What Macroeconomics Is All About

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Question 1
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Multiple Choice

Macroeconomics is mainly concerned with the study of

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A

individual households and how they deal with problems like inflation and unemployment.

B

large economic units such as General Motors or Molson Breweries.

C

fluctuations and trends in disaggregated data.

D

fluctuations and trends in aggregated data.

E

governments and their intervention in individual markets.

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Question 2
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Multiple Choice

An example of a topic outside the scope of macroeconomics is

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A

changes in the price of a particular good in a specific market.

B

changes in the unemployment rate.

C

the aggregate growth rate of the economy.

D

the overall level of unemployment.

E

the level of productivity,as compared with that in the United States.

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Question 3
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Multiple Choice

An equivalent term for "real national income" is

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A

nominal national income.

B

current-dollar national income.

C

constant-dollar national income.

D

actual national income.

E

potential national income.

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Question 4
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Multiple Choice

A nation's real national income in a given year measures the

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A

dollar income earned by the nation's producing sector.

B

value of output produced by the economy,measured in constant dollars.

C

level of national income that is subject to taxation by the federal government.

D

market value of national output produced by the economy.

E

opportunity cost of the economy's national output.

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Question 5
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Multiple Choice

Which of the following is an accurate statement about real national income?

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A

it always equals nominal national income

B

it changes by the same amount and in the same direction as does nominal national income

C

it changes only when the underlying quantities change

D

it refers to national income with no adjustment for changes in prices

E

it refers to national wealth but is not an indicator of current production

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Question 6
Multiple Choice

In macroeconomics,the term "national income" refers to

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A
all sales of both current production and used goods.
B
only those sales of currently produced goods sold to other nations.
C
the value of a nation's total wealth.
D
the value of the income generated by the production of total output.
E
total current spending by all households.
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Question 7
Multiple Choice

An upward trend in real national income over an extended period of time is called

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A
an inflationary boom.
B
aggregate output.
C
constant-dollar national income.
D
potential national income.
E
economic growth.
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Question 8
Multiple Choice

Suppose that in 2016 Canada's automobile manufacturers produced 2 million cars priced at $20 000 each.And in 2017 they produced 1 million cars priced at $40 000 each.Ceteris paribus,the change in nominal national income is

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A
a decrease because fewer cars were produced.
B
an increase because the price of each car increased.
C
insufficient information to know.
D
no change in nominal national income.
E
an increase because of inflation.
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Question 9
Multiple Choice

Suppose Honest Rob's Used Cars buys a used car for $2000 and resells it for $3000.The result of Honest Rob's transactions is to

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A
decrease the value of national income by $3000.
B
decrease the value of national income by $1000.
C
leave the value of national income unchanged.
D
increase the value of national income by $1000.
E
increase the value of national income by $3000.
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Question 10
Multiple Choice

To compare the economy's aggregate output in two different time periods,economists compare the

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A
nominal national income for the two periods.
B
potential national incomes for the two periods.
C
real national income for the two periods.
D
unemployment rates for the two periods.
E
inflation rates for the two periods.
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Question 11
Multiple Choice

In order to determine the economy's real GDP growth rate between two time periods,we should look at

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A
nominal national income,because it compares actual output in each time period.
B
real national income in each time period,which is equal to nominal national income corrected for price-level changes.
C
potential national income,corrected for price-level changes.
D
real national income in each period,which is equal to nominal national income corrected for quantity changes.
E
only the real national product from the latest time period.
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Question 12
Multiple Choice

In macroeconomics,if the value of the national product increases,there is

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A
an even larger increase in the value of income claims on that output,due to value added.
B
a decrease in value of income claims on that output,due to taxation.
C
a decrease in the value of income claims on that output,due to importing.
D
a decrease in the value of income claims on that output,due to household saving.
E
an equal increase in the value of income claims on that output.
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Question 13
Multiple Choice

Suppose Appliance Mart buys a used refrigerator for $100,repairs it,and resells it for $250.The result of this transaction is to

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A
increase the value of national product by $250.
B
leave the value of national product unchanged.
C
increase the value of national product by $150.
D
decrease the value of national product by $100.
E
There is insufficient information to know.
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Question 14
Multiple Choice

Real GDP measures

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A
the constant-dollar value of the potential output of the nation's economy over the period of one year.
B
the quantity of total output produced by the nation's economy over the period of one year.
C
the fluctuations of national income around its long-term trend.
D
the annual growth rate of real national income.
E
the long-term trend in total output produced by the nation's economy.
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Question 15
Multiple Choice

Consider a small economy with 3 individuals where each individual produces and sells $1000 worth of final goods and services.The national income for this economy is

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A
$3000.
B
less than $3000 if some of the income is saved.
C
more than $3000 if some of the income is invested.
D
less than $3000 if there are taxes in this economy.
E
more than $3000 if the individuals are earning profits.
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Question 16
Multiple Choice

Consider a small economy with 3 individuals.Individual A produces 100 chickens that sell for $8 each.Individual B produces 50 bags of corn that sell for $10 each.Individual C produces 40 bushels of apples that sell for $20 each.National product in this economy is

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A
100 chickens plus 50 bags of corn plus 40 bushels of apples.
B
190 units of goods produced.
C
$2100.
D
$2470.
E
Not determinable from the information provided.
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Question 17
Multiple Choice

Which of the following is the best description of the business cycle?

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A
the normal cycle of profits and losses by producers in the economy
B
the short-run fluctuations of national income around its trend value
C
a five-year period designed for national accounting purposes to capture the normal cycle of recession periods and boom periods
D
a ten-year period designed for national accounting purposes to capture the normal cycle of recession periods and boom periods
E
the fluctuations of one country's national income in comparison to another country's national income
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Question 18
Multiple Choice

What is potential or full-employment output?

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A
the maximum GDP that an economy actually achieves throughout its entire history
B
achieved during periods when all of the labour force is employed
C
a goal that can never be achieved by the economy
D
the GDP that would be produced if the economy's resources were fully employed at a normal intensity of use
E
the GDP that could be produced if the economy's resources were fully employed at their maximum intensity of use
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Question 19
Multiple Choice

Which of the following is an equivalent term for "full-employment output"?

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A
actual output
B
long-run output
C
gross national product (GNP)
D
gross domestic product (GDP)
E
potential output
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Question 20
Multiple Choice

In macroeconomics,the "output gap" is the difference between

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A
output in the current year and output in the base year.
B
output and employment.
C
potential real national income and actual real national income.
D
real GNP and real GDP.
E
real and nominal national income.
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