Macroeconomic topics do not generally include:
a. inflation.
b. aggregate demand.
c. government spending and taxation.
d. the production decisions of individual firms.
Question 2Which of the following is true of the aggregate demand curve?
a. The aggregate demand curve shows the various levels of expenditures in the economy at alternative price levels.
b. The aggregate demand curve implies a positive relationship between inflation and unemployment.
c. The aggregate demand curve is identical to the income consumption curve.
d. The aggregate demand curve has the same slope as the aggregate supply curve.
e. The aggregate demand curve relates relative prices to the quantity demanded of a particular good.
Question 3Microeconomic topics do not usually include:
a. the impact of large government budget deficits on private investment spending.
b. the determinants of the supply of wheat by farmers.
c. the determinants of the demand for DVD players by consumers.
d. the impact of a change in the price of leather used to manufacture shoes.
Question 4Which of the following is most likely to lead to an economic contraction?
a. A decrease in the average price level
b. An increase in aggregate supply
c. A decrease in aggregate demand
d. A decrease in taxes
e. An increase in transaction demand for money
Question 5Macroeconomics:
a. is narrower in scope than microeconomics.
b. analyzes mergers and acquisitions between firms.
c. is concerned with the expansion and contraction of the overall economy.
d. is primarily concerned with the decisions of individual households.
Question 6Which of the following is an incorrect statement?
a. Macroeconomic equilibrium occurs at the intersection of the aggregate demand and aggregate supply curves.
b. The aggregate supply curve indicates a positive relationship between the price level and GDP.
c. Other things equal, a downward shift of the aggregate demand curve implies that the economy is entering a contractionary phase.
d. Aggregate demand and aggregate supply determine the equilibrium price and quantity of any given good.
e. The aggregate demand curve indicates a negative relationship between the price level and GDP.
Question 7The branch of economics that studies the economy as a whole is:
a. normative economics.
b. positive economics.
c. microeconomics.
d. macroeconomics.
Question 8Aggregate demand represents the _____ at alternative price levels.
a. total spending in the economy
b. total saving in the economy
c. total money demand in the economy
d. total output of the economy
e. total money supply in the economy
Question 9Microeconomic topics do not usually include:
a. how wages are determined in the labor market.
b. the magnitude of national income.
c. how firms choose output to maximize profits.
d. how consumers maximize utility subject to a budget constraint.
Question 10Business cycles are linked to the interaction between:
a. the foreign exchange rate and the balance of payments account.
b. the aggregate demand and aggregate supply curves.
c. the demand and supply curves for a particular good.
d. the substitution and the wealth effect.
e. the long-run aggregate supply curve and the aggregate resource curve.
Question 11The branch of economics that focuses on the conduct of affairs within narrowly defined units, such as households or business firms, is called:
a. macroeconomics.
b. microeconomics.
c. socioeconomics.
d. applied economics.
Question 12Hyperinflation is usually accompanied by a great macroeconomic expansion.
a. True
b. False
Indicate whether the statement is true or false
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