ch 1 quiz – Macroeconomics – Flashcards
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Which of the following best denotes the reason for the existence of substantial black markets?
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a command economy
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what best characterizes the circular flow of income?
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businesses buy resources from households, and households use their income from the sale of resources to buy goods and services from businesses
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what lies primarily within the realm of macroeconomics?
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a study of how tax cuts stimulate aggregate production
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what best describes a fiscal policy tool?
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government spending
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in a ____, most economic decisions about what to produce, how to produce it, and for whom to produce it are made by buyers and sellers.
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market-oriented economy
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What is concerned with the expansion and contraction of the overall economy
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marcoeconomics
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Regardless of whether you are looking through the microeconomics microscope or the macroeconomics telescope, the fundamental subject material of the interconnected ___ doesn't change.
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economy
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what is most likely a topic of discussion in macroeconomics?
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a decrease in employment rate
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when nations desire a healthy macro economy, they typically focus on three goals, one of these being
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low inflation
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_______- a term referring to the fact that for many goods, as the level of production increases, the average cost of producing each individual unit declines
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economies of scale
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the two main tools of macroeconomic policy include monetary policy, and fiscal policy, which involves ____ spending.
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government
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The basic difference between macroeconomics and microeconomics is that
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micro is concerned with the trees (individual markets) while macro is concerned with the forest (aggregate markets)
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in a command economy, the ____ either makes most economic decisions itself or at least strongly influences how the decisions are made
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government
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in the circular flow diagram model
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households receive income from businesses in exchange for providing inputs and use that income to buy goods and services from businesses. Businesses receive revenues from households in exchange for providing goods and services and use those revenues to buy inputs from households
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Because of their relatively small national economies, which of the following is most likely considered to be the most important factor for Belgium, Korea, and Canada to take full advantage of specialization?
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international trade
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In a market-oriented economy, the amount of a good that is produced is primarily decided by the interaction of
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buyers and sellers
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macroeconomics primarily examines
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broad issues such as national output, employment, and inflation
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In the first chapter of The Wealth of Nations, Smith introduces the idea of the ____, which means the way in which the work required to produce a good of service is divided into a number of tasks that are performed by different workers.
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division of labor
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Macro topics do not usually include:
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the profit maximizing decisions of an individual manufaturer
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In the _____, households receive goods and services and pay firms for them
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goods and services market
