Introduction to Macroeconomics (Pre-Test)

Which body or group is most able to use money to influence the economy?

Government

The circular flow model examines interactions between which sectors of the economy? Check all that apply.

Government Business Households

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 it's resources efficiently

Which best describes why taxes and savings are considered leakage factors?

They take money out of the economic system

The aggregate is

the total number of goods demanded or supplied

What area of economics focuses on the interactions between individual consumers and producers?

Microeconomics

In macroeconomics, the economy can best be understood through the use of

Models

Which best describes the purpose served by economic models within an economic system?

Models identify patterns

In microeconomics, what occurs when equilibrium is reached?

Prices are set

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.