Question 1

Macroeconomics is concerned with the market price and equilibrium quantity of each good or service.

Accepted Answer

A) True 
 B)False

Question 2

Workers are demanded and supplied in the

Accepted Answer

A)   money market.
B)   goods and services market.
C)   labor market.
D)   transfer market.

Question 3

In the United States in 1929, ________ people were unemployed.

Accepted Answer

A)   250,000
B)   1.5 million
C)   13 million
D)   51 million

Question 4

Promissory notes include

Accepted Answer

A)   Treasury notes.
B)   Treasury bills.
C)   corporate bonds.
D)   all of the above.

Question 5

Hyperinflation refers to a(n)

Accepted Answer

A)   increase in both price level and output.
B)   very rapid increase in the overall price level.
C)   very rapid decrease in the overall price level.
D)   decrease in unemployment which is accompanied by a rapid increase in wages.

Question 6

In the circular flow diagram, the different payments made by ________ to ________ include wages, rent and profits.

Accepted Answer

A)   households; firms
B)   firms; the government
C)   the government; households
D)   firms; households

Question 7

The United States economy has yet to simultaneously experience high inflation and high unemployment.

Accepted Answer

A) True 
 B)False

Question 8

A capital gain is

Accepted Answer

A)   a financial instrument that gives the holder a share in the ownership of a firm and therefore the right to share in the profits of the firm.
B)   the portion of a corporation's profits that the firm pays out each period to its shareholders.
C)   an increase in the value of an asset over the price initially paid for it.
D)   the difference between an individual's economic income and money income.

Question 9

The trend of the economy is

Accepted Answer

A)   the long run growth path of the economy.
B)   the long run inflation rate.
C)   the long run unemployment rate.
D)   the short run production capacity of an economy.

Question 10

Since 1970, the U.S. economy has experienced ________ period(s)  of high inflation.

Accepted Answer

A)   1
B)   2
C)   3
D)   4

Question 11

Unemployment implies that in the labor market

Accepted Answer

A)   there is an excess supply of labor.
B)   there is an excess demand for labor.
C)   there are too few workers for the jobs available.
D)   quantity demanded of labor exceeds quantity supplied.

Question 12

According to Keynes, the government's role during periods when private demand is low is to stimulate aggregate demand and, by so doing, lift the economy out of recession.

Accepted Answer

A) True 
 B)False

Question 13

According to the Classical economists, the economy

Accepted Answer

A)   requires fine-tuning to reach full employment.
B)   has sticky prices in many industries.
C)   is self-correcting.
D)   will never be at full employment.

Question 14

If Congress increases government spending, it is using

Accepted Answer

A)   monetary policy.
B)   supply-side policy.
C)   fiscal policy.
D)   incomes policy.

Question 15

Microeconomics is best described as the study of

Accepted Answer

A)   the relationship between inflation and wage inequality.
B)   very large issues.
C)   the choices made by individual households, firms, and governments.
D)   the nation's economy as a whole.

Question 16

The ________ affecting the supply of money is known as monetary policy.

Accepted Answer

A)   Congress
B)   Treasury Department
C)   Federal Reserve
D)   Commerce Department

Question 17

If the central bank increases the money supply, it is conducting

Accepted Answer

A)   fiscal policy.
B)   supply-side policy.
C)   monetary policy.
D)   incomes policy.

Question 18

Celine purchased 5,000 shares of stock for $500,000. A year later the stock is valued at $650,000. Instead of selling the stock, Celine held onto it for another year. Which of the following is true?

Accepted Answer

A)   The $150,000 increase in the value of the stock represents a dividend.
B)   The $150,000 increase in the value of the stock represents an unrealized capital gain.
C)   To determine the capital gain, it is first necessary to know the normal rate of return on capital.
D)   The total capital gain will be at least $150,000.

Question 19

Classical economists believed that economic slowdowns are self-correcting.

Accepted Answer

A) True 
 B)False

Question 20

Before the Great Depression, economists applied microeconomic models to economy-wide problems.

Accepted Answer

A) True 
 B)False

Exam 20: Introduction to Macroeconomics

Macroeconomics is concerned with the market price and equilibrium quantity of each good or service.

Correct AnswerverifiedShow Answer

According to the Classical economists, the economy

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The trend of the economy is

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Promissory notes include

Correct AnswerverifiedShow Answer

Workers are demanded and supplied in the

Correct AnswerverifiedShow Answer

The ________ affecting the supply of money is known as monetary policy.

Correct AnswerverifiedShow Answer

If the central bank increases the money supply, it is conducting

Correct AnswerverifiedShow Answer

The United States economy has yet to simultaneously experience high inflation and high unemployment.

Correct AnswerverifiedShow Answer

Before the Great Depression, economists applied microeconomic models to economy-wide problems.

Correct AnswerverifiedShow Answer

A capital gain is

Correct AnswerverifiedShow Answer

In the United States in 1929, ________ people were unemployed.

Correct AnswerverifiedShow Answer

According to Keynes, the government's role during periods when private demand is low is to stimulate aggregate demand and, by so doing, lift the economy out of recession.

Correct AnswerverifiedShow Answer

Hyperinflation refers to a(n)

Correct AnswerverifiedShow Answer

Unemployment implies that in the labor market

Correct AnswerverifiedShow Answer

Celine purchased 5,000 shares of stock for $500,000. A year later the stock is valued at $650,000. Instead of selling the stock, Celine held onto it for another year. Which of the following is true?

Correct AnswerverifiedShow Answer

Classical economists believed that economic slowdowns are self-correcting.

Correct AnswerverifiedShow Answer

Since 1970, the U.S. economy has experienced ________ period(s) of high inflation.

Correct AnswerverifiedShow Answer

If Congress increases government spending, it is using

Correct AnswerverifiedShow Answer

In the circular flow diagram, the different payments made by ________ to ________ include wages, rent and profits.

Correct AnswerverifiedShow Answer

Microeconomics is best described as the study of

Correct AnswerverifiedShow Answer

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In the circular flow diagram, the different payments made by to include wages, rent and profits.

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