Chapter 06 – An Introduction to Macroeconomics
1. Macroeconomics is mostly focused on:
2. The two topics of primary concern in macroeconomics are:
Chapter 06 – An Introduction to Macroeconomics
3. The business cycle depicts:
4. The term “recession” describes a situation where:
Chapter 06 – An Introduction to Macroeconomics
6. Which of the following statements is most accurate about advanced economies?
7. Real GDP measures the:
Chapter 06 – An Introduction to Macroeconomics
8. If the prices of all goods and services rose, but the quantity produced remained unchanged,
what would happen to nominal and real GDP?
9. Real GDP is preferred to nominal GDP as a measure of economic performance because:
10. Harry‘s Pepperoni Pizza Parlor produced 10,000 large pepperoni pizzas last year that sold
for $10 each. This year Harry’s again produced 10,000 large pepperoni pizzas (identical to last
year’s pizzas), but sold them for $12 each. Based on this information we can conclude that
Harry’s production of large pepperoni pizzas:
Chapter 06 – An Introduction to Macroeconomics
11. Harry’s Pepperoni Pizza Parlor produced 10,000 large pepperoni pizzas last year that sold
for $10 each. This year Harry’s again produced 10,000 large pepperoni pizzas (identical to last
year’s pizzas), but sold them for $12 each. Based on this information we can conclude that
Harry’s production of large pepperoni pizzas this year:
12. Why are high rates of unemployment of concern to economists?
13. Unemployment describes the condition where:
Chapter 06 – An Introduction to Macroeconomics
14. Higher rates of unemployment are linked with:
15. Inflation is defined as:
16. Why are economists concerned about inflation?
Chapter 06 – An Introduction to Macroeconomics
17. The three statistics that are the main focus for those measuring macroeconomic health
are:
18. Modern economic growth refers to countries that have experienced an increase in:
19. Before the period of modern economic growth:
Chapter 06 – An Introduction to Macroeconomics
20. In making international comparisons of living standards using GDP, which of the
following is not adjusted for in the calculation?
21. Which of the following countries would economists say definitively is achieving modern
economic growth?
22. Which of the following is used to measure directly the average standard of living across
countries?
Chapter 06 – An Introduction to Macroeconomics
23. Savings are generated whenever:
24. When economists refer to “investment,” they are describing a situation where:
25. Which of the following would an economist consider to be investment?
Chapter 06 – An Introduction to Macroeconomics
26. For an economy to increase investment, it must:
27. If an economy wants to increase its current level of investment, it must:
28. Increased present saving:
Chapter 06 – An Introduction to Macroeconomics
29. Banks and other financial institutions:
30. Shocks to the economy occur:
31. Shocks to the economy occur when:
Chapter 06 – An Introduction to Macroeconomics
32. Demand shocks:
33. Which of the following is an example of a demand shock?
34. Supply shocks:
Chapter 06 – An Introduction to Macroeconomics
35. Which of the following is an example of a supply shock?
36. When demand shocks lead to recessions, it is mainly due to:
37. Suppose that Techno TV produces LCD televisions. At a price of $2,000 per television,
Techno determines that its optimal output is 3000 television sets per week. If prices are sticky
and fears of a recession reduce demand for LCD televisions, we would expect Techno to:
Chapter 06 – An Introduction to Macroeconomics
38. The figure above depicts a situation where:
Chapter 06 – An Introduction to Macroeconomics
39. Refer to the figure above. Assuming this market is representative of the economy as a
whole, this economy:
40. Refer to the figure above. Assuming this market is representative of the economy as a
whole, a positive demand shock will:
41. Refer to the figure above. Assuming this market is representative of the economy as a
whole, a negative demand shock will:
Chapter 06 – An Introduction to Macroeconomics
42. The figure above depicts a situation where:
Chapter 06 – An Introduction to Macroeconomics
43. Refer to the figure above. Assuming this market is representative of the economy as a
whole, this economy:
44. Refer to the figure above. Assuming this market is representative of the economy as a
whole, a positive demand shock will:
45. Refer to the figure above. Assuming this market is representative of the economy as a
whole, a negative demand shock will most likely:
Chapter 06 – An Introduction to Macroeconomics
46. Refer to the above figures. Which figure(s) represent a situation where prices are
flexible?
47. Refer to the above figures. Which figure(s) represent a situation where prices are sticky?
Chapter 06 – An Introduction to Macroeconomics
48. Refer to the above figures. Which figure(s) represent a situation where negative demand
shocks can result in a recession?
49. Refer to the above figures. Which of the following events would most likely result in
higher unemployment?
50. Refer to the above figures. Which of the following events would most likely result in
inflation?
Chapter 06 – An Introduction to Macroeconomics
51. Refer to the above figures. Which figure(s) represent a situation where firms are likely to
hold inventories to accommodate unexpected changes in demand?
52. Which of the following results from firms holding inventories?