Deck 1: Introduction to Macroeconomics

Question 1

Which of the following is not a concern of macroeconomics?

A) economy-wide employment and unemployment
B) the aggregate price level
C) product pricing
D) economy-wide levels of production

Answer 1

product pricing

Question 2

Which of the following is not a reason to study macroeconomics?

A) to gain cultural literacy
B) to understand how macroeconomic trends affect you personally
C) to exercise your responsibility as a citizen
D) to learn how to become wealthy

Answer 2

to learn how to become wealthy

Question 3

Which of the following is not one of the six key variables in macroeconomics?

A) the unemployment rate
B) the price of wheat
C) the inflation rate
D) the level of the stock market.

Answer 3

the price of wheat

Question 4

Which of the following is not one of the six key variables in macroeconomics?

A) the unemployment rate
B) the exchange rate
C) the price of Microsoft stock
D) the level of the stock market.

Question 5

Which of the following is not one of the six key variables in macroeconomics?

A) the interest rate
B) the unemployment rate
C) the inflation rate
D) the level of the production in the steel industry

Question 6

Which of the following is not one of the six key variables in macroeconomics?

A) the level of employment in the automobile industry
B) the interest rate
C) the inflation rate
D) the level of the stock market.

Question 7

Which of the following is not one of the six key variables in macroeconomics?

A) the exchange rate
B) the cost of a college education
C) the inflation rate
D) the unemployment rate.

Question 8

The nominal exchange rate is

A) the rate which banks charge the least risky businesses.
B) the rate which District Federal Reserve Banks charge member banks.
C) the rate at which the goods and services purchased in different countries can be exchanged one for another.
D) the rate at which the monies of different countries can be exchanged one for another.

Question 9

The real exchange rate is

A) the rate which banks charge the least risky businesses.
B) the rate which District Federal Reserve Banks charge member banks.
C) the rate at which the goods and services purchased in different countries can be exchanged one for another.
D) the rate at which the monies of different countries can be exchanged one for another.

Question 10

In 2000 prices, real GDP per worker has reached a level of approximately

A) $65,000 in the year 2000.
B) $73,000 in the year 2000.
C) $50,000 in the year 2000.
D) $80,000 in the year 2000.

Question 11

Real GDP is a measure of the economy's

A) unemployment level.
B) output level.
C) stock market level.
D) inflation rate.

Question 12

The two major macroeconomic policy of the government are

A) tax and spending policies.
B) growth policy and monetary policy.
C) growth policy and stabilization policy.
D) monetary policy and stabilization policy.

Question 13

If a domestic currency has appreciated

A) foreign-made goods are cheap relative to domestic-made goods.
B) domestic-made goods are cheap relative to foreign-made goods.
C) exports are likely to increase.
D) imports are likely to decrease.

Question 14

If a domestic currency has depreciated

A) foreign-made goods are cheap relative to domestic-made goods.
B) domestic-made goods are cheap relative to foreign-made goods.
C) exports are likely to decrease.
D) imports are likely to increase.

Question 15

Real GDP per worker approximately _________ since 1890.

A) doubled
B) tripled
C) sextupled
D) quintupled

Question 16

Fluctuations in production and employment are commonly referred to as

A) palpitations.
B) booms.
C) unemployment.
D) business cycles.

Question 17

Periods in which production falls and unemployment rises are called

A) macroeconomic expansions.
B) business cycles.
C) recessions, or possibly, depressions.
D) inflation.

Question 18

Microeconomists

A) focus on the markets for individual commodities and on the decisions of single economic agents.
B) spend much time analyzing how total income changes, and how changes in income cause changes in other modes of economic behavior.
C) spend a great deal of time and energy investigating how people form their expectations and change them over time.
D) consider the possibility that decision makers might change the quantities they produce before they change the prices they charge.

Question 19

Microeconomists

A) focus on the economy as a whole.
B) hold total income constant.
C) spend a great deal of time and energy investigating how people form their expectations and change them over time.
D) consider the possibility that decision makers might change the quantities they produce before they change the prices they charge.

Question 20

Microeconomists

A) focus on the economy as a whole.
B) spend much time analyzing how total income changes, and how changes in income cause changes in other modes of economic behavior.
C) don't worry much about how decision makers form their expectations.
D) consider the possibility that decision makers might change the quantities they produce before they change the prices they charge.

Question 21

Microeconomists

A) focus on the economy as a whole.
B) spend much time analyzing how total income changes, and how changes in income cause changes in . other modes of economic behavior.
C) spend a great deal of time and energy investigating how people form their expectations and change them over time.
D) assume that economic adjustment occurs first through prices that change to balance supply and demand.

Question 22

Macroeconomists

A) hold total income constant.
B) spend much time analyzing how total income changes, and how changes in income cause changes inother modes of economic behavior.
C) don't worry much about how decision makers form their expectations.
D) assume that economic adjustment occurs first through prices that change to balance supply and demand.

Question 23

Macroeconomists

A) focus on the economy as a whole.
B) hold total income constant.
C) don't worry much about how decision makers form their expectations.
D) assume that economic adjustment occurs first through prices that change to balance supply and demand.

Question 24

Macroeconomists

A) focus on the markets for individual commodities and on the decisions of single economic agents.
B) hold total income constant.
C) spend a great deal of time and energy investigating how people form their expectations and change them over time.
D) assume that economic adjustment occurs first through prices that change to balance supply and demand.

Question 25

Macroeconomists

A) focus on the markets for individual commodities and on the decisions of single economic agents.
B) hold total income constant.
C) don't worry much about how decision makers form their expectations.
D) consider the possibility that decision makers might change the quantities they produce before they change the prices they charge.

Question 26

Estimates of the value and composition of economic activity are the fundamental data of macroeconomics and are principally contained in

A) the National Income and Product Accounts (NIPA).
B) the New York Times.
C) the Washington Times.
D) the American Economic Review.

Question 27

Sweden became richer than Argentina in the twentieth century because

A) Argentina's output growth rate was larger than Sweden's.
B) Sweden is located in the northern hemisphere.
C) Sweden's output growth rate was larger than Argentina's.
D) Argentina is located in the southern hemisphere.

Question 28

In the latter half of the 1990s, real GDP in the United States was

A) greater than its trend level.
B) equal to its trend level.
C) less than its trend level.
D) not relevant to its trend level.

Question 29

In the first half of the 2000s, real GDP in the United States was

A) greater than its trend level.
B) equal to its trend level.
C) less than its trend level.
D) not relevant to its trend level.

Question 30

At the end of 1982, the unemployment rate in the United States

A) was less than 4%.
B) was between 4% and 7%.
C) was between 7% and 10%.
D) was more than 10%.

Question 31

At the end of 2000, the unemployment rate in the United States

A) was approximately 4%.
B) was between 5% and 6%.
C) was between 7% and 9%.
D) was more than 10%.

Question 32

At the end of 2003, the unemployment rate in the United States

A) was approximately 4%.
B) was between 5% and 6%.
C) was between 7% and 9%.
D) was more than 10%.

Question 33

Which of the following is not likely to be considered part of economic activity?

A) Purchasing a new automobile.
B) Working in a clothing store.
C) Making pancakes for breakfast (and eating them yourself).
D) Renting an apartment.

Question 34

Which of the following is not likely to be considered part of economic activity?

A) Purchasing a new bicycle.
B) Working in a restaurant.
C) Making steel rods for use in bridge construction.
D) Mowing your own lawn.

Question 35

Which of the following is not likely to be considered part of economic activity?

A) Cleaning your apartment.
B) Hiring someone to mow your lawn.
C) Making pancakes in a restaurant.
D) Renting an apartment.

Question 36

When U.S. interest rates are relatively low compared to those of other countries, the U.S. dollar tends to

A) become more popular.
B) appreciate in value.
C) depreciate in value.
D) appreciate then depreciate in value.

Question 37

Inflation in the United States in the latter half of the 1990s was generally

A) lower than in the 1970s.
B) lower than in the 1960s.
C) higher than in the 1980s.
D) lower than in the 1950s.

Question 38

Examples of investment goods are

A) items that are bought and sold in the stock market.
B) machine tools, buildings, highways, and bridges.
C) bonds.
D) mutual funds.

Question 39

When interest rates decrease,

A) investment spending tends to decrease.
B) investment spending tends to increase.
C) investment spending isn't generally affected.
D) investment spending tends to decrease and then increase.

Question 40

When interest rates increase,

A) investment spending tends to decrease.
B) investment spending tends to increase.
C) investment spending isn't generally affected.
D) investment spending tends to increase and then decrease.

Question 41

Since the early 1980s, real interest rates have generally been _______ the levels of the 1960s and 1970s.

A) unchanged from
B) lower than
C) higher than
D) sometimes higher and sometimes lower than

Question 42

The yield curve shows the difference between

A) short-term and long-term exchange rates.
B) short-term and long-term unemployment rates.
C) short-term and long-term interest rates.
D) short-term and long-term inflation rates.

Question 43

Between 2000 and 2004, the gap between short-term and long-term real interest rates has

A) decreased.
B) decreased and then increased.
C) remained the same.
D) increased.

Question 44

Since the early 1980s, the gap between short-term and long-term real interest rates has been _______ the levels of the 1960s and 1970s.

A) unchanged from
B) lower than
C) higher than
D) sometimes higher and sometimes lower than

Question 45

Since 1997 real stock market index prices have far exceeded their standard, conventional valuation of
_______ times earnings.

A) thirty
B) forty
C) fifteen
D) twenty five

Question 46

Which of the following is not one of the reasons economists offer for the phenomenon of real stock market index prices far exceeding their standard, conventional valuation?

A) an irrational speculative mania.
B) an increased tolerance for risk.
C) a decreased desire to purchase goods and services.
D) expectations of rapid future economic growth on the part of investors.

Question 47

The 1970s was a decade of generally

A) low output growth, increasing unemployment, and increasing inflation.
B) high output growth, increasing unemployment, and decreasing inflation.
C) low output growth, increasing unemployment, and decreasing inflation.
D) high output growth, decreasing unemployment, and decreasing inflation.

Question 48

The 1960s was a decade of generally

A) low output growth, increasing unemployment, and increasing inflation.
B) high output growth, increasing unemployment, and decreasing inflation.
C) high output growth, decreasing unemployment, and increasing inflation.
D) high output growth, decreasing unemployment, and decreasing inflation.

Question 49

The 1990s was a decade of generally

A) low output growth, increasing unemployment, and increasing inflation.
B) high output growth, increasing unemployment, and decreasing inflation
C) high output growth, increasing unemployment, and decreasing inflation.
D) high output growth, decreasing unemployment, and decreasing inflation

Question 50

Which of the following macroeconomic scenarios would likely enhance your chances of receiving a reasonable job offer as you near graduation from your college of university?

A) low output growth and high unemployment.
B) high inflation and high unemployment.
C) high output growth and low unemployment.
D) low output growth and high inflation.

Question 51

Unemployment which is the result of a downturn in the business cycle is called __________
Unemployment.

A) frictional
B) structural
C) cyclical
D) voluntary

Question 52

The ________________ is the best indicator of how well the economy is doing relative to its potential output.

A) unemployment rate.
B) inflation rate
C) interest rate
D) exchange rate.