A) macroeconomics.
B) aggregation.
C) agglomeration.
D) data development.
Answer: B
Diff: 1 Type: MC Page Ref: 6
27) A country that has many well-trained macroeconomic analysts will not necessarily have more beneficial macroeconomic policies because
A) economists' understanding of the economy remains poor.
B) there are few ways in which economists' complex models can be applied to the real world.
C) economists agree on so few government policies.
D) economic policy is usually made by politicians, not economists.
Answer: D
Diff: 1 Type: MC Page Ref: 7
28) The main goal of macroeconomic research is to
A) predict how the macroeconomy will perform in the future.
B) analyze current macroeconomic data.
C) develop new data that can be used to better understand the operation of the economy.
D) make general statements about how the economy works.
Answer: D
Diff: 1 Type: MC Page Ref: 8
29) Assumptions for economic theories and models should be
A) rejected if they are not totally realistic.
B) logical rather than empirically testable.
C) simple and reasonable rather than complex.
D) maintained until overwhelming evidence to the contrary occurs.
Answer: C
Diff: 1 Type: MC Page Ref: 8
30) If the theory behind an economic model fits the data only moderately well, you would probably want to
A) use the theory to predict what would happen if the economic setting or economic policies change.
B) start from scratch with a new model.
C) enrich the model with additional assumptions.
D) restate the research question.
Answer: C
Diff: 2 Type: MC Page Ref: 9
31) A useful macroeconomic theory
A) is based on reasonable and realistic assumptions.
B) is easy to use.
C) has implications that can be tested in the real world.
D) is consistent with the data and observed behaviour of the real-world economy.
E) all of the above.
Answer: E
Diff: 2 Type: MC Page Ref: 9
32) Macroeconomists disagree on normative analysis of economic issues because
A) they use different tools to study economics.
B) they have different political agenda.
C) they have different values.
D) they have different objectives.
Answer: C
Diff: 2 Type: MC Page Ref: 11
33) Positive analysis of economic policy
A) examines the economic consequences of policies but does not address the question of whether those consequences are desirable.
B) examines the economic consequences of policies and addresses the question of whether those consequences are desirable.
C) generates less agreement among economists than normative analysis.
D) is rare in questions of economic policy.
Answer: A
Diff: 1 Type: MC Page Ref: 10
34) Which of the statements below is primarily normative in nature?
A) There is an unequal distribution of income in Canada.
B) The distribution of income is more unequal in Canada than it is in Japan.
C) The inequality of income that exists in Canada is partly caused by an unequal distribution of wealth.
D) The distribution of income in Canada should be more equal than it is.
Answer: D
Diff: 1 Type: MC Page Ref: 10
35) Adam Smith's idea of the "invisible hand" tries to convey the idea that while there are free markets and people conduct their economic affairs in their own best interests
A) any country can become an advanced, industrialized nation.
B) markets will eliminate problems of hunger and dissatisfaction.
C) most inequalities between the rich and the poor will be eliminated.
D) the overall economy will work well.
Answer: D
Diff: 1 Type: MC Page Ref: 11
36) Equilibrium in the economy means
A) unemployment is zero.
B) quantities demanded and supplied are equal in all markets.
C) prices aren't changing over time.
D) tax revenues equal government spending, so the government has no budget deficit.
Answer: B
Diff: 1 Type: MC Page Ref: 11