Practice_final_multiple_choice_problems_Wissink - Econ 002...

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E c o n 0 0 2 p r a c t i c e f i n a l e x a m m u l t i p l e c h o i c e q u e s t i o n s Practice final exam tes for Wissink With answers at the end Multiple Choice: CIRCLE the best answer _____ 1 . Macroeconomics is the branch of economics that deals with A. the economy as a whole. B. the functioning of individual industries and the behavior of individual decision-making units - business firms and households. C. imperfectly competitive markets. D. only the long run adjustments to equilibrium in the economy. E. government policy to regulate markets. _____ 2 . The period in the business cycle from a peak to a trough is called A. a contraction, recession, or slump. B. an expansion or boom. C. a growth period. D. a deep depression E. the trend line. _____ 3 . Early Macroeconomic theory, which emphasized the theories of Keynes and de-emphasized the Classical theory, developed as the result of the failure of A. economic theory to explain the simultaneous increases in inflation and unemployment during the 1970s. B. fine tuning during the 1960s. C. the Classical model to explain the prolonged existence of high unemployment during the Great Depression. D. the economy to grow at a rapid rate during the 1950s. E. monetary and fiscal policy. 4 . The Aggregate Demand Curve (AD) is negatively sloped because when the price level increases A. the market demands for each and every good and service in the economy will decrease. B. the supply of money automatically decreases C. the demand for money increases. D. interest rates fall E. people buy bonds and not goods and services. L S C p a g e 1
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_____ 5 . If the economy is operating at Ypotential, an increase in the money supply will initially lead to A. stagflation. B. a sustained inflation. C. demand-pull inflation. D. cost-push inflation. E. deflation. _____ 6 . If the long-run aggregate supply curve is vertical, then in the long-run fiscal and monetary policies will change A. both the price level and the level of aggregate output. B. neither the price level nor the level of aggregate output. C. only the price level. D. only the level of aggregate output. E. change the price level under fiscal but not under monetary policy. _____ 7 . As the economy nears full capacity, the short-run aggregate supply curve A. becomes flatter. B. becomes steeper. C. shifts to the right. D. shifts to the left. E. becomes positively sloped. 8 . Which of the following situations would be an example of cyclical unemployment? A. A woman reenters the labor force now that all her children are enrolled in school. B. A teacher loses his job as his school converts to computer-assisted, self-paced instruction that does not require as many classroom teachers.
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Practice_final_multiple_choice_problems_Wissink - Econ 002...

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