Question 1

Individuals live and work in both individual and aggregate economic entities.

Accepted Answer

A) True 
 B)False

Question 2

Business cycles are a persistent feature of the U.S.economy.

Accepted Answer

A) True 
 B)False

Question 3

What was not an effect of the Great Depression?

Accepted Answer

A)  Policy makers recommended boots in government spending after recessions.
B)  Policy makers believed reductions in taxes would promote growth.
C)  The government limited its role in correcting the economy.
D)  The Federal Reserve increased its role in correcting the economy.

Question 4

Intermediate goods, like milk sold by a farmer to a supermarket, are

Accepted Answer

A)  included in GDP.
B)  included in GDP at market value.
C)  included if it is imported.
D)  are not included in GDP.

Question 5

When people smoke cigarettes, their friends and family members may become sick.This affects GDP by

Accepted Answer

A)  reducing GDP by the amount of medical care needed.
B)  reducing GDP by the cost of the cigarettes purchased.
C)  increasing GDP by the cost of the medical care and the cost of the cigarettes purchased.
D)  decreasing GDP by the cost of the medical care and increasing GDP by the cost of the cigarettes purchased.

Question 6

The clearest sign of economic growth is a(n)

Accepted Answer

A)  increase in nominal GDP.
B)  increase in real GDP.
C)  decrease in nominal GDP.
D)  increase in nominal GDP

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

You can generally distinguish an aggregate supply-caused recession from an aggregate demand-caused recession because

Accepted Answer

A)  real GDP will rise in an aggregate supply recession.
B)  the price level will fall in an aggregate supply recession.
C)  the price level will fall in an aggregate demand recession.
D)  real GDP will rise in an aggregate demand recession.

Question 9

The vertical axis of the aggregate demand-aggregate supply model measures the amount of

Accepted Answer

A)  total employment.
B)  total final output.
C)  the price level.
D)  net exports.

Question 10

Nominal GDP is

Accepted Answer

A)  also called real GDP.
B)  a more accurate measure than real GDP.
C)  real GDP adjusted for changes in the price level.
D)  GDP measured in current prices.

Question 11

Mitsubishi Corporation of America builds a car in Normal, Illinois, and ships it to Japan for sale.In which country's GDP is this production included?

Accepted Answer

A)  Japan
B)  Both Japan and the United States
C)  In Japan as retail value and the United States as wholesale value
D)  Half the value in Japan and half in the United States
E)  The United States

Question 12

Technically speaking, in what year did the "Great Recession" end?

Accepted Answer

A)  1933
B)  1935
C)  2007
D)  2009
E)  It had not ended as of 2011.

Question 13

Since the end of World War II, the economy of the United States has been more influenced by stabilization policy.One of the undesirable side effects of this has been that the economy now has a greater tendency to suffer from

Accepted Answer

A)  more severe recessions and depressions.
B)  higher levels of unemployment and lower rates of employment growth.
C)  lower rates of growth in real and nominal GDP.
D)  more persistent periods of inflation.

Question 14

The most severe depression in the United States was the 30 percent decrease in real GDP that occurred between

Accepted Answer

A)  1899 and 1913.
B)  1929 and 1933.
C)  1959 and 1963.
D)  1979 and 1983.

Question 15

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 16

If the price of pizza is $10 this year and $15 next year, then 200 pizzas would contribute

Accepted Answer

A)  $2,000 to this year's GDP and $2,000 to next year's nominal GDP.
B)  $3,000 to this year's nominal GDP and $3,000 to next year's nominal GDP.
C)  $2,000 to this year's nominal GDP and $3,000 to next year's nominal GDP.
D)  $3,000 to this year's GDP and $2,000 to next year's GDP.

Question 17

A good produced in 2009 and held in inventory until it is sold in 2010 would be included in which measure of GDP?

Accepted Answer

A)  Half the value in 2009 and half the value in 2010
B)  In 2010 GDP
C)  In both 2009 and 2010 GDP
D)  In 2009 GDP

Question 18

Does GDP for a particular year include items produced in a previous year?

Accepted Answer

A)  Nominal GDP will not and real GDP will
B)  Real GDP will and nominal GDP will not
C)  Yes for both nominal and real GDP
D)  No for both nominal and real GDP

Question 19

If the government uses stabilization policies to reduce inflation, the economy may have to suffer

Accepted Answer

A)  higher rates of real GDP growth.
B)  higher rates of unemployment.
C)  lower rates of unemployment.
D)  higher rates of price level growth.

Question 20

Both the Bush and Obama administrations used tax cuts as a remedy to the housing "bubble."

Accepted Answer

A) True 
 B)False

Exam 21: An Introduction to Macroeconomics

When people smoke cigarettes, their friends and family members may become sick.This affects GDP by

Correct AnswerverifiedShow Answer

Technically speaking, in what year did the "Great Recession" end?

Correct AnswerverifiedShow Answer

If the price of pizza is $10 this year and $15 next year, then 200 pizzas would contribute

Correct AnswerverifiedShow Answer

You can generally distinguish an aggregate supply-caused recession from an aggregate demand-caused recession because

Correct AnswerverifiedShow Answer

Individuals live and work in both individual and aggregate economic entities.

Correct AnswerverifiedShow Answer

The vertical axis of the aggregate demand-aggregate supply model measures the amount of

Correct AnswerverifiedShow Answer

If the government uses stabilization policies to reduce inflation, the economy may have to suffer

Correct AnswerverifiedShow Answer

The clearest sign of economic growth is a(n)

Correct AnswerverifiedShow Answer

Does GDP for a particular year include items produced in a previous year?

Correct AnswerverifiedShow Answer

Both the Bush and Obama administrations used tax cuts as a remedy to the housing "bubble."

Correct AnswerverifiedShow Answer

A good produced in 2009 and held in inventory until it is sold in 2010 would be included in which measure of GDP?

Correct AnswerverifiedShow Answer

Mitsubishi Corporation of America builds a car in Normal, Illinois, and ships it to Japan for sale.In which country's GDP is this production included?

Correct AnswerverifiedShow Answer

The most severe depression in the United States was the 30 percent decrease in real GDP that occurred between

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Since the end of World War II, the economy of the United States has been more influenced by stabilization policy.One of the undesirable side effects of this has been that the economy now has a greater tendency to suffer from

Correct AnswerverifiedShow Answer

What was not an effect of the Great Depression?

Correct AnswerverifiedShow Answer

Business cycles are a persistent feature of the U.S.economy.

Correct AnswerverifiedShow Answer

Nominal GDP is

Correct AnswerverifiedShow Answer

Intermediate goods, like milk sold by a farmer to a supermarket, are

Correct AnswerverifiedShow Answer

Stagflation can be defined as a combination of ____.

Correct AnswerverifiedShow Answer

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