Macroeconomics
Exam Materials
Course Introduction
Macroeconomics is a foundational course that explores the behavior and performance of an economy as a whole. It examines aggregate indicators such as GDP, unemployment rates, and inflation to understand economic growth, cycles, stabilization policies, and international trade. Students will analyze how government policies, monetary and fiscal tools, and global events affect overall economic activity and societal welfare. Through theoretical models and real-world applications, the course equips students to critically assess economic news, policy debates, and the broader forces shaping national and international economies.
Recommended Textbook
Macroeconomics 5th Edition by Stephen D. Williamson
Available Study Resources on Quizplus
18 Chapters
966 Verified Questions
966 Flashcards
Source URL: https://quizplus.com/study-set/357
Page 2
Chapter 1: Introduction
Available Study Resources on Quizplus for this Chatper
73 Verified Questions
73 Flashcards
Source URL: https://quizplus.com/quiz/5954
Sample Questions
Q1) Primarily,macroeconomists use microeconomic principles to study
A) business cycles and trends in the stock market.
B) long-run economic growth and antitrust policies.
C) trends in the stock market and long-term economic growth.
D) long-run economic growth and business cycles.
Answer: D
Q2) In the 2008-09 recession,the government deficit
A) stayed roughly constant.
B) decreased.
C) increased.
D) would have increased if the government had intervened.
Answer: C
Q3) In the long run,the quantity of money
A) does not matter.
B) influences GDP.
C) influences unemployment.
D) influences the business cycle.
Answer: A
To view all questions and flashcards with answers, click on the resource link above.
3
Chapter 2: Measurement
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/5955
Sample Questions
Q1) Additions to the nation's capital stock are brought about through A) the current account surplus.
B) investment.
C) investment and the current account surplus.
D) investment and the government budget surplus.
Answer: B
Q2) The nominal GDP of Year 1 is
A) $800.
B) $1050.
C) $1900.
D) $2400.
Answer: A
Q3) Suppose that GDP is equal to 1000,national saving is equal to 200,the current account deficit is equal to 100,and the government budget deficit is equal to 50. Investment must equal A) 150.
B) 200.
C) 250.
D) 300.
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Business Cycle Measurement
Available Study Resources on Quizplus for this Chatper
56 Verified Questions
56 Flashcards
Source URL: https://quizplus.com/quiz/5956
Sample Questions
Q1) If x is useful for predicting future GDP then
A) x is coincident.
B) x is a lagging variable.
C) x is countercyclical.
D) x is a leading variable.
Answer: D
Q2) Real investment tends to be
A) procyclical and less variable than real GDP.
B) procyclical and more variable than real GDP.
C) countercyclical and less variable than real GDP.
D) countercyclical and more variable than real GDP.
Answer: B
Q3) Before 2000,the three most recent U.S. recessions occurred in
A) 1969-1973, 1979-1982, and 1994-1995.
B) 1973-1975, 1982-1985, and 1990-1991.
C) 1973-1975, 1981-1982, and 1990-1991.
D) 1981-1982, 1990-1991, and 1998-1999.
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Consumer and Firm Behavior: The Work-Leisure
Decision and Profit Maximization
Available Study Resources on Quizplus for this Chatper
103 Verified Questions
103 Flashcards
Source URL: https://quizplus.com/quiz/5957
Sample Questions
Q1) We assume that the representative consumer's preferences exhibit the properties that
A) they are convex and that more is always preferred to less.
B) more is always preferred to less and that each consumer has one strictly favorite good.
C) each consumer has one strictly preferred good and that consumption and leisure are both normal goods.
D) consumption and leisure are both normal goods and that the consumer likes diversity in his or her consumption bundle.
Q2) The fact that indifference curves are downward sloping
A) is not true.
B) follows from the fact that more is preferred to less.
C) follows from the property that the consumer likes diversity in his or her consumption bundle.
D) follows from the property that consumption and leisure are normal goods.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: A Closed-Economy One-Period Macroeconomic Model
Available Study Resources on Quizplus for this Chatper
70 Verified Questions
70 Flashcards
Source URL: https://quizplus.com/quiz/5958
Sample Questions
Q1) If public goods can be produced more efficiently,then
A) public goods increase, and private goods may increase or decrease.
B) public goods production stays the same, and private goods increase.
C) public goods and private goods both increase.
D) public goods production falls, and private goods production rises.
Q2) An externality is any activity for which an individual firm or consumer does not take into account all
A) of the ramifications of its actions on others.
B) associated costs.
C) associated benefits.
D) associated costs and benefits.
Q3) In a one-period economic model,the government budget constraint requires that government spending
A) = taxes + transfers.
B) = taxes + borrowing.
C) > 0.
D) = taxes.
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Search and Unemployment
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/5959
Sample Questions
Q1) In the DMP model,
A) There are N firms, Q is the labor force, and N-Q is the vacancy rate.
B) There are N consumers, Q is the labor force, and N+Q is the number of consumers choosing home production.
C) There are Q consumers, N is the labor force, and N-Q is the number of consumers choosing home production.
D) There are N consumers, Q is the labor force, and N-Q is the number of consumers choosing home production.
Q2) In the DMP model,a decrease in matching efficiency
A) has no effect on vacancies.
B) reduces the unemployment rate.
C) increases labor market tightness.
D) increases the size of the labor force.
Q3) In the DMP model,an increase in the unemployment insurance benefit does not,under any circumstances
A) increase the vacancy rate.
B) increase the unemployment rate.
C) reduce labor market tightness.
D) reduce the size of the labor force.
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: Economic Growth: Malthus and Solow
Available Study Resources on Quizplus for this Chatper
64 Verified Questions
64 Flashcards
Source URL: https://quizplus.com/quiz/5960
Sample Questions
Q1) In Solow's exogenous growth model,the principal obstacle to continuous growth in output per capita is due to
A) the declining marginal product of labor.
B) the declining marginal product of capital.
C) limits in the ability of government policymakers.
D) too little savings.
Q2) A steady state is
A) a temporary equilibrium.
B) a Pareto Optimum.
C) a long-run equilibrium.
D) an economy with ongoing fluctuations.
Q3) One plausible explanation of the U.S. productivity slowdown starting in 1973 is that it is an artifact of mismeasurement. This explanation would require that production of A) goods is underestimated.
B) goods is overestimated.
C) services is underestimated.
D) services is overestimated.
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Income Disparity Among Countries and Endogenous Growth
Available Study Resources on Quizplus for this Chatper
45 Verified Questions
45 Flashcards
Source URL: https://quizplus.com/quiz/5961
Sample Questions
Q1) Endogenous growth theory is about
A) welfare of indigenous people.
B) explaining growth.
C) studying education.
D) studying fertility choices.
Q2) Suppose a country is much richer than the others in the Solow growth model. What happens in the long run?
A) The other countries catch up to the rich one.
B) The rich country grows the fastest.
C) The rich country becomes poorer than the others.
D) Nothing.
Q3) In the endogenous growth model presented in the text,suppose that u represents the fraction of time spent working (as opposed to accumulating human capital)and b represents the efficiency of human capital accumulation. The growth rate of human capital equals
A) u(1 - b) - 1.
B) 1 + b(1 - u).
C) (1 + b)(1 - u).
D) b(1 - u) - 1.
Page 10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: A Two-Period Model: The Consumption-Savings
Decision and Credit Markets
Available Study Resources on Quizplus for this Chatper
66 Verified Questions
66 Flashcards
Source URL: https://quizplus.com/quiz/5962
Sample Questions
Q1) Why don't consumers work in the two-period model?
A) It's a convenient simplification.
B) It would make no difference to the model if consumers could work.
C) People who participate in real-world credit markets do not work.
D) We don't know how to include workers in the model.
Q2) In the data,which of the following is most volatile?
A) real GDP
B) consumption of durables
C) consumption of nondurables
D) consumption of services
Q3) Savings in our model are
A) durable consumption.
B) non-durable consumption.
C) postponed consumption.
D) money.
Q4) A permanent decrease in taxes leads to
A) a small increase in current consumption.
B) a large increase in current consumption.
C) a small decrease in future consumption.
D) a large decrease in future consumption.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter
Available Study Resources on Quizplus for this Chatper
28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/5963
Sample Questions
Q1) In the two-period model with limited commitment,if the collateral constraint binds
A) increases in the present value of collateral increase current consumption and reduce future consumption.
B) increases in the present value of collateral increase current consumption one-for-one.
C) increases in the present value of collateral decrease current consumption and increase future consumption.
D) increases in the present value of collateral increase current consumption less than one-for-one.
Q2) In the two-period model,the nature of the asymmetric information is that
A) only the bank knows who the bad borrowers are.
B) only borrowers know whether they are bad or not.
C) only borrowers know the value of their collateral.
D) only banks can value the collateral.
To view all questions and flashcards with answers, click on the resource link above.
12
Chapter 11: A Real Intertemporal Model with Investment
Available Study Resources on Quizplus for this Chatper
57 Verified Questions
57 Flashcards
Source URL: https://quizplus.com/quiz/5964
Sample Questions
Q1) In general equilibrium
A) supply equals demand for all goods in all periods.
B) supply equals demand for most goods in all periods.
C) supply equals demand in present value, but not in all periods.
D) prices are exogenous.
Q2) For the firm in the real intertemporal model with investment
A) depreciation occurs more quickly if the firm produces more output.
B) depreciation takes place at a constant rate.
C) depreciation can be slowed with more maintenance.
D) depreciation is always 100%.
Q3) The condition,MRSC,C' = 1 + r,describes the representative consumer's
A) investment decision.
B) consumption - savings decision.
C) current period work - leisure decision.
D) future period work - leisure decision.
Q4) Next period's capital is equal to current-period investment
A) plus the amount of current capital left over after depreciation.
B) minus the amount of current capital left over after depreciation.
C) plus the amount of current period depreciation.
D) minus the amount of current period depreciation.
Page 13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Money, Banking, Prices, and Monetary Policy
Available Study Resources on Quizplus for this Chatper
54 Verified Questions
54 Flashcards
Source URL: https://quizplus.com/quiz/5965
Sample Questions
Q1) The Taylor rule
A) is a rule stating that money should grow at a constant rate.
B) is not considered to be a practical policy rule for central banks to follow.
C) dictates that the central bank's target interest rate be responsive to real economic activity and to inflation.
D) dictates that the nominal interest rate stay constant in the long run.
Q2) Credit cards are not a form of money because
A) money needs to be tangible (not virtual).
B) credit cards just extend a loan.
C) credit cards just relate to an account.
D) credit card balances are in fact counted as money.
Q3) Seigniorage is government revenue raised by
A) a tax on transactions.
B) issuance of treasury bonds.
C) issuance of money.
D) lump-sum taxation.
To view all questions and flashcards with answers, click on the resource link above.
14
Chapter 13: Business Cycle Models with Flexible Prices and Wages
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/5966
Sample Questions
Q1) In the coordination failure model,the "good" equilibrium is characterized by a
A) higher real interest rate and a higher price level than the "bad" equilibrium.
B) higher real interest rate and a lower price level than the "bad" equilibrium.
C) lower real interest rate and a higher price level than the "bad" equilibrium.
D) lower real interest rate and a lower price level than the "bad" equilibrium.
Q2) The appropriate monetary policy response to a situation with deficient financial liquidity
A) an open market sale of government bonds.
B) to do nothing.
C) an open market purchase of government bonds.
D) to increase reserve requirements.
Q3) Business cycle models with flexible prices
A) are all non-Keynesian models.
B) were first introduced in the General Theory of Employment, Interest, and Money.
C) the only business cycle models in use.
D) none of the above.
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: New Keynesian Economics: Sticky Prices
Available Study Resources on Quizplus for this Chatper
32 Verified Questions
32 Flashcards
Source URL: https://quizplus.com/quiz/5967
Sample Questions
Q1) Under fiscal stabilization policy in the New Keynesian model,after a negative shock to output,
A) the government increases expenditures and the central bank increases the money supply.
B) the government increases expenditures and the central bank decreases the money supply.
C) the government decreases expenditures and the central bank increases the money supply.
D) the government decreases expenditures and the central bank decreases the money supply.
Q2) What fundamental problem does the New Keynesian model have,when compared to the data?
A) Investment fluctuates more than consumption.
B) The real wage moves too little.
C) Aggregate output demand does not matter.
D) Prices do not fluctuate in the right way.
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: International Trade in Goods and Assets
Available Study Resources on Quizplus for this Chatper
23 Verified Questions
23 Flashcards
Source URL: https://quizplus.com/quiz/5968
Sample Questions
Q1) In a two-period model with production,a permanent increase in domestic government spending
A) increases domestic output and increases the current account surplus.
B) increases domestic output and decreases the current account surplus.
C) decreases domestic output and increases the current account surplus.
D) decreases domestic output and decreases the current account surplus.
Q2) When current account deficits are used to finance investment spending,such deficits may be self-correcting because
A) they promote more responsible government policies.
B) the resulting increase in the capital stock over time shifts the output supply curve to the right.
C) the resulting increase in the capital stock over time shifts the output demand curve to the right.
D) the resulting increase in national indebtedness increases labor demand.
Q3) The current account surplus is not
A) the trade balance.
B) the excess of national savings over investment.
C) private saving less government deficit.
D) output less taxes and trade deficit.
To view all questions and flashcards with answers, click on the resource link above.
Page 17
Chapter 16: Money in the Open Economy
Available Study Resources on Quizplus for this Chatper
60 Verified Questions
60 Flashcards
Source URL: https://quizplus.com/quiz/5969
Sample Questions
Q1) To maintain a fixed exchange rate,authorities
A) make laws stipulating the exchange rate.
B) modify money supply.
C) modify government expenses.
D) modify taxes.
Q2) In the New Keynesian open economy model
A) the nominal exchange rate is always fixed.
B) prices are flexible.
C) net exports depends on the relative price of foreign goods to domestic goods.
D) the nominal exchange rate is always flexible.
Q3) In the monetary small open-economy model with a fixed exchange rate,an increase in the foreign price level
A) increases the domestic money supply and increases the domestic price level.
B) increases the domestic money supply and decreases the domestic price level.
C) decreases the domestic money supply and increases the domestic price level.
D) decreases the domestic money supply and decreases the domestic price level.
To view all questions and flashcards with answers, click on the resource link above.
18
Chapter 17: Money, Inflation, and Banking
Available Study Resources on Quizplus for this Chatper
47 Verified Questions
47 Flashcards
Source URL: https://quizplus.com/quiz/5970
Sample Questions
Q1) To implement the Friedman rule for long-term monetary policy,the monetary authority would need to set the
A) inflation rate equal to zero.
B) nominal rate of interest equal to zero.
C) real rate of interest equal to zero.
D) money growth rate equal to zero.
Q2) An increase in the inflation rate shifts the labor
A) supply curve to the right.
B) supply curve to the left.
C) demand curve to the right.
D) demand curve to the left.
Q3) Moral hazard is a problem in providing deposit insurance because insured banks are
A) more likely to make bookkeeping errors.
B) overly cautious due to extra regulations adopted by the FDIC.
C) more likely to provide bank managers with lavish perquisites.
D) encouraged to take on more risk.
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Inflation, the Phillips Curve, and Central Bank Commitment
Available Study Resources on Quizplus for this Chatper
21 Verified Questions
21 Flashcards
Source URL: https://quizplus.com/quiz/5971
Sample Questions
Q1) The Phillips curve shifts because
A) fiscal policy changes over time.
B) of total factor productivity shocks.
C) of economic development.
D) none of the above.
Q2) Application of the time inconsistency problem to monetary policy suggests that,without some mechanism to ensure commitment,the
A) rate of inflation will be higher than it would be with commitment.
B) level of real output will be lower than it would be with commitment.
C) rate of inflation will be higher and the level of real output will be lower than they would be with commitment.
D) rate of inflation and the level of real output will be higher than they would be with commitment.
Q3) The Phillips curve shifts because
A) private behavior adapts to monetary policy.
B) expected inflation changes.
C) the central bank attempts to exploit the Phillips curve.
D) all of the above.
To view all questions and flashcards with answers, click on the resource link above. Page 20