Topic: Macroeconomic policy
42. ‘If Government cuts income taxes, demand for output is likely to increase’ is a _______ statement about ______ policy.
A. positive; fiscal
B. normative; fiscal
C. positive; monetary
D. normative; monetary
Ans: A
AACSB: Reflective thinking
Blooms: Comprehension
Difficulty: Medium
LO: 1.2 Can you identify the three major types of macroeconomic policy and discuss the difference between positive and normative analyses of macroeconomic policy?
Topic: Macroeconomic policy
43. ‘Any tax cut to increase demand for output should favour lower-income people’ is a ______ statement about ______ policy.
A. positive; fiscal
B. normative; fiscal
C. positive; monetary
D. normative; monetary
Ans: B
AACSB: Reflective thinking
Blooms: Comprehension
Difficulty: Medium
LO: 1.2 Can you identify the three major types of macroeconomic policy and discuss the difference between positive and normative analyses of macroeconomic policy?
Topic: Macroeconomic policy
44. Aggregation means the:
A. adding up of individual economic variables to obtain economy wide totals
B. participation in national economic policy discussions
C. worsening of an economic situation
D. enhancement of the power and wealth of a nation
Ans: A
AACSB: Reflective thinking
Blooms: Knowledge
Difficulty: Easy
LO: 1.3 Do you understand the difference between microeconomics and macroeconomics and how aggregation is used?
Topic: Aggregation
45. Macroeconomists, instead of microeconomists, would deal with:
A. positive analysis
B. aggregation
C. the scarcity principle
D. individual firms
Ans: B
AACSB: Reflective thinking
Blooms: Knowledge
Difficulty: Easy
LO: 1.3 Do you understand the difference between microeconomics and macroeconomics and how aggregation is used?
Topic: Aggregation
46. Which of the following is the most aggregated value?
A. Total output of a firm
B. Total output of a country
C. Total output of a city
D. Total output of an industry
Ans: B
AACSB: Reflective thinking
Blooms: Comprehension
Difficulty: Medium
LO: 1.3 Do you understand the difference between microeconomics and macroeconomics and how aggregation is used?
Topic: Aggregation
47. A cost of aggregation is that:
A. details about individual households and firms are lost
B. the ‘big picture’ cannot be studied
C. economy-wide totals cannot be obtained
D. broad economic trends are obscured
Ans: A
AACSB: Reflective thinking
Blooms: Comprehension
Difficulty: Medium
LO: 1.3 Do you understand the difference between microeconomics and macroeconomics and how aggregation is used?
Topic: Aggregation
48. To aggregate 300 tonnes of steel, 5000 bushels of wheat, and 1 million barrels of crude oil, economists add together the _____ of the three products
A. units
B. dollar value
C. weight
D. number of tonnes, bushels and barrels
Ans: B
AACSB: Reflective thinking
Blooms: Comprehension
Difficulty: Medium
LO: 1.3 Do you understand the difference between microeconomics and macroeconomics and how aggregation is used?
Topic: Aggregation
49. Aggregation allows economists to ______ at the cost of ________.
A. see the big picture; obscuring the details
B. make positive statements; ignoring normative analysis
C. make normative statements; ignoring positive analysis
D. see the details; obscuring the big picture
Ans: A
AACSB: Reflective thinking
Blooms: Knowledge
Difficulty: Easy
LO: 1.3 Do you understand the difference between microeconomics and macroeconomics and how aggregation is used?
Topic: Aggregation
50. In a debate on the state of the economy, Senator A pointed out that the price of clothing, fruits and computers had decreased slightly over the last year, while Senator B stated that the inflation rate had increased over the last year. In this example, aggregate data is being used by:
A. both senators
B. Senator A
C. Senator B
D. neither senator
Ans: C
AACSB: Reflective thinking
Blooms: Comprehension
Difficulty: Medium
LO: 1.3 Do you understand the difference between microeconomics and macroeconomics and how aggregation is used?
Topic: Aggregation
Chapter 01 Testbank Summary
Category
# of Questions
AACSB: Analytical thinking
2
AACSB: Knowledge application
3
AACSB: Reflective thinking
45