1. Which of these options fits what we call "Economics in three words" ? a. Goals, Resources, Decisions b. GDP, inflation, unemployment. c. Congress, Presidency, Judiciary d. Cars, Houses, Technology e. Scarcity, Exchange, Growth 2. Which of the following is a macroeconomic question? a. How many novels should be printed by a publisher? b. How do members of a small organization decide whether to hire an outside contractor for their accounting needs? c. How much should Aerospace Engineers earn after college? d. How much unemployment can the economy tolerate? e. What is the price of a used Tesla? 3. For the US economy in 2022, average year-over-year inflation rate has been __________ compared with average year-over-year inflation rate of _______ from 2010-2019: a. 3.5% , 5.5% b. 5.5% , 3.5% c. 8% , 2.5% d. 2.5% , 8% e. 10% , 8% 4. Some jobs in the economy are subject to the disappearance of certain jobs due to technological and institutional changes, even when the economy is otherwise growing . A person who loses their job due to such changes would fall under which classification? a. frictional unemployment b. cyclical unemployment c. structural unemployment d. overemployed e. a discouraged worker 5. Which is NOT a goal of US macroeconomic policy? a. Stable financial conditions and lending standards b. About 2-3% inflation c. 1.8-2.2% real GDP growth over the longer term d. Full employment e. The Dow Jones Industrial Average exceeding 60,000 6. The largest expense category in the consumer price index (CPI) is: a. transportation. b. education. c. food and beverages. d. housing. e. medical care.

7. In the Fed model, the risk-free rate is..? a. The interest rate that the Federal Reserve influences through its tools b. The guaranteed rate of return all business in the economy earn c. The risk premium that banks and the financial sector generate based on conditions d. households and foreign entities; firms and the (U.S.) government e. large firms and households; small firms and micro-capital organizations 8. Which of the following measures is the preferred measure of inflation used by the Federal Reserve when evaluating and setting monetary policy?: a. The personal consumption expenditures (PCE) index less food and energy or core PCE. b. The trimmed-mean personal consumption expenditures (PCE) index c. The Sticky Prices Index d. The consumer price index (CPI) less food and energy e. The personal consumption expenditures (PCE) index 9. GDP as a measure of the economy, is limited by its inability to measure nonmarket activities, such as: a. Net exports b. Household work c. Government purchases d. Spending on capital assets e. Financial products bought through a brokerage 10. Horatio is making a presentation on the state of the US Economy for an audience that has never taken economics coursework. Which of the four scaling strategies for big numbers could Horatio use to help his audience understand that the US GDP is $26 trillion? a. Compare it to the GDP of ancient Rome b. Exaggerate the GDP c. Present it as grains of sand d. Present it as GDP per person e. Compare it to the size of a country's geographic boundaries 11. Are demographics an important factor when planning the federal budget? a. No, because government spending and taxation policies do not discriminate based on any demographic factors. b. Yes, because many government benefits are received by the fast -growing elderly population, causing implications for future levels of taxation and government benefits for everyone. c. No, because demographics do not change much from year to year. d. No, because federal budgets do not change much from year to year. e. Yes, because government benefits are allocated solely based on demographic factors. 12. Xiao Lin is deciding whether or not to take the bus or drive to work. Since riding the bus will reduce traffic for everyone, Xiao Lin's transportation choice is a ______ decision with ______ consequences...? a. Microeconomic; microeconomic b. Macroeconomic; international c. Macroeconomic; microeconomic d. Microeconomic; macroeconomic e. International; microeconomic

13. The aggregate demand curve is best represented by which of the following equations? a. AD = C + I + G + NX b. AD = C + I + G - NX c. AD = C + I + G d. AD = C + I e. AD = C + I - G - NX 14. A recent issue is the problem of disillusioned workers, who are workers who __ ____ after being unable to find a job and are no longer searching a. Have left the labor force b. Have left the working age population c. Are employed d. Are underemployed e. Are overemployed 15. Why does the federal debt historically tend to increase during periods of recession? a. Economic activity decreases, which decreases revenues and increases outlays. b. Economic activity decreases, which decreases revenues and decreases outlays. c. Economic activity increases, which increases revenues and increases outlays. d. Economic activity increases, which increases revenues and decreases outlays. e. Economic activity increases, which decreases revenues and increases outlays. 16. If the potential output of Germany is 5 trillion euros and the actual output is 4.5 trillion euros what is the output gap? a. 90% b. -10% c. -0.5 trillion euros d. 0.5 trillion euros e. 4.5 trillion euros 17. Functionally, bonds are ________: a. ownership shares in a firm b. securities that represent a debt to be paid. c. markets in which securities are bought and sold. d. contracts that represent a guaranteed payment. e. not available for individual investors. 18. Contractionary monetary policy occurs when: a. a central bank acts to decrease the money supply in an effort to decrease demand in the economy. b. Congress and the president increase taxes in an effort to stimulate the economy. c. Congress and the president decrease taxes in an effort to stimulate the economy. d. a central bank acts to increase the money supply in an effort to deflate the economy. e. a central bank acts to increase government spending in an effort to stimulate the economy.

20. The headline unemployment rate is low, and the news shows good job opportunities for American workers. Some people do not feel that this news matches their reality. An additional unemployment measure, sometimes referred to as the "u-6" rate, adds what additional information about the labor force? a. workers who are self-employed b. workers who are not legally authorized to work in the US c. workers who are part-time but would like to be full-time, and workers that have given up looking for a job d. workers who speak more than one language e. workers who non-citizens, but authorized to work in the US 21. Assume the US population is 340 million, 90 million are too young to work, 160 million are working and 6 million are unemployed and looking for work, what is the headline unemployment rate (to the nearest tenth of a percent)? a. 3.6% b. 2.5% c. 6% d. 8.3% e. 1.8% 22. Assume the current exchange rate for $1 is 120 Japanese Yen. The price of a Japanese-made interior decoration is 33,600 Yen. What is the price in dollars? a. $120 b. $336 c. $33.60 d. $280 e. $360

23. Which of the following is an example of what growth economics calls institutions? a. Oil wells b. mountains c. an educational system d. television programming e. incentives

25. The deficit measures ____________ over a year, while the debt measures ___________ at a point in time: a. The accumulated stock of government spending; the accumulated stock of borrowing b. The flow of new borrowing; the accumulated stock of borrowing c. The flow of government spending; the flow of new borrowing d. The accumulated stock of borrowing; the flow of new borrowing e. The flow of government spending; the accumulated stock of government spending 26. The $2.2T Coronavirus Aid, Relief and Economic Security (CARES) Act & the $1.9T American Rescue Plan Act (ARPA) are examples of what type of macroeconomic policy? a. contractionary monetary policy. b. strategic industrial policy. c. trade relief policy d. expansionary fiscal policy. e. expansionary monetary policy.