Download 1. The field of economics is traditionally divided into two - E-SGH

Macroeconomics I
110461-1792
Spring Semester 2014/2015
Introduction to macroeconomics (ch. 1)
1. The field of economics is traditionally divided into two broad subfields
a. National economics and international economics
b. Consumer economics and producer economics
c. private sector economics and public sector economics
d. microeconomics and macroeconomics
2. The basic goal of economics is:
a. controlling the effects of government actions.
b. determining how to distribute all that is produced in an economy.
c. addressing the scarcity problem created because the population’s desire for goods exceeds
the ability to produce them.
d. matching limited resources to people’s limited wants and needs.
e. controlling tastes and wishes so that there will be enough resources to produce all the goods
and services that people want.
3. As a discipline, economics is best described by which of the following?
a. the study of how to control the effects of government actions
b. the study of how to control the preferences of consumers so that there will be enough
resources to produce all the goods and services that consumers want
c. the study of how to use scarce resources to satisfy unlimited wants and needs
d. the study of how to dispose of excess goods and services that nobody wants
e. the study of how to maximize profits for firms
4.
Which of the following statements best represents the fact that I cannot put in extra hours of
work because of scarcity?
a. I don’t have enough time for additional work because I need to spend time with my family
and there are only so many hours in the day.
b. I don’t like going to work, so why would I work more than I have to?
c. I don’t think that overtime pay is high enough.
d. I am worried that if I work extra hours, I will get bored with my job.
e. I don’t want my coworkers to feel pressure to work more because I am working additional
hours.
5. The principle that "people face tradeoffs" applies to:
a. Individuals
b. Families
c. Societies
d. All of the above are correct
6. The most fundamental economic problem is
a. Security
b. The fact that US buys more goods from foreigners than it sells to foreigners
c. health
d. scarcity
7. In an economy in which decisions are guided by prices and individual self-interest, there is
a. The potential to achieve efficiency in production
b. A strong need for government intervention in the market
c. less efficiency that would be observed in a centrally-planned economy
d. more need for a strong legal system to control individual greed that would be needed in a
centrally-planned economy
8. Macroeconomics is the study of:
a. the economic motives of voters and elected officials.
b. individual decision-making units such as households and businesses.
c. how government purchases affect specific markets.
d. the operation of the economy as a whole.
e. the interaction between the government and businesses.
9. Which of the following is a macroeconomic question?
a. How many textbooks should be published by a publisher?
b. How much should English majors earn after college?
c. How do members of a household decide whether to clean their own house or hire someone
else to do it?
d. What is the rate of unemployment?
e. What is the price of a new 40-inch television?
10. Microeconomics is the study of:
a. how government activities affect the economy.
b. individual decision-making units.
c. collective decision-making.
d. the operation of the economy as a whole.
e. the interaction between the government and businesses.
11. Which of the following is a microeconomic question?
a. What are the total production levels in the economy?
b. How can we best encourage economic growth?
c. What is the overall price level in the economy?
d. What are the variables that determine the price of a specific good?
e. How can we reduce the unemployment rate among Hispanic men?
12. A normative statement describes how the world
a. Was in the past
b. Is in the present
c. Will be in the future
d. Ought to be
13. In building economic models, economists often omit
a. Assumptions
b. Theories
c. Details
d. Equations
14. When studying the effects of public policy, economists
a. Always refrain from making assumptions
b. Sometimes make different assumptions about short run and the long run
c. Consider only the direct effects of those policy changes and not the indirect effects
d. Consider only the shirt-run effects of those policy changes and not the long-run effects
15. An example of a price that changes only infrequently is the price of
a. Stocks on the New Your Stock Exchange
b. Crude oil
c. Residential real estate
d. Magazines sold at newsstands
16. Economists consider normative statements to be
a. Descriptive, making a claim about how the world is
b. Statements about the normal condition of the world
c. Prescriptive, making a claim about how the world ought to be
d. Statements which establish production goals for the economy
17. Which of the following would be considered a topic of study in macroeconomics?
a. The effect of agricultural price support programs on the cotton industry
b. The effect on US steel producers of an import quota imposed on foreign steel
c. The effect of an increasing inflation rate on national living standards
d. The effect of an increase in the price of imported coffee beans on the US coffee industry
18. Which of the following statements is correct?
a. Microeconomics and macroeconomics are two separate divisions of economics, completely
independent of each other.
b. Macroeconomists focus their attention on markets for small products, while
macroeconomists focus their attention on markets for large products.
c. Microeconomics and macroeconomics are two distinct but closely intertwined fields of
economics.
d. It is possible to understand macroeconomics without understanding the microeconomics, but
not vice versa.
19. Which of the following is an example of a positive statement?
a. Prices rise when the government prints too much money
b. If welfare payments increase, the world will be better place
c. Inflation is more harmful to the economy than is unemployment
d. When public policies are evaluated, the benefits to the economy of improves equity should
be considered more important than the costs of reduced efficiency.
20. Which of the following is not a positive statement?
a. Higher gasoline prices will reduce gasoline consumption
b. Equity is more important than efficiency
c. Trade restrictions lower our standard of living
d. If a nation wants to avoid inflation, it will restrict the growth rate of the quantity of money