ECON Ch 1

In which of the following countries will the national government have the greatest influence with respect to the nation's economy? a)Cuba b)China c)Chile d)Canada

a)Cuba

Macroeconomic topics do not usually include: a)economic growth. b)the profit maximizing decisions of an individual manufacturer. c)the rate of unemployment. d)the rate of inflation.

b)the profit maximizing decisions of an individual manufacturer.

Which of the following is most likely a topic of discussion in macroeconomics? a)a decrease in the unemployment rate b)a decrease in the production of DVD players by a consumer electronics company c)an increase in the price of a hamburger d)an increase in the wage rate paid to automobile workers

a)a decrease in the unemployment rate

When nations desire a healthy macroeconomy, they typically focus on three goals, one of these being: a)low inflation b)assuring competition between firms c)prudent monetary policy d)balanced budget

a)low inflation

In the ____________, households work and receive payment from firms. a)financial capital market b)labor market c)financial investment market d)saving market

b)labor market

Which of the following best denotes the reason for the existence of substantial black markets? a)government laws and rules b)a market-oriented economy c)a command economy d)the microeconomy

c)a command economy

The circular flow diagram of economic activity is a model of the: a)role of unions and government in the economy. b)influence of government on business behaviour. c)interaction among taxes, prices, and profits. d)flow of goods, services, and payments between households and firms.

d)flow of goods, services, and payments between households and firms.

Which of the following best describes a monetary policy tool? a)household savings b)taxes c)government spending d)interest rates

d)interest rates

If macroeconomics looks at the economy as a whole, it focuses on which of the following? a)business firms b)the division of labor c)households d)unemployed people

d)unemployed people

In a _______________________, most economic decisions about what to produce, how to produce it, and for whom to produce it are made by buyers and sellers. a)market-oriented economy b)macroeconomy c)microeconomy d)command economy

a)market-oriented economy

In a discussion of economics, which of the following would exert the most influence on an individual firm's decision to hire workers? a)the macroeconomy b)wage levels c)household income d)the firm's income

a)the macroeconomy

In the circular flow diagram model: a)households receive revenue for selling goods and services to businesses, and use that revenue to buy inputs from businesses. b)Both (d) and (c) are correct. c)businesses receive revenues from households in exchange for providing goods and services and use those revenues to buy inputs from households. d)households receive income from businesses in exchange for providing inputs and use that income to buy goods and services from businesses.

b) both d and c are correct

_____________ - a term referring to the fact that for many goods, as the level of production increases, the average cost of producing each individual unit declines. a)Division of labor b)Economies of scale c)Specialization d)Skill

b)Economies of scale

Which of the following lies primarily within the realm of macroeconomics? a)a study of the impact of "mad cow" disease on the price of beef worldwide b)a study of how tax cuts stimulate aggregate production c)a study of the demand for gasoline d)an analysis of supply and demand conditions in the electricity market

b)a study of how tax cuts stimulate aggregate production

Economic models like the _____________________ are not physical models, but instead are diagrams or graphs or even mathematical equations that represent economic patterns or theories. a)Specialization Model b)circular flow diagram c)financial investment market d)financial capital market

b)circular flow diagram

Which of the following best characterizes the circular flow of income? a)Households buy factors of production from businesses, and businesses buy goods and services from households. b)The government purchases resources from businesses and households and then sells goods and services to businesses and households. c)Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses. d)Businesses buy resources from the government, and households buy goods and services from businesses.

c)Businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses.

Regardless of whether you are looking through the microeconomics microscope or the macroeconomics telescope, the fundamental subject material of the interconnected __________ doesn't change. a)firm b)production c)economy d)production

c)economy

In a command economy, the __________ either makes most economic decisions itself or at least strongly influences how the decisions are made. a)business sector b)firm c)government d)market

c)government

Which of the following best describes a fiscal policy tool? a)financial capital markets b)household spending c)government spending d)bank lending

c)government spending

The basic difference between macroeconomics and microeconomics is that: a)macroeconomics is concerned with generalization while microeconomics is concerned with specialization. b)microeconomics looks at the forest (aggregate markets) while macroeconomics looks at the trees (individual markets). c)microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned with the forest (aggregate markets). d)macroeconomics is concerned with groups of individuals while microeconomics is concerned with single countries.

c)microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned with the forest (aggregate markets).