Practice Test Questions 220-324

Practice Test Questions 220-324 - Intermediate...

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Unformatted text preview: Intermediate Macroeconomics CHAPTER 1 (The Science of Macroeconomics) 1. Macroeconomics does not try to answer the question of: A) why do some countries experience rapid growth. B) what is the rate of return on education. C) why do some countries have high rates of inflation. D) what causes recessions and depressions. Ans: B 2. Macroeconomics is the study of the: A) activities of individual units of the economy. B) decision making by households and firms. C) economy as a whole. D) interaction of firms and households in the marketplace. Ans: C 3. Macroeconomists cannot conduct controlled experiments, such as testing various tax and expenditure policies, because: A) it is against the law. B) they tried it once and it did not work. C) they must make use of the data history gives them. D) economists already know the answers that would come out of the experiments. Ans: C 4. All of the following are types of macroeconomics data except the: A) price of an IBM computer. B) growth rate of real GDP. C) inflation rate. D) unemployment rate. Ans: A 5. Recessions are periods when real GDP: A) increases slowly. B) increases rapidly. C) decreases mildly. D) decreases severely. Ans: C 6. Deflation occurs when: A) real GDP decreases. B) the unemployment rate decreases. C) prices fall. D) prices increase, but at a slower rate. Ans: C 7.In a simple model of the supply and demand for pizza, the endogenous variables are: A) the price of pizza and the price of cheese. B) aggregate income and the quantity of pizza sold. C) aggregate income and the price of cheese. 1 D) the price of pizza and the quantity of pizza sold. Ans: D 8.In a simple model of the supply and demand for pizza, when aggregate income increases, the price of pizza ________ and the quantity purchased ________. A) increases; decreases B) increases; increases C) decreases; increases D) decreases; decreases Ans: B 9.The assumption of continuous market clearing means that: A) sellers can sell all that they want at the going price. B) buyers can buy all that they want at the going price. C) in any given month, buyers can buy all that they want and sellers can sell all that they want at the going price. D) at any given instant, buyers can buy all that they want and sellers can sell all that they want at the going price. Ans: D 10.The assumption of flexible prices is a more plausible assumption when applied to price changes that occur: A) from minute to minute. B) from year to year. C) in the long run. D )in the short run. Ans: C CHAPTER 2 (The Data of Macroeconomics) 1. The statistic used by economists to measure the value of economic output is: A) the CPI. B) GDP. C) the GDP deflator. D) the unemployment rate. Ans: B 2. All of the following are measures of GDP except the total: A) expenditures of all businesses in the economy....
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This note was uploaded on 12/13/2010 for the course ECON 304 taught by Professor Schwenkenberg during the Spring '10 term at Rutgers.

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Practice Test Questions 220-324 - Intermediate...

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