Question 1

Which of the following groups is the principal source of savings in an economy?

Accepted Answer

A)  banks
B)  government
C)  businesses
D)  households

Question 2

If nominal GDP increases from one year to the next, then we know that the economy's output has grown.

Accepted Answer

A) True 
 B)False

Question 3

Who are the main economic investors in a market economy?

Accepted Answer

A)  savers
B)  government
C)  businesses
D)  households

Question 4

Businesses are the main economic investors, while households are the main savers.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is the best example of economic investment?

Accepted Answer

A)  Apple builds a new plant to manufacture iPads.
B)  Your college purchases a 5-year-old building in order to have more classrooms.
C)  A retiree purchases U.S.government bonds.
D)  A company, like Bank of America, acquires another company, like Merrill Lynch.

Question 6

Which of the following is not an important question that macroeconomic models help clarify?

Accepted Answer

A)  Can governments reduce the severity of their economies' recessions?
B)  Is a policy of manipulating interest rates more effective at mitigating short-run economic fluctuations than a policy of changing the tax rates?
C)  How will OPEC manipulate and maintain the price of crude oil in the world markets?
D)  Is there a trade-off between lower unemployment and lower inflation?

Question 7

Buying 100 shares of Google stock would be an example of economic investment.

Accepted Answer

A) True 
 B)False

Question 8

A demand shock occurs when large numbers of consumers unexpectedly reduce their purchases of goods and services.

Accepted Answer

A) True 
 B)False

Question 9

Modern economic growth refers to countries that have experienced an increase in

Accepted Answer

A)  real GDP over time.
B)  nominal GDP over time.
C)  real output spread evenly across all sectors of the economy.
D)  real output per person. D

Question 10

Which of the following is most likely to indicate higher unemployment?

Accepted Answer

A)  an increase in real GDP
B)  an increase in nominal GDP
C)  a decrease in real GDP
D)  a decrease in nominal GDP

Question 11

In 2014, China's GDP per person was almost as high as that of the United States.

Accepted Answer

A) True 
 B)False

Question 12

From 1995 until the start of the recession in 2007, the U.S.economy grew at the same rate as the economy of Japan.

Accepted Answer

A) True 
 B)False

Question 13

When economists refer to "investment," they are describing a situation where

Accepted Answer

A)  people are buying shares of corporate stock.
B)  resources are devoted to increasing future output.
C)  money is saved in a bank account.
D)  financial assets are purchased in the hope of a monetary gain. B

Question 14

If prices of goods and services quickly adjusted to demand shocks, then

Accepted Answer

A)  firms would find it difficult to produce at their optimal output rates.
B)  output rates would quickly adjust to changes in demand.
C)  firms would find it easier to produce at their optimal output rates.
D)  the economy would experience severe short-run fluctuation.

Question 15

An increase in the overall level of prices in an economy is called

Accepted Answer

A)  growth.
B)  expansion.
C)  inflation.
D)  nominal GDP growth.

Question 16

(Last Word)  Advocates for a structural solution to the Great Recession argued that

Accepted Answer

A)  government should cut taxes across the board to stimulate demand for goods and services.
B)  firms should be allowed to go bankrupt, allowing the economy to correct for resource misallocations.
C)  firms in financial distress should be taken over by the government and run for the public good.
D)  massive public works projects should be implemented to produce public capital, keep people employed, and help workers maintain job skills.

Question 17

Economists are in general agreement as to what caused the Great Recession and how to properly deal with it.

Accepted Answer

A) True 
 B)False

Question 18

Macroeconomics is mostly focused on

Accepted Answer

A)  the individual markets within an economy.
B)  only the largest industries in the economy.
C)  the economy as a whole.
D)  why specific businesses fail.

Question 19

For which of the following goods is the price least likely to be flexible?

Accepted Answer

A)  airline tickets
B)  beer
C)  milk
D)  newspapers D

Question 20

Suppose that an economy's output does not change from one year to the next, but the price level doubles.What happens to real GDP?

Accepted Answer

A)  Real GDP doubles.
B)  Real GDP is halved.
C)  Real GDP doesn't change.
D)  There is not enough information to determine what happens to real GDP.

Exam 26: An Introduction to Macroeconomics

Which of the following groups is the principal source of savings in an economy?

Correct AnswerverifiedShow Answer

If nominal GDP increases from one year to the next, then we know that the economy's output has grown.

Correct AnswerverifiedShow Answer

Who are the main economic investors in a market economy?

Correct AnswerverifiedShow Answer

Businesses are the main economic investors, while households are the main savers.

Correct AnswerverifiedShow Answer

Which of the following is the best example of economic investment?

Correct AnswerverifiedShow Answer

Which of the following is not an important question that macroeconomic models help clarify?

Correct AnswerverifiedShow Answer

Buying 100 shares of Google stock would be an example of economic investment.

Correct AnswerverifiedShow Answer

A demand shock occurs when large numbers of consumers unexpectedly reduce their purchases of goods and services.

Correct AnswerverifiedShow Answer

Modern economic growth refers to countries that have experienced an increase in

Correct AnswerverifiedD

Which of the following is most likely to indicate higher unemployment?

Correct AnswerverifiedShow Answer

In 2014, China's GDP per person was almost as high as that of the United States.

Correct AnswerverifiedShow Answer

From 1995 until the start of the recession in 2007, the U.S.economy grew at the same rate as the economy of Japan.

Correct AnswerverifiedShow Answer

When economists refer to "investment," they are describing a situation where

Correct AnswerverifiedB

If prices of goods and services quickly adjusted to demand shocks, then

Correct AnswerverifiedShow Answer

An increase in the overall level of prices in an economy is called

Correct AnswerverifiedShow Answer

(Last Word) Advocates for a structural solution to the Great Recession argued that

Correct AnswerverifiedShow Answer

Economists are in general agreement as to what caused the Great Recession and how to properly deal with it.

Correct AnswerverifiedShow Answer

Macroeconomics is mostly focused on

Correct AnswerverifiedShow Answer

For which of the following goods is the price least likely to be flexible?

Correct AnswerverifiedD

Suppose that an economy's output does not change from one year to the next, but the price level doubles.What happens to real GDP?

Correct AnswerverifiedShow Answer

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D

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B

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D

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