Question 1

In a macroeconomic model designed to explain why some countries grow faster than others,which of these variables is likely to be endogenous?
A)investment
B)economic policies
C)geographic size
D)population
E)none of the above

Accepted Answer

Investment is likely to be endogenous because it is influenced by various factors such as economic policies, human capital, and technological advancements, which are all endogenous variables. Economic policies (B) can also be endogenous to some extent, but they can also be exogenous if imposed by external entities like international organizations. Geographic size (C) and population (D) are typically exogenous variables that do not change much over time and are not influenced by the economic system in the short run. Therefore, the best choice for an endogenous variable is A) investment.

Question 2

Macroeconomics is the study of ________ while microeconomics studies ________.
A)large biological systems;political implications of nanotechnology
B)the overall economic activity and prices;an individual firm,household,or market
C)an individual firm;the overall economic performance of a nation
D)the overall economic performance of the world;the economy of a single country
E)firm behavior;market behavior

Accepted Answer

Macroeconomics studies the overall economic activity and prices in a nation or globally, while microeconomics studies the behavior of individual firms, households, or markets.

Question 3

A(n)________ variable is calculated from within the model.A(n)________ variable can never be taken as given.
A)endogenous;endogenous
B)exogenous;endogenous
C)endogenous;exogenous
D)exogenous;exogenous
E)none of the above

Accepted Answer

An endogenous variable is calculated from within the model and can never be taken as given. An exogenous variable is taken as given and comes from outside the model. Therefore, of the given options, the only appropriate answer is A.

Question 4

An exogenous variable is typically ________.
A)not considered in an economic model
B)only used to conduct policy analysis
C)taken as given
D)explained inside the model
E)explained by interest rates

Accepted Answer

Exogenous variables are typically taken as given and not explained inside the model. They are external factors that impact the model but are not directly affected by it.

Question 5

Macroeconomic models particularly focus on the following three economic data series.
A)real GDP,the unemployment rate,and inflation
B)endogenous variables,exogenous variables,and GDP per person
C)inflation,recessions,and business cycles
D)real GDP,the employment rate,and interest rates
E)real GDP,the unemployment rate,and depressions

Accepted Answer

Macroeconomic models typically focus on real GDP, the unemployment rate, and inflation as these are key indicators of overall economic performance and health. Real GDP measures the total value of goods and services produced in an economy, the unemployment rate measures the percentage of the labor force that is unemployed but actively seeking work, and inflation measures the rate at which prices for goods and services are increasing. These three indicators are closely watched by economists, policymakers, and businesses as they provide important information about the state of the economy and can help guide decision-making.

Question 6

Macroeconomics is the study of ________ while microeconomics studies ________.
A)large business enterprises;small business ventures
B)the overall household economic activity;market behavior
C)an individual firm;the overall economic performance of a nation
D)the overall economic performance of the world;the economy of a single country
E)none of the above

Accepted Answer

Macroeconomics focuses on the economy as a whole, including issues like inflation, unemployment, and economic growth, while microeconomics deals with individual and business decisions regarding prices, resource allocation, and demand. None of the provided options accurately capture this distinction.

Question 7

An endogenous variable is typically ________.
A)strictly explained inside the model
B)taken as given
C)strictly explained outside the model
D)constant inside the model
E)explained by unemployment

Accepted Answer

An endogenous variable is a variable that is explained inside the model, through the relationships among the variables in the model. It is opposed to an exogenous variable, which is taken as given outside the model. Therefore, choice A is the best answer.

Question 8

Macroeconomic models particularly focus on the following three economic data series.
A)endogenous variables,exogenous variables,and taxes
B)inflation,unemployment,and business cycles
C)nominal GDP,the employment rate,and budget deficits
D)bankruptcies,the unemployment rate,and depressions
E)none of the above

Accepted Answer

The answer of Macroeconomic models particularly focus on the following...

Question 9

An exogenous variable is typically ________.
A)calculated by the model
B)only used to conduct policy analysis
C)explained inside the model
D)disregarded in economic models
E)none of the above

Accepted Answer

An exogenous variable is a variable that is not explained within the model and is typically given or assumed. It is not calculated by the model and can be used for policy analysis, but is not limited to that. Therefore, options A, B, and C are incorrect. Option D is also incorrect, as exogenous variables are an important part of economic models.

Question 10

A simple macroeconomic model might explain how an increase in the demand for new housing would lead to a decrease in the rate of unemployment.In such a model,which of these variables is likely to be exogenous?
A)the quantity sold of home furnishings
B)the degree of unionization of the construction industry
C)the wage rate for unskilled workers
D)the level of tax revenues
E)the demand for concrete

Accepted Answer

The degree of unionization of the construction industry is likely to be considered an exogenous variable in this context because it is determined outside the model and affects the model's outcomes (such as employment levels in construction) without being influenced by the changes within the model itself, like the increase in demand for new housing.

Question 11

If a macroeconomist studying the causes of unemployment suspects that changes in technology might play a role,then this macroeconomist is at which step in the process of developing an economic model?
A)Identify the exogenous variables.
B)Identify the endogenous variables.
C)Compare the model with the data.
D)Conduct prediction and policy analysis.
E)Develop a model.

Accepted Answer

Identifying the exogenous variables is the step in developing an economic model where a macroeconomist would consider changes in technology as a potential cause of unemployment. Exogenous variables are those external factors that the model takes as given, which could influence the endogenous variables (outcomes) the economist is trying to understand.

Question 12

If a macroeconomist studying the causes of unemployment finds that,historically,changes in technology seem to have caused between five and 15 percent of changes in unemployment,then this macroeconomist is at which step in the process of developing an economic model?
A)Identify the exogenous variables.
B)Identify the endogenous variables.
C)Develop a model.
D)Compare the model with the data.
E)Conduct prediction and policy analysis.

Accepted Answer

The macroeconomist comparing historical data on technology changes and unemployment changes is at the step of comparing the model with the data. This step involves assessing how well the model's predictions align with actual historical data.

Question 13

Real GDP measures ________.
A)the total hours the average U.S.citizen works a year
B)the percentage of income produced by workers and firms
C)how slowly interest rates grow
D)the total market value of actual goods and services produced in an economy over a year
E)how rapidly the overall level of prices is rising

Accepted Answer

Real GDP measures the total market value of actual goods and services produced in an economy over a year.

Question 14

An endogenous variable is typically ________.
A)taken as given
B)strictly explained outside the model
C)strictly explained inside the model
D)strictly explained by data
E)strictly explained by graphical analysis

Accepted Answer

An endogenous variable is strictly explained inside the model, meaning it is a variable that is determined by other variables within the same model. It is not taken as given, explained outside the model, or explained solely by data or graphical analysis.

Question 15

Which statement is true of an exogenous variable in an economic model?
A)It has no direct relation to the endogenous variables.
B)Its value within the model cannot be changed.
C)It is often a policy variable.
D)It is explained inside the model.
E)All of the above.

Accepted Answer

An exogenous variable is often a policy variable (such as taxes, subsidies, or regulations) that is outside of the model and can be changed by policymakers. It has a direct impact on the endogenous variables in the model, but its value is determined outside of the model. Therefore, options A, B, and D are incorrect.

Question 16

In a model of the saving rate,which of these relationships is most crucial?
A)the effect of the saving rate on government spending
B)the effect of government spending on the saving rate
C)the effect of the saving rate on taxes
D)the effect of taxes on the saving rate
E)the effect of the saving rate on the real wage

Accepted Answer

The relationship between the saving rate and taxes is most crucial in a model of the saving rate. When taxes increase, disposable income decreases, which in turn reduces the amount of money available for saving. Alternatively, when taxes decrease, disposable income increases, which provides an incentivize for people to save more. Therefore, the effect of taxes on the saving rate is a critical relationship to consider in a model of the saving rate.

Question 17

To compare the conclusions of a model with what actually happens,historical data are entered into the model as ________.
A)endogenous variables
B)exogenous variables
C)equations
D)predictions
E)policies

Accepted Answer

Exogenous variables represent the factors outside of the model that influence the endogenous variables. Historical data can be entered into the model as exogenous variables to compare the conclusions of the model with what actually happened. Endogenous variables are the variables determined within the model, while equations are the mathematical relationships between the variables. Predictions are the expected outcomes based on the model, and policies are the proposed courses of action based on the model's conclusions.

Question 18

Which of the following sequences best describes the five necessary steps to develop an economic model in the correct order?
A)(1): Identify the endogenous variables; (2): identify the exogenous variables; (3): develop a model; (4): compare the model with the data; (5): conduct prediction and policy analysis.
B)(1): Develop a model; (2): identify the exogenous variables; (3): identify the endogenous variables; (4): compare the model with the data; (5): conduct prediction and policy analysis.
C)(1): Conduct prediction and policy analysis; (2): develop a model; (3): identify the endogenous variables; (4): identify the exogenous variables; (5): compare the model with the data.
D)(1): Conduct prediction and policy analysis; (2): compare the model with the data; (3):identify the endogenous variables; (4): identify the exogenous variables; (5): develop a model.
E)none of the above

Accepted Answer

The correct sequence for developing an economic model starts with identifying the variables (endogenous then exogenous), developing the model, comparing it with real-world data, and finally conducting prediction and policy analysis.

Question 19

Macroeconomics is the study of ________ while microeconomics studies ________.
A)an individual firm;the overall economic performance of a nation
B)the overall economic performance of the world;the economy of a single country
C)the overall economic activity and prices;an individual firm,household,or market
D)firm choices;market behavior
E)consumer choices;government behavior

Accepted Answer

Macroeconomics is concerned with the overall economic activity and prices in a country or region, such as GDP, inflation, and unemployment. Microeconomics is focused on the behavior of individual firms, households, and markets, examining factors like supply and demand, consumer choices, and producer decisions.

Question 20

If a macroeconomist studying the causes of unemployment asserts that a particular change in technology will cause the rate of unemployment to decrease by ten percent,then this macroeconomist is at which step in the process of developing an economic model?
A)Identify the endogenous variables.
B)Develop a model.
C)Compare the model with the data.
D)Identify the exogenous variables.
E)Conduct prediction and policy analysis.

Accepted Answer

The macroeconomist is at the step of conducting prediction and policy analysis, as they are making a prediction about how a change (in this case, a technological change) will affect an economic outcome (unemployment rate). This step comes after developing the model and identifying both the endogenous and exogenous variables.

Quiz 1: The Policy and Practice of Macroeconomics

In a macroeconomic model designed to explain why some countries grow faster than others,which of these variables is likely to be endogenous?

Macroeconomics is the study of while microeconomics studies .

A(n) variable is calculated from within the model.A(n) variable can never be taken as given.

An exogenous variable is typically ________.

Macroeconomic models particularly focus on the following three economic data series.

Macroeconomics is the study of while microeconomics studies .

An endogenous variable is typically ________.

Macroeconomic models particularly focus on the following three economic data series.

An exogenous variable is typically ________.

A simple macroeconomic model might explain how an increase in the demand for new housing would lead to a decrease in the rate of unemployment.In such a model,which of these variables is likely to be exogenous?

If a macroeconomist studying the causes of unemployment suspects that changes in technology might play a role,then this macroeconomist is at which step in the process of developing an economic model?

If a macroeconomist studying the causes of unemployment finds that,historically,changes in technology seem to have caused between five and 15 percent of changes in unemployment,then this macroeconomist is at which step in the process of developing an economic model?

Real GDP measures ________.

An endogenous variable is typically ________.

Which statement is true of an exogenous variable in an economic model?

In a model of the saving rate,which of these relationships is most crucial?

To compare the conclusions of a model with what actually happens,historical data are entered into the model as ________.

Which of the following sequences best describes the five necessary steps to develop an economic model in the correct order?

Macroeconomics is the study of while microeconomics studies .

If a macroeconomist studying the causes of unemployment asserts that a particular change in technology will cause the rate of unemployment to decrease by ten percent,then this macroeconomist is at which step in the process of developing an economic model?

Quiz 1: The Policy and Practice of Macroeconomics

In a macroeconomic model designed to explain why some countries grow faster than others,which of these variables is likely to be endogenous?

Macroeconomics is the study of ________ while microeconomics studies ________.

A(n) ________ variable is calculated from within the model.A(n) ________ variable can never be taken as given.

An exogenous variable is typically ________.

Macroeconomic models particularly focus on the following three economic data series.

Macroeconomics is the study of ________ while microeconomics studies ________.

An endogenous variable is typically ________.

Macroeconomic models particularly focus on the following three economic data series.

An exogenous variable is typically ________.

A simple macroeconomic model might explain how an increase in the demand for new housing would lead to a decrease in the rate of unemployment.In such a model,which of these variables is likely to be exogenous?

If a macroeconomist studying the causes of unemployment suspects that changes in technology might play a role,then this macroeconomist is at which step in the process of developing an economic model?

If a macroeconomist studying the causes of unemployment finds that,historically,changes in technology seem to have caused between five and 15 percent of changes in unemployment,then this macroeconomist is at which step in the process of developing an economic model?

Real GDP measures ________.

An endogenous variable is typically ________.

Which statement is true of an exogenous variable in an economic model?

In a model of the saving rate,which of these relationships is most crucial?

To compare the conclusions of a model with what actually happens,historical data are entered into the model as ________.

Which of the following sequences best describes the five necessary steps to develop an economic model in the correct order?

Macroeconomics is the study of ________ while microeconomics studies ________.

If a macroeconomist studying the causes of unemployment asserts that a particular change in technology will cause the rate of unemployment to decrease by ten percent,then this macroeconomist is at which step in the process of developing an economic model?

Macroeconomics is the study of while microeconomics studies .

A(n) variable is calculated from within the model.A(n) variable can never be taken as given.

Macroeconomics is the study of while microeconomics studies .

Macroeconomics is the study of while microeconomics studies .