macro95ex1 - (d) a recession. Chapter 1: Introduction to...

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Introduction to Macroeconomics The two major reasons for the tremendous growth in output in the U.S. economy over the last 125 years are (a) population growth and low inflation. (b) population growth and increased productivity. (c) low unemployment and low inflation. (d) low inflation and low trade deficits. Answer: B The main reason that the United States has such a high standard of living is (a) low unemployment. (b) high average labor productivity. (c) low inflation. (d) high government budget deficits. Answer: B Average labor productivity is the (a) amount of workers per machine. (b) amount of machines per worker. (c) ratio of employed to unemployed workers. (d) amount of output per worker. Answer: D In which of the following periods did average labor productivity in the United States grow the fastest? (a) 1929 to 1935 (b) 1949 to 1973 (c) 1973 to 1995 (d) 1995 to 2002 Answer: B The most direct effect of an increase in the growth rate of average labor productivity would be an increase in (a) the inflation rate. (b) the unemployment rate. (c) the long–run economic growth rate. (d) imported goods. Answer: C Short-run contractions and expansions in economic activity are called (a) recessions. (b) expansions. (c) deficits. (d) the business cycle. Answer: D When national output rises, the economy is said to be in (a) an expansion. (b) a deflation. (c) an inflation. (d) a recession. Answer: A Which of the following best describes a typical business cycle? (a) Economic expansions are followed by economic contractions. (b) Inflation is followed by unemployment. (c) Trade surpluses are followed by trade deficits. (d) Stagflation is followed by inflationary economic growth. Answer: A During recessions, the unemployment rate ___________ and output ___________. (a) rises; falls (b) rises; rises (c) falls; rises (d) falls; falls Answer: A The number of unemployed divided by the labor force equals (a) the inflation rate. (b) the labor force participation rate. (c) the unemployment rate. (d) the misery index. Answer: C The highest and most prolonged period of unemployment in the United States over the last 125 years occurred during (a) World War II. (b) the 1890s Depression. (c) the 1990–1991 recession. (d) the Great Depression of the 1930s. Answer: D During the Great Depression, the unemployment rate for the United States peaked at approximately (a) 10%. (b) 70%. (c) 45%. (d) 25%. Answer: D A country is said to be experiencing inflation when (a) prices of most goods and services are rising over time. (b) prices of most goods and services are falling over time. (c) total output is rising over time. (d) total output is falling over time. Answer: A From 1800 to 1940, the price level in the United States (a) trended neither upward nor downward. (b) fluctuated wildly.
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macro95ex1 - (d) a recession. Chapter 1: Introduction to...

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