Deck 16: Macroeconomics: The Birds Eye View of the Economy

Question 1

A key indicator of the hardship experienced during the Great Depression is the:

A)high rate of inflation.
B)high rate of unemployment.
C)large trade deficits.
D)large budget deficits.

Answer 1

high rate of unemployment.

Question 2

The standard of living in an economy is best measured by:

A)average labor productivity.
B)total output.
C)output per person.
D)the inflation rate.

Answer 2

output per person.

Question 3

Government actions designed to affect the performance of the economy as a whole are called ________ policies.

A)global
B)microeconomic
C)macroeconomic
D)social

Answer 3

macroeconomic

Question 4

If total output increases from $100 billion to $200 billion as population increases from 100 million to 150 million, then output per person:

A)doubles.
B)increases, but by less than 100 percent.
C)remains constant.
D)decreases.

Question 5

If Country A and Country B have the same population size, then the standard of living in these two countries can still be different depending on:

A)their respective political systems.
B)their respective inflation rates.
C)their relative geographic size.
D)the relative sizes of total output.

Question 6

The field of macroeconomics developed when economists looked for causes of:

A)the wealth of nations.
B)the Great Depression.
C)World War I.
D)poverty and inflation.

Question 7

Most economists who have studied it believe that the Great Depression was caused by:

A)the stock market crash.
B)poor economic policymaking.
C)illegal immigration.
D)a sharp decline in average labor productivity.

Question 8

People who enjoy high standards of living usually have all of the following EXCEPT:

A)higher literacy rates.
B)longer life expectancies.
C)freedom from scarcity.
D)better general health.

Question 9

If Country A and Country B have the same total output, then the standard of living in these two countries can be different depending on:

A)their respective political systems.
B)their respective inflation rates.
C)their relative geographic size.
D)population size.

Question 10

The Great Depression:

A)occurred only in the United States.
B)resulted in the development of microeconomics.
C)was a period of low production and high unemployment.
D)ended a few months after the stock market crash of 1929.

Question 11

The degree to which people have access to goods and services that make their lives easier, healthier, safer, and more enjoyable is called the:

A)microeconomic standard.
B)global standard.
C)scarcity standard.
D)standard of living.

Question 12

Among economists today, the most widely accepted cause of the Great Depression is:

A)poor economic policymaking.
B)wild stock market speculation on Wall Street.
C)globalization.
D)Adolf Hitler's election as Chancellor of Germany.

Question 13

When comparing the standard of living in two countries it is important to adjust total output for differences in:

A)geographic area.
B)employment levels.
C)political systems.
D)population.

Question 14

If total output increases from $1 trillion to $2 trillion as population increases from 100 million to 200 million, then output per person:

A)doubles.
B)increases, but by less than 100 percent.
C)remains constant.
D)decreases.

Question 15

If total output increases from $1 trillion to $2 trillion as population increases from 100 million to 250 million, then output per person:

A)doubles.
B)increases, but by less than 100 percent.
C)remains constant.
D)decreases.

Question 16

ALL of the following describe economic conditions during the Great Depression in the United States EXCEPT:

A)high rates of unemployment.
B)high rates of inflation.
C)low levels of production.
D)a sharp decline in stock prices.

Question 17

Macroeconomics first developed as a new subfield of economics:

A)when Adolph Hitler ordered economists to learn more about national economies.
B)following the oil price increases of the 1970s.
C)as a result of Adam Smith's publication of The Wealth of Nations in 1776.
D)in response to the severe economic hardships of the Great Depression.

Question 18

If living standards in a country, as measured by output per person, increase, then total output must have:

A)increased more rapidly than population increased.
B)increased at the same rate that population increased.
C)increased more slowly than population increased.
D)decreased more rapidly than population decreased.

Question 19

Macroeconomic policies are government policies designed to affect:

A)the environmental impact of all industries.
B)the performance of the economy as a whole.
C)the economic activity of the government.
D)particular sectors of the economy.

Question 20

Since 1950, the standard of living in the United States has:

A)increased when measured by output per person, but decreased when measured by total output.
B)increased when measured by both total output and output per person.
C)decreased when measured by output per person, but increased when measured by total output.
D)decreased when measured by both total output and output per person.

Question 21

Output per worker must be ________ output per person.

A)greater than or equal to
B)less than or equal to
C)no more than half the size of
D)equal to

Question 22

Average labor productivity equals:

A)average production per year.
B)total output.
C)output per person.
D)output per employed worker.

Question 23

The value of output was $1,000 billion in Northland and $2,000 billion in Southland. The population of Northland was 50 million and the population of Southland was 120 million. There were 30 million employed workers in Northland and 75 million employed workers in Southland. Average labor productivity was higher in ________ and the standard of living was ________.

A)Northland; the same in both countries
B)Northland; higher in Northland
C)Southland; the same in both countries
D)Southland; higher in Southland

Question 24

The process of steady increase in the quantity and quality of goods and services the economy can produce is called:

A)aggregation.
B)globalization.
C)production.
D)economic growth.

Question 25

If living standards in a country, as measured by output per person, decrease, then total output must have:

A)increased more rapidly than population increased.
B)increased at the same rate that population increased.
C)increased more slowly than population increased.
D)decreased more slowly than population decreased.

Question 26

Output per person must be ________ output per worker.

A)greater than or equal to
B)less than or equal to
C)no more than half the size of
D)equal to

Question 27

In Econland population increased from 1 million to 1.1 million, the number of employed workers increased from 500,000 to 600,000, but average labor productivity decreased from $20,000 per worker per year to $18,000 per worker per year. Total output in Econland ________ and the average standard of living ________.

A)decreased; decreased
B)decreased; increased
C)increased; decreased
D)increased; increased

Question 28

Output per employed worker is called:

A)total output.
B)average standard of living.
C)average labor productivity.
D)output per person.

Question 29

The country of Southland produced $2,000 billion of output in one year. The population of Southland was 100 million, of whom 60 million were employed. What was average labor productivity in Southland?

A)$20
B)$33
C)$20,000
D)$33,333

Question 30

The value of output was $100 billion in Northland and $200 billion in Southland. The population of Northland was 50 million and the population of Southland was 30 million. There were 30 million employed workers in Northland and 20 million employed workers in Southland.

A)Northland; the same in both countries
B)Northland; higher in Northland
C)Southland; the same in both countries
D)Southland; higher in Southland

Question 31

In Econland population and average labor productivity are constant. If a larger proportion of the population enters retirement, then total output will ________ and output per person will ________.

A)increase; increase
B)decrease; decrease
C)remain constant; remain constant
D)decrease; remain constant

Question 32

In Econland population increased from 1 million to 1.1 million, the number of employed workers increased from 500,000 to 600,000, but average labor productivity decreased from $20,000 per worker per year to $19,000 per worker per year. Total output in Econland ________ and the average standard of living ________.

A)decreased; decreased
B)decreased; increased
C)increased; decreased
D)increased; increased

Question 33

Which of the following correctly ranks the amounts from smallest to largest?

A)Output per person, average labor productivity, total output
B)Output per person, total output, average labor productivity
C)Total output, average labor productivity, output per person
D)Total output, output per person, average labor productivity

Question 34

The country of Northland produced $1,000 billion of output in one year. The population of Northland was 50 million, of whom 30 million were employed. What was average labor productivity in Northland?

A)$20
B)$33
C)$20,000
D)$33,333

Question 35

Which of the following correctly ranks the amounts from largest to smallest?

A)Average labor productivity, output per person, total output
B)Output per person, total output, average labor productivity
C)Total output, average labor productivity, output per person
D)Total output, output per person, average labor productivity

Question 36

If average labor productivity increases while population and the number of employed workers remain constant, then total output:

A)increases.
B)decreases.
C)remains constant.
D)may increase or decrease.

Question 37

Average consumption in an economy is best measured by ________, while average productivity in an economy is best measured by ________.

A)total output; output per worker
B)output per worker; total output
C)output per person; output per worker
D)output per worker; output per person

Question 38

In Econland population and average labor productivity are constant. If a larger proportion of the population becomes employed workers, then total output will ________ and output per person will ________.

A)increase; increase
B)decrease; decrease
C)remain constant; remain constant
D)decrease; remain constant

Question 39

Compared to the 1950-1973 period, output per worker ________ in the 1974-1995 period.

A)increased more rapidly
B)increased more slowly
C)decreased more rapidly
D)decreased more slowly

Question 40

Compared to 1929, total output in the U.S. in 2016 was approximately ________ times larger.

A)2
B)5
C)15
D)25

Question 41

If average labor productivity increases while population and the number of employed workers remain constant, then output per person:

A)increases.
B)decreases.
C)remains constant.
D)may increase or decrease.

Question 42

If average labor productivity decreases, then the same number of employed workers will always produce:

A)more total output.
B)more output per person.
C)less total output.
D)less output per person.

Question 43

After increasing at more than 2 percent per year between 1950 and 1973, the growth rate of average labor productivity ________ between 1973 and 1995, and ________ between 1996 to 2007.

A)slowed; decreased even more
B)speeded up; accelerated even more
C)slowed; picked up
D)speeded up; slowed

Question 44

Over the entire period since 1950, average labor productivity in the United States has ________ although between 1973 and 1995 the rate of change ________.

A)increased; slowed
B)decreased; accelerated
C)increased; accelerated
D)decreased; slowed

Question 45

A particularly severe recession is called a(n):

A)super recession.
B)lull.
C)growth recession.
D)depression.

Question 46

In both Gamma and Delta average labor productivity is $40,000 per worker per year. The population of Gamma is 200,000 and the population of Delta is 400,000. Fifty percent of the population in each country is employed. Total output in Gamma is ________ and total output in Delta is ________.

A)$2.4 billion; $4.8 billion
B)$4 billion; $8 billion
C)$100,000; $200,000
D)$8 billion; $16 billion

Question 47

The unemployment rate in the United States at the peak of the Great Depression was ________ percent.

A)5
B)10
C)20
D)25

Question 48

The largest change in the unemployment rate from the beginning of a recession to the peak unemployment rate occurred during the recession beginning in:

A)1929.
B)1973.
C)1980.
D)2007.

Question 49

When jobs are easy to find, wage increases are frequently given, and businesses are doing well, the economy is most likely in a(n):

A)expansion.
B)depression.
C)recession.
D)surplus.

Question 50

In Econland total output is $6 billion, population equals 250,000 people, and, of these, 200,000 are employed workers. Output per person in Econland equals ________ and average labor productivity equals ________.

A)$30,000; $24,000
B)$24,000; $30,000
C)$30,000; $30,000
D)$24,000; $24,000

Question 51

The fraction of people who would like to be employed, but can't find work is called the:

A)inflation rate.
B)average labor productivity rate.
C)unemployment rate.
D)participation rate.

Question 52

In both Gamma and Delta average labor productivity is $20,000 per worker per year. The population of Gamma is 200,000 and the population of Delta is 400,000. Sixty percent of the population in each country is employed. Total output in Gamma is ________ and total output in Delta is ________.

A)$2.4 billion; $4.8 billion
B)$8 billion; $4 billion
C)$120,000; $800,000
D)$4 billion; $8 billion

Question 53

A particularly strong expansion is called a(n):

A)output excess.
B)boom.
C)growth recession.
D)bonanza.

Question 54

Unemployment typically ________ during a recession.

A)only exist
B)rises
C)falls
D)remains constant

Question 55

If average labor productivity increases, then the same number of employed workers will always produce:

A)more total output.
B)more output per person.
C)less total output.
D)less output per person.

Question 56

In Econland total output is $8 billion, population equals 500,000 people, and, of these, 400,000 are employed workers. Output per person in Econland equals ________ and average labor productivity equals ________.

A)$20,000; $16,000
B)$16,000; $20,000
C)$20,000; $20,000
D)$16,000; $16,000

Question 57

When jobs are hard to find, profits are low, few wage increases are given, and many companies go out of business, the economy is most likely in a(n):

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

Question 58

If average labor productivity decreases while population and the number of employed workers remain constant, then total output:

A)increases.
B)decreases.
C)remains constant.
D)may increase or decrease.

Question 59

The growth of total output in the United States since 1929 has been:

A)rapid and smooth.
B)slow with fluctuations.
C)slow and steady.
D)rapid but with fluctuations.

Question 60

If average labor productivity decreases while population and the number of employed workers remain constant, then output per person:

A)increases.
B)decreases.
C)remains constant.
D)may increase or decrease.

Question 61

Macroeconomic issues include all of the following EXCEPT:

A)productivity.
B)economic growth.
C)energy reserves.
D)recessions and expansions.

Question 62

In the 1950's and 1960's the European unemployment rate tended to be ________ the U.S. unemployment rate, while in the 1990's the European unemployment rate tended to be ________ the U.S. unemployment rate.

A)higher than; higher than
B)lower than; higher than
C)higher than; lower than
D)lower than; lower than

Question 63

A trade surplus occurs when:

A)government spending exceeds government revenue.
B)government revenue exceeds government spending.
C)exports exceed imports.
D)exports are less than imports.

Question 64

In 2016 the United States imported approximately ________ percent of all goods and services produced in the country.

A)3
B)8
C)20
D)15

Question 65

In 2016 the United States exported approximately ________ percent of all goods and services produced in the country.

A)3
B)8
C)12
D)20

Question 66

The rate at which prices in general are increasing is called the:

A)inflation rate.
B)standard of living.
C)unemployment rate.
D)trade balance.

Question 67

In Econland exports equal 25 percent of total output, while imports equal 20 percent of total output. Econland has a:

A)budget surplus.
B)budget deficit.
C)trade surplus.
D)trade deficit.

Question 68

A trade deficit occurs when:

A)government spending exceeds government revenue.
B)government revenue exceeds government spending.
C)exports exceed imports.
D)exports are less than imports.

Question 69

Before 1970 the United States generally had a trade ________ and since 1970 the United States has generally run a trade ________.

A)surplus; surplus
B)surplus; deficit
C)deficit; deficit
D)deficit; surplus

Question 70

The unemployment rate in the United States:

A)falls to zero during expansions.
B)never falls to zero.
C)equals zero during booms.
D)can be zero in both expansions and recessions.

Question 71

Major macroeconomic questions include all of the following EXCEPT:

A)What causes economic growth?
B)What causes differences in wages between men and women?
C)Why does inflation vary over time and across countries?
D)What are the causes of unemployment?

Question 72

In Econland exports equal 15 percent of total output, while imports equal 20 percent of total output. Econland has a:

A)budget surplus.
B)budget deficit.
C)trade surplus.
D)trade deficit.

Question 73

A trade imbalance occurs when:

A)exports from and imports to a country suddenly decline.
B)the quantity of imports equals the quantity of exports, but are large relative to total output.
C)a country does not import or export any goods or services.
D)the quantity of a country's exports differs significantly from the quantity of imports.

Question 74

Major macroeconomic issues include differences across countries in all of the following EXCEPT:

A)infant mortality rates.
B)inflation rates.
C)unemployment rates.
D)economic growth rates.

Question 75

Major macroeconomic questions include all of the following EXCEPT:

A)Are free trade agreements beneficial?
B)Can inflation be reduced without generating additional unemployment?
C)What causes slowdowns in productivity growth?
D)How do monopoly firms set prices and determine quantities to produce?

Question 76

The unemployment rate is the:

A)number of workers unemployed.
B)number of workers in the labor force.
C)percentage of the population that is out of work.
D)percentage of the labor force that is out of work.

Question 77

If its exports are greater than its imports, then a country has a:

A)government budget deficit.
B)trade surplus.
C)government budget surplus.
D)trade deficit.

Question 78

Inflation was a major problem in the United States during the:

A)1950s.
B)1960s.
C)1970s.
D)2000s.

Question 79

If the unemployment rate increases from 4 percent to 10 percent, then the economy is mostly likely in a(n):

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

Question 80

Inflation is the increase in:

A)total output.
B)imports relative to exports.
C)total output per worker.
D)the general level of prices.