Question 1

A nation that realizes a 3 percent increase in its output per person is experiencing modern economic growth.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements best describes how firms respond to demand shocks under conditions of inflexible prices?

Accepted Answer

A)   Firms respond to shorter-term demand shocks by adjusting production levels;more persistent changes in demand result in changes in inventories.
B)   Firms respond to shorter-term demand shocks by adjusting inventories;more persistent changes in demand result in changes in production levels.
C)   Firms are reluctant to adjust inventory levels because the costs are higher than changing the quantity of output produced.
D)   Firms are quick to let go of workers when negative demand shocks occur.E) None of the above
F) A) and C)

Question 3

Demand shocks:

Accepted Answer

A)   refer to unexpected changes in the desires of households and businesses to buy goods and services.
B)   refer to unexpected changes in the ability of firms to produce and sell goods and services.
C)   always have a negative impact on the economy.
D)   cause fewer short-run fluctuations than supply shocks.E) None of the above
F) All of the above

Question 4

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.E) A) and D)
F) C) and D)

Question 5

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 6

Savings are generated whenever:

Accepted Answer

A)   prices are rising.
B)   current spending exceeds current income.
C)   current income exceeds current spending.
D)   real GDP exceeds nominal GDP.E) B) and D)
F) A) and C)

Question 7

Which of the following is used to measure directly the average standard of living across countries?

Accepted Answer

A)   Real GDP.
B)   Nominal GDP.
C)   Purchasing power parity.
D)   GDP per person.E) All of the above
F) A) and C)

Question 8

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.E) A) and B)
F) C) and D)

Question 9

Economists believe that most short-run fluctuations in output are the result of supply shocks.

Accepted Answer

A) True 
 B)False

Question 10

The three statistics that are the main focus for those measuring macroeconomic health are:

Accepted Answer

A)   real GDP,inflation,and unemployment.
B)   real GDP,nominal GDP,and inflation.
C)   nominal GDP,unemployment,and inflation.
D)   real GDP,nominal GDP,and unemployment.E) A) and D)
F) A) and B)

Question 11

Inflation is defined as:

Accepted Answer

A)   an increase in the overall level of prices.
B)   the rate of growth in nominal GDP.
C)   a situation where all prices in the economy rise simultaneously.
D)   the growth phase of the business cycle.E) B) and C)
F) A) and D)

Question 12

Prices are particularly sticky:

Accepted Answer

A)   when there are widespread macroeconomic and monetary disturbances in the economy.
B)   in the long run.
C)   when markets are highly competitive.
D)   when the economy is at full employment and positive demand shocks are occurring.E) C) and D)
F) A) and C)

Question 13

A sometimes short,sometimes extended period of declining output and living standards is referred to as a recession.

Accepted Answer

A) True 
 B)False

Question 14

Output per person has grown steadily since the beginning of the Roman Empire.

Accepted Answer

A) True 
 B)False

Question 15

Prices tend to be stickier in the shorter run than in the longer run.

Accepted Answer

A) True 
 B)False

Question 16

Milk prices tend to be stickier than gasoline prices.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Why are high rates of unemployment of concern to economists?

Accepted Answer

A)   Higher rates of unemployment generally lead to higher inflation rates.
B)   Environmental destruction is more prevalent when unemployment rates are high.
C)   There is lost output that could have been produced if the unemployed had been working.
D)   All of these options are reasons why economists are concerned about high unemployment rates.E) None of the above
F) A) and D)

Question 19

Harry's Pepperoni Pizza Parlor produced 10,000 large pepperoni pizzas last year that sold for $10 each.This year Harry's again produced 10,000 large pepperoni pizzas (identical to last year's pizzas) but sold them for $12 each.Based on this information we can conclude that Harry's production of large pepperoni pizzas:

Accepted Answer

A)   increased both nominal and real GDP from last year.
B)   increased nominal GDP from last year,but real GDP was unaffected.
C)   increased real GDP from last year,but nominal GDP was unaffected.
D)   did not change either nominal or real GDP from last year.E) B) and D)
F) None of the above

Question 20

In making international comparisons of living standards using GDP,which of the following is not adjusted for in the calculation?

Accepted Answer

A)   Purchasing power parity.
B)   The quantity of resources available to the economy.
C)   Population size.
D)   Different currency values.E) A) and B)
F) A) and C)

Exam 25: An Introduction to Macroeconomics

Correct Answer
verified

Why are high rates of unemployment of concern to economists?

Correct Answer
verified

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

Correct Answer
verified

Demand shocks:

Correct Answer
verified

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

Correct Answer
verified

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 Answer
verified

Prices tend to be stickier in the shorter run than in the longer run.

Correct Answer
verified

A sometimes short,sometimes extended period of declining output and living standards is referred to as a recession.

Correct Answer
verified

Which of the following statements best describes how firms respond to demand shocks under conditions of inflexible prices?

Correct Answer
verified

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

Correct Answer
verified

Which of the following is used to measure directly the average standard of living across countries?

Correct Answer
verified

Inflation is defined as:

Correct Answer
verified

In making international comparisons of living standards using GDP,which of the following is not adjusted for in the calculation?

Correct Answer
verified

Output per person has grown steadily since the beginning of the Roman Empire.

Correct Answer
verified

A nation that realizes a 3 percent increase in its output per person is experiencing modern economic growth.

Correct Answer
verified

Savings are generated whenever:

Correct Answer
verified

Economists believe that most short-run fluctuations in output are the result of supply shocks.

Correct Answer
verified

Milk prices tend to be stickier than gasoline prices.

Correct Answer
verified

Prices are particularly sticky:

Correct Answer
verified

The three statistics that are the main focus for those measuring macroeconomic health are:

Correct Answer
verified

Exam 25: An Introduction to Macroeconomics

Correct AnswerverifiedShow Answer

Why are high rates of unemployment of concern to economists?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Demand shocks:

Correct AnswerverifiedShow Answer

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

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

Prices tend to be stickier in the shorter run than in the longer run.

Correct AnswerverifiedShow Answer

A sometimes short,sometimes extended period of declining output and living standards is referred to as a recession.

Correct AnswerverifiedShow Answer

Which of the following statements best describes how firms respond to demand shocks under conditions of inflexible prices?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is used to measure directly the average standard of living across countries?

Correct AnswerverifiedShow Answer

Inflation is defined as:

Correct AnswerverifiedShow Answer

In making international comparisons of living standards using GDP,which of the following is not adjusted for in the calculation?

Correct AnswerverifiedShow Answer

Output per person has grown steadily since the beginning of the Roman Empire.

Correct AnswerverifiedShow Answer

A nation that realizes a 3 percent increase in its output per person is experiencing modern economic growth.

Correct AnswerverifiedShow Answer

Savings are generated whenever:

Correct AnswerverifiedShow Answer

Economists believe that most short-run fluctuations in output are the result of supply shocks.

Correct AnswerverifiedShow Answer

Milk prices tend to be stickier than gasoline prices.

Correct AnswerverifiedShow Answer

Prices are particularly sticky:

Correct AnswerverifiedShow Answer

The three statistics that are the main focus for those measuring macroeconomic health are:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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