Macro Final Exam Study Guide ECO-252-620
"Macroeconomics is nothing but a simple aggregation of all the microeconomic parts." Do you agree or disagree with this statement? A) Don't agree; there is a lot more to the study of macroeconomics than the sum of its microeconomic parts. B) Agree; macroeconomics is exactly equal to the total of all microeconomic units. C) Don't agree; these two disciplines deal with completely independent issues. D) Don't agree; microeconomics is an aggregation of all the macroeconomic parts.
A
3. Macroeconomics entails the study of the: A) overall behavior of the economy. B) individual decision makers. C) market structures. D) cost and production decisions by firms.
A
4. Macroeconomics focuses on: A) the economy as a whole. B) individual decisions. C) wages. D) the allocation of scarce resources.
A
6. Which is most likely a macroeconomic, not microeconomic, question? A) Is the national unemployment rate rising or falling? B) Are consumers buying more bottled water and less fruit juice? C) Are salaries for nurses rising or falling? D) Should a tax be levied on each ton of carbon dioxide a factory emits?
A
Among the tools available to macroeconomic policy makers is: A) fiscal policy, for use in manipulating government spending and taxation. B) antitrust policy, to break up monopolies. C) environmental policy, to clean up the economy. D) improving standards for food and drugs.
A
An increase in the nation's _____ is generally accepted as a long-run indicator of a rising standard of living. A) output per person B) unemployment rate C) inflation rate D) trade deficit
A
An open economy: A) trades goods and services with other countries. B) does not regulate its industries. C) does not impose taxes on its citizens. D) allows free practice of speech and religion.
A
Between 1980 and 2014, inflation wiped out most of the wage gains of the typical worker. A) True B) False
A
Changing the level of government spending is an example of _____ policy. A) fiscal B) interest rate C) monetary D) exchange rate
A
Changing the quantity of money, hence the interest rate, hence overall spending in the economy, is use of _____ policy. A) monetary B) fiscal C) free-market D) trickle-down
A
During the Great Depression, unemployment rates reached as high as: A) 25%. B) 50%. C) 10%. D) 60%.
A
Economists have identified several consecutive months of falling employment, and forecasts for the next few months suggest more of the same. The economy is at the _____ stage of the business cycle. A) recession B) expansion C) peak D) trough
A
Expansions are periods when real GDP and employment are growing. A) True B) False
A
Fiscal policy can be used to reduce the severity of recessions. A) True B) False
A
Following a trough, real GDP increases. A) True B) False
A
For the past several months, per capita output has increased at a slower and slower rate. Over the same period, the unemployment rate has been falling, but it appears to have leveled off and may soon rise. Where in the business cycle is the economy? A) peak B) recession C) trough D) expansion
A
How the actions of individuals and firms interact to produce a particular economy-wide level of performance is the focus of: A) macroeconomics. B) fiscal policy. C) monetary policy. D) microeconomics.
A
If a country runs a trade deficit, its investment spending is probably: A) above its level of saving. B) less than its level of saving. C) equal to its level of saving. D) equal to zero.
A
If a country sells more goods and services to the rest of the world than it purchases from the other countries, then the country has a: A) trade deficit. B) budget deficit. C) trade surplus. D) budget surplus.
A
If the value of a country's exports is greater than the value of its imports, it is: A) running a trade surplus. B) running a trade deficit. C) in an economic contraction. D) likely to find its investment spending greater than its level of saving.
A
If wages grew at 5% last year and average prices grew at 3%, then the average worker: A) is better off. B) is worse off. C) has lost purchasing power. D) is unaffected.
A
In 1936 economic theory changed dramatically with the publication of: A) The General Theory of Employment, Interest, and Money, by John Maynard Keynes. B) The Wealth of Nations, by Adam Smith. C) The Road to Serfdom, by F. A. Hayek. D) Principles of Economics, by Paul Samuelson.
A
In a typical business cycle, the peak is immediately followed by the: A) recession. B) trough. C) expansion. D) depression.
A
In macroeconomics: A) aggregate data such as real GDP, the price level, and unemployment are analyzed. B) individual and firm decisions regarding utility and profit maximization are studied. C) long-term growth is not considered to be important. D) market intervention from the government is not considered important.
A
In recent times, the U.S. government has been trying to help the economy through one of the worst economic slumps ever. The policies used are based on _____ theory. A) Keynesian B) classical C) supply-side D) trickle-down
A
Inflation: A) raises the cost of making purchases. B) can result in a decrease in barter transactions. C) encourages people to hold cash. D) is caused by changes in interest rates.
A
John Maynard Keynes believed that the government should: A) actively try to mitigate the effects of recessions by using fiscal and monetary policies. B) not interfere with the economy but let the economy self-correct. C) intervene only when there is a boom but let the recession run its course. D) not use fiscal and monetary policies, as these policies have long-term adverse effects.
A
Keynesian economics stressed: A) the importance of total spending. B) the self-correcting power of free markets. C) the long run. D) that the Depression should run its course to bring down the high cost of living.
A
Long-run economic growth is best measured by: A) a sustained rise in the production of goods and services. B) the growth of the money supply. C) trade surpluses in the long run. D) the rate of private saving.
A
Long-run growth is the sustained upward trend in: A) aggregate output per person over several decades. B) the unemployment rate over time. C) interest rates over time. D) aggregate output per person over the business cycle.
A
Long-run growth is the: A) sustained upward trend in aggregate output per person over several decades. B) expansion phase of business cycles. C) downturn phase of business cycles. D) sustained downward trend in the employment rate over several decades.
A
Long-run growth is: A) a sustained upward trend in the economy's overall output per person, which generates higher incomes and a higher standard of living for its members. B) an increase in the rate of inflation across time, which reduces real salaries. C) an increase in the overall output of the economy over a three- or four-year period. D) a reduction in the price level over decades.
A
Monetary and fiscal policy are tools to reduce the severity of recessions. A) True B) False
A
Periods in which output and employment are falling are: A) recessions. B) booms. C) expansions. D) deflations.
A
Promotion of employment and growth in the economy as a whole is the focus of: A) macroeconomics. B) fiscal policy. C) monetary policy. D) microeconomics.
A
Recessions are periods in which output and employment are falling. A) True B) False
A
Setting government spending and taxes in an effort to change overall spending in an economy is use of: A) fiscal policy. B) monetary policy. C) investment. D) the stock market.
A
The additional profit earned by Microsoft Corporation by marketing and using a proprietary method of coding software is a microeconomic issue. A) True B) False
A
The annual percentage change in the aggregate price level is negative when there is: A) deflation. B) disinflation. C) inflation. D) spiraling inflation.
A
The most painful consequence of a recession is: A) rising unemployment. B) increasing inflation. C) increasing aggregate output. D) higher interest rates.
A
The most widely used indicator of the conditions in the labor market is the: A) unemployment rate. B) population growth rate. C) inflation rate. D) trade deficit.
A
The point at which a recession ends and the expansion begins is called the: A) trough. B) downturn. C) peak. D) lag.
A
The point on a business cycle when real GDP stops rising and begins falling is a(n): A) peak. B) trough. C) expansion. D) recession.
A
The short-run alternation between economic downturns and recessions, then economic upturns and expansions is known as the _____ cycle. A) business B) contractionary C) expansionary D) disequilibrium
A
The topics studied in macroeconomics include: A) inflation. B) monopolies. C) spillovers, such as pollution. D) mergers.
A
When an economy is expanding, unemployment tends to _____ and overall prices tend to _____. A) fall; rise B) fall; fall C) rise; fall D) rise; rise
A
When an economy is operating between a trough and a peak of the business cycle, it is in: A) an expansion. B) a contraction. C) a short-run condition. D) the beginning of a fall in aggregate spending.
A
When an economy's overall production grows faster than its population, it is undergoing: A) long-run growth per capita. B) an increase in nominal GDP. C) deflation. D) the paradox of thrift.
A
Which of the following are considered to be the two types of macroeconomic policies? A) monetary and fiscal policy B) monetary and regulation policy C) fiscal and regulation policy D) fiscal policy and price controls
A
Which of the following areas is most likely to suggest a limited role for government? A) microeconomics B) macroeconomics C) behavioral economics D) labor economics
A
Which of the following is TRUE? A) Inflation means an increase in the overall level of prices. B) Deflation refers to a decrease in prices only in the energy and transportation sectors. C) During inflation most people enjoy an increase in their standard of living even if their wages don't increase. D) Inflation was a problem for the first time in the recession of 1929-1933.
A
Which question is the most appropriate to the study of MACROECONOMICS? A) How does the aggregate price level affect overall consumer spending? B) How does the level of interest rates affect Delta's decision to buy a new airplane? C) How much will Sony charge for the new game system to be introduced later this year? D) What determines whether Wachovia opens a new office in Beijing?
A
Which statement about the U.S. economy is FALSE? A) Since the Second World War, aggregate output has grown more slowly than the population. B) Since the Second World War, aggregate output has grown more rapidly than the population. C) Since the Second World War, macroeconomic policy has helped make the economy more stable. D) Long-run growth per capita is the key to higher wages and a rising standard of living.
A
Which would most likely be a MICROECONOMIC question? A) Should I go to business school or take a job? B) What determines the overall salary levels paid to workers in a given year? C) What government policies should be adopted to promote full employment and growth? D) What determines the level of output for the economy as whole?
A
With inflation: A) overall prices are increasing, although some may be decreasing. B) all prices must be increasing. C) the economy must be contracting. D) the economy must be producing at full employment.
A
With regard to the aggregate price level, economists generally believe: A) price stability is desirable. B) inflation is worse than deflation. C) deflation is worse than inflation. D) inflation benefits most retired people.
A
A contraction in the business cycle is: A) the long run. B) a recession. C) accompanied by an increase in employment. D) viewed as a rarity.
B
A country's real gross domestic product (GDP), undergoes periodic fluctuations called a(n): A) recession. B) business cycle. C) expansion. D) trough.
B
A depression occurs when: A) both output and employment increase. B) the economic downturn becomes extremely deep and prolonged. C) both price level and unemployment increase. D) output rises but employment remains unchanged.
B
A key insight into macroeconomics is that in the short run the combined effect of individual decisions: A) is always the same as what one individual intended. B) may be very different from what any one individual intended. C) is always beneficial to the economy as a whole. D) is always detrimental to the economy as a whole.
B
A nation whose value of imports exceeds its value of exports is said to have: A) hyperinflation. B) a trade deficit. C) price stability. D) a trade surplus.
B
An overall decrease in the price level is called: A) inflation. B) deflation. C) long-run growth. D) the result of an increase in economic production.
B
Business cycles are defined by the expansion, contraction, then expansion again of nominal GDP. A) True B) False
B
During a recession, one will often observe: A) rising aggregate output. B) rising unemployment rates and falling aggregate output. C) rising employment rates. D) zero unemployment rates.
B
During inflation the _____ price level _____. A) average; falls B) average; increases C) average; remains constant D) real; falls
B
Economists use the term long-term growth to indicate: A) the expansion phase of the business cycle. B) growth of the economy over several decades. C) growth of the economy over one to five years. D) long-run growth of the value of a company.
B
Fiscal policy entails changes in the quantity of money or the interest rate. A) True B) False
B
Fiscal policy entails: A) setting the money supply. B) setting levels of taxation and/or government spending. C) setting interest rates in specific markets. D) correcting only recessionary problems.
B
Fiscal policy refers to changes in _____ to affect overall spending in the economy: A) interest rates B) government spending and taxation C) the quantity of money D) interest rates and of government spending
B
Goods and services that are produced in a foreign country but consumed domestically are called: A) exports. B) imports. C) investment goods. D) consumer durables.
B
If an economy is open: A) anyone can immigrate to the country. B) trading with other countries makes up a portion of its economy. C) it does not trade with other countries. D) Its real GDP will drop.
B
If during several months the economy is simultaneously increasing its levels of output and employment, then the economy is in a(n): A) depression. B) expansion. C) recession. D) turning point between a recovery and a downturn.
B
If macroeconomic policy has been successful over time, it is likely that the economy has not seen: A) any inflation. B) any severe recessions. C) any unemployment. D) a business cycle.
B
If workers' nominal wages have risen by 50% over a 10 years and prices have increased by 40% in that same period, then we can safely conclude that the amount of goods and services workers can buy has: A) fallen. B) increased. C) not changed. D) decreased in quality.
B
In many countries, economists adopt the rule that a recession is a period of at least _____ during which aggregate output falls. A) one quarter B) two consecutive quarters C) three consecutive quarters D) a full year
B
Keynesian economics promotes ideas: A) that government intervention can be destabilizing. B) that the government can help a depressed economy via fiscal and monetary policies. C) that the private sector is perfectly capable of regulating itself. D) that the free market system will always prevail.
B
Keynesians argue that low levels of spending: A) are irrelevant. B) can lead to prolonged recessions. C) are not helped by monetary or fiscal policy efforts. D) are evident only during expansions.
B
Monetary policy attempts to affect the overall level of spending through: A) changes in the inflation rate. B) changes in the quantity of money and the interest rate. C) changes in tax policy or government spending. D) discretionary regulation of profits and wages.
B
One role of government policy is: A) to provide insurance to cover damages from macroeconomic fluctuations. B) to attempt to manage short-run macroeconomic fluctuations. C) to subsidize private insurance for businesses to cover harm from macroeconomic fluctuations. D) to avoid Keynesian economics.
B
One type of macroeconomic policy is antitrust enforcement. A) True B) False
B
Per capita economic growth is: A) growth per unit of capital. B) growth per person. C) always accelerated during a business cycle. D) a sustained increase in interest rates.
B
Setting interest rates and the money supply in an effort to change overall spending in is use of: A) fiscal policy. B) monetary policy. C) investment. D) the stock market.
B
The business cycle is the long-run alternation between downturns and upturns. A) True B) False
B
The economist whose writings in the 1930s argued that the cause of an economic depression is inadequate spending was: A) Herbert Hoover. B) John Maynard Keynes. C) Andrew Mellon. D) Joseph Schumpeter.
B
The modern macroeconomic tools used by the government are _____ policy and _____ policy. A) tax; antitrust B) fiscal; monetary C) monetary; exchange rate D) capital; labor
B
The most painful effect of a recession is: A) inflation. B) unemployment. C) money neutrality. D) liquidity trap.
B
The peak of the business cycle provides evidence that the recession is over. A) True B) False
B
The trade balance is the difference between the value of: A) the trade deficit and the budget deficit. B) exports and the imports. C) the exchange rates of two countries that are engaged in international trade. D) the national debt and the foreign debt.
B
Use of fiscal policy involves changes in: A) interest rates. B) government spending. C) the quantity of money. D) the quantity of money and interest rates.
B
When overall price levels rise over time, it is referred to as: A) deflation. B) inflation. C) an increase in purchasing power. D) the consumer price index.
B
5. The topics studied in macroeconomics include: A) the price of a motorcycle. B) the wages of engineers. C) the average price level in the economy. D) how much ice cream consumers buy.
C
62. A period of rising real GDP is a(n): A) peak. B) trough. C) expansion. D) recession.
C
A pattern of expansion, then recession, then expansion again is a(n): A) annual trend. B) secular trend. C) business cycle. D) consumer cycle.
C
A trade surplus occurs: A) during economic contractions only. B) when the value of imports exceeds the value of exports. C) when the value of imports is less than the value exports. D) when unemployment is rising.
C
An economic expansion in the United States is typically associated with a(n): A) falling inflation rate. B) increase in the poverty rate. C) falling unemployment rate. D) decrease in corporate profits.
C
An expansion is a period in which: A) output declines. B) the price level falls. C) output rises. D) unemployment rises.
C
An increase in the nation's overall price level is: A) long-term economic growth. B) unemployment. C) inflation. D) deflation.
C
Changing government spending and taxes to affect overall spending is use of _____ policy. A) tax-and-spend B) monetary C) fiscal D) free-trade
C
Changing interest rates is an example of _____ policy. A) fiscal B) tax C) monetary D) exchange rate
C
Deflation: A) raises the cost of making purchases. B) can result in an increase in employment. C) encourages people to hold cash rather than invest. D) is caused by changes in interest rates.
C
Fiscal policy attempts to affect the overall level of spending through: A) changes in the inflation rate. B) changes in the quantity of money or the interest rate. C) changes in tax policy or government spending. D) discretionary regulation of profits and wages.
C
Historical evidence shows that for determining a country's living standards, over: A) an extended period, long-run growth is just as important as the business cycle. B) short periods, long-run growth is less important than the business cycle. C) an extended period, long-run growth is much more important than the business cycle. D) long periods, it is difficult to determine whether the business cycle or long-run growth is more important.
C
If a country has a trade deficit, does it indicate that the country has a serious problem? A) No. Trade deficits occur when a country's investment spending is higher than its level of saving. B) Yes. Trade deficits occur when a country has low productivity. C) Yes. Trade deficits occur when a country does not have a comparative advantage in production. D) Yes. Trade deficits occur when a country has a high budget surplus.
C
If all of the households and businesses start saving more during economic hard times, then aggregate income will fall, hurting everyone in the economy. This is known as: A) the quantity theory. B) the crowding-out theory. C) the paradox of thrift. D) the permanent income hypothesis.
C
If the economy grew at 3% this year and average prices increased _____, people would be better off this year than last year. A) 3% B) faster than 3% C) less than 3% D) faster than 10%
C
In the United States, recessions are typically associated with a(n): A) falling unemployment rate. B) decrease in the number of people living in poverty. C) decrease in the percentage of Americans with health insurance. D) increase in corporate profits.
C
In the long run the overall price level is mainly determined by: A) the business cycle. B) the price of crude oil. C) changes in the money supply. D) the government's budgetary policies.
C
One normally expects that unemployment increases while aggregate output and aggregate incomes decrease during: A) an expansion. B) government intervention. C) a recession. D) the peak of the business cycle.
C
One of the issues of importance to macroeconomists is: A) the behavior of individuals and their allocation of income. B) how firms determine the profit-maximizing level of output. C) understanding how living standards change over time. D) the behavior of individual markets.
C
Price stability occurs when: A) the overall price level is zero. B) the economy is at full employment. C) the overall cost of living is changing very slowly. D) food prices have remained the same.
C
Recessions tend to be _____, and expansions tend to be _____. A) short; short B) long; long C) short; long D) long; short
C
The General Theory of Employment, Interest, and Money was written by: A) Robert Lucas. B) David Ricardo. C) John Maynard Keynes. D) Thomas Malthus.
C
The General Theory of Employment, Interest, and Money, written by _____ and published in _____, transformed the way economists thought about macroeconomics. A) Milton Friedman; 1946 B) Paul Samuelson; 1940 C) John Maynard Keynes; 1936 D) Paul Lucas; 1966
C
The alternation between recessions and expansions is known as the: A) unemployment rate. B) long-run economic growth. C) business cycle. D) macroeconomy.
C
The concept that the whole is greater than the sum of its parts best characterizes: A) microeconomics. B) supply and demand. C) macroeconomics. D) business forecasting.
C
The onset of the Great Depression: A) was not a shock to anyone, since most economists predicted the roaring '20s were bound to end in disaster. B) caused a disagreement between the Hoover administration and conventional economists because Hoover wanted the government to intervene much more quickly than most others. C) came as a considerable shock to the conventional wisdom of economics at that time and opened the door for critiques of mainstream thought by economists like John Maynard Keynes. D) was in 1918 at the end of World War I.
C
The point on a business cycle when real GDP stops falling and begins rising is a(n): A) peak. B) expansion. C) trough. D) recession.
C
The sequence of business cycle phases is: A) peak, trough, expansion, recession. B) peak, expansion, trough, recession. C) peak, recession, trough, expansion. D) peak, expansion, recession, trough.
C
The view that the government should take an active role in the macroeconomy dates to: A) the Civil War. B) World War I. C) the Great Depression. D) the Vietnam War.
C
Use of monetary policy entails changes in: A) government spending. B) tax receipts. C) the quantity of money. D) tax rates.
C
When the Great Depression reached its trough in 1933, the unemployment rate was approximately: A) 5%. B) 10%. C) 25%. D) 50%.
C
Which one of the following measures long-run economic growth? A) a rise in employment B) an increase in the money supply C) a sustained increase in the production of goods and services D) an increase in the labor force
C
Which question is the most appropriate to the study of MICROECONOMICS? A) How does the aggregate price level affect consumer spending? B) How does the level of interest rates affect investment spending? C) How much will Sony charge for the new game system to be introduced later this year? D) How does the GDP affect overall government spending?
C
1. The topics studied in macroeconomics include: A) inflation. B) unemployment. C) economic growth. D) inflation, unemployment, and economic growth.
D
7. Which is a microeconomic question rather than a macroeconomic question? A) Will a decrease in the income tax rate lift the nation out of a recession? B) Will an increase in consumer spending cause inflation? C) Will a decrease in the income tax rate lead to a government budget deficit? D) Will an increase in the cigarette tax reduce the number of packs sold?
D
A business cycle is a: A) very deep and prolonged economic downturn. B) period in which output and employment are rising. C) period in which output and employment are falling. D) short-run alternation between economic upturns and downturns.
D
A period of falling real GDP is a(n): A) peak. B) trough. C) expansion. D) recession.
D
A recession leads to all of the following EXCEPT: A) higher unemployment. B) reduced output. C) reduced income and living standards. D) higher employment.
D
According to official statistics for the United States, since the Great Depression: A) economists are confident that the business cycle has been tamed. B) the economy has constantly had positive real GDP growth rates. C) the economy had longer recessions than expansions only during the 1960s and 1990s. D) the economy has not had another severe and prolonged economic downturn comparable to it.
D
An economic recovery encompasses all of the following EXCEPT: A) sustained economic growth. B) a short-run increase in aggregate production. C) a time of increasing employment. D) the end of the business cycle.
D
An independent panel of economic experts at the _____ analyzes the macroeconomy and determines when recessions begin and end. A) Bureau of the Census B) President's Council of Economic Advisers C) Treasury Department D) National Bureau of Economic Research
D
An open economy: A) trades only with its neighbors. B) trades goods but not services or assets with other countries. C) does not trade goods, services, or assets with other countries. D) trades goods and services with other countries.
D
Fiscal and monetary policies: A) have no role in macroeconomic policies. B) have been used by the government for over 250 years. C) are most effective in microeconomic settings. D) are used to correct for short-term economic fluctuations.
D
Fiscal policy attempts to affect the level of overall spending by making changes in: A) the interest rate. B) the money supply. C) banking regulations. D) taxes and spending.
D
In a typical business cycle, the trough is immediately followed by the: A) peak. B) recession. C) depression. D) expansion.
D
In an open economy: A) the exchange rate is determined by the government. B) specialization in activities with a comparative advantage is not possible. C) trade is beneficial only to the larger economy. D) there is trade in goods, services, and/or assets with other countries.
D
In contrast to the conclusions drawn from microeconomics, many economists argue that in macroeconomics, government: A) control of rent prices increases overall economic activity. B) intervention in markets usually leaves society as a whole worse off. C) taxation of goods and services does not cause a deadweight loss of economic welfare. D) intervention in markets can prevent or reduce the effects of adverse events on the macroeconomy.
D
Inflation affects people adversely because: A) nominal income falls. B) purchasing power tends to increase. C) the budget deficit increases. D) it causes money to lose its value over time.
D
Inflation: A) is a movement of the economy toward economic growth. B) can be thought of as an increase in a nation's standard of living. C) is a sustained fall in the overall level of prices. D) is an increase in the overall level of prices.
D
Monetary policy attempts to affect the overall level of spending by making changes in: A) taxes. B) taxes and spending. C) taxes and interest rates. D) interest rates and the quantity of money.
D
Recessions are periods when: A) output rises. B) the aggregate price level rises. C) the unemployment rate is falling. D) output and employment are falling.
D
Rising total output accompanied by increasing employment is generally known as: A) stagflation. B) recession. C) inflation. D) expansion.
D
The central mission of modern macroeconomics is to prevent: A) shortages. B) surpluses. C) high gas prices. D) a deep recession like the Great Depression.
D
The purpose of macroeconomic policy is to:+ A) bring unemployment closer to the natural rate. B) reduce the severity of recessions. C) rein in excessively strong expansions. D) bring unemployment closer to the natural rate, rein in excessively strong expansions, and reduce the severity of recessions.
D
The trough of the business cycle: A) comes right after the expansion phase. B) comes before the recession phase. C) is a temporary maximum level of real GDP. D) is a temporary minimum level of real GDP.
D
When economists measure economic growth, they often use: A) the inflation rate. B) the unemployment rate. C) nominal GDP. D) real GDP.
D
Which of the following is TRUE about inflation and deflation? A) Both are good for the economy. B) Inflation is always good for the economy and deflation is always bad for the economy. C) Inflation is always bad for the economy and deflation is always good for the economy. D) Both inflation and deflation can pose problems for the economy.
D
Which of the following statements is CORRECT? A) Supply and demand cannot explain why a particular good or service becomes more expensive relative to other goods and services. B) Inflation affects only the more advanced countries, whereas less advanced countries face deflation. C) Prices of most goods and services remained stable during the Great Depression. D) When the economy is in recession and jobs are hard to find, inflation tends to fall.
D
Which of the following statements is TRUE? A) In the past century, the population of the United States has grown faster than output. B) Long-run growth models and business cycle models are the same. C) Since World War II, the economy of Argentina has grown faster than the economy of Canada. D) The level of saving is important for long-run growth.
D
Which of the following statements is TRUE? A) Long-run growth started during the Renaissance. B) Long-run growth started in the early 1700s. C) Peasants in eighteenth-century Europe had a standard of living more than 50 times that of the Egyptian peasants in the age of the pharaohs. D) Long-run growth is a relatively modern phenomenon.
D
Which would NOT be classified as a MACROECONOMIC question? A) How many people are employed in the economy as a whole? B) What determines the overall level of prices? C) What determines the overall trade in goods, services, and financial assets between the United States and the rest of the world? D) What determines a university's cost of offering a new course?
D
