20 Jul WHICH ONE OF THE FOLLOWING IS A QUESTION THAT A MACROECONOMIC MODEL WOULD HELP TO CLARIFY?
Short-run fluctuations in output and employment are often referred to as Short-run fluctuations in output and employment are often referred to as A) recession B) Show more Short-run fluctuations in output and employment are often referred to as Short-run fluctuations in output and employment are often referred to as A) recession B) inflation C) the business cycle D) modern economic growth 2 2 Economic growth in an economy is best measured from one year to the next by comparing the change in Economic growth in an economy is best measured from one year to the next by comparing the change in A) the rate of inflation B) the rate of unemployment C) nominal GDP D) real GDP 3 3 Unemployment is undesirable because it Unemployment is undesirable because it A) increases inflation B) wastes labor resources C) contributes to sticky prices D) raises interest rates in the economy 4 4 A major problem with inflation is that it A major problem with inflation is that it A) lowers housing prices B) increases the rate of saving C) reduces purchasing power D) decreases government spending 5 5 Which one of the following is a question that a macroeconomic model would help to clarify? Which one of the following is a question that a macroeconomic model would help to clarify? A) Can governments promote long-run economic growth? B) Is the purchase of General Electric stock a worthwhile financial investment? C) Should the sales tax in a city be raised from 7 percent to 9 percent? D) Does a large rise in the price of gasoline significantly reduce consumer spending on gasoline? 6 6 What was the average percentage increase in the output of the United States from 1995 to the start of the 20072009 recession? What was the average percentage increase in the output of the United States from 1995 to the start of the 20072009 recession? A) 1.1 percent B) 2.7 percent C) 3.6 percent D) 4.1 percent 7 7 Before the Industrial Revolution began in England in the late 1700s standards of living showed Before the Industrial Revolution began in England in the late 1700s standards of living showed A) significant growth B) significant decline C) virtually no growth D) wide swings from growth to decline 8 8 Modern economic growth is characterized as a situation in which Modern economic growth is characterized as a situation in which A) inflation is almost zero B) output per person is rising C) unemployment is minimal D) the prices of products are flexible 9 9 An annual growth rate of 2 percent implies that the standard of living in an economy will double in An annual growth rate of 2 percent implies that the standard of living in an economy will double in A) 10 years B) 20 years C) 35 years D) 70 years 10 10 What accounts for the vast differences in the living standards today between rich and poor countries? What accounts for the vast differences in the living standards today between rich and poor countries? A) purchasing power parity B) rising rates of inflation C) increases in nominal GDP D) modern economic growth 11 11 About how many times greater on average are the material standards of living of citizens in the richest nations compared with the material living standards of citizens in the poorest nations? About how many times greater on average are the material standards of living of citizens in the richest nations compared with the material living standards of citizens in the poorest nations? A) 5 times B) 10 times C) 50 times D) 100 times 12 12 When current spending is less than current income it generates When current spending is less than current income it generates A) saving B) investment C) demand shocks D) supply shocks 13 13 Which of the following purchases would be an example of an economic investment by a business? Which of the following purchases would be an example of an economic investment by a business? A) shares of stock in another business B) a used factory from another business C) new computers to improve data analysis D) a certificate of deposit with a high interest rate 14 14 The reason that economic investment is important is that it The reason that economic investment is important is that it A) enables higher levels of consumption in the future B) enables higher levels of consumption in the present C) increases the rate of saving in the present D) decreases the rate of saving in the future 15 15 A well-functioning banking and financial system helps to promote economic growth and stability by A well-functioning banking and financial system helps to promote economic growth and stability by A) paying high interest rates on deposits B) offering dividends on corporate stocks C) directing savings to the most productive investments D) increasing current consumption and future consumption 16 16 If people and businesses hold positive attitudes about the future they are more likely to If people and businesses hold positive attitudes about the future they are more likely to A) save less and invest less B) save more and invest more C) save more and invest less D) save less and invest more 17 17 Macroeconomic behavior is most significantly influenced by Macroeconomic behavior is most significantly influenced by A) purchasing power parity B) expectations about the future C) the price of agricultural land D) employment in the construction industry 18 18 Economic forecasters had expected consumer spending to increase by 5 percent this year but instead it increases by 0.5 percent. This situation would be an example of a Economic forecasters had expected consumer spending to increase by 5 percent this year but instead it increases by 0.5 percent. This situation would be an example of a A) positive supply shock B) negative supply shock C) positive demand shock D) negative demand shock 19 19 The primary reason that economists think most short-run fluctuations in the economy are the result of demand shocks is that the prices of many goods and services are The primary reason that economists think most short-run fluctuations in the economy are the result of demand shocks is that the prices of many goods and services are A) flexible in the short run B) inflexible in the short run C) flexible in the long run D) inflexible in the long run 20 20 Alpha Dog Foods is a business firm that produces 10000 units of dog food a week which is the optimal output for the firm. If prices for this product are flexible and Alpha Dog Foods experiences an unexpected decrease in demand it is most likely to Alpha Dog Foods is a business firm that produces 10000 units of dog food a week which is the optimal output for the firm. If prices for this product are flexible and Alpha Dog Foods experiences an unexpected decrease in demand it is most likely to A) increase the product price B) decrease the product price C) increase the production of the product D) decrease the production of the product 21 21 Swirlpool typically sells 5000 energy-efficient dishwashers at the fixed price of $1000 a month which is a price it has used for a long time. If there is an unexpected decrease in the demand for this product then Swirlpool is most likely to Swirlpool typically sells 5000 energy-efficient dishwashers at the fixed price of $1000 a month which is a price it has used for a long time. If there is an unexpected decrease in the demand for this product then Swirlpool is most likely to A) increase the product price B) decrease the product price C) increase production of the product D) decrease production of the product 22 22 If demand falls for many goods and services across the entire economy for an extended period of time and prices are sticky most firms that produce those goods and services will be forced to If demand falls for many goods and services across the entire economy for an extended period of time and prices are sticky most firms that produce those goods and services will be forced to A) increase production and increase employment B) decrease production and decrease employment C) decrease production but increase employment D) increase production but decrease employment 23 23 Reliable economic reports indicate that consumers are spending more on goods and services this year. This trend is highly likely to continue for the next few years because of a growing economy. If prices for these goods and services are sticky then the businesses producing these goods and services are most likely to Reliable economic reports indicate that consumers are spending more on goods and services this year. This trend is highly likely to continue for the next few years because of a growing economy. If prices for these goods and services are sticky then the businesses producing these goods and services are most likely to A) lower prices and hire more workers B) raise prices and hire more workers C) increase output and hire more workers D) decrease output and hire fewer workers 24 24 Which of the following good or service is most inflexible or sticky in price? Which of the following good or service is most inflexible or sticky in price? A) milk B) gasoline C) newspapers D) airline tickets 25 25 Macroeconomic models of the economy over the long term are more likely to assume that the economy has Macroeconomic models of the economy over the long term are more likely to assume that the economy has A) stuck prices B) sticky prices C) flexible prices D) inflexible prices Show less
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