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1 | |
Which of the following is a central issue in macroeconomics? |
| | A) | the deregulation of the banking industry |
| | B) | inflation of prescription drug prices |
| | C) | the effect of excise taxes on consumers' buying patterns |
| | D) | none of the above |
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2 | |
Which of the following is NOT an issue in macroeconomics? |
| | A) | issues relating to the balance of payment |
| | B) | the determination of prices in the agricultural sector |
| | C) | the relationship between inflation and unemployment |
| | D) | the possible effect of budget deficit increases on the level of investment |
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3 | |
In studying growth theory |
| | A) | we focus on the very long run |
| | B) | we ignore recessions and booms |
| | C) | we assume that all inputs are fully employed |
| | D) | all of the above |
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4 | |
In the very long run |
| | A) | the position of the AD-curve depends on the productive capacity of the economy |
| | B) | the position of the AS-curve depends on the degree of consumer confidence |
| | C) | the position of the AS-curve essentially determines the level of output |
| | D) | the position of the AD-curve is affected by changes in efficiency improvements |
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5 | |
The position of the long-run AS-curve is determined by |
| | A) | the full-employment level of output |
| | B) | consumer confidence |
| | C) | fiscal policy |
| | D) | monetary policy |
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6 | |
In the very long run, |
| | A) | the AS-curve is vertical |
| | B) | the AS-curve is horizontal |
| | C) | the AS-curve is upward sloping |
| | D) | the level of output is solely determined by the position of the AD-curve |
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7 | |
Which of the following is NOT true in the very short run? |
| | A) | a shift in the AD-curve will change output but not prices |
| | B) | a shift in the AD-curve will change prices but not output |
| | C) | the AS-curve is horizontal |
| | D) | the position of the AD-curve can be influenced by fiscal policy |
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8 | |
In the very short run |
| | A) | the position of the AD-curve determines the level of output |
| | B) | the position of the AD-curve cannot be changed by fiscal or monetary policy |
| | C) | a change in monetary policy will affect both the price level and the level of output |
| | D) | a change in fiscal policy will not change the level of output |
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9 | |
In the very short run |
| | A) | the level of prices can change quite rapidly, but the level of output is fixed |
| | B) | the level of prices is unaffected by the level of output |
| | C) | the level of prices and the level of output change with a shift in aggregate demand |
| | D) | the level of prices and the level of output are both fixed |
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10 | |
In the medium run, restrictive fiscal policy will cause |
| | A) | a decrease in the level of output but no change in the level of prices |
| | B) | a decrease in the level of prices but no change in the level of output |
| | C) | a decrease in both the level of prices and the level of output |
| | D) | a decrease in real GDP with no change in nominal GDP |
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11 | |
In the medium run, monetary policy can be used to |
| | A) | shift the AD-curve, but this will only result in a price change, not in a change in real GDP |
| | B) | affect nominal GDP, but this will not have any effect on real GDP |
| | C) | lower the price level while increasing the level of real GDP |
| | D) | lower the price level but only at the cost of also lowering the level of real GDP |
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12 | |
Periods of very high inflation rates |
| | A) | can only occur in a situation when the AS-curve is vertical |
| | B) | most often are caused by sharp increases in aggregate demand |
| | C) | can only occur if the output gap is large |
| | D) | most often occur when actual GDP is less than potential GDP |
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13 | |
Potential GDP is |
| | A) | always greater than actual GDP |
| | B) | the level of GDP if unemployment is zero |
| | C) | equal to nominal GDP adjusted for inflation |
| | D) | none of the above |
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14 | |
Which of the following does NOT affect the trend path of GDP over time? |
| | A) | efficiency improvements |
| | B) | an increase in population growth |
| | C) | fluctuations in the unemployment rate |
| | D) | the availability of capital equipment |
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15 | |
The output gap is defined as |
| | A) | nominal GDP minus real GDP |
| | B) | potential GDP minus actual GDP |
| | C) | nominal GDP adjusted for inflation |
| | D) | actual output minus the output that could be produced if the capital stock remained constant |
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16 | |
One of the main controversies in macroeconomics is |
| | A) | whether the AS-curve is really flat in the very short run |
| | B) | whether the AD-curve can be shifted by fiscal or monetary policy |
| | C) | how steep the medium run AS-curve really is |
| | D) | whether the level of output can be changed by an increase in the efficiency of the factors of production |
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17 | |
If we compare the trend path of GDP with the behavior of actual GDP in the U.S. over the last four decades, we realize that |
| | A) | actual GDP never went above potential GDP |
| | B) | the output gap was never more than 5 percent of GDP |
| | C) | the output gap never was negative |
| | D) | none of the above |
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18 | |
If we look at the growth of real GDP per capita around the world from 1913-98, we see that |
| | A) | the U.S. had the highest growth rate among industrial nations |
| | B) | the U.S. growth rate was about twice as high as that of the United Kingdom |
| | C) | the U.S. growth rate was only about half of Japan's |
| | D) | Japan was the only country with a growth rate higher than the U.S. |
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19 | |
Increases in the rate of inflation |
| | A) | generally are inversely related to the output gap |
| | B) | are more pronounced in periods of recession |
| | C) | always coincide with a decrease in the unemployment rate |
| | D) | generally do not occur in periods of high growth in money supply |
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20 | |
If we look at the behavior of the U.S. CPI over the last four decades we realize that inflation |
| | A) | never exceeded 10 percent |
| | B) | steadily increased in the 1970s |
| | C) | was, on average, lower in the 1990s than in the 1960s |
| | D) | was at its highest in the early 1980s |
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