Introduction to Macroeconomics
Midterm Exam
Course Introduction
Introduction to Macroeconomics explores the foundational concepts and principles that explain the behavior of economies as a whole. Students will examine key topics such as national income determination, economic growth, inflation, unemployment, and the roles of government fiscal and monetary policy. Emphasis is placed on understanding how aggregate markets function, interpreting economic indicators, and analyzing the impact of policy decisions on economic stability and performance. Through case studies and real-world examples, this course equips students with the analytical tools necessary to critically assess macroeconomic issues in both domestic and global contexts.
Recommended Textbook
ECON MACRO4 4th Edition by William A. McEachern
Available Study Resources on Quizplus
21 Chapters
3789 Verified Questions
3789 Flashcards
Source URL: https://quizplus.com/study-set/3722 Page 2
Chapter 1: The Art and Science of Economic Analysis
Available Study Resources on Quizplus for this Chatper
147 Verified Questions
147 Flashcards
Source URL: https://quizplus.com/quiz/74205
Sample Questions
Q1) As a scientist, an economist's main professional objective is to become wealthy.
A)True
B)False
Answer: False
Q2) Scarcity
A)exists because people have wants that are unlimited relative to the availability of resources to satisfy those wants
B)applies when a resource is not freely available
C)means that each society and each individual must make choices
D)exists in all societies
E)all of the above are true
Answer: E
Q3) Because people's wants are unlimited but resources are scarce,
A)only the rich get everything they want
B)choices must be made
C)there will be more services produced than goods
D)people search for spiritual fulfillment rather than material fulfillment
E)poor people never get anything they want
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: Understanding Graphs-Appendix
Available Study Resources on Quizplus for this Chatper
64 Verified Questions
64 Flashcards
Source URL: https://quizplus.com/quiz/74204
Sample Questions
Q1) The statement that there is a direct relation between x and y means that
A)x and y move in the same direction
B)x causes y
C)y causes x
D)either y causes x or x causes y
E)the causal connection between x and y is immediate
Answer: A
Q2) If the dependent variable Y is directly related to the independent variable X, this means that changes in X cause changes in Y.
A)True
B)False
Answer: False
Q3) In Exhibit 1-2, curve A has a __________ slope that is __________ at every point.
A)positive; constant
B)positive; changing
C)negative; constant
D)negative; changing
E)changing; constant
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Economic Tools and Economics Systems
Available Study Resources on Quizplus for this Chatper
195 Verified Questions
195 Flashcards
Source URL: https://quizplus.com/quiz/74206
Sample Questions
Q1) Of the various types of economic systems, pure market capitalism involves the greatest government interference and control over the economy.
A)True
B)False
Answer: False
Q2) Which of the following is a characteristic of pure capitalism?
A)all resources are owned communally
B)economic activity is coordinated by government decision makers
C)the price system is used to guide resources to their highest-valued uses
D)centralized economic planning is used to answer the basic economic questions
E)individual choices are reflected only through collective decisions
Answer: C
Q3) Refer to exhibit 2-10. In Costa Rica the opportunity cost of 1 ton of rice is:
A)1/2 of a T-shirt
B)3/4 of a T-shirt
C)1 T-shirt
D)11/2 T-shirts
E)2 T-shirts
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: Economic Decision Makers
Available Study Resources on Quizplus for this Chatper
200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/74207
Sample Questions
Q1) When externalities are present, market prices do not reflect all the social costs or benefits of the activity.
A)True
B)False
Q2) Firms
A)are where entrepreneurs combine resources
B)are economic units formed by profit-seeking entrepreneurs
C)are assumed to try to maximize profit
D)reward entrepreneurs with profits, which are sales revenue minus the cost of production
E)All of the answers are correct.
Q3) Since 1930, U.S. government spending as a percent of GDP has
A)increased
B)decreased
C)stayed the same
D)showed no particular trend
E)increased by the same percent each year
Q4) Import quotas on sugar result in lower sugar prices in the United States.
A)True
B)False
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Demand, Supply, and Markets
Available Study Resources on Quizplus for this Chatper
232 Verified Questions
232 Flashcards
Source URL: https://quizplus.com/quiz/74208
Sample Questions
Q1) Many people argue against increasing the minimum wage because they believe the result would be increased unemployment. Which of the following best summarizes this argument? A higher minimum wage would
A)increase the supply of labor while decreasing the demand for labor
B)decrease the supply of labor while increasing the demand for labor
C)increase the quantity supplied of labor while decreasing the quantity demanded of labor
D)decrease the quantity supplied of labor while increasing the quantity demanded of labor
E)increase the supply of labor while decreasing the quantity demanded of labor
Q2) If both demand and supply increase, price will A)always increase
B)always decrease
C)increase only if supply increases more than demand does
D)increase only if demand increases more than supply does
E)decrease only if supply increases less than demand does
Q3) If the price of labor increases, employers will hire more labor because it is more valuable.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Introduction to Macroeconomics
Available Study Resources on Quizplus for this Chatper
162 Verified Questions
162 Flashcards
Source URL: https://quizplus.com/quiz/74209
Sample Questions
Q1) Keynes believed that the best method for ending the Great Depression was to
A)increase the money supply so that individuals would have more to spend
B)cut government spending and increase taxes to reduce or even eliminate the government's deficit
C)increase government spending and cut taxes so that consumers could spend more
D)cut both government spending and taxes so that government would not be such a large part of the economy
E)increase both government spending and taxes to increase the role government played in the economy
Q2) If the government owes $3,500 billion and then borrows $300 billion more this year,
A)the debt is $300 billion and the deficit is $3.8 trillion
B)the debt is $3,800 billion and the deficit is $300 billion
C)the debt is $4,100 billion
D)the deficit is $3,800 billion
E)both the debt and the deficit are $3.8 trillion
Q3) The Reagan administration's policies were aimed at managing aggregate demand.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
8
Chapter 7: Tracking the Us Economy
Available Study Resources on Quizplus for this Chatper
213 Verified Questions
213 Flashcards
Source URL: https://quizplus.com/quiz/74210
Sample Questions
Q1) Suppose that the economy is in equilibrium with the government budget in deficit and with exports greater than imports. According to the circular flow model,
A)saving must exceed investment
B)saving must equal investment
C)saving must be less than investment
D)saving could be equal to or less than investment
E)it is impossible to determine anything about saving and investment using the given information
Q2) A firm run by a rational entrepreneur would want to hold inventories.
A)True
B)False
Q3) Which of the following would not be included in the calculation of GDP?
A)Jim purchases a new automobile.
B)Joe pays a plumber $100 to fix a broken pipe.
C)Sandy, who is on welfare, receives $100 in food stamps.
D)Kurt purchases an airline ticket for $500 just before a big reduction in fares.
E)Laurie pays $15 for a haircut.
To view all questions and flashcards with answers, click on the resource link above.
9
Chapter 8: Unemployment and Inflation
Available Study Resources on Quizplus for this Chatper
202 Verified Questions
202 Flashcards
Source URL: https://quizplus.com/quiz/74211
Sample Questions
Q1) An increase in the interest rate will increase the demand for loanable funds.
A)True
B)False
Q2) Which of the following is true about labor force participation?
A)When workers become unemployed, the labor force participation rate declines.
B)When the unemployed become "discouraged workers," the labor force participation rate declines.
C)When workers are not fully using their skills, the labor force participation rate decreases.
D)Since the 1950s the labor force participation rate of women has decreased in the United States.
E)The trend toward earlier retirement has increased the labor force participation rate in the United States.
Q3) Workers who are temporarily unemployed but who normally find jobs quickly are called
A)frictionally unemployed
B)cyclically unemployed
C)seasonally unemployed
D)structurally unemployed
E)discouraged workers
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Productivity and Growth
Available Study Resources on Quizplus for this Chatper
119 Verified Questions
119 Flashcards
Source URL: https://quizplus.com/quiz/74212
Sample Questions
Q1) Improvements in technology shift the per-worker production function downward.
A)True
B)False
Q2) In the long run, changing technology on average has led to
A)lower employment and lower wage rates
B)higher employment and lower wage rates
C)lower employment with wage rates unchanged
D)higher employment with wage rates unchanged
E)higher incomes and more leisure time
Q3) Government policy that uses taxes, subsidies and regulation for the purpose of giving domestic industry an advantage, is known as
A)research and development policy
B)economic development policy
C)industrial policy
D)trade policy
E)free trade
Q4) The process of adding more capital per worker is known as "capital deepening."
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Aaggregate Expenditure and Agregate Demand
Available Study Resources on Quizplus for this Chatper
179 Verified Questions
179 Flashcards
Source URL: https://quizplus.com/quiz/74213
Sample Questions
Q1) Expectations that the price level will rise in the future cause consumption to rise today.
A)True
B)False
Q2) If a household's income falls from $20,000 to $17,000 and its consumption spending falls from $18,000 to $15,000, then its
A)marginal propensity to consume is -0.67
B)marginal propensity to consume is 0.88
C)marginal propensity to consume is 0.20
D)marginal propensity to save is zero
E)marginal propensity to save is 0.12
Q3) If the market interest rate equals 8 percent, the opportunity cost of the last new investment project undertaken would be approximately equal to A)zero percent
B)4 percent
C)infinity
D)8 percent
E)16 percent
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Aggregate Expenditure and Aggregate Demand
Available Study Resources on Quizplus for this Chatper
148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/74203
Sample Questions
Q1) An increase in the price level can be indicated by a downward shift of the aggregate expenditure line.
A)True
B)False
Q2) If the price level increases, other things constant, consumption spending
A)increases because real income rises
B)decreases because real income rises
C)increases because the real value of wealth increases
D)decreases because the real value of wealth decreases
E)increases because nominal income increases
Q3) If the marginal propensity to consume is 4/5, the value of the simple multiplier is
A)4
B)1/5
C)4/5
D)5/4
E)5
Q4) Aggregate expenditure means total or combined spending.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Aggregate Supply
Available Study Resources on Quizplus for this Chatper
213 Verified Questions
213 Flashcards
Source URL: https://quizplus.com/quiz/74214
Sample Questions
Q1) In Exhibit 11-6, the distance between Y<sub>1</sub> and Y<sub>2</sub> is called
A)an expansionary gap
B)a contractionary gap
C)an increase in potential output
D)a decrease in potential output
E)the natural rate of unemployment
Q2) Which of the following is generally true of nominal wages?
A)In the long run, nominal and real wages tend to be equal.
B)Nominal wages are more flexible downward than upward.
C)Nominal wages are more flexible than prices.
D)Sustained and continuous (cyclical) unemployment suggests nominal wages do not fall quickly.
E)Nominal wages do not rise during labor shortages.
Q3) Increases in the costs of producing each level of output will cause a rightward shift of the short-run aggregate supply curve.
A)True
B)False
Q4) Supply shocks are unexpected events that affect aggregate supply.
A)True
B)False
Page 14
To view all questions and flashcards with answers, click on the resource link above.
Chapter 13: Fiscal Policy
Available Study Resources on Quizplus for this Chatper
240 Verified Questions
240 Flashcards
Source URL: https://quizplus.com/quiz/74215
Sample Questions
Q1) Lags in the approval and implementation of fiscal policy
A)weaken fiscal policy as a tool of economic stabilization
B)increase the effectiveness of fiscal policy as a tool of economic stabilization
C)help legislators to better assess what policies are most appropriate to adopt
D)make fiscal policy more responsive to the current economic environment
E)cause fiscal policy to be more effective in changing the level of real GDP than changing the price level
Q2) Temporary tax cuts tend to have little effect on household consumption spending.
A)True
B)False
Q3) Most government transfer programs are
A)also government spending programs
B)examples of monetary policy rather than fiscal policy
C)designed mainly to offset macroeconomic instability
D)discretionary fiscal policies
E)automatic stabilizers
Q4) Discretionary fiscal policy works by shifting the aggregate demand curve.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Federal Budgets and Public Policy
Available Study Resources on Quizplus for this Chatper
158 Verified Questions
158 Flashcards
Source URL: https://quizplus.com/quiz/74216
Sample Questions
Q1) The federal budget experienced surpluses from
A)1998-2001
B)2002-2006
C)1970-1973
D)1991-1994
E)1985-1988
Q2) One explanation for persistent federal budget deficits is that officials are not required to
A)honor the Constitution
B)balance the budget
C)raise taxes
D)run for reelection
E)None of the answers is correct
Q3) Transfer payments are included in the government budget deficit but not included in the government purchases component of GDP.
A)True
B)False
Q4) The federal government spends more for national defense than for anything else.
A)True
B)False
Page 16
To view all questions and flashcards with answers, click on the resource link above.
Chapter 15: Money and the Financial System
Available Study Resources on Quizplus for this Chatper
209 Verified Questions
209 Flashcards
Source URL: https://quizplus.com/quiz/74217
Sample Questions
Q1) All of the following are depository institutions except one. Which is the exception?
A)commercial banks
B)savings and loan associations
C)anminsurance company
D)mutual savings banks
E)credit unions
Q2) The actions of the Fed
A)must be approved by the president and the Congress
B)must be approved by the president alone
C)must be approved by the Congress alone
D)are not subject to approval by any branch of government
E)are subject to the approval of the electorate
Q3) Commodity money is something
A)that has no intrinsic value
B)that has an intrinsic value
C)that is based on a valuable metal
D)whose value never changes
E)whose value changes frequently
To view all questions and flashcards with answers, click on the resource link above.
Chapter 16: Banking and the Money Supply
Available Study Resources on Quizplus for this Chatper
229 Verified Questions
229 Flashcards
Source URL: https://quizplus.com/quiz/74218
Sample Questions
Q1) The federal funds market is the market for overnight lending and borrowing of reserves.
A)True
B)False
Q2) A 2005 quarter is called token money because
A)it is legal tender
B)its metal value exceeds it face value
C)there is less than a quarter's worth of metal in it
D)it can be used in the subway
E)it is not generally accepted in exchange
Q3) Narrowly defined, the M1 money supply consists primarily of
A)coins and currency
B)gold
C)gold and silver
D)certificates of deposit
E)checkable deposits
Q4) Currency held by the nonbank public is a medium of exchange.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Monetary Theory and Policy
Available Study Resources on Quizplus for this Chatper
186 Verified Questions
186 Flashcards
Source URL: https://quizplus.com/quiz/74219
Sample Questions
Q1) The equation of exchange
A)states that the price level times velocity equals GDP divided by the interest rate
B)states that total spending equals real GDP
C)states that money supply times velocity equals real GDP
D)is an identity, not a theory
E)becomes the quantity theory of money on the assumption that the price level is always constant
Q2) According to the equation of exchange, if the amount of money in the economy of Monetania times the velocity of money equals 800 million Monetanian dollars ($), then Monetania's
A)real GDP equals $800 million
B)nominal GDP equals $800 million
C)real GDP equals $800 million times the price level
D)nominal GDP equals $800 million times the price level
E)price level equals 8 Monetanian dollars
Q3) If the Fed is targeting the money supply, it loses control over the interest rate.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 18: Macro Policy Debate: Active or Passive
Available Study Resources on Quizplus for this Chatper
189 Verified Questions
189 Flashcards
Source URL: https://quizplus.com/quiz/74220
Sample Questions
Q1) According to the rational expectations school,
A)on average people have very little idea of what to expect from government policy makers
B)people form expectations by focusing only on the private sector
C)changes in the expected price level shift the aggregate demand curve
D)people do not consider likely government policies when forming expectations, choosing to remain rationally ignorant
E)people form expectations, in part, by considering the probable future actions of government policy makers
Q2) The long-run Phillips curve
A)represents the fact that inflation is consistent with many unemployment rates
B)represents the fact that inflation will not influence unemployment in the long run
C)has a negative slope because the short-run Phillips curve shifts up and to the left
D)shows that expected inflation can never equal actual inflation
E)shows that unemployment is a short run, but not a long run, phenomenon
To view all questions and flashcards with answers, click on the resource link above.
Chapter 19: International Trade
Available Study Resources on Quizplus for this Chatper
163 Verified Questions
163 Flashcards
Source URL: https://quizplus.com/quiz/74221
Sample Questions
Q1) Whenever the opportunity costs of goods are significantly different in different countries, there are gains from specialization and trade.
A)True
B)False
Q2) In Exhibit 19-5, the world price of a baseball is $3. With free trade, how many baseballs will the United States import?
A)4,000
B)6,000
C)8,000
D)10,000
E)12,000
Q3) The difference between an import quota and a tariff that results in the same domestic price is
A)none; they are the same
B)the quantity demanded is higher under the tariff
C)the world price is higher under the quota
D)the tariff revenue goes to the domestic government; quota benefits may go to foreigners
E)none because both quotas and tariffs are illegal
To view all questions and flashcards with answers, click on the resource link above.
Page 21
Chapter 20: International Finance
Available Study Resources on Quizplus for this Chatper
231 Verified Questions
231 Flashcards
Source URL: https://quizplus.com/quiz/74222
Sample Questions
Q1) Imagine that there are only two nations in the world, the United States and Mexico. If Americans buy more goods made in Mexico, other things constant, the
A)U.S. demand curve for Mexican pesos will shift rightward
B)U.S. demand curve for Mexican pesos will shift leftward
C)U.S. supply curve of Mexican pesos will shift leftward
D)U.S. supply curve of Mexican pesos will shift rightward
E)U.S. supply curve of Mexican pesos will shift upward
Q2) In 2012, the United States largest balance of trade deficit was with A)the European Union
B)Canada
C)China
D)Mexico
E)Brazil
Q3) In the United States, imports have exceeded exports in every year since 1979.
A)True
B)False
Q4) Bank deposits denominated in Mexican pesos are an example of foreign exchange.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 22
Chapter 21: Economic Development
Available Study Resources on Quizplus for this Chatper
110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/74223
Sample Questions
Q1) Education makes people more receptive to new ideas and methods, which leads to economic development.
A)True
B)False
Q2) In 2011, high-income economies with only about one sixth of the world's population produced more than half of the world's output.
A)True
B)False
Q3) Which of the following is not an example of an institution (rules of the game)?
A)formal rules of behavior
B)government takeover of private corporations
C)a constitution
D)informal constraints on behavior
E)traditions
Q4) Around the world, once-socialist countries have replaced central plans with
A)foreign aid
B)budgets
C)special interests
D)markets
E)capital equipment
Page 23
To view all questions and flashcards with answers, click on the resource link above.