MCQ MacroEconomics

Questions and Answers y y




Chapter 1 y



Q1:yMCQ
1. Macroeconomicsyapproachesytheystudyyofyeconomicsyfromytheyviewpointyof:

A) theyentireyeconomy.
B) governmentalyunits.
C) theyoperationyofyspecificyproductyandyresourceymarkets.
D) individualyfirms.
Answer:yA

2. Whichyofytheyfollowingyisyassociatedywithymacroeconomics?

A) anyexaminationyofytheyincomesyofyHarvardyBusinessySchoolygraduates
B) anyempiricalyinvestigationyofytheygeneralypriceylevelyandyunemploymentyratesysincey1990
C) aystudyyofytheytrendyofypecanypricesysinceytheySecondyWorldyWar
D) aycaseystudyyofypricingyandyproductionyinytheytextbookyindustry
yAnswer:yB



3. Theyproblemsyofyaggregateyinflationyandyunemploymentyare:

A) majorytopicsyofymacroeconomics.yC)ymajorytopicsyofymicroeconomics.
B) notyrelevantytoytheyU.S.yeconomy.yD)ypeculiarytoycommandyeconomies.
yAnswer:yA



4. Whichyofytheyfollowingystatementsypertainsytoymacroeconomics?

A) Becauseytheyminimumywageywasyraised,yMrs.yOlsenydecidedytoyenterytheylaboryforce.
B) AydeclineyinytheypriceyofysoybeansycausedyfarmeryWanekytoyplantymoreylandyinywheat.
C) Theynationalyproductivityyrateygrewybyy2.7ypercentylastyyear.
D) TheyPumpkinyCenteryStateyBankyincreasedyitsyinterestyrateyonyconsumeryloansybyy1
ypercentageypoint.

Answer:yC

5. Macroeconomicsycanybestybeydescribedyasythe:

A) analysisyofyhowyayconsumerytriesytoyspendyincome.
B) studyyofytheylargeyaggregatesyofytheyeconomyyorytheyeconomyyasyaywhole.
C) analysisyofyhowyfirmsyattemptytoymaximizeytheiryprofits.
D) studyyofyhowysupplyyandydemandydetermineypricesyinyindividualymarkets.
yAnswer:yB



6. NominalyGDPyis:

A) theysumyofyallymonetaryytransactionsythatyoccuryinytheyeconomyyinyayyear.


1 PrinciplesyofyMacroeconomics-
yChaptery1

, B) theysumyofyallymonetaryytransactionsyinvolvingyfinalygoodsyandyservicesythatyoccuryinythe
yeconomyyinyayyear.

C) theyamountyofyproductionythatyoccursywhenytheyeconomyyisyoperatingyatyfull
yemployment.

D) moneyyGDPyadjustedyforyinflation.
yAnswer:yB



7. RealyGDPyrefersyto:

A) theyvalueyofytheydomesticyoutputyafteryadjustmentsyhaveybeenymadeyforyenvironmental
ypollutionyand

changesyinytheydistributionyofyincome.
B) GDPydataythatyembodyychangesyinytheypriceylevel,ybutynotychangesyinyphysicalyoutput.
C) GDPydataythatyreflectychangesyinybothyphysicalyoutputyandytheypriceylevel.
D) GDPydataythatyhaveybeenyadjustedyforychangesyinytheypriceylevel.
yAnswer:yD



8. RealyGDPymeasures:

A) currentyoutputyatycurrentyprices.yC)ybaseyyearyoutputyatycurrentyprices.
B) currentyoutputyatybaseyyearyprices.yD)ybaseyyearyoutputyatycurrentyexchangeyrates.
yAnswer:yB



9. NominalyGDPyisyadjustedyforypriceychangesythroughytheyuseyof:

A) theyConsumeryPriceyIndexy(CPI).yC)ytheyGDPypriceyindex.
B) theyProduceryPriceyIndexy(PPI).yD)yexchangeyrates.
yAnswer:yC



10. Aypriceyindexyis:

A) aycomparisonyofytheypriceyofyaymarketybasketyfromyayfixedypointyofyreference.
B) aycomparisonyofyrealyGDPyinyoneyperiodyrelativeytoyanother.
C) theycostyofyaymarketybasketyofygoodsyandyservicesyinyaybaseyperiodydividedybyytheycostyof
ytheysameymarketybasketyinyanotheryperiod.

D) ayratioyofyrealyGDPytoynominalyGDP.
yAnswer:yA



11. TheyGDPypriceyindex:

A) includesyfewerygoodsyandyservicesythanytheyconsumerypriceyindex.
B) isyidenticalytoytheyconsumerypriceyindex.
C) isyanotherytermyforytheyproducerypriceyindex.
D) includesyallygoodsycomprisingytheynation'sydomesticyoutput.
yAnswer:yD



12. IfyrealyGDPyfallsyfromyoneyperiodytoyanother,yweycanyconcludeythat:

A) deflationyoccurred. C)ynominalyGDPyfell.
B) inflationyoccurred.
D)ynoneyofytheyaboveynecessarilyyoccurred.yAnswer:yD


2 PrinciplesyofyMacroeconomics-
yChaptery1