Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Chapter 17 Macroeconomics: The Big Picture Question Which of the following is not a macroeconomic topic? a) The current unemployment rates in Europe b) The rising costs in the US health-care industry c) Unemployment during the Great Depression d) US inflation rates during a recession e) Economic growth of countries in Latin America Copyright © Houghton Mifflin Company. All rights reserved. 17 | 2 Answer Which of the following is not a macroeconomic topic? a) The current unemployment rates in Europe b) The rising costs in the US health-care industry (Correct) c) Unemployment during the Great Depression d) US inflation rates during a recession e) Economic growth of countries in Latin America Copyright © Houghton Mifflin Company. All rights reserved. 17 | 3 Question Which of the following is the best measure of how individuals benefit from economic growth? a) The rate of increase in GDP per capita b) The rate of increase in GDP c) The rate of increase in real GDP per capita d) The rate of inflation e) The rate of increase in real GDP Copyright © Houghton Mifflin Company. All rights reserved. 17 | 4 Answer Which of the following is the best measure of how individuals benefit from economic growth? a) The rate of increase in GDP per capita b) The rate of increase in GDP c) The rate of increase in real GDP per capita (Correct) d) The rate of inflation e) The rate of increase in real GDP Copyright © Houghton Mifflin Company. All rights reserved. 17 | 5 Question A recession is a) a fall in real GDP lasting at least one month. b) a fall in real GDP lasting at least six months. c) said to occur whenever real GDP falls below the long-term trend. d) said to occur whenever real GDP falls below the long-term trend for at least one month. e) a fall in real GDP lasting at least one year. Copyright © Houghton Mifflin Company. All rights reserved. 17 | 6 Answer A recession is a) a fall in real GDP lasting at least one month. b) a fall in real GDP lasting at least six months. (Correct) c) said to occur whenever real GDP falls below the long-term trend. d) said to occur whenever real GDP falls below the long-term trend for at least one month. e) a fall in real GDP lasting at least one year. Copyright © Houghton Mifflin Company. All rights reserved. 17 | 7 Question When a recession ends , the economy usually experiences a) immediate growth and prosperity. b) a depression. c) a period of recovery back to its pre-recession state. d) rising inflation and unemployment rates. e) no ill effects from the recession. Copyright © Houghton Mifflin Company. All rights reserved. 17 | 8 Answer When a recession ends , the economy usually experiences a) immediate growth and prosperity. b) a depression. c) a period of recovery back to its pre-recession state. (Correct) d) rising inflation and unemployment rates. e) no ill effects from the recession. Copyright © Houghton Mifflin Company. All rights reserved. 17 | 9 Question The unemployment rate a) has increased steadily over the last 30 years. b) is never equal to zero. c) is zero if the economy is in an expansion. d) increases as real GDP increases. e) is zero unless the economy is in a recession. Copyright © Houghton Mifflin Company. All rights reserved. 17 | 10 Answer The unemployment rate a) has increased steadily over the last 30 years. b) is never equal to zero. (Correct) c) is zero if the economy is in an expansion. d) increases as real GDP increases. e) is zero unless the economy is in a recession. Copyright © Houghton Mifflin Company. All rights reserved. 17 | 11 Question The two branches of macroeconomic theory are a) inflation and growth theory. b) inflation and economic fluctuations theory. c) economic fluctuations and unemployment theory. d) inflation and unemployment theory. e) economic fluctuations and economic growth theory. Copyright © Houghton Mifflin Company. All rights reserved. 17 | 12 Answer The two branches of macroeconomic theory are a) inflation and growth theory. b) inflation and economic fluctuations theory. c) economic fluctuations and unemployment theory. d) inflation and unemployment theory. e) economic fluctuations and economic growth theory. (Correct) Copyright © Houghton Mifflin Company. All rights reserved. 17 | 13 Question The three determinants of the supply of real GDP are a) labor, capital, and money. b) labor, capital, and households. c) labor, capital, and technology. d) labor, capital, and markets. e) labor, capital, and government. Copyright © Houghton Mifflin Company. All rights reserved. 17 | 14 Answer The three determinants of the supply of real GDP are a) labor, capital, and money. b) labor, capital, and households. c) labor, capital, and technology. (Correct) d) labor, capital, and markets. e) labor, capital, and government. Copyright © Houghton Mifflin Company. All rights reserved. 17 | 15 Question Which of the following best explains how fiscal policy affects economic growth? a) By controlling strategic industries b) By developing new government agencies c) By funding higher education d) By providing unemployment compensation e) By affecting incentives to invest, work, hire workers, and develop new technologies Copyright © Houghton Mifflin Company. All rights reserved. 17 | 16 Answer Which of the following best explains how fiscal policy affects economic growth? a) By controlling strategic industries b) By developing new government agencies c) By funding higher education d) By providing unemployment compensation e) By affecting incentives to invest, work, hire workers, and develop new technologies (Correct) Copyright © Houghton Mifflin Company. All rights reserved. 17 | 17 Question Monetary policy a) affects long-term economic growth by keeping interest rates high. b) affects long-term economic growth by keeping interest rates low. c) affects long-term economic growth by keeping inflation rates low and stable. d) has no effect on long-term economic growth. e) affects long-term economic growth by keeping the US national debt low. Copyright © Houghton Mifflin Company. All rights reserved. 17 | 18 Answer Monetary policy a) affects long-term economic growth by keeping interest rates high. b) affects long-term economic growth by keeping interest rates low. c) affects long-term economic growth by keeping inflation rates low and stable. (Correct) d) has no effect on long-term economic growth. e) affects long-term economic growth by keeping the US national debt low. Copyright © Houghton Mifflin Company. All rights reserved. 17 | 19 Question According to the theory of economic fluctuations, which of the following explains the relationship between aggregate demand and employment during a recession? a) A fall in output causes potential GDP to increase, causing employment to decline. b) A fall in real GDP causes aggregate demand to fall. As a result, firms lay off workers. c) A fall in aggregate demand causes real GDP to fall as firms adjust their production. Workers are laid off as a result. d) A fall in aggregate demand causes potential GDP to fall. The resulting decline in output causes employment to fall. e) Workers decide they would rather have more leisure time and decide not to work as much. As a result there is less labor employed and less is produced. Copyright © Houghton Mifflin Company. All rights reserved. 17 | 20 Answer According to the theory of economic fluctuations, which of the following explains the relationship between aggregate demand and employment during a recession? a) A fall in output causes potential GDP to increase, causing employment to decline. b) A fall in real GDP causes aggregate demand to fall. As a result, firms lay off workers. c) A fall in aggregate demand causes real GDP to fall as firms adjust their production. Workers are laid off as a result. (Correct) d) A fall in aggregate demand causes potential GDP to fall. The resulting decline in output causes employment to fall. e) Workers decide they would rather have more leisure time and decide not to work as much. As a result there is less labor employed and less is produced. Copyright © Houghton Mifflin Company. All rights reserved. 17 | 21 Question If the economy is heading towards a recession, the Federal Reserve is likely to a) raise interest rates in order to increase aggregate demand. b) raise interest rates in order to reduce aggregate demand. c) lower interest rates in order to increase aggregate demand. d) lower interest rates in order to reduce aggregate demand. e) do nothing because it is not clear what effect interest rates have on aggregate demand. Copyright © Houghton Mifflin Company. All rights reserved. 17 | 22 Answer If the economy is heading towards a recession, the Federal Reserve is likely to a) raise interest rates in order to increase aggregate demand. b) raise interest rates in order to reduce aggregate demand. c) lower interest rates in order to increase aggregate demand. (Correct) d) lower interest rates in order to reduce aggregate demand. e) do nothing because it is not clear what effect interest rates have on aggregate demand. Copyright © Houghton Mifflin Company. All rights reserved. 17 | 23