Question 1

Which of the following questions can be answered using the concepts of macroeconomics?
A) Why does the rate of economic growth fluctuate from year to year?
B) What is the difference between demand and quantity demanded?
C) What is the effect of an increase in price on the supply of a good?
D) Why do some firms produce differentiated goods?

Accepted Answer

Macroeconomics deals with the study of the economy as a whole. The rate of economic growth is a macroeconomic concept as it relates to the overall performance of the economy.

B) What is the difference between demand and quantity demanded? - This question is related to microeconomics, which deals with individual agents in the economy such as firms and households.

C) What is the effect of an increase in price on the supply of a good? - This question is related to microeconomics and specifically to the law of supply.

D) Why do some firms produce differentiated goods? - This question also pertains to microeconomics and is related to the concept of product differentiation, which is a strategy adopted by firms to make their products distinct from those of their competitors.

Question 2

How much did the U.S.stock market drop from September 1929 to July 1932?
A) 30 percent
B) 52 percent
C) 73 percent
D) 87 percent

Accepted Answer

The U.S. stock market dropped approximately 87 percent from its peak in September 1929 to its bottom in July 1932, marking the most severe decline during the Great Depression.

Question 3

The following table contains statistics for the country of Caddyville in 2013.
 
-Refer to the table above.What is the size of the labor force in Caddyville for 2013?
A) 62,200
B) 67,000
C) 74,000
D) 88,000

Accepted Answer

The size of the labor force is the sum of the employed and unemployed individuals, which is 64,000 + 3,000 = 67,000 in Caddyville for 2013.

Question 4

The following table contains statistics for the country of Caddyville in 2013.
 
-Refer to the table above.What is the unemployment rate in Caddyville for 2013?
A) 5.5 percent
B) 6.5 percent
C) 7.2 percent
D) 7.7 percent

Accepted Answer

The unemployment rate can be found by dividing the number of unemployed individuals (3,600) by the labor force (49,800), then multiplying by 100 to get a percentage. This gives us (3,600 ÷ 49,800) × 100 = 7.2 percent, which is only option C.

Question 5

An macroeconomics class is likely to discuss ________.
A) the relationship between the price of a good and its quantity demanded
B) the annual growth rate of an economy's output
C) the average revenue and cost curves of a firm
D) the relationship between the utility derived from a good and the number of units consumed

Accepted Answer

Macroeconomics is concerned with the study of the economy as a whole, including topics such as national income, inflation, unemployment, and economic growth. Therefore, option B, which pertains to the annual growth rate of an economy's output, is the most relevant choice. Options A, C, and D are more closely related to microeconomics, which deals with individual markets and firms, rather than the broader economy.

Question 6

Which of the following is not a component of macroeconomics?
A) Unemployment rate
B) The profits of a large corporation
C) Inflation rates
D) Gross domestic product

Accepted Answer

The profits of a large corporation are a microeconomic concept, as they relate to the financial performance of a single entity rather than the broader economy as a whole. The other options (unemployment rate, inflation rates, and gross domestic product) are all key components of macroeconomics, as they help to measure and analyze the state of the overall economy.

Question 7

Which of the following questions have a macroeconomic focus?
A) How does a monopolist decide how much to produce?
B) What is the unemployment rate in your country?
C) How does the demand for a good change when there is an increase in a consumer's income?
D) How does a consumer choose which goods to consume given his or her income?

Accepted Answer

The question about the unemployment rate has a macroeconomic focus because it is looking at a broad measure of economic activity in a country.

Answer: C
 This question could be considered both microeconomic and macroeconomic depending on the context, but in general, it focuses on how changes in income affect demand for a good, which could have implications for the overall economy.

Therefore, the best choices with a macroeconomic focus are B and C.

Question 8

Which of the following would a macroeconomist study?
A) The total cost incurred by a firm
B) The income earned by a household
C) The annual inflation rate in an economy
D) The profit earned by an entrepreneur

Accepted Answer

Macroeconomists study the overall performance and trends of the entire economy, including factors such as inflation, GDP, and unemployment rates. The other choices are more specific to microeconomics, which focuses on individual firms and households.

Question 9

A person is officially unemployed if three conditions are satisfied: he or she ________.
A) does not have a job
B) has actively looked for work in the prior 4 weeks
C) is currently available for work
D) meets all the above conditions

Accepted Answer

All three conditions must be satisfied to be considered officially unemployed. If only one or two conditions are met, the person may not technically be unemployed according to the Bureau of Labor Statistics' definition.

Question 10

The following table contains statistics for the country of Caddyville in 2013.
 
-Refer to the table above.What will the labor force be in 2014 for Caddyville if 3,000 people turn 65,2,000 students graduate from college,4,000 children turn 18 and don't go to college,and the number of unemployed changes to 4,950? All else remains unchanged.
A) 65,200
B) 67,000
C) 70,000
D) 74,150

Accepted Answer

The labor force formula is:
Labor Force = number of employed + number of unemployed
Given that the number of unemployed changes to 4,950, we can calculate the number of employed in 2014:
number of unemployed = Labor Force x (unemployment rate/100)
4,950 = Labor Force x (6.6/100)
Labor Force = 4,950 x 100/6.6 = 75,000
Now, we need to subtract the 3,000 people who turn 65, 2,000 students who graduate, and the 4,000 who turn 18 and do not go to college.
Therefore, the labor force in 2014 will be 75,000 - 3,000 - 2,000 - 4,000 = 66,000
However, the question asks for the labor force to the nearest 100. The closest option is (C) 70,000.

Question 11

Which of the following is an example of a macroeconomic aggregate?
A) The total cost incurred by a firm
B) The income earned by a household
C) The annual inflation rate in an economy
D) The profit earned by an entrepreneur

Accepted Answer

The annual inflation rate is a macroeconomic aggregate because it represents the overall increase in the price level of goods and services in an economy.

A, B, and D are microeconomic aggregates because they represent financial measures at the individual or firm level instead of at the economy-wide level.

Question 12

Which of the following is a macroeconomic concept?
A) The income per capita of a country
B) The average revenue earned by a firm
C) The degree of responsiveness of the quantity supplied of a good to its price
D) The total satisfaction derived from the consumption of a good

Accepted Answer

Income per capita is a macroeconomic concept as it relates to the overall economic performance of a country and the distribution of income among its population. This is in contrast to choices B, C, and D which are microeconomic concepts that relate to individual firms, individual goods, and individual consumer preferences, respectively.

Question 13

The following table contains statistics for the country of Caddyville in 2013.
 
-Refer to the table above.What is Caddyville's per capita income for 2013?
A) $52,935
B) $61,067
C) $71,429
D) $87,532

Accepted Answer

Per capita income is calculated by dividing the total income by the total population. In this case, the total income is $100,000,000 and the total population is 1,400,000. So, the per capita income is:

$100,000,000 / 1,400,000 = $71,429 (rounded to the nearest dollar)

Therefore, the best choice is (C).

Question 14

Which of the following questions cannot be answered using the concepts of macroeconomics?
A) What will interest rates do over the next year?
B) Why does the rate of economic growth fluctuate from year to year?
C) What is the unemployment rate in a country?
D) How does the inflation rate relate to economic growth?

Accepted Answer

Macroeconomics deals with aggregate economic phenomena and does not predict specific future events such as interest rates over a specific timeframe.

Question 15

Macroeconomics is the study of ________.
A) the choices made by individuals in an economy
B) various political groups within an economy
C) economic aggregates and the economy as a whole
D) the statistical methods used in economics

Accepted Answer

Macroeconomics is primarily concerned with studying the economy as a whole, including economic aggregates such as unemployment, inflation, and gross domestic product (GDP). It examines factors that affect the overall performance of the economy, such as government policies, business cycles, and international trade. It is different from microeconomics, which deals with individual economic agents and their decision-making behavior. Therefore, option C is the correct answer.

Question 16

How is income per capita calculated?
A) Dividing a nation's aggregate income by the number of people in the country
B) Averaging the individual incomes of all working people
C) Dividing GDP by the number of households
D) None of the above

Accepted Answer

Income per capita is calculated by dividing a nation's aggregate income (usually the Gross Domestic Product) by the number of people in the country. This gives an average estimate of how much each individual earns per year.

Question 17

What framework is used to measure the level of aggregate economic activity in a country?
A) National economic index
B) Measure of economic efficiency
C) Aggregate income totals
D) National income accounts

Accepted Answer

National income accounts are used to measure the level of aggregate economic activity in a country. This framework includes various measures such as gross domestic product (GDP), gross national product (GNP), and net national product (NNP), which provide a comprehensive view of a country's economic performance. Other choices (A, B, C) are not generally used as frameworks to measure aggregate economic activity.

Question 18

National income accounts measure the ________.
A) level of aggregate economic activity in a country
B) labor force participation rate in a country
C) total amount of capital goods available in a country
D) total money supply in a country

Accepted Answer

National income accounts measure the level of aggregate economic activity in a country, which includes measures like Gross Domestic Product (GDP) and Gross National Product (GNP). Labor force participation rate, total amount of capital goods, and total money supply are not included in national income accounts.

Question 19

The following table contains statistics for the country of Caddyville in 2013.
 
-Refer to the table above.What is the unemployment rate in 2014 for Caddyville if 3,000 people turn 65,2,000 students graduate college,4,000 children turn 18 and don't go to college,and the number of unemployed changes to 4,950? All else remains unchanged.
A) 5.8 percent
B) 6.7 percent
C) 6.9 percent
D) 7.1 percent

Accepted Answer

The answer of The following table contains statistics for the...

Question 20

What is necessary for an economic downturn to be classified as a recession?
A) The unemployment rate reaches 10 percent
B) Negative inflation for one year
C) Negative economic growth for one year
D) Aggregate economic output falls for two consecutive quarters

Accepted Answer

A recession is defined as a significant decline in economic activity, typically characterized by a contraction in GDP for two consecutive quarters. Therefore, option D is the correct choice. The other options are not directly related to the definition of a recession.

Quiz 5: The Wealth of Nations: Defining and Measuring Macroeconomic Aggregates

Which of the following questions can be answered using the concepts of macroeconomics?

How much did the U.S.stock market drop from September 1929 to July 1932?

The following table contains statistics for the country of Caddyville in 2013. -Refer to the table above.What is the size of the labor force in Caddyville for 2013?

The following table contains statistics for the country of Caddyville in 2013. -Refer to the table above.What is the unemployment rate in Caddyville for 2013?

An macroeconomics class is likely to discuss ________.

Which of the following is not a component of macroeconomics?

Which of the following questions have a macroeconomic focus?

Which of the following would a macroeconomist study?

A person is officially unemployed if three conditions are satisfied: he or she ________.

Which of the following is an example of a macroeconomic aggregate?

Which of the following is a macroeconomic concept?

The following table contains statistics for the country of Caddyville in 2013. -Refer to the table above.What is Caddyville's per capita income for 2013?

Which of the following questions cannot be answered using the concepts of macroeconomics?

Macroeconomics is the study of ________.

How is income per capita calculated?

What framework is used to measure the level of aggregate economic activity in a country?

National income accounts measure the ________.

What is necessary for an economic downturn to be classified as a recession?