CHAPTER 1: Introduction to Macroeconomics
MULTIPLE CHOICE
1. A central topic of study in macroeconomics is ________, while a central topic of study in microeconomics is ________.
a. the cosmos; particle physics
b. the overall performance of an economy; an individual market
c. an individual market; the overall performance of an economy
d. the performance of international trade; the individual firm
e. consumer behavior; firm behavior
ANS: B DIF: Easy REF: 1.1 TOP: I.
MSC: Remembering
2. The three main variables we discuss in the short run are
a. economic fluctuations, the real exchange rate, and unemployment.
b. economic fluctuations, inflation, and international trade.
c. economic fluctuations, inflation, and unemployment.
d. interest rates, money supply, and taxes.
e. economic fluctuations, interest rates, and productivity.
ANS: C DIF: Easy REF: 1.1 TOP: I.
MSC: Remembering
3. Macroeconomics is to microeconomics what ________ is to ________.
a. cosmology; particle physics d. chemistry; organic chemistry
b. particle physics; cosmology e. biology; zoology
c. physics; biology
ANS: A DIF: Easy REF: 1.1 TOP: I.
MSC: Applying
4. Which of the following does macroeconomics endeavor to answer?
i. Why is the typical person in the United States today more than 10 times richer than the typical person in the United States a century ago?
ii. Why has the unemployment rate been nearly twice as high in Europe as in the United States in recent years?
iii. What determines the rate of inflation? What determines how rapidly the overall price level in an economy increases?
a. i only d. i and ii
b. i, ii, and iii e. ii and iii
c. ii only
ANS: B DIF: Easy REF: 1.1 TOP: I.
MSC: Applying
5. Which of the following does macroeconomics NOT endeavor to answer?
i. Why is the typical person in the United States today more than 10 times richer than the typical person in the United States a century ago?
ii. Why has the unemployment rate been nearly twice as high in Europe as in the United States in recent years?
iii. Why has the price of orange juice risen sharply?
a. ii and iii d. i, ii, and iii
b. i only e. iii only
c. ii only
ANS: E DIF: Easy REF: 1.1 TOP: I.
MSC: Applying
6. Which of the following does macroeconomics endeavor to answer?
i. What role does the government play in recessions, booms, and determining the rate of inflation?
ii. What causes an increase in the price of Exxon stock?
iii. How does a dairy farmer react to rising milk prices?
a. i only d. i, ii, and iii
b. ii only e. ii and iii
c. iii only
ANS: A DIF: Easy REF: 1.2 TOP: II.
MSC: Applying
7. Which of the following does macroeconomics endeavor to answer?
i. How does a dairy farmer react to rising wheat prices?
MULTIPLE CHOICE
1. A central topic of study in macroeconomics is ________, while a central topic of study in microeconomics is ________.
a. the cosmos; particle physics
b. the overall performance of an economy; an individual market
c. an individual market; the overall performance of an economy
d. the performance of international trade; the individual firm
e. consumer behavior; firm behavior
ANS: B DIF: Easy REF: 1.1 TOP: I.
MSC: Remembering
2. The three main variables we discuss in the short run are
a. economic fluctuations, the real exchange rate, and unemployment.
b. economic fluctuations, inflation, and international trade.
c. economic fluctuations, inflation, and unemployment.
d. interest rates, money supply, and taxes.
e. economic fluctuations, interest rates, and productivity.
ANS: C DIF: Easy REF: 1.1 TOP: I.
MSC: Remembering
3. Macroeconomics is to microeconomics what ________ is to ________.
a. cosmology; particle physics d. chemistry; organic chemistry
b. particle physics; cosmology e. biology; zoology
c. physics; biology
ANS: A DIF: Easy REF: 1.1 TOP: I.
MSC: Applying
4. Which of the following does macroeconomics endeavor to answer?
i. Why is the typical person in the United States today more than 10 times richer than the typical person in the United States a century ago?
ii. Why has the unemployment rate been nearly twice as high in Europe as in the United States in recent years?
iii. What determines the rate of inflation? What determines how rapidly the overall price level in an economy increases?
a. i only d. i and ii
b. i, ii, and iii e. ii and iii
c. ii only
ANS: B DIF: Easy REF: 1.1 TOP: I.
MSC: Applying
5. Which of the following does macroeconomics NOT endeavor to answer?
i. Why is the typical person in the United States today more than 10 times richer than the typical person in the United States a century ago?
ii. Why has the unemployment rate been nearly twice as high in Europe as in the United States in recent years?
iii. Why has the price of orange juice risen sharply?
a. ii and iii d. i, ii, and iii
b. i only e. iii only
c. ii only
ANS: E DIF: Easy REF: 1.1 TOP: I.
MSC: Applying
6. Which of the following does macroeconomics endeavor to answer?
i. What role does the government play in recessions, booms, and determining the rate of inflation?
ii. What causes an increase in the price of Exxon stock?
iii. How does a dairy farmer react to rising milk prices?
a. i only d. i, ii, and iii
b. ii only e. ii and iii
c. iii only
ANS: A DIF: Easy REF: 1.2 TOP: II.
MSC: Applying
7. Which of the following does macroeconomics endeavor to answer?
i. How does a dairy farmer react to rising wheat prices?