Question 1

GDP consistently measures the output of goods and services in all countries.

Accepted Answer

A) True 
 B)False

Question 2

If aggregate demand shifts outward, the result will be inflation.

Accepted Answer

A) True 
 B)False

Question 3

Aggregate demand and supply curves have been widely used to analyze the performance of the macroeconomy. Figure 5-3 shows four diagrams that represent different changes in the macroeconomy. Choose the diagram that best represents the situations described in the following questions. Figure 5-3

Which graph in Figure 5-3 best represents the economic conditions of the American economy in 2001?

Accepted Answer

A)   1
B)   2
C)   3
D)   4E) B) and C)
F) A) and D)

Question 4

In 2008, you buy a 1967 Shelby cobra. This purchase would

Accepted Answer

A)   be included in the GDP for 2008.
B)   not be included in the GDP for 2008.
C)   be included in both the GDP for 1967 and 2008.
D)   be in the GDP for 2008 at a depreciated value.E) C) and D)
F) None of the above

Question 5

If aggregate demand shifts outward over a long period of time, with aggregate supply held constant, the economy should experience

Accepted Answer

A)   unemployment.
B)   recession.
C)   budget surpluses.
D)   inflation.E) A) and C)
F) C) and D)

Question 6

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 goodsE) A) and C)
F) B) and C)

Question 7

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.F) A) and C)
G) A) and B)

Question 8

Gross domestic product is a monetary measure of

Accepted Answer

A)   total consumption in the economy.
B)   the total value of all final goods and services.
C)   total industrial output.
D)   the total value of all foreign sales and purchases.E) A) and D)
F) All of the above

Question 9

The first year of the Bush administration in 2001 could be represented as a(n)

Accepted Answer

A)   increase in the aggregate demand curve.
B)   decrease in the aggregate demand curve.
C)   increase in the aggregate supply curve.
D)   decrease in the aggregate supply curve.E) A) and D)
F) A) and C)

Question 10

Since countries differ in the amount of economic activity that is transacted in organized markets,

Accepted Answer

A)   some countries are more productive than others.
B)   persons live better in some countries than others.
C)   international comparisons of per capita GDP are often misleading.
D)   comparisons between countries are totally impossible.E) All of the above
F) None of the above

Question 11

Fiscal policy and monetary policy are economic stabilization policies designed to

Accepted Answer

A)   prolong recessions.
B)   prolong inflation.
C)   stabilize prices.
D)   decrease employment.E) All of the above
F) C) and D)

Question 12

The main reason that President Clinton was forced to revise his campaign promise to cut taxes was that, in 1993, he faced a large

Accepted Answer

A)   balance of payments surplus.
B)   balance of payments deficit.
C)   federal budget deficit.
D)   federal budget surplus.E) B) and C)
F) None of the above

Question 13

Gross domestic product accurately measures the environmental costs of producing all goods and services.

Accepted Answer

A) True 
 B)False

Question 14

Two of the most important macroeconomic issues are unemployment and inflation.

Accepted Answer

A) True 
 B)False

Question 15

John Maynard Keynes wrote that economies can suffer recession or depression for many years if the government does not intervene.

Accepted Answer

A) True 
 B)False

Question 16

Cars produced by General Motors in Mexico would be included in U.S. Gross domestic product.

Accepted Answer

A) True 
 B)False

Question 17

The horizontal axis on the aggregate demand-aggregate supply model measures

Accepted Answer

A)   the price of the specific product produced.
B)   the level of total output.
C)   the price level.
D)   the level of employment.E) None of the above
F) B) and C)

Question 18

Nominal GDP is calculated by using

Accepted Answer

A)   prices set in a base year.
B)   average prices in all major cities.
C)   current prices.
D)   prices charged by initial producers.E) A) and B)
F) A) and C)

Question 19

Economist John Maynard Keynes wrote that recessions can be prolonged and interminable; therefore, government action is needed to jump-start the economy.

Accepted Answer

A) True 
 B)False

Question 20

International per capita GDP comparisons are misleading when countries involved differ greatly in

Accepted Answer

A)   the type of economic system each country uses to solve its economic problem.
B)   the freedom of their election processes.
C)   the percentage of economic activity that is transacted in organized markets.
D)   the quantity of human and natural resources they possess.E) None of the above
F) All of the above

Exam 21: An Introduction to Macroeconomics

Correct Answer
verified

Economist John Maynard Keynes wrote that recessions can be prolonged and interminable; therefore, government action is needed to jump-start the economy.

Correct Answer
verified

The horizontal axis on the aggregate demand-aggregate supply model measures

Correct Answer
verified

The main reason that President Clinton was forced to revise his campaign promise to cut taxes was that, in 1993, he faced a large

Correct Answer
verified

Two of the most important macroeconomic issues are unemployment and inflation.

Correct Answer
verified

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 Answer
verified

Since countries differ in the amount of economic activity that is transacted in organized markets,

Correct Answer
verified

Cars produced by General Motors in Mexico would be included in U.S. Gross domestic product.

Correct Answer
verified

Economists define an aggregate as

Correct Answer
verified

Gross domestic product accurately measures the environmental costs of producing all goods and services.

Correct Answer
verified

Gross domestic product is a monetary measure of

Correct Answer
verified

The first year of the Bush administration in 2001 could be represented as a(n)

Correct Answer
verified

International per capita GDP comparisons are misleading when countries involved differ greatly in

Correct Answer
verified

John Maynard Keynes wrote that economies can suffer recession or depression for many years if the government does not intervene.

Correct Answer
verified

In 2008, you buy a 1967 Shelby cobra. This purchase would

Correct Answer
verified

GDP consistently measures the output of goods and services in all countries.

Correct Answer
verified

Fiscal policy and monetary policy are economic stabilization policies designed to

Correct Answer
verified

If aggregate demand shifts outward over a long period of time, with aggregate supply held constant, the economy should experience

Correct Answer
verified

If aggregate demand shifts outward, the result will be inflation.

Correct Answer
verified

Nominal GDP is calculated by using

Correct Answer
verified

Exam 21: An Introduction to Macroeconomics

Correct AnswerverifiedShow Answer

Economist John Maynard Keynes wrote that recessions can be prolonged and interminable; therefore, government action is needed to jump-start the economy.

Correct AnswerverifiedShow Answer

The horizontal axis on the aggregate demand-aggregate supply model measures

Correct AnswerverifiedShow Answer

The main reason that President Clinton was forced to revise his campaign promise to cut taxes was that, in 1993, he faced a large

Correct AnswerverifiedShow Answer

Two of the most important macroeconomic issues are unemployment and inflation.

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

Since countries differ in the amount of economic activity that is transacted in organized markets,

Correct AnswerverifiedShow Answer

Cars produced by General Motors in Mexico would be included in U.S. Gross domestic product.

Correct AnswerverifiedShow Answer

Economists define an aggregate as

Correct AnswerverifiedShow Answer

Gross domestic product accurately measures the environmental costs of producing all goods and services.

Correct AnswerverifiedShow Answer

Gross domestic product is a monetary measure of

Correct AnswerverifiedShow Answer

The first year of the Bush administration in 2001 could be represented as a(n)

Correct AnswerverifiedShow Answer

International per capita GDP comparisons are misleading when countries involved differ greatly in

Correct AnswerverifiedShow Answer

John Maynard Keynes wrote that economies can suffer recession or depression for many years if the government does not intervene.

Correct AnswerverifiedShow Answer

In 2008, you buy a 1967 Shelby cobra. This purchase would

Correct AnswerverifiedShow Answer

GDP consistently measures the output of goods and services in all countries.

Correct AnswerverifiedShow Answer

Fiscal policy and monetary policy are economic stabilization policies designed to

Correct AnswerverifiedShow Answer

If aggregate demand shifts outward over a long period of time, with aggregate supply held constant, the economy should experience

Correct AnswerverifiedShow Answer

If aggregate demand shifts outward, the result will be inflation.

Correct AnswerverifiedShow Answer

Nominal GDP is calculated by using

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified