Macroeconomics chapters 1-9

Question 1 of 81

1

Economics is a social science concerned with:

Select one of the following:

the best use of scarce resources to achieve the maximum satisfaction of economic wants
increasing the level of productive resources so there is a minimum level of income
increasing the level of productive resources so there is a maximum output in society
the best use of scarce resources paid for at the minimum level of cost to consumers and businesses

Explanation

Question 2 of 81

1

a person should consume more of something when its marginal:

Select one of the following:

Benefit exceeds is marginal cost
cost exceeds its marginal benefit
cost equals its marginal benefit
benefit is still positive

Explanation

Question 3 of 81

1

the process of developing hypotheses, testing them against facts, and using the result to construct theories is called:

Select one of the following:

opportunity cost calculation
microeconomics
marginal analysis
the scientific method

Explanation

Question 4 of 81

1

which is an illustration of a microeconomic question?

Select one of the following:

what is the current national rate of unemployment?
is the economy experiencing a decline in the rate of inflation?
will a new type of television set increase the number of buyers?
is the production of goods and services in the economy greater this year than last year?

Explanation

Question 5 of 81

1

A schedule or curve that shows the various combinations of two products a consumer can purchase with a specific amount of money income is:

Select one of the following:

a tradeoff
a budget line
a tangent point
an optimal output

Explanation

Question 6 of 81

1

which of the following is real capital?

Select one of the following:

a pair of stockings
a construction crane
a savings account
a share of IBM stock

Explanation

Question 7 of 81

1

a point inside a production possibilities curve best illustrates:

Select one of the following:

unemployment
the efficient use of resources
the use of best-available technology
unlimited wants

Explanation

Question 8 of 81

1

A normative statement is one that:

Select one of the following:

is based on the law of averages
applies only to microeconomics
applies only to macroeconomics
is based on value judgments.

Explanation

Question 9 of 81

1

the problems of aggregate inflation and unemployment are:

Select one of the following:

major topics of macroeconomics
not relevant to the u.s. economy
major topics of microeconomics.
peculiar to command economics

Explanation

Question 10 of 81

1

On a production possibilities curve, the single optimal or best combination of output for any society:

Select one of the following:

is at a point near the top of the curve
is at the precise midpoint of the curve
is at a point near the bottom of the curve
depends upon the preferences of society

Explanation

Question 11 of 81

1

which statement best describes a command economy

Select one of the following:

the production of goods and services is determined primarily by markets, but the allocation of goods and services is determined primarily by the government.
the production of goods and services is determined primarily by government, but the allocation of goods and services is determined by markets.
the production and allocation of goods and services is determined primarily through markets.
the production and allocation of goods and services is determined primarily through government.

Explanation

Question 12 of 81

1

which statement is correct?

Select one of the following:

Freedom of choice and enterprise are essential elements of the market system
producers are "kings" in a market economy because they determine what is produced.
the market system is efficient at allocation of resources, but not consumer goods to their most valued uses.
the operation of a market system eventually results in an equal distribution of income.

Explanation

Question 13 of 81

1

In a competitive economy, prices:

Select one of the following:

influence consumers in their purchases of goods and services.
influence businesses in their purchases of economic resources.
influence workers in making occupational choices.
do all of these.

Explanation

Question 14 of 81

1

the competitive market system:

Select one of the following:

encourages innovation because government provides tax breaks and subsidies to those who develop new products or new productive techniques.
discourages innovation because it is difficult to acquire additional capital in the form of new machinery and equipment.
discourages innovation because firms want to get all the profits possible from existing machinery and equipment.
encourages innovation because successful innovators are rewarded with economic profits.

Explanation

Question 15 of 81

1

which is not one of the Five Fundamental Questions?

Select one of the following:

how will the goods and services be produced?
how should the system accommodate change?
who is to receive the output of the system?
what goods and services should be produced by government?

Explanation

Question 16 of 81

1

The idea that firms and resource suppliers in seeking to further their own self-interests in a competitive market economy also simultaneously promotes the public or social interest is a description of:

Select one of the following:

the guiding function of prices
Capital accumulation
the "Invisible hand"
"Dollar votes"

Explanation

Question 17 of 81

1

which of the following is a limitation of the simple circular flow model?

Select one of the following:

product markets are ignored.
resource markets are ignored.
the determination of product and resource prices is not explained.
households are included, but not businesses.

Explanation

Question 18 of 81

1

households and businesses are:

Select one of the following:

both buyers in the resource market.
both sellers in the product market.
sellers in the resource and product markets respectively.
sellers in the product and resource markets respectively.

Explanation

Question 19 of 81

1

The influential book written by Adam Smith was:

Select one of the following:

The Worldly Philosophers
The Wealth of Nations
The Age of the Economist
The Affluent Society

Explanation

Question 20 of 81

1

the circular flow model:

Select one of the following:

assumes that central planning is taking place
illustrates how natural resources are created
illustrates how money is created by the banking system
illustrates the interdependence of businesses and consumers

Explanation

Question 21 of 81

1

the law of demand is illustrated by a demand curve that is:

Select one of the following:

vertical
horizontal
upward sloping
downward sloping

Explanation

Question 22 of 81

1

which would cause a decrease in the quantity of computers supplied?

Select one of the following:

An increase in the demand for computers
a decrease in the demand for computers
an increase in the incomes of consumers
a decrease in the price of parts for making computers

Explanation

Question 23 of 81

1

when the price of oil declines significantly, the price of gasoline also declines. the latter occurs because of a(n):

Select one of the following:

increase in the demand for gasoline
decrease in the demand for gasoline
increase in the supply of gasoline
decrease in the supply of gasoline

Explanation

Question 24 of 81

1

a schedule which shows the various amounts of a product producers are willing and able to produce at each price in a series of possible prices during a specified period of time is called:

Select one of the following:

Quantity supplied
Quantity demanded
Supply
Demand

Explanation

Question 25 of 81

1

if the quantity supplied of a product is less than the quantity demanded then:

Select one of the following:

there is a shortage of the product
there is a surplus of the product
the product is a normal good
the product is an inferior good

Explanation

Question 26 of 81

1

if the market price is above the equilibrium price:

Select one of the following:

a shortage will occur and producers will produce more and lower prices
a surplus will occur and producers will produce less and lower prices
a surplus will result and consumers will bid prices up
producers make extremely high profits

Explanation

Question 27 of 81

1

a competitive market will:

Select one of the following:

achieve an equilibrium price.
produce shortages
produce surpluses
create disorder

Explanation

Question 28 of 81

1

a product market is in equilibrium:

Select one of the following:

when there is no surplus or the product
when there is no shortage of the product
when consumers want to buy more of the product than producers offer for sale
where the demand and supply curves intersect

Explanation

Question 29 of 81

1

a headline reads "storms destroy half of the lettuce crop." this situation would lead to a(n):

Select one of the following:

increase in the price of lettuce and quantity purchased
decrease in the price of lettuce and quantity purchased
increase in the price of lettuce and decrease in the quantity purchased
decrease in the prices of lettuce and increase in the quantity purchased

Explanation

Question 30 of 81

1

government-set price floors and price ceilings:

Select one of the following:

Do not affect the rationing function of price in a free market
interfere with the rationing function of price in a free market
result in surpluses of products in markets where they are used
result in shortages of products in markets where they are used

Explanation

Question 31 of 81

1

a perfectly inelastic demand schedule:

Select one of the following:

rises upward and to the right, but has a constant slope
can be represented by a line parallel to the vertical axis
cannot be shown on a two-dimensional graph.
Can be represented by a line parallel to the horizontal axis.

Explanation

Question 32 of 81

1

when the percentage change in price is greater than the resulting percentage change in quantity demanded:

Select one of the following:

a decrease in price will increase total revenue.
demand may either be elastic or inelastic.
an increase in price will increase total revenue
demand is elastic

Explanation

Question 33 of 81

1

demand is said to be inelastic when:

Select one of the following:

an increase in price results in a reduction in total revenue
a reduction in price results in an increase in total revenue
a reduction in price results in a decrease in total revenue
the elasticity coefficient exceeds one

Explanation

Question 34 of 81

1

in which of the following instances will total revenue decline?

Select one of the following:

price rises and supply is elastic
price falls and demand is elastic
price rises and demand is inelastic
price rises and demand is elastic

Explanation

Question 35 of 81

1

the main determinant of elasticity of supply is the:

Select one of the following:

number of close substitutes for the product available to consumers
amount of time the producer has to adjust inputs in response to a price change
urgency of consumer wants for the product
number of uses for the product

Explanation

Question 36 of 81

1

price elasticity of supply is:

Select one of the following:

positive in the short run but negative in the long run
greater in the long run than in the short run
greater in the short run than in the long run
independent of time

Explanation

Question 37 of 81

1

Cross elasticity of demand measures how sensitive purchases of a specific product are to changes in:

Select one of the following:

the price of some other product
the price of that same product
income
the general price level

Explanation

Question 38 of 81

1

a remote island nation is discovered, and on this island the cross elasticity of demand for coconut milk and fruit punch is 1.0 this indicates that these two goods are:

Select one of the following:

normal
inferior
complements
substitutes

Explanation

Question 39 of 81

1

consumer surplus arises in a market because:

Select one of the following:

at the market price, quantity supplied is greater than quantity demanded
at the current market price, quantity demanded is greater than quantity supplied
some consumers are willing to pay more than the equilibrium price but do not need to do so
some consumers are willing to pay less than the equilibrium price but do not need to do so

Explanation

Question 40 of 81

1

negative externalities arise:

Select one of the following:

when firms pay more than the opportunity cost of resources
when the demand curve for a product is located too far to the left
when firms "use" resources without being compelled to pay for their full costs
only in capitalistic societies

Explanation

Question 41 of 81

1

rivalry and excludability are the main characteristics of:

Select one of the following:

capital goods
private goods
public goods
consumption goods

Explanation

Question 42 of 81

1

the market system does not produce public goods because:

Select one of the following:

there is no need or demand for such goods.
private firms cannot stop consumers who are unwilling to pay for such goods from benefiting from them
public enterprises can produce such goods at a lower cost than can private enterprises.
their production seriously distorts the distribution of income

Explanation

Question 43 of 81

1

a demand curve for a public good is determined by:

Select one of the following:

summing vertically the individual demand curves for the public good
summing horizontally the individual demand curves for the public good
combining the amounts of the public good that the individual members of society demand at each price
multiplying the per-unit cost of the public good by the quantity made available

Explanation

Question 44 of 81

1

cost-benefit analysis attempts to:

Select one of the following:

compare the real worth, rather than the market values, of various goods and services.
compare the relative desirability of alternative distributions of income
determine whether it is better to cut government expenditures or reduce taxes
compare the benefits and costs associated with any economic project or activity

Explanation

Question 45 of 81

1

at the optimal quantity of a public good:

Select one of the following:

Marginal benefit exceeds marginal cost by the greatest amount
total benefit equals total cost
marginal benefit equals marginal cost
marginal benefit is zero

Explanation

Question 46 of 81

1

an important problem in evaluating public projects through the use of cost-benefit analysis is that:

Select one of the following:

real costs cannot be stated in monetary terms.
one must decide whether to compare total costs and total benefits or marginal costs and marginal benefits.
positive and negative externalities associated with such projects may be difficult to measure.
the funding of such projects is inherently inflationary.

Explanation

Question 47 of 81

1

from the economist's perspective, "market failures" basically arise when:

Select one of the following:

the quantity demanded for a good or service is greater than the quantity supplied of the good or service
the quantity supplied of a good or service is greater than the quantity supplied of the good or service
demand and supply do not accurately reflect all the benefits and all the costs of production
the market system is unable to adapt to or to accommodate change

Explanation

Question 48 of 81

1

when production of a product creates external costs greater than external benefits, a market economy will:

Select one of the following:

not produce the product without government intervention
produce a socially optimal allocation of resources
allocate too few resources to production of the product
allocate too many resources to production of the product

Explanation

Question 49 of 81

1

Real gross domestic product...

Select one of the following:

is a measure of inflation
will increase if there is an increase in the price level
will increase if there is an increase in the level of output
can change from one year to the next even if there is no change in output

Explanation

Question 50 of 81

1

suppose that real GDP increases by 5% while the population of a country increases by 7%. then...

Select one of the following:

output per person necessarily increases
output per person necessarily decreases
output per person necessarily remains unchanged
there is not enough information to determine what happens to output per person

Explanation

Question 51 of 81

1

which of the following is the best example of financial investment?

Select one of the following:

Ford Motor Co. builds a new manufacturing plant
a student pursues an MBA degree
a retiree purchases Google stock
a young couple purchases a new home

Explanation

Question 52 of 81

1

in economics, the word "shocks" refers to...

Select one of the following:

situations where firms' expectations are unmet
any changes in the demand for goods and services
any changes in the supply of goods and services
a decrease in real GDP

Explanation

Question 53 of 81

1

higher oil prices are most likely to lead to...

Select one of the following:

a negative demand shock
a positive demand shock
a negative supply shock
a positive supply shock

Explanation

Question 54 of 81

1

the business cycle depicts:

Select one of the following:

fluctuations in the general price level
the phases a business goes through from when it first opens to when it finally closes
the evolution of technology over time
short run fluctuations in output and employment

Explanation

Question 55 of 81

1

which of the following statements is most accurate about advanced economies?

Select one of the following:

economies experience a positive growth trend over the short run, but experience significant variability in the long run.
economies experience a positive growth trend over the long run, but experience significant variability in the short run.
economies experience positive and stable growth over both the long run and short run
economies experience little long-run growth in output, but can experience significant growth in the short run.

Explanation

Question 56 of 81

1

before the period of modern economic growth:

Select one of the following:

only civilizations such as the roman empire experienced economic growth
rates of population growth virtually matched rates of output growth
most economies realized high rates of growth in output per person
output and population growth were stagnant.

Explanation

Question 57 of 81

1

what is the difference between financial investment and economic investment?

Select one of the following:

there is no difference between the two.
financial investment refers to the purchase of financial assets only; economic investment refers to the purchase of any new or used capital goods.
economic investment is adjusted for inflation; financial investment is not.
financial investment refers to the purchase of assets for financial gain; economic investment refers to the purchase of newly created capital goods.

Explanation

Question 58 of 81

1

if an economy wants to increase its current level of investment, it must:

Select one of the following:

sacrifice future consumption
print more money
offer more stocks and bonds to financial investors
sacrifice current consumption.

Explanation

Question 59 of 81

1

suppose the total monetary value of all final goods and services produced in a particular country in 2008 is $500 billion and the total monetary value of final goods and services sold is $450 billion. we can conclude that:

Select one of the following:

GDP in 2008 is $450 billion
NDP in 2008 is $450 billion
GDP in 2008 is $500 billion
inventories in 2008 fell by $50 billion

Explanation

Question 60 of 81

1

if depreciation (consumption of fixed capital) exceeds domestic investment, we can conclude that:

Select one of the following:

nominal GDP is rising, but real GDP is declining
net investment is negative
the economy is importing more than it exports
the economy's production capacity is expanding

Explanation

Question 61 of 81

1

Real GDP measures:

Select one of the following:

current output at current prices
current output at base year prices
base year output at current prices
base year output at current exchange rates

Explanation

Question 62 of 81

1

Real GDP and nominal GDP differ because the real GDP:

Select one of the following:

is adjusted for changes in the volume of intermediate transactions.
includes the economic effects of international trade
has been adjusted for the changes in the price level
excludes depreciation charges

Explanation

Question 63 of 81

1

the GDP tends to:

Select one of the following:

overstate economic welfare because it does not include certain non-market activities such as the productive work of housewives
understate economic welfare because it includes expenditures undertaken to offset or correct pollution.
understate economic welfare because it does not take into account increases in leisure.
overstate economic welfare because it does not reflect improvements in product quality.

Explanation

Question 64 of 81

1

the monetary value of all final goods and services produced by the united states economy during a year is:

Select one of the following:

NDP
GDP
NI
DI

Explanation

Question 65 of 81

1

which would be considered an investment according to economists?

Select one of the following:

the purchase of newly-issued shares of stock in Microsoft
the construction of a new computer chip factory by Intel
the purchase of shares of stock by Fidelity, a mutual fund company
the sale of government bonds by the nation's central bank

Explanation

Question 66 of 81

1

consumer price index attempts to measure changes in:

Select one of the following:

the price of all goods and services produced by the U.S. economy
the price of a select market basket of goods and services
the spending patterns of all consumers in the United States
the spending patterns of consumers worldwide

Explanation

Question 67 of 81

1

which is a demand factor in economic growth?

Select one of the following:

more human and natural resources
technological progress and innovation
an increase in the economy's stock of capital goods
an increase in total spending in the economy

Explanation

Question 68 of 81

1

the entry of women into the workforce since the 1960's resulted in:

Select one of the following:

a shift outward in the production possibilities curve or the united states
a shift inward in the production possibilities curve of the unites states
a movement along the existing production possibilities curve in the united states
a falling real wage for women workers of the united states

Explanation

Question 69 of 81

1

a decline in a nation's rate of productivity growth will:

Select one of the following:

reduce the inflation rate
increase education and training
slow the growth of the standard of living
make industry more competitive in world markets

Explanation

Question 70 of 81

1

which is best considered a supply factor for long-run economic growth?

Select one of the following:

government spending
the stock of capital goods
full employment of resources
personal consumption expenditures

Explanation

Question 71 of 81

1

Real GDP per capita:

Select one of the following:

cannot grow more rapidly than real GDP
cannot grow more slowly than real GDP
necessarily grows more rapidly than real GDP
can grow either more slowly or more rapidly than real GDP

Explanation

Question 72 of 81

1

growth is advantageous to a nation because it:

Select one of the following:

promotes faster population growth
lessens the burden of scarcity
eliminates the economizing problem
slows the growth of wants

Explanation

Question 73 of 81

1

increases in the value of a product to each user, including existing users, as the total number of users rises are called:

Select one of the following:

information cascades
learning effects
network effects
scale economies

Explanation

Question 74 of 81

1

economists who believe that the recent increase in the average productivity growth rate may be permanent claim that the above-normal economic growth in the united states between 1995 and 2009 was caused by:

Select one of the following:

increases in the rate of personal saving
increased entrepreneurial activity, application of information technology, and global competition.
rising Federal budget surpluses that reduced real interest rates
expansionary monetary policy.

Explanation

Question 75 of 81

1

critics of economic growth:

Select one of the following:

contend that growth and industrialization reduce pollution
argue that economic growth does not resolve socioeconomic problems such as an unequal distribution of income and wealth
point out that growth results in greater economic security for workers
say that its benefits accrue nearly exclusively to white males

Explanation

Question 76 of 81

1

the rate of unemployment when the economy is at its potential output is called the:

Select one of the following:

full employment rate of unemployment
natural rate of unemployment
structural rate of unemployment
frictional rate of unemployment

Explanation

Question 77 of 81

1

Kevin has lost his job in an automobile plant because of the use of robots for welding on the assembly line. Kevin plans to go to technical school to learn how to repair microcomputers. The type of unemployment Kevin is faced with is:

Select one of the following:

cyclical
frictional
structural
natural

Explanation

Question 78 of 81

1

the industries or sectors of the economy in which business cycle fluctuations tend to affect output the most are:

Select one of the following:

military goods and capital goods
services and non-durable consumer goods
clothing and education
capital goods and durable consumer goods

Explanation

Question 79 of 81

1

in which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates?

Select one of the following:

expansion
recession
peak
trough

Explanation

Question 80 of 81

1

during periods of full employment the:

Select one of the following:

burden of unemployment is quite evenly distributed among males and females, african-americans and whites, and young and old workers.
unemployment rate for teenagers is below the rate for the labor force as a whole
unemployment rate for women is considerably lower than that for men
unemployment rate for african-americans is about twice the rate for whites

Explanation

Question 81 of 81

1

a college graduate using the summer following graduation to search for a job would best be classified as:

Select one of the following:

not officially a member of the labor forces
a part of structural unemployment
a part of cyclical unemployment
a part of frictional unemployment

	Created by Jess Todd about 10 years ago

quiz on macroeconomics from the textbook "Macroeconoics:priciples, problems, and policies." 19th edition by McConnell, Brue, and Flynn. Chapters 1-9

Macroeconomics chapters 1-9

Question 1 of 81

Economics is a social science concerned with:

Select one of the following:

Explanation

Question 2 of 81

a person should consume more of something when its marginal:

Select one of the following:

Explanation

Question 3 of 81

the process of developing hypotheses, testing them against facts, and using the result to construct theories is called:

Select one of the following:

Explanation

Question 4 of 81

which is an illustration of a microeconomic question?

Select one of the following:

Explanation

Question 5 of 81

A schedule or curve that shows the various combinations of two products a consumer can purchase with a specific amount of money income is:

Select one of the following:

Explanation

Question 6 of 81

which of the following is real capital?

Select one of the following:

Explanation

Question 7 of 81

a point inside a production possibilities curve best illustrates:

Select one of the following:

Explanation

Question 8 of 81

A normative statement is one that:

Select one of the following:

Explanation

Question 9 of 81

the problems of aggregate inflation and unemployment are:

Select one of the following:

Explanation

Question 10 of 81

On a production possibilities curve, the single optimal or best combination of output for any society:

Select one of the following:

Explanation

Question 11 of 81

which statement best describes a command economy

Select one of the following:

Explanation

Question 12 of 81

which statement is correct?

Select one of the following:

Explanation

Question 13 of 81

In a competitive economy, prices:

Select one of the following:

Explanation

Question 14 of 81

the competitive market system:

Select one of the following:

Explanation

Question 15 of 81

which is not one of the Five Fundamental Questions?

Select one of the following:

Explanation

Question 16 of 81

The idea that firms and resource suppliers in seeking to further their own self-interests in a competitive market economy also simultaneously promotes the public or social interest is a description of:

Select one of the following:

Explanation

Question 17 of 81

which of the following is a limitation of the simple circular flow model?

Select one of the following:

Explanation

Question 18 of 81

households and businesses are:

Select one of the following:

Explanation

Question 19 of 81

The influential book written by Adam Smith was:

Select one of the following:

Explanation

Question 20 of 81

the circular flow model: