Deck 1: Thinking About Macroeconomics

Question 1

Macroeconomists study:

A)the determination of real GDP.
B)the production of specific goods.
C)the relative production in different markets.
D)all of the above.

Answer 1

the determination of real GDP.

Question 2

Macroeconomists study the amount of employment and unemployment.

Answer 2

True

Question 3

Macroeconomics deals with:

A)how individual markets work.
B)the overall performance of the economy.
C)relative prices in different markets.
D)substitution of one good for another good.

Answer 3

the overall performance of the economy.

Question 4

Monetary policy involves:

A)the government's expenditure.
B)taxation.
C)determining the quantity of money.
D)the fiscal deficit.

Question 5

During recessions the unemployment rate:

A)declines.
B)increases.
C)is stable.
D)is unmeasurable.

Question 6

Macroeconomists study:

A)the determination of the economy's total production.
B)unemployment
C)the general price level.
D)all of the above.

Question 7

Among the prices that macroeconomists study are:

A)the wage rate.
B)the interest rate.
C)the exchange rate.
D)all of the above.

Question 8

Fiscal policy involves:

A)determining exchange rates.
B)government expenditures.
C)interest rates.
D)all of the above.

Question 9

The unemployment rate is:

A)the fraction of the population with no job.
B)the fraction of those seeking work with no job.
C)the rate of growth of those with no job.
D)the rate of growth of those seeking work.

Question 10

The unemployment rate in France was highest in:

A)1990
B)1994
C)2001
D)2009

Question 11

Macroeconomists study the price of individual products like beer.

Question 12

When real GDP falls toward a low point or trough it is called a[n]:

A)boom.
B)recession.
C)inflation.
D)expansion.

Question 13

When GDP is expanding toward a high point it is called a[n]:

A)depression.
B)boom.
C)recession.
D)inflation.

Question 14

If price is below equilibrium in a market, then quantity supplied will be less than quantity demanded.

Question 15

A recession is when GDP is falling toward a trough.

Question 16

Variations in real GDP are called:

A)inflation.
B)deflation.
C)economic fluctuations.
D)all of the above.

Question 17

The rate of growth of GDP for period t is:

A)
B)
C)
D)

Question 18

When the gross domestic product is growing, it is called inflation.

Question 19

Among the prices that macroeconomist study are:

A)the price of coffee.
B)the price of tea.
C)the interest rate.
D)all of the above.

Question 20

Macroeconomics includes the study of:

A)the general price level.
B)the price of individual goods.
C)the relative price of goods.
D)all of the above.

Question 21

A possible order of events in an economy over time is:

A)expansion, recession, peak, expansion.
B)recession, trough, expansion, peak.
C)expansion, peak, trough, recession.
D)recession, trough, peak, expansion.

Question 22

In Figure1.1 if the price is 2, then:

A)the market is in equilibrium.
B)there is excess quantity supplied.
C)there is excess quantity demanded.
D)the market clears.

Question 23

The inflation rate for year t is:

A)
B)
C)
D)

Question 24

In Figure1.1 the equilibrium quantity is

A)5
B)2
C)7
D)8

Question 25

A peak in an economy is when the economy:

A)is growing.
B)reaches a low point.
C)is contracting.
D)reaches a high point.

Question 26

In Figure1.1, if price is 7, then quantity demanded is:

A) 2.
B) 7.
C) 3.
D) 8.

Question 27

The price of labour is the:

A)exchange rate.
B)wage rate.
C)interest rate.
D)the rental price.

Question 28

In Figure1.1 the equilibrium price is:

A)2
B)5
C)7
D)0

Question 29

In Figure1.1 if price is 7, then

A)the market is in equilibrium.
B)there is excess quantity supplied.
C)there is excess quantity demanded.
D)the market clears.

Question 30

In Figure1.1, if price is 2, then quantity demanded is:

A) 2.
B) 7.
C) 3.
D) 8.

Question 31

A trough in an economy is when the economy:

A)is growing.
B)reaches a low point.
C)is contracting.
D)reaches a high point.

Question 32

In Figure1.1, if price is 5, then quantity demanded is:

A) 2.
B) 7.
C) 3.
D) 5.

Question 33

A variable that macroeconomists want to model is a[n]

A)endogenous variable.
B)dummy variable.
C)exogenous variable.
D)predetermined variable.

Question 34

In Figure1.1, if price is 2, then quantity supplied is:

A) 2.
B) 7.
C) 3.
D) 8.

Question 35

In Figure1.1, if price is 7, then quantity supplied is:

A) 2.
B) 7.
C) 3.
D) 8.

Question 36

In Figure1.1, if demand falls, then equilibrium:

A)price and quantity fall.
B)price and quantity rise.
C)price falls and quantity rises.
D)prices rises and quantity falls.

Question 37

In Figure1.1, if price is 7, then quantity demanded is:

A) 2.
B) 7.
C) 3.
D) 8.

Question 38

A variable taken as given in a model is a[n]

A)endogenous variable.
B)dummy variable.
C)exogenous variable.
D)dichotomous variable.

Question 39

In Figure1.1 if supply increases, then equilibrium:

A)price and quantity fall.
B)price and quantity rise.
C)price rises and quantity falls.
D)price falls and quantity rises.

Question 40

The euro price paid to use capital is known as:

A)the interest rate.
B)the exchange rate.
C)the rental price of capital.
D)the general price level.

Question 41

What are exogenous and endogenous variables?

Question 42

What is the rate of growth of real GDP?

Question 43

What types of economic issues do macroeconomists study?

Question 44

If prices are sticky:

A)the market quickly sticks at equilibrium.
B)the market clears quickly.
C)the market only slowly moves toward equilibrium.
D)all of the above.

Question 45

In an economic model:

A)endogenous variables feed into a model to affect exogenous variable.
B)exogenous variables feed into a model to affect endogenous variables.
C)exogenous and endogenous variables feed into the model.
D)none of the above.

Question 46

Describe what happens when demand or supply increase in a market.

Question 47

A possible order of economic fluctuations is:

A)recession, boom, expansion, trough.
B)expansion, recession, boom, trough.
C)recession, trough, expansion, peak.
D)expansion, trough, recession, peak.

Question 48

A macroeconomist would study the:

A)price of cars.
B)the market for shoes.
C)the sales of beer.
D)none of the above.

Question 49

A price taker:

A)takes the price to the market.
B)controls the market price.
C)accepts the market price and decides whether and how much to buy or sell.
D)accepts the market quantity and sets price.

Question 50

How is the annual inflation rate calculated?