Question 1

E&S Cooling Co.installs air conditioning systems in new houses for homebuilders, and replacement systems for homeowners.Sales of which systems are included in this year's GDP?

Accepted Answer

A)   Sales of replacement systems
B)   Sales of both systems
C)   Sales of systems in new houses
D)   Neither system would be included, because they are always intermediate goods.

Question 2

Changes in nominal GDP always reflect changes in real output.

Accepted Answer

A) True 
 B)False

Question 3

Gross Domestic Product is an economic aggregate that represents the

Accepted Answer

A)   potential output of a country.
B)   total product of a nation's economy.
C)   total income earned from all sales.
D)   total product that a country exports.

Question 4

One of the initial problems facing the newly elected President Clinton was a large budget deficit.

Accepted Answer

A) True 
 B)False

Question 5

Stabilization policy often faces a trade-off between inflation and unemployment.

Accepted Answer

A) True 
 B)False

Question 6

An economist who studies the sales and profits of a large corporation would be classified as a(n)

Accepted Answer

A)   macroeconomist.
B)   equity analyst.
C)   stock broker.
D)   microeconomist.
E)   social economist.

Question 7

Stagflation can be defined as a combination of ____.

Accepted Answer

A)   economic migration and inflation
B)   economic aggregation and deflation
C)   economic stagnation and inflation
D)   economic aggregation and inflation

Question 8

Illegal gambling on the NCAA Final Four would be included in GDP.

Accepted Answer

A) True 
 B)False

Question 9

In the period of U.S.economic history known as the Great Depression, the rate of inflation was generally

Accepted Answer

A)   trending upward.
B)   positive.
C)   uncertain.
D)   negative.

Question 10

Economists define an aggregate as

Accepted Answer

A)   a concrete object.
B)   a specific principle.
C)   a representative good or service.
D)   a useful abstraction.
E)   something immeasurable.

Question 11

In response to significant economic problems, the Obama administration recommended

Accepted Answer

A)   more tax cuts.
B)   increased government spending.
C)   substantial aid to state and local governments.
D)   all of the above

Question 12

It might be useful to think of macroeconomics as a study of ____ and microeconomics as a study of ____.

Accepted Answer

A)   big corporations, small businesses
B)   oceans, fish
C)   the long run, the short run
D)   abstract, concrete
E)   theory, reality

Question 13

Which of the following would tend to increase the value of officially measured GDP?

Accepted Answer

A)   decriminalization of drugs such as marijuana and cocaine
B)   decriminalization of prostitution
C)   decriminalization of gambling on basketball and football
D)   all of the above

Question 14

A product that is produced in 2010 and not sold until 2011 will be counted in the GDP for

Accepted Answer

A)   both 2010 and 2011.
B)   neither 2010 nor 2011.
C)   2010.
D)   2011.

Question 15

The major difference between nominal GDP and real GDP is that

Accepted Answer

A)   real GDP is the absolute value of goods and services and nominal GDP is a relative value.
B)   real GDP refers to products made in the United States and nominal GDP refers to both exports and imports.
C)   nominal GDP is the market value and real GDP has been adjusted for inflation.
D)   real GDP is a relative value and nominal GDP is an absolute value.

Question 16

Combining various goods and services into a convenient grouping is called

Accepted Answer

A)   conglomeration.
B)   blending.
C)   congregation.
D)   agglomeration.
E)   aggregation.

Question 17

In her book on the American work week, economist Juliet Schorr argues that Americans work too much.Her argument may be interpreted as concluding that this behavior

Accepted Answer

A)   increases GDP but decreases well being.
B)   increases GDP and increases well-being.
C)   decreases GDP and decreases well being.
D)   decreases GDP but increases well being.

Question 18

The existence of the "underground economy" causes measured GDP to overestimate actual output.

Accepted Answer

A) True 
 B)False

Question 19

The Great Depression of the 1930s

Accepted Answer

A)   confirmed the value of a "hands off" policy for governments.
B)   was exacerbated by an expansionary monetary policy.
C)   was a worldwide event.
D)   continued throughout the 1940s without any interruption.

Question 20

Macroeconomists think that

Accepted Answer

A)   most questions about individual markets are more important than the overall economy.
B)   questions of overall unemployment are less important than the jobs of particular workers.
C)   the details of resource allocation and individual market prices are less important than the amount of national output.
D)   the causes of unemployment usually lie with the personalities of individual workers.
E)   the price of particular products is more important than the overall price level.

Exam 22: An Introduction to Macroeconomics

An economist who studies the sales and profits of a large corporation would be classified as a(n)

Correct AnswerverifiedShow Answer

Stagflation can be defined as a combination of ____.

Correct AnswerverifiedShow Answer

In the period of U.S.economic history known as the Great Depression, the rate of inflation was generally

Correct AnswerverifiedShow Answer

Which of the following would tend to increase the value of officially measured GDP?

Correct AnswerverifiedShow Answer

Macroeconomists think that

Correct AnswerverifiedShow Answer

E&S Cooling Co.installs air conditioning systems in new houses for homebuilders, and replacement systems for homeowners.Sales of which systems are included in this year's GDP?

Correct AnswerverifiedShow Answer

Changes in nominal GDP always reflect changes in real output.

Correct AnswerverifiedShow Answer

In her book on the American work week, economist Juliet Schorr argues that Americans work too much.Her argument may be interpreted as concluding that this behavior

Correct AnswerverifiedShow Answer

One of the initial problems facing the newly elected President Clinton was a large budget deficit.

Correct AnswerverifiedShow Answer

Gross Domestic Product is an economic aggregate that represents the

Correct AnswerverifiedShow Answer

Combining various goods and services into a convenient grouping is called

Correct AnswerverifiedShow Answer

The existence of the "underground economy" causes measured GDP to overestimate actual output.

Correct AnswerverifiedShow Answer

The Great Depression of the 1930s

Correct AnswerverifiedShow Answer

Stabilization policy often faces a trade-off between inflation and unemployment.

Correct AnswerverifiedShow Answer

It might be useful to think of macroeconomics as a study of ____ and microeconomics as a study of ____.

Correct AnswerverifiedShow Answer

In response to significant economic problems, the Obama administration recommended

Correct AnswerverifiedShow Answer

The major difference between nominal GDP and real GDP is that

Correct AnswerverifiedShow Answer

A product that is produced in 2010 and not sold until 2011 will be counted in the GDP for

Correct AnswerverifiedShow Answer

Economists define an aggregate as

Correct AnswerverifiedShow Answer

Illegal gambling on the NCAA Final Four would be included in GDP.

Correct AnswerverifiedShow Answer

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It might be useful to think of macroeconomics as a study of and microeconomics as a study of .

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