5 Macroeconomics: An Introduction
1 Introduction to Macroeconomics
Economic interactions involving which of the following would most likely be studied in macroeconomics? International Monetary Fund policy
4 Inflation and Stagflation
How does demand-pull inflation differ from cost-push inflation? Demand-pull inflation is driven by consumers, while cost-push inflation is driven by producers.
1 Introduction to Macroeconomics
In microeconomics, price helps determine both quantity supplied and quantity demanded. Which other factors can impact each by causing a shift to occur? Quantity supplied is determined by production costs, and quantity demanded is determined by desire for the product.
1 Introduction to Macroeconomics
In microeconomics, what occurs when equilibrium is reached? Prices are set.
3 The Business Cycle
Income reaches the highest level at the point of the business cycle. peak
2 Economic Growth
Jim lost his job in a car assembly factory to a robot and his skills will no longer be needed. Which terms can be used to describe Jim? Check all that apply. structurally unemployed unemployed
2 Economic Growth
This graph shows changes in GDP and the unemployment rate in the United States in recent years.In what year would someone looking for work have had the hardest time finding a job? 2009
3 The Business Cycle
This is a graph of the business cycle.Time is measured along the x-axis. What is measured along the y-axis? economic output
1 Introduction to Macroeconomics
This is a graph showing price and total output in the short and long run.According to this graph, how does supply behave in the long run? Output remains constant.
1 Introduction to Macroeconomics
This is a graph showing price and total output in the short and long run.According to this graph, how does supply behave in the short run and long run? Output reacts differently.
2 Economic Growth
To help encourage economic growth, a country can invest in research and development.
4 Inflation and Stagflation
Typically, high inflation is a sign of a struggling economy because wages cannot keep up with the increase in prices.
1 Introduction to Macroeconomics
What area of economics focuses on the interactions between individual consumers and producers? microeconomics
2 Economic Growth
When economists determine that a nation's GDP has declined, they can point to this as a sign of economic shrinkage.
4 Inflation and Stagflation
When government intervention makes currency worthless, this condition is called hyperinflation.
3 The Business Cycle
Which best describes how a recession develops as demand and production decrease? The recession accelerates. ?
3 The Business Cycle
Which best describes the nature of cause and effect in the context of the business cycle? Each effect has other effects.
1 Introduction to Macroeconomics
Which best describes the purpose served by economic models within an economic system? Models identify patterns.
1 Introduction to Macroeconomics
Which best describes what injector factors bring to an economic system? money
3 The Business Cycle
Which best describes what is represented in the business cycle model? macroeconomic trends
1 Introduction to Macroeconomics
Which best describes what occurs in the product market? the exchange of goods and services for money
1 Introduction to Macroeconomics
Which best describes why taxes and savings are considered leakage factors? They take money out of the economic system.
1 Introduction to Macroeconomics
Which body or group is most able to use money to influence the economy? government
2 Economic Growth
Which describes a factor that limits economic growth? having low internal demand
3 The Business Cycle
Which event most likely explains renewed demand in a recovery period? Economic policy renews consumer confidence and demand.
4 Inflation and Stagflation
Which federal agency calculates the Consumer Price Index (CPI)? US Bureau of Labor Statistics
3 The Business Cycle
Which of the following conditions is most indicative of recovery? The economy is growing again.
3 The Business Cycle
Which of the following is a characteristic of the prosperity phase of the business cycle? high levels of production
3 The Business Cycle
Which scenario best reflects the relationship between production and demand in a recession? Car dealerships cannot sell their stock.
4 Inflation and Stagflation
Which scenario is an example of cost-push inflation? An increase in workers' wages raises the production cost of cars, and car prices rise as a result.
4 Inflation and Stagflation
Which scenario is an example of demand-pull inflation? Consumers have more money to buy cars, and the prices of cars and car accessories rise as a result.
1 Introduction to Macroeconomics
Which statement best describes the circular flow model? The model represents the movement of money and resources throughout the economy.
3 The Business Cycle
Which statement best describes why it is difficult to sell a home during a recession? Demand greatly decreases.
2 Economic Growth
Which unemployment rate do most economists consider to be acceptable in the United States? 5 percent
4 Inflation and Stagflation
Why is gasoline weighted more heavily than tomatoes in a calculation of the annual inflation rate in the United States? Americans spend more money on gasoline than tomatoes, on average.
1 Introduction to Macroeconomics
The aggregate is the total number of goods demanded or supplied.
1 Introduction to Macroeconomics
The circular flow model examines interactions between which two groups? households and firms
2 Economic Growth
The graph shows changes in GDP in the United States from 2009 to 2011.How did the contribution of the services sector to GDP change between 2009 and 2011? It rose significantly.
2 Economic Growth
The graph shows data for the years 2010 through 2012. Which might be a better title for this graph? Total Exports for the United States and China
3 The Business Cycle
The graphs show the US unemployment rate and the price of whole milk between 2006 and 2012.What do these graphs indicate about the relationship between employment levels and prices during economic cycles? As unemployment rates rise, average prices fall. ?
4 Inflation and Stagflation
The inflationary spiral explains the causes and effects of high inflation.The spiral usually begins with an increase in demand. What is the direct effect of this increase? Producers raise prices to continue to make a profit.
2 Economic Growth
The map shows GDP per capita in the United States for a given year.What conclusion can someone draw from the map? States with the lowest per capita GDP tend to be in the South.
3 The Business Cycle
There are five stages in a recession. 1. job loss 2. falling production 3. falling demand (occurs twice) 4. peak production In which order do these stages occur? 4, 3, 2, 1, 3
3 The Business Cycle
There are four stages in an economic recovery. 1. increased production 2. rising demand (occurs twice) 3. increased hiring In which order do these stages occur? 2, 1, 3, 2
3 The Business Cycle
These are the four stages of the business cycle: 1. Depression 2. Prosperity 3. Recession 4. Recovery In which order do these stages occur? 2, 3, 1, 4
2 Economic Growth
These circle graphs show information about Bolivia's workforce and GDP. Few people in Bolivia work in industry.
2 Economic Growth
These circle graphs show information about Bolivia's workforce.Which statement best summarizes the information on these graphs? Many Bolivians are farmers, but the agriculture sector does not produce much in terms of GDP. ?
1 Introduction to Macroeconomics
A long-run equilibrium occurs when long-run aggregate supply and aggregate demand meet. What does having long-run equilibrium indicate about a society? The society is using all of its resources efficiently.
2 Economic Growth
An increase in gross domestic product (GDP) is a sign that a country's economy is growing.
4 Inflation and Stagflation
Consumers having more money to purchase computers will most likely result in an increase in prices for computers and computer accessories.
3 The Business Cycle
During a recession, what is one way governments try to encourage growth? by increasing unemployment benefits
2 Economic Growth
Rabia does not currently have a job, but declined a job offer because she feels her skills merit better pay and a better position. Which terms can be used to describe Rabia? Check all that apply. frictionally unemployed unemployed
3 The Business Cycle
Read a passage from a speech given by President Barack Obama. Because of this plan, families who are struggling to pay tuition costs will receive a $2,500 tax credit . . . And Americans who have lost their jobs in this recession will be able to receive extended unemployment benefits. -President Barack Obama,February 4, 2009 Which statement best explains this passage? It describes government measures to stimulate demand and bring about a recovery.
2 Economic Growth
Sometimes an economy cannot grow because of external factors, such as low demand for exports.
4 Inflation and Stagflation
Stagflation occurs when high inflation combines with high unemployment and a low level of production.
