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Macroeconomics is mostly focused on

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the economy as a whole

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The two topics of primary concern in macroeconomics are

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short run fluctuations in output and employment and long run economic growth

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The business cycle depicts

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short run fluctuations in output and employment

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Which of the following is most closely related to recessions

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Negative real growth in output

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Real GDP measures the

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value of final goods and services produced within the borders of a country, corrected for price changes

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Real GDP is preferred to to nominal GDP as a measure of economic performance because

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nominal GDP uses current prices and thus may over or understate true changes in output

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Harry's Pepperoni Pizza Parlor produced 10,000 large pepperoni pizzas last year that sold for $10 each. This year Harry's again produced 10,000 large pepperoni pizzas (identical to last year's pizzas) but sold them for $12 each. Based on this information we can conclude that Harry's production of large pepperoni pizzas:

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increased nominal GDP from last year, but real GDP was unaffected.

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Harry's Pepperoni Pizza Parlor produced 10,000 large pepperoni pizzas last year that sold for $10 each. This year Harry's again produced 10,000 large pepperoni pizzas (identical to last year's pizzas) but sold them for $12 each. Based on this information we can conclude that Harry's production of large pepperoni pizzas this year:

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increased nominal GDP by $20,000 but left real GDP unchanged.

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Unemployment describes the condition where:

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a person cannot get a job but is willing to work and is actively seeking work.

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Inflation is defined as:

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an increase in the overall level of prices.

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The three statistics that are the main focus for those measuring macroeconomic health are:

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real GDP, inflation, and unemployment.

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Before the period of modern economic growth

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rates of population growth virtually matched rates of output growth.

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In making international comparisons of living standards using GDP, which of the following is not adjusted for in the calculation?

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The quantity of resources available to the economy.

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Which of the following is used to measure directly the average standard of living across countries?

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GDP per person.

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When economists refer to "investment," they are describing a situation where:

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resources are devoted to increasing future output.

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If an economy wants to increase its current level of investment, it must:

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sacrifice current consumption.

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For economists, the word "utility" means:

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pleasure or satisfaction.

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When economists say that people act rationally in their self-interest, they mean that individuals:

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look for and pursue opportunities to increase their utility.

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According to economists, economic self-interest:

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is a reality that underlies economic behavior.

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A person should consume more of something when its marginal:

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benefit exceeds its marginal cost.

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Purposeful behavior suggests that:

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individuals may make different choices because of different desired outcomes.

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Economics involves marginal analysis because:

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most decisions involve changes from the present situation.

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Opportunity costs exist because:

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the decision to engage in one activity means forgoing some other activity.

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Consumers spend their incomes to get the maximum benefit or satisfaction from the goods and services they purchase. This is a reflection of:

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purposeful behavior.

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Even though local newspapers are very inexpensive, people rarely buy more than one of them each day. This fact:

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implies that, for most people, the marginal benefit of reading a second newspaper is less than the marginal cost.

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Which one of the following expressions best states the idea of opportunity cost?

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"There is no such thing as a free lunch."

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Which of the following most closely relates to the idea of opportunity costs?

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trade offs

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The amount of pizzas that consumers want to buy per week is reflected in the equation P = 15 - .02Qd, where Qd is the amount of pizzas purchased per week and P is the price of pizzas. On the basis of this information we can say that:

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50 fewer pizzas will be purchased per week for every $1 increase in price.

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Refer to the diagram. The slope of curve ZZ at point B is:

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zero.

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Refer to the diagram. The slope of curve ZZ at point C is approximately:

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-2^2/5

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The slope of a line parallel to the vertical axis is:

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infinite

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The slope of a line parallel to the horizontal axis is:

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zero

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Which of the following is a distinguishing feature of a command system?

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Central planning

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Which of the following is a distinguishing feature of laissez-faire capitalism?

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Minimal government intervention.

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Of the following countries, which one best exhibits the characteristics of a market economy?

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Canada

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An economic system:

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is a particular set of institutional arrangements and a coordinating mechanism used to respond to the economizing problem.

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Economic systems differ according to which two main characteristics?

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Who owns the factors of production and the methods used to coordinate economic activity.

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A fundamental difference between the command system and laissez-faire capitalism is that, in command systems:

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the division of output is decided by central planning rather than by individuals operating freely through markets.

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A market:

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is an institution that brings together buyers and sellers.

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The demand curve shows the relationship between:

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price and quantity demanded.

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Economists use the term "demand" to refer to:

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a schedule of various combinations of market prices and amounts/quantities demanded.

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The relationship between quantity supplied and price is _____ and the relationship between quantity demanded and price is _____.

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direct; inverse

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When the price of a product increases, a consumer is able to buy less of it with a given money income. This describes the:

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income effect.

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A demand curve:

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indicates the quantity demanded at each price in a series of prices.

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In presenting the idea of a demand curve, economists presume the most important variable in determining the quantity demanded is:

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the price of the product itself.

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The income and substitution effects account for:

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the downward-sloping demand curve.

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When the price of a product falls, the purchasing power of our money income rises and thus permits consumers to purchase more of the product. This statement describes:

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the income effect.

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The construction of demand and supply curves assumes that the primary variable influencing decisions to produce and purchase goods is:

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price

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When the price of Nike soccer balls fell, Ronaldo purchased more Nike soccer balls and fewer Adidas soccer balls. Which of the following best explains Ronaldo's decision to buy more Nike soccer balls?

answer

The substitution effect.

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