Macroeconomics Chapter 4

Deregulation of the airline, trucking, telephone, and electric utility industries are examples of _______ policy.

structural

Monetary policy refers to

the determination of the nation's money supply.

Macroeconomic policies are government policies designed to affect

the performance of the economy as a whole.

In Econland total output is $6 billion, population equals 500,000 people, and, of these, 400,000 are employed workers. Output per person in Econland equals _______ and average labor productivity equals ______.

12,000 , 15,000

Major macroeconomic questions include all of the following except

How do monopoly firms set prices and determine quantities to produce?

Which of the following statements is normative?

Large budget deficits should be avoided.

A trade surplus occurs when

exports exceed imports.

If tax revenues equal 25 percent of total output and government expenditures equal 30 percent of total output, then there is a

government budget deficit.

An example of fiscal policy is

a reduction in income tax rates.

The adding up of individual economic variables to obtain economy wide totals is called

aggregation.

Positive analysis

aims at determining only the economic consequences of a particular policy.

The country of Northland produced $1,000 billion of output in one year. The population of Northland was 60 million, of whom 25 million were employed. What was average labor productivity in Northland?

$40,000

______ policy focuses on the nation's money supply, while _____ policy focuses on the government's budget.

Monetary, Fiscal

When comparing the standard of living in two countries it is important to adjust total output for differences in

Population

The value of output was $100 billion in Northland and $200 billion in Southland. The population of Northland was 50 million and the population of Southland was 30 million. There were 30 million employed workers in Northland and 20 million employed workers in Southland. Average labor productivity was higher in ______ and the standard of living was ________.

Southland; higher in Southland

Which of the following would not be studied by macroeconomists?

The worldwide operations of General Motors

Macroeconomists are concerned with each of the following issues except

Why do the prices of computers increase more slowly than the price of gasoline?

A particularly strong expansion is called a(n)

boom

Over the entire period since 1950, average labor productivity in the United States has _______ although between 1973 and 1995 the rate of change ________.

increased; slowed

Among economists today, the most widely accepted cause of the Great Depression is

poor economic policymaking.