C11S : Macroeconomics
C11S : Macroeconomics
Question 1
Economics is the study of:
how to invest in the stock market.
how society uses limited resources.
the role of money in markets.
how government officials decide which goods and services are produced.
Question 2
The Law of Demand can be explained as:
a lot of people wanting the same thing.
the higher the price, the smaller the quantity demanded, ceteris paribus.
people are willing to make limited sacrifices to acquire products.
legal reasons people make purchases in the marketplace.
Question 3
The Law of Supply states that:
producers should only produce what they can sell.
producers should only sell the items when the price is right.
there is a positive relationship between price and quantity supplied, ceteris paribus.
producers are legally required to make necessary items available in the marketplace.
Question 4
Gross domestic product calculations count only final goods and services because:
these are the only goods and services that are purchased in an economy.
counting all goods and services would lead to double-counting of many activities.
it is difficult to measure the prices of intermediate goods produced.
one cannot calculate the quantities of intermediate goods produced.
Question 5
Firms consider the __________wage when considering whether to hire additional units of labor.
nominal
real
minimum
normal
Question 6
A comparison of the average growth rates across time for developed nations indicates that:
nations with lower levels of income grow more slowly than those with higher levels of income.
nations with lower levels of income will never be as rich as nations with high levels of income.
nations with high levels of income experience a continuously increasing growth rate.
nations with lower levels of income grow more quickly than those with higher levels of income.
Question 7
An increase in the income tax rate __________ the value of the tax multiplier.
has no effect on
may increase or decrease
increases
decreases
Question 8
What would be a way for the Federal Reserve to slow down the economy when it is growing too quickly or is inflationary?
Print more money
Buy back government bonds on the open market
Sell more government bonds
Encourage the stock market
Question 9
How does an increase in the money wage rate affect aggregate supply?
It decreases aggregate supply.
It increases aggregate supply.
It barely has any effect.
Since it applies to a firm’s costs, it does not affect aggregate supply.
Question 10
A decrease in the money supply causes:
a long-run decrease in the level of output.
both a long-run and short-run decrease in the level of output.
a short-run decrease in the level of output.
no changes in the level of output.
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