Macro Test 1

The behavior of all households and firms together is known as

Aggregate behavior

The following is a correct order in the business cycle: recession, trough, peak, expansion

FALSE

If congress increases government spending, it is using

Fiscal policy

Which of the following is not a component of gross domestic product?

purchases by consumers of used goods

The GDP of the United States in 2014 was around $17.4 trillion. This means

that the value of output produced in the U.S. in 2014 was around $17.4 trillion.

The value of what KFC produces in Japan is included in the U.S. ________ and in the Japanese _______.

GNP; GDP

The total market value of all final goods and services produced within a given period by factors of production located within a country is

Gross Domestic Product

In the circular flow diagram, households __________ goods and services and _________ labor

demand; supply

A household that spends more than it receives in income during a given period is known as

dissaving

The interest rate on a given loan reflects the __________ of the loan and the perceived risk to the __________

length; lender

Since 1970, the US has experienced five

recessions

In the United States in 1933, the unemployment rate was approximently

25%

Which of the following is an example of an intermediate good?

the pizza sauce you purchase to make pizzas to sell for a fund-raiser for an organization you belong to

Which of the following is not a topic studied in macroeconomics?

the price of dell computers

Which of the following would not be counted in 2016s GDP?

the value of a 1976 convertible you purchase from a dealer in 2016

According to classical models, the level of employment is determined primarily by

prices and wages

The equation for GDP using the expenditure approach is

GDP=C+I+G+EX-IM

In the circular flow diagram, firms payments ________ and the government

Flow into and out of

Keynes believed that expansionary fiscal policy could help get an economy out of an inflation

FALSE

To bring the economy out of an inflationary period, Keynes argued that the government should

Increase taxes and/or decrease government spending

Prices that do not always adjust rapidly to maintain equality between quantity supplied and quantity demanded are

Sticky Prices

According to Keynes, the governments role during periods when private demand is low is to stimulate aggregate demand and, by so doing, lift the economy out of recession

TRUE

In the United States, unemployment rose in all of the recessions that have occurred since the 1970's

TRUE

Delation occurs when

The average price level declines