QUESTION 1

Suppose the U.S. population increases by 10%, but employment levels remain the same. Then

	A.	economic output will increase
	B.	worker productivity will decrease
	C.	per capita GDP will increase
	D.	per capita GDP will decrease

1 points

QUESTION 2

The Czech Republic has a GDP of 1,800 billion koruny. The exchange rate is 20 koruny per U.S. dollar. The Czech population is 20 million. The per capita GDP of the Czech Republic in U.S. dollars is

	A.	1,800 U.S. dollars per capita
	B.	3,600 U.S. dollars per capita
	C.	4,500 U.S. dollars per capita
	D.	9,000 U.S. dollars per capita

1 points

QUESTION 3

What will happen in an economy if the price of inputs used in production decreases?

	A.	output will increase and the price level will decrease
	B.	unemployment will increase and the price level will increase
	C.	unemployment will increase and the price level will decrease
	D.	unemployment will decrease and the price level will increase

1 points

QUESTION 4

If a country is experiencing high levels of inflation, then a government could

	A.	use contractionary fiscal policy to shift aggregate demand to the right
	B.	use contractionary fiscal policy to shift aggregate demand to the left
	C.	use expansionary fiscal policy to shift aggregate demand to the right
	D.	use expansionary fiscal policy to shift aggregate demand to the left

1 points

QUESTION 5

When is the most recent time that inflation was a truly major issue in the U.S. economy?

	A.	late 1960s to early 1970s
	B.	early to late 1970s
	C.	late 1970s to early 1980s
	D.	the late 1980s

1 points

QUESTION 6

Which of the following is NOT a valid statement based on the figure above?

	A.	this figure depicts a neoclassical view of the economy
	B.	increasing aggregate demand would cause this economy to grow
	C.	the vertical aggregate supply curve represents potential real GDP
	D.	this is a long-run view of the macroeconomy

1 points

QUESTION 7

From a long-run perspective, U.S. GDP has

	A.	increased over 2% a year
	B.	increased at 5% a year
	C.	stayed almost the same
	D.	there was no particular trend

1 points

QUESTION 8

Keynes's Law states that

	A.	prices will adjust so that firms sell all of their merchandise
	B.	aggregate demand equals aggregate supply
	C.	demand creates its own supply
	D.	supply creates its own demand

1 points

QUESTION 9

	A.	both inflation and output will decrease
	B.	inflation decreases and output increases
	C.	inflation decreases, but output changes little
	D.	inflation increases, but output changes little

1 points

QUESTION 10

For an individual,

	A.	loans are assets and deposits are liabilities
	B.	loans are liabilities and deposits are assets
	C.	both loans and deposits are assets
	D.	both loans and deposits are liabilities

1 points

QUESTION 11

Using the model of the macroeconomy illustrated above, in the short run if the government raises taxes and cuts spending in an effort to balance the budget

	A.	LRAS shifts to the left and Real Output decreases.
	B.	AD shifts to the left and Real Output decreases.
	C.	AD shifts to the right and Real Output increases.
	D.	AS shifts to the right and Real Output increases.

1 points

QUESTION 12

If many college instructors leave the college system for alternative jobs elsewhere in the economy, thus reducing the capabilities of the higher education system, this would result in

	A.	more physical capital deepening
	B.	less physical capital deepening
	C.	more human capital deepening
	D.	less human capital deepening

1 points

QUESTION 13

A Phillips curve shows the relationship between

	A.	output and the price level in an economy
	B.	output and the input price level
	C.	unemployment and output
	D.	unemployment and inflation

1 points

QUESTION 14

How do we measure GDP?

	A.	add up the value of raw materials, intermediate goods and final goods
	B.	add up the value of intermediate goods and final goods
	C.	add up the value of final goods
	D.	all of the above are different methods for measuring GDP

1 points

QUESTION 15

If a government wants to enact contractionary fiscal policy, then they should

	A.	decrease government spending or decrease taxes
	B.	increase government spending or increase taxes
	C.	decrease government spending or increase taxes
	D.	increase government spending or decrease taxes

1 points

QUESTION 16

Which of the following would not be included in GDP?

	A.	the cost of hospital stays
	B.	the cost of the pizza delivery guy delivering pizza
	C.	the cost of hiring a babysitter
	D.	the cost of washing your own dishes at home

1 points

QUESTION 17

If the central bank uses open market operations to sell bonds,

	A.	the money supply will increase
	B.	the money supply will decrease
	C.	the money supply is unaffected
	D.	interest rates will decrease

1 points

QUESTION 18

Data that has been adjusted for the effects of inflation is known as

	A.	price index data
	B.	nominal data
	C.	real data
	D.	natural data

1 points

QUESTION 19

Since the year 2000, the U.S. government has always been running a budget surplus.

	A.	This statement is true.
	B.	This statement is false.
	C.	The federal budget is mandated by law to be balanced.
	D.	The validity of this statement cannot be determined because the federal budget is top-secret.

1 points

QUESTION 20

A government advisor wants to know what economic laws hold in the short and long run. We can tell him that, for the most part,

	A.	Say's Law and Keynes's Law will hold in the short and long run
	B.	Say's Law and Keynes's Law do not hold in the short and the long run
	C.	Say's Law holds in the short run, and Keynes's Law holds in the long run
	D.	Say's Law holds in the long run, and Keynes's Law holds in the short run

1 points

QUESTION 21

If a government wants to enact expansionary fiscal policy, then it should

	A.	decrease government spending or decrease taxes
	B.	increase government spending or increase taxes
	C.	decrease government spending or increase taxes
	D.	increase government spending or decrease taxes

1 points

QUESTION 22

The following table shows the initial aggregate supply and demand information for a country. Assume that input prices rise and AS shifts to the left by 2,000 units at each price level. What will the new output equal?

Price Level	Aggregate Demand	Aggregate Supply
200	10,000	4,000
300	9,000	6,000
400	8,000	8,000
500	7,000	9,000
600	6,000	9,500
700	5,000	9,800
800	4,000	9,900

	A.	4,000
	B.	6,000
	C.	7,000
	D.	8,000

1 points

QUESTION 23

Which of the following is an example of a transfer payment?

	A.	Government purchases
	B.	Income taxes
	C.	Property taxes
	D.	Social Security benefits

1 points

QUESTION 24

Which of the following is not a monetary policy tool?

	A.	open market operations
	B.	reserve requirements
	C.	the discount rate
	D.	centralized bank mergers

1 points

QUESTION 25

Costa Rica has a GDP of 9 billion U.S. dollars and a population of 4 million. What is Costa Rica's per capita GDP in U.S. dollars?QUESTION 1

Suppose the U.S. population increases by 10%, but employment levels remain the same. Then

	A.	economic output will increase
	B.	worker productivity will decrease
	C.	per capita GDP will increase
	D.	per capita GDP will decrease

1 points

QUESTION 2

The Czech Republic has a GDP of 1,800 billion koruny. The exchange rate is 20 koruny per U.S. dollar. The Czech population is 20 million. The per capita GDP of the Czech Republic in U.S. dollars is

	A.	1,800 U.S. dollars per capita
	B.	3,600 U.S. dollars per capita
	C.	4,500 U.S. dollars per capita
	D.	9,000 U.S. dollars per capita

1 points

QUESTION 3

What will happen in an economy if the price of inputs used in production decreases?

	A.	output will increase and the price level will decrease
	B.	unemployment will increase and the price level will increase
	C.	unemployment will increase and the price level will decrease
	D.	unemployment will decrease and the price level will increase

1 points

QUESTION 4

If a country is experiencing high levels of inflation, then a government could

	A.	use contractionary fiscal policy to shift aggregate demand to the right
	B.	use contractionary fiscal policy to shift aggregate demand to the left
	C.	use expansionary fiscal policy to shift aggregate demand to the right
	D.	use expansionary fiscal policy to shift aggregate demand to the left

1 points

QUESTION 5

When is the most recent time that inflation was a truly major issue in the U.S. economy?

	A.	late 1960s to early 1970s
	B.	early to late 1970s
	C.	late 1970s to early 1980s
	D.	the late 1980s

1 points

QUESTION 6

Which of the following is NOT a valid statement based on the figure above?

	A.	this figure depicts a neoclassical view of the economy
	B.	increasing aggregate demand would cause this economy to grow
	C.	the vertical aggregate supply curve represents potential real GDP
	D.	this is a long-run view of the macroeconomy

1 points

QUESTION 7

From a long-run perspective, U.S. GDP has

	A.	increased over 2% a year
	B.	increased at 5% a year
	C.	stayed almost the same
	D.	there was no particular trend

1 points

QUESTION 8

Keynes's Law states that

	A.	prices will adjust so that firms sell all of their merchandise
	B.	aggregate demand equals aggregate supply
	C.	demand creates its own supply
	D.	supply creates its own demand

1 points

QUESTION 9

	A.	both inflation and output will decrease
	B.	inflation decreases and output increases
	C.	inflation decreases, but output changes little
	D.	inflation increases, but output changes little

1 points

QUESTION 10

For an individual,

	A.	loans are assets and deposits are liabilities
	B.	loans are liabilities and deposits are assets
	C.	both loans and deposits are assets
	D.	both loans and deposits are liabilities

1 points

QUESTION 11

Using the model of the macroeconomy illustrated above, in the short run if the government raises taxes and cuts spending in an effort to balance the budget

	A.	LRAS shifts to the left and Real Output decreases.
	B.	AD shifts to the left and Real Output decreases.
	C.	AD shifts to the right and Real Output increases.
	D.	AS shifts to the right and Real Output increases.

1 points

QUESTION 12

If many college instructors leave the college system for alternative jobs elsewhere in the economy, thus reducing the capabilities of the higher education system, this would result in

	A.	more physical capital deepening
	B.	less physical capital deepening
	C.	more human capital deepening
	D.	less human capital deepening

1 points

QUESTION 13

A Phillips curve shows the relationship between

	A.	output and the price level in an economy
	B.	output and the input price level
	C.	unemployment and output
	D.	unemployment and inflation

1 points

QUESTION 14

How do we measure GDP?

	A.	add up the value of raw materials, intermediate goods and final goods
	B.	add up the value of intermediate goods and final goods
	C.	add up the value of final goods
	D.	all of the above are different methods for measuring GDP

1 points

QUESTION 15

If a government wants to enact contractionary fiscal policy, then they should

	A.	decrease government spending or decrease taxes
	B.	increase government spending or increase taxes
	C.	decrease government spending or increase taxes
	D.	increase government spending or decrease taxes

1 points

QUESTION 16

Which of the following would not be included in GDP?

	A.	the cost of hospital stays
	B.	the cost of the pizza delivery guy delivering pizza
	C.	the cost of hiring a babysitter
	D.	the cost of washing your own dishes at home

1 points

QUESTION 17

If the central bank uses open market operations to sell bonds,

	A.	the money supply will increase
	B.	the money supply will decrease
	C.	the money supply is unaffected
	D.	interest rates will decrease

1 points

QUESTION 18

Data that has been adjusted for the effects of inflation is known as

	A.	price index data
	B.	nominal data
	C.	real data
	D.	natural data

1 points

QUESTION 19

Since the year 2000, the U.S. government has always been running a budget surplus.

	A.	This statement is true.
	B.	This statement is false.
	C.	The federal budget is mandated by law to be balanced.
	D.	The validity of this statement cannot be determined because the federal budget is top-secret.

1 points

QUESTION 20

A government advisor wants to know what economic laws hold in the short and long run. We can tell him that, for the most part,

	A.	Say's Law and Keynes's Law will hold in the short and long run
	B.	Say's Law and Keynes's Law do not hold in the short and the long run
	C.	Say's Law holds in the short run, and Keynes's Law holds in the long run
	D.	Say's Law holds in the long run, and Keynes's Law holds in the short run

1 points

QUESTION 21

If a government wants to enact expansionary fiscal policy, then it should

	A.	decrease government spending or decrease taxes
	B.	increase government spending or increase taxes
	C.	decrease government spending or increase taxes
	D.	increase government spending or decrease taxes

1 points

QUESTION 22

The following table shows the initial aggregate supply and demand information for a country. Assume that input prices rise and AS shifts to the left by 2,000 units at each price level. What will the new output equal?

Price Level	Aggregate Demand	Aggregate Supply
200	10,000	4,000
300	9,000	6,000
400	8,000	8,000
500	7,000	9,000
600	6,000	9,500
700	5,000	9,800
800	4,000	9,900

	A.	4,000
	B.	6,000
	C.	7,000
	D.	8,000

1 points

QUESTION 23

Which of the following is an example of a transfer payment?

	A.	Government purchases
	B.	Income taxes
	C.	Property taxes
	D.	Social Security benefits

1 points

QUESTION 24

Which of the following is not a monetary policy tool?

	A.	open market operations
	B.	reserve requirements
	C.	the discount rate
	D.	centralized bank mergers

1 points

QUESTION 25

Costa Rica has a GDP of 9 billion U.S. dollars and a population of 4 million. What is Costa Rica's per capita GDP in U.S. dollars?

	A.	550 U.S. dollars per capita
	B.	1,050 U.S. dollars per capita
	C.	2,000 U.S. dollars per capita
	D.	2,250 U.S. dollars per capita

	A.	550 U.S. dollars per capita
	B.	1,050 U.S. dollars per capita
	C.	2,000 U.S. dollars per capita
	D.	2,250 U.S. dollars per capita