This would not be a useful undertaking because

Aggregation is important because it allows macroeconomists to divide a whole into its individual components.

In macroeconomics,

When we study macroeconomics,

-Refer to Figure 5-1 above.If the economy reaches point B on the graph,it is going through a(n)

Why is inflation considered a problem?

Which of the following is a period of decreasing output that is severe and long lasting?

During the expansion phase of a business cycle

-Refer to Figure 5-1 above.If the economy goes from point A to point C on the graph,it is going through a(n)

Aggregation is the process of combining different things into a single category.