MACROECONOMICS 8TH EDITION OLIVIER
BLANCHARD TEST BANK ALL CHAPTERS
100% ORIGINAL VERIFIED PRACTICE
SCRIPT UPDATED 2026 TESTED SOLUTIONS
⫸ 2. The presence of discouraged workers:
A. reduces the size of the labor force but does not affect the
unemployment rate.
B. may cause the official unemployment rate to understate the true
amount of unemployment.
C. increases the size of the labor force but does not affect the
unemployment rate.
D. may cause the official unemployment rate to overstate the true
amount of unemployment. Answer: B. may cause the official
unemployment rate to understate the true amount of unemployment.
⫸ 3. If Carol's disposable income increases from $1,200 to $1,700 and
her level of saving increases from minus $100 to a plus $100, her
marginal propensity to:
A. consume is one-sixth.
,B. save is three-fifths.
C. consume is one-half.
D. consume is three-fifths. Answer: D. consume is three-fifths.
⫸ 4. Which of the following transactions would be included in GDP?
A. Olivia receives a tax refund of $500.
B. Nick buys $5000 worth of stock in Microsoft.
C. Peter buys a newly constructed house.
D. Mary buys a used book for $5 at a garage sale. Answer: C. Peter buys
a newly constructed house.
⫸ 5. Suppose the government purposely changes the economy's
standardized budget from a deficit of 3 percent of real GDP to a surplus
of 1 percent of real GDP. The government is engaging in a(n):
A. expansionary fiscal policy.
B. neutral fiscal policy.
, C. contractionary fiscal policy.
D. high-interest rate policy. Answer: C. contractionary fiscal policy.
⫸ 6. The production of durable goods varies more than the production
of nondurable goods because:
A. the producers of nondurables have monopoly power.
B. producers of durables are highly competitive.
C. durables purchases are postponable.
D. durables purchases are nonpostponable. Answer: C. durables
purchases are postponable.
⫸ 7. Why are economists concerned about inflation?
A. Inflation increases the value of peoples' saving and encourages
overspending on goods and services.
B. Inflation generally causes unemployment rates to rise.
BLANCHARD TEST BANK ALL CHAPTERS
100% ORIGINAL VERIFIED PRACTICE
SCRIPT UPDATED 2026 TESTED SOLUTIONS
⫸ 2. The presence of discouraged workers:
A. reduces the size of the labor force but does not affect the
unemployment rate.
B. may cause the official unemployment rate to understate the true
amount of unemployment.
C. increases the size of the labor force but does not affect the
unemployment rate.
D. may cause the official unemployment rate to overstate the true
amount of unemployment. Answer: B. may cause the official
unemployment rate to understate the true amount of unemployment.
⫸ 3. If Carol's disposable income increases from $1,200 to $1,700 and
her level of saving increases from minus $100 to a plus $100, her
marginal propensity to:
A. consume is one-sixth.
,B. save is three-fifths.
C. consume is one-half.
D. consume is three-fifths. Answer: D. consume is three-fifths.
⫸ 4. Which of the following transactions would be included in GDP?
A. Olivia receives a tax refund of $500.
B. Nick buys $5000 worth of stock in Microsoft.
C. Peter buys a newly constructed house.
D. Mary buys a used book for $5 at a garage sale. Answer: C. Peter buys
a newly constructed house.
⫸ 5. Suppose the government purposely changes the economy's
standardized budget from a deficit of 3 percent of real GDP to a surplus
of 1 percent of real GDP. The government is engaging in a(n):
A. expansionary fiscal policy.
B. neutral fiscal policy.
, C. contractionary fiscal policy.
D. high-interest rate policy. Answer: C. contractionary fiscal policy.
⫸ 6. The production of durable goods varies more than the production
of nondurable goods because:
A. the producers of nondurables have monopoly power.
B. producers of durables are highly competitive.
C. durables purchases are postponable.
D. durables purchases are nonpostponable. Answer: C. durables
purchases are postponable.
⫸ 7. Why are economists concerned about inflation?
A. Inflation increases the value of peoples' saving and encourages
overspending on goods and services.
B. Inflation generally causes unemployment rates to rise.
