Chapter 5.1, 5.2

Over the long run, the U.S. economy:

Has grown dramatically.

An increase in an economy's average price level is known as:

Inflation.

_____ is a theory that believes that a nation's economic objective should be to accumulate precious metals in the public treasury.

Mercantilism

A recession in the United States hits hardest those regions that:

Mostly produce capital goods and durable goods.

According to mercantilism, _____.

Restricting imports through trade barriers such as tariffs and quotas will help a nation accumulate precious metals in the public treasury.

Which of the following events refers to the largest U.S. economic downturn that occurred in the 1930s?

The Great Depression.

Which of the following is an example of a flow variable?

The amount by which a firm's output increases with every additional worker.

Macroeconomics typically focuses on:

The performance of the national economy.

Which of the following best describes the gross domestic product (GDP)?

The product of the quantity of all goods and services produced in a nation during a year and the price.

Which of the following reflects an economic contraction?

An increase in the rate of unemployment in an economy.

_____ are examples of coincident indicators.

Consumer confidence and stock of inventories. Personal income and industrial production.

Which of the following is most likely to indicate an economic expansion in the United States?

An increase in the annual average disposable income of households from $25,000 in 2014 to $35,000 in 2015.

_____ are leading economic indicators.

Consumer confidence, consumer spending, and purchase of machinery by firms.

Which of the following is true of a stock variable?

A stock variable is a measure of something at a particular point in time.

The gross domestic product (GDP) measures the market value of:

All final goods and services produced in a country during a year.

Which of the following is true?

An economy with well-defined property rights is likely to experience an increase in total production.

The key difference between a stock and a flow is that a flow is measured _____, while a stock is measured _____.

Over an interval of time; at a particular point in time.

Since World War II, the U.S. economy has experienced:

Recessions but not depressions.

An economy does not move smoothly through the phases of the business cycle due to:

Seasonal fluctuations and random disturbances.

It has been observed that _____ falls more in comparison to other goods and services during an economic contraction in the United States.

The demand for houses

Economic fluctuations refer to the rise and fall of economic activity relative to:

The long-term growth trend of an economy.

During _____, the U.S. economy experienced an annual average real gross domestic product (GDP) growth of almost 20 percent.

World War II