Macroeconomics Quiz 6 Flashcards
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Don't agree, because there is a lot more to the study of macroeconomics than the sum of its individual microeconomic parts.
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"Macroeconomics is nothing but a simple aggregation of all the microeconomic parts." Do you or do you not agree with this statement?
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the paradox of thrift.
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If all the households and businesses in the economy start saving more during economic hard times, that results in a fall in aggregate income hurting everyone in the economy. This is known as:
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inflation, unemployment and economic growth.
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The topics studied in macroeconomics include:
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"Will an increase in the cigarette tax cause a decrease in the number of smokers?"
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Which of the following is a microeconomic question rather than a macroeconomic question?
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an effect on a country's trade balances.
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The relationships between a country's level of saving and investment have:
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greater than its level of saving.
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If a country is experiencing a trade deficit, most likely one would find that its investment spending is:
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when the value of goods and services a country imports is less than the value of goods and services it exports.
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A trade surplus occurs:
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trading with other countries makes up a portion of its economy.
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If an economy is open, this means that:
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inflation.
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When overall price levels rise over time, this is referred to as:
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long-run growth per capita.
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When an economy's overall production grows faster than its population, this is referred to as:
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tends to fall, and overall prices tend to rise.
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When an economy is in an expansion, unemployment:
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an expansion
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When an economy is operating between the business cycle trough and the business cycle peak, this is considered to be:
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short run in nature, long run in nature
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Economic recessions are _______________ and economic expansions are _______________.
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real GDP.
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When economists measure economic growth, they often use:
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25%.
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During the Great Depression, unemployment rates reached as high as:
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monetary policy.
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Changes in interest rates and the money supply in an effort to change overall spending in an economy is:
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possible and can lead to prolonged recessions.
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Keynesians argue that a lack of spending is:
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deliberate changes in taxation and/or government spending.
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Fiscal policy involves:
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are used to correct for short-term economic fluctuations.
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Fiscal and monetary policies:
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which trades goods and services with other countries.
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An open economy is an economy:
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No. Trade deficits occur when a country has higher investment spending relative to its level of saving.
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If a country has a trade deficit, does it indicate that the country has a serious problem?
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changes in the money supply.
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In the long run the overall price level is mainly determined by:
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the overall cost of living is changing very slowly.
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Price stability refers to a situation where:
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inflation causes money to lose its value over time if the overall price level is rising.
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Inflation affects people adversely because:
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slower than 3%
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If the economy grew at a 3% rate this year and average prices grew ______, people would be better off this year compared with last year.
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increased.
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If workers nominal wages have risen by 50% over a ten-year period and prices have increased by 40% in that same period, then we can safely conclude that the real wages of the workers have:
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business cycle.
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A pattern of expansion, then recession, then expansion again is a(n):
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The General Theory of Employment, Interest and Money by John Maynard Keynes.
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Economic theory in 1936 changed dramatically with the publication of:
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taxes and spending.
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Fiscal policy attempts to affect the level of overall spending in the economy by changes in:
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severe recessions.
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If macroeconomic policy has been successful over a period of time, it is likely that the economy has not seen:
