Mankiw 7e Testbank Chapter 23 Macroeconomies PDF

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Multiple Choice – Section 00: Introduction Macroeconomists study a. the decisions of individual households and firms. b. the interaction between households and firms. c. economy-wide phenomena. d. regulations imposed on firms and unions. ANSWER: c POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: ECON...

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Measuring a Nation’s Income Multiple Choice – Section 00: Introduction 1. Macroeconomists study a. the decisions of individual households and firms. b. the interaction between households and firms. c. economy-wide phenomena. d. regulations imposed on firms and unions. ANSWER: POINTS:

c 1

DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.15.110 - LO: 23-0 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC:General Macro KEYWORDS: BLOOM'S: Knowledge 2. Which of the following headlines is more closely related to what microeconomists study than to what macroeconomists study? a. Unemployment rate falls from 7.5 percent to 7.3 percent. b. Real GDP falls by 0.4 percent in the third quarter. c. Inflation was 2.4 percent last year. d. The price of gasoline rises due to rising oil prices. ANSWER: POINTS:

d 1

DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.15.110 - LO: 23-0 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC:General Micro KEYWORDS: BLOOM'S: Comprehension NOTES: r

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3. Which of the following questions is more likely to be studied by a microeconomist than a macroeconomist? a. Why do prices in general rise by more in some countries than in others? b. Why do wages differ across industries? c. Why do national production and income increase in some periods and not in others? d. How rapidly is GDP currently increasing? ANSWER:

b

POINTS: DIFFICULTY:

1 Moderate

LEARNING OBJECTIVES: ECON.MANK.15.110 - LO: 23-0 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS:

DISC:General Micro BLOOM'S: Comprehension

4. Which of the following topics are more likely to be studied by a macroeconomist than by a microeconomist? a. the effect of taxes on the prices of airline tickets, and the profitability of automobilemanufacturing firms b. the price of beef, and wage differences between genders c. how consumers maximize utility, and how prices are established in markets for agricultural products d. the percentage of the labor force that is out of work, and differences in average income from country to country ANSWER: POINTS:

d 1

DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.15.110 - LO: 23-0 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC:General Macro KEYWORDS: BLOOM'S: Comprehension

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Measuring a Nation’s Income

5593

5. A macroeconomist is interested in a. explaining how changes in sellers’ behavior affect prices of a particular good. b. explaining price changes in a particular market. c. explaining why the unemployment rate is higher. d. All of the above are correct. ANSWER:

c

POINTS: DIFFICULTY:

1 Moderate

LEARNING OBJECTIVES: ECON.MANK.15.110 - LO: 23-0 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS: NOTES:

DISC:General Macro BLOOM'S: Comprehension r

6. Which of the following is not a question addressed by macroeconomists? a. Why is average income high in some nations but low in others? b. What, if anything, can the government do to promote growth in incomes, low inflation, and stable employment? c. What is the impact of foreign competition on the U.S. auto industry? d. Why do production and employment expand in some years and contract in others? ANSWER: POINTS:

c 1

DIFFICULTY: Difficulty: Easy LEARNING OBJECTIVES: ECON.MANK.15.110 - LO: 23-0 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC:General Macro KEYWORDS: BLOOM'S: Knowledge

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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7. Which of the following is not a question that macroeconomists address? a. Why is average income high in some countries while it is low in others? b. Why does the price of oil rise when war erupts in the Middle East? c. Why do production and employment expand in some years and contract in others? d. Why do prices rise rapidly in some periods of time while they are more stable in other periods? ANSWER:

b

POINTS: DIFFICULTY:

1 Moderate

LEARNING OBJECTIVES: ECON.MANK.15.110 - LO: 23-0 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS:

DISC:General Macro BLOOM'S: Comprehension

8. The basic tools of supply and demand are a. useful only in the analysis of economic behavior in individual markets. b. useful in analyzing the overall economy, but not in analyzing individual markets. c. central to microeconomic analysis, but seldom used in macroeconomic analysis. d. central to macroeconomic analysis as well as to microeconomic analysis. ANSWER:

d

POINTS: DIFFICULTY:

1 Difficulty: Easy

LEARNING OBJECTIVES: ECON.MANK.15.110 - LO: 23-0 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS:

DISC:Supply and Demand BLOOM'S: Knowledge

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Measuring a Nation’s Income

5595

9. Which of the following statistics is usually regarded as the best single measure of a society’s economic wellbeing? a. the unemployment rate b. the inflation rate c. gross domestic product d. the trade deficit ANSWER:

c

POINTS: DIFFICULTY:

1 Difficulty: Easy

LEARNING OBJECTIVES: ECON.MANK.15.110 - LO: 23-0 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS:

DISC:Measuring Output GDP BLOOM'S: Knowledge

10. GDP a. is used to monitor the performance of the overall economy but is not the single best measure of a society’s economic well-being. b. is used to monitor the performance of the overall economy and is the single best measure of a society’s economic well-being. c. is not used to monitor the performance of the overall economy but is the single best measure of a society’s economic well-being. d. is not used to monitor the performance of the overall economy and is not the single best measure of a society’s economic wellbeing. ANSWER:

b

POINTS: DIFFICULTY:

1 Difficulty: Easy

LEARNING OBJECTIVES: ECON.MANK.15.110 - LO: 23-0 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS:

DISC:Measuring Output GDP BLOOM'S: Knowledge

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Measuring a Nation’s Income

Multiple Choice – Section 01: The Economy’s Income and Expenditure 1. Gross domestic product measures a. income and expenditures. b. income but not expenditures. c. expenditures but not income. d. neither income nor expenditures. ANSWER:

a

POINTS: DIFFICULTY:

1 Moderate

LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS:

DISC:Measuring Output GDP BLOOM'S: Comprehension

2. Expenditures on a nation’s domestic production a. are less than its domestic production. b. are equal to its domestic production. c. are greater than its domestic production. d. could be less than, equal to, or greater than its domestic production. ANSWER:

b

POINTS: DIFFICULTY:

1 Easy

LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS:

DISC:Measuring Output BLOOM'S: Knowledge

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Measuring a Nation’s Income

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3. Income generated by a nation’s domestic production a. is less than its domestic production. b. is equal to its domestic production. c. is greater than its domestic production. d. could be less than, equal to, or greater than its domestic production. ANSWER:

b

POINTS: DIFFICULTY:

1 Easy

LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS:

DISC:Measuring Output Income Approach BLOOM'S: Knowledge

4. For an economy as a whole, a. wages must equal profit. b. consumption must equal income. c. income must equal expenditure. d. consumption must equal saving. ANSWER:

c

POINTS: DIFFICULTY:

1 Moderate

LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS:

DISC:Measuring Output BLOOM'S: Comprehension

NOTES:

r

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Measuring a Nation’s Income

5. For an economy as a whole, a. the market value of production must equal expenditure. b. investment must equal the value of stocks and bonds purchased. c. wages must equal income. d. consumption must equal saving. ANSWER: POINTS:

a 1

DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC:Measuring Output KEYWORDS: NOTES:

BLOOM'S: Comprehension n

6. For the economy as a whole, a. income must be greater than expenditure. b. unemployment must rise when GDP rises. c. expenditure must equal income. d. consumption must be greater than investment. ANSWER:

c

POINTS: DIFFICULTY:

1 Easy

LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS:

DISC:Measuring Output BLOOM'S: Knowledge

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Measuring a Nation’s Income

5599

7. Which of the following statements about GDP is correct? a. GDP measures two things at once: the total income of everyone in the economy and the total expenditure on the economy’s output of goods and services. b. Money continuously flows from households to firms and then back to households, and GDP measures this flow of money. c. GDP is generally regarded as the best single measure of a society’s economic wellbeing. d. All of the above are correct. ANSWER:

d

POINTS: DIFFICULTY:

1 Moderate

LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS:

DISC:Measuring Output GDP BLOOM'S: Comprehension

8. In the GDP accounts production equals a. income. b. income + saving. c. income - government expenditures. d. income - imports. ANSWER:

a

POINTS: DIFFICULTY:

1 Easy

LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS:

DISC:Measuring Output GDP BLOOM'S: Knowledge

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Measuring a Nation’s Income

9. Because every transaction has a buyer and a seller, a. GDP is more closely associated with an economy’s income than it is with an economy’s expenditure. b. every transaction contributes equally to an economy’s income and to its expenditure. c. the number of firms must be equal to the number of households in a simple circular-flow diagram. d. firms’ profits are necessarily zero in a simple circularflow diagram. ANSWER:

b

POINTS: DIFFICULTY:

1 Moderate

LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS:

DISC:Measuring Output BLOOM'S: Comprehension

10. For an economy as a whole, income must equal expenditure because a. the number of firms is equal to the number of households in an economy. b. individuals can only spend what they earn each period. c. every dollar of spending by some buyer is a dollar of income for some seller. d. every dollar of saving by some consumer is a dollar of spending by some other consumer. ANSWER: POINTS:

c 1

DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC:Measuring Output KEYWORDS:

BLOOM'S: Comprehension

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Measuring a Nation’s Income

5601

11. If an economy’s GDP falls, then it must be the case that the economy’s a. income falls and saving rises. b. income and saving both fall. c. income falls and expenditure rises. d. income and expenditure both fall. ANSWER:

d

POINTS: DIFFICULTY:

1 Moderate

LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS:

DISC:Measuring Output GDP BLOOM'S: Comprehension

12. If an economy’s GDP falls, then it must be the case that the economy’s a. income and saving fall. b. income and market value of all production both fall. c. income falls and market value of all production rises. d. income rises and market value of all production falls. ANSWER:

b

POINTS: DIFFICULTY:

1 Moderate

LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS: NOTES:

DISC:Measuring Output GDP BLOOM'S: Comprehension n

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Measuring a Nation’s Income

13. If an economy’s GDP rises, then it must be the case that the economy’s a. income rises and saving falls. b. income and saving both rise. c. income rises and expenditure falls. d. income and expenditure both rise. ANSWER:

d

POINTS: DIFFICULTY:

1 Moderate

LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS:

DISC:Measuring Output GDP BLOOM'S: Comprehension

14. Which of the following statements about GDP is correct? a. GDP measures two things at once: the total income of everyone in the economy and the unemployment rate of the economy’s labor force. b. Money continuously flows from households to government and then back to households, and GDP measures this flow of money. c. GDP is to a nation’s economy as household income is to a household. d. All of the above are correct. ANSWER: POINTS:

c 1

DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC:Measuring Output GDP KEYWORDS: BLOOM'S: Comprehension

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Measuring a Nation’s Income

5603

15. In a simple circular-flow diagram, total income and total expenditure are a. never equal because total income always exceeds total expenditure. b. seldom equal because of the ongoing changes in an economy’s unemployment rate. c. equal only when the government purchases no goods or services. d. always equal because every transaction has a buyer and a seller. ANSWER:

d

POINTS: DIFFICULTY:

1 Moderate

LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS:

DISC:Thinking Like an Economist Circular Flow Model BLOOM'S: Comprehension

16. In a simple circular-flow diagram, a. households spend all of their income. b. all goods and services are bought by households. c. expenditures flow through the markets for goods and services, while income flows through the markets for the factors of production. d. All of the above are correct. ANSWER:

d

POINTS: DIFFICULTY:

1 Moderate

LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS:

DISC:Thinking Like an Economist Circular Flow Model BLOOM'S: Comprehension

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Measuring a Nation’s Income

17. In a simple circular-flow diagram, firms use the money they get from a sale to a. pay wages to workers. b. pay rent to landlords. c. pay profit to the firms’ owners. d. All of the above are correct. ANSWER: POINTS:

d 1

DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC:Thinking Like an Economist Circular Flow Model KEYWORDS: BLOOM'S: Knowledge 18. In a simple circular-flow diagram, firms a. purchase resources from households. b. purchase the output produced by households. c. receive income by selling resources to households. d. All of the above are correct. ANSWER: POINTS:

a 1

DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC:Thinking Like an Economist Circular Flow Model KEYWORDS: BLOOM'S: Knowledge NOTES: n

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Measuring a Nation’s Income

5605

19. In a simple circular-flow diagram, households buy goods and services with the income they get from a. wages. b. rents. c. profits. d. All of the above are correct. ANSWER:

d

POINTS: DIFFICULTY:

1 Easy

LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS:

DISC:Thinking Like an Economist Circular Flow Model BLOOM'S: Knowledge

20. In the actual economy, households a. spend all of their income. b. divide their income among spending, taxes, and saving. c. buy all goods and services produced in the economy. d. Both (a) and (c) are correct. ANSWER:

b

POINTS: DIFFICULTY:

1 Moderate

LEARNING OBJECTIVES: ECON.MANK.15.111 - LO: 23-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: KEYWORDS:

DISC:Consumption, Saving, and Investment BLOOM'S:...