TEST BANK
MACRO ECONOMICS
, Macroeconomics, 11th Edition Abel [All Lessons
Included]
Complete Chapter Solution Manual
are Included (Ch.1 to Ch.15)
Rapid Download
Quick Turnaround
Complete Chapters Provided
, Table Of Contents
Part 1: Introduction
1. Introduction To Macroeconomics
2. The Measurement And Structure Of The National Economy
Part 2: Long-Run Economic Performance
3. Productivity, Output, And Employment
4. Consumption, Saving, And Investment
5. Saving And Investment In The Open Economy
6. Long-Run Economic Growth
7. The Asset Market, Money, And Prices
Part 3: Business Cycles And Macroeconomic Policy
8. Business Cycles
9. The IS–LM/AD–AS Model: A General Framework For Macroeconomic Analysis
10. Classical Business Cycle Analysis: Market-Clearing Macroeconomics
11. Keynesianism: The Macroeconomics Of Wage And Price Rigidity
Part 4: Macroeconomic Policy: Its Environment And Institutions
12. Unemployment And Inflation
13. Exchange Rates, Business Cycles, And Macroeconomic Policy In The Open Economy
14. Monetary Policy And The Federal Reserve System
15. Government Spending And Its Financing
.
PAGE 3
,CHAPTER 1: INTRODUCTION TO MACROECONOMICS (30 QUESTIONS)
1. Which Of The Following Best Describes The Scope Of Macroeconomics?
A) It Studies Individual Consumers And Firms.
B) It Focuses On The Behavior Of Large Corporations Only.
C) It Examines National Economic Aggregates And Overall Economic Performance.
D) It Only Deals With The Study Of Inflation.
Answer: C
Explanation: Microeconomics Studies Individual Agents, Whereas Macroeconomics Looks At Aggregates
(GDP, Inflation, Unemployment, Etc.) At The National Or Global Level.
2. A Primary Concern Of Macroeconomics Is:
A) Determination Of A Firm’s Profit-Maximizing Output.
B) Understanding How Individual Preferences Affect Consumption Of Specific Goods.
C) Analysis Of The Overall Price Level And National Output.
D) Market Structure And Firm Behavior In Oligopolies.
Answer: C
Explanation: While Microeconomics Focuses On Individual Markets, Macroeconomics Deals With Broad
Indicators Such As Aggregate Price Levels (Inflation) And National Output (GDP).
3. Which Of The Following Is A Key Macroeconomic Goal?
A) Minimizing The Costs Of Production For Individual Firms.
PAGE 4
,B) Achieving High And Stable Rates Of Economic Growth.
C) Maximizing The Utility Of Individual Consumers.
D) Managing The Internal Organization Of Firms.
Answer: B
Explanation: Major Macroeconomic Policy Goals Typically Include Stable Growth, Low Unemployment,
And Stable Prices.
4. The Difference Between ―Positive‖ And ―Normative‖ Economics Is Best Described As:
A) Positive Economics Deals With Value Judgments; Normative Economics Deals With Facts.
B) Positive Economics Deals With ―What Is‖; Normative Economics Deals With ―What Ought To Be.‖
C) They Are The Same Thing In Macroeconomics.
D) Normative Economics Is Always Wrong.
Answer: B
Explanation: Positive Economics Analyzes Facts And Cause-Effect Relationships; Normative Economics
Incorporates Value Judgments And Policy Recommendations.
5. Macroeconomists Rely On Models Primarily To:
A) Predict Precise Future Economic Events Without Error.
B) Simplify Complex Real-World Phenomena Into Core Relationships.
C) Eliminate The Role Of Assumptions In Economics.
D) Ensure That Economic Policies Never Fail.
Answer: B
Explanation: Economic Models Are Abstractions Designed To Highlight The Most Important Relationships
And Simplify The Complex Real-World Economy.
PAGE 5
,6. An Exogenous Variable In A Macroeconomic Model Is:
A) Determined Within The Model.
B) Determined By Forces Outside The Model.
C) Always Constant Over Time.
D) Unrelated To Any Real-World Data.
Answer: B
Explanation: Exogenous Variables Come From Outside The Model And Are Taken As Given, Whereas
Endogenous Variables Are Determined By The Model Itself.
PAGE 6
,7. In The Short Run, Macroeconomists Tend To Be More Concerned With:
A) The Classical Dichotomy.
B) Business Cycle Fluctuations In Output And Employment.
C) Only The Long-Term Growth Rate Of The Economy.
D) Rapid Technological Change.
Answer: B
Explanation: The Short-Run Approach Emphasizes Business Cycles And Short-Term Changes In Output And
Employment, Whereas Long-Run Analysis Focuses On Growth Trends.
8. Business Cycles Refer To:
A) Seasonal Fluctuations In Agricultural Output.
B) Recurring Periods Of Expansions And Recessions In The Economy.
C) The Daily Fluctuations Of Stock Prices.
D) One-Time Downturns In An Economy Due To Specific Events.
Answer: B
Explanation: Business Cycles Are Expansions (Booms) And Recessions (Contractions) In Aggregate
Economic Activity Over Time.
9. Which Of The Following Is NOT Typically A Macroeconomic Policy Tool?
A) Fiscal Policy
B) Monetary Policy
C) Price Discrimination
D) Government Spending And Taxation
PAGE 7
,Answer: C
Explanation: Price Discrimination Is A Microeconomic Concept. Fiscal (Government Spending/Taxes) And
Monetary (Central Bank Actions) Policies Are Macro Tools.
10. In Classical Macroeconomic Theory, Markets:
A) Do Not Adjust And Require Government Intervention.
B) Are Always In Disequilibrium.
C) Tend To Clear Through Flexible Prices And Wages.
D) Are Regulated By Labor Unions Alone.
Answer: C
Explanation: The Classical Approach Assumes That Wages And Prices Are Flexible, Leading To Market
Clearing In The Long Run.
11. According To Keynesian Economics, Recessions Often Occur Because:
A) Prices And Wages Adjust Instantly To Clear Markets.
B) Aggregate Demand Can Fall Below The Economy’s Capacity To Produce.
C) The Government Always Balances Its Budget.
D) Households And Firms Have No Impact On The Macroeconomy.
Answer: B
Explanation: Keynes Emphasized That Insufficient Aggregate Demand Can Lead To Underemployment And
Recessions, And That Prices/Wages May Be Sticky In The Short Run.
PAGE 8
,12. Monetary Policy Is Primarily Conducted By:
A) Congress Or The Legislative Branch.
B) The Country’s Central Bank (E.G., Federal Reserve).
C) Individual Commercial Banks.
D) Private Corporations.
Answer: B
Explanation: Central Banks (Like The Federal Reserve In The U.S.) Set Monetary Policy Via Interest Rates,
Open Market Operations, Etc.
13. Which Of The Following Is An Example Of A Normative Economic Statement?
A) ―The Unemployment Rate Is Currently 5%.‖
B) ―Reducing Inflation Often Requires Higher Interest Rates.‖
C) ―The Government Should Aim For Lower Unemployment Than It Does Now.‖
D) ―Net Exports Increased Last Quarter.‖
Answer: C
Explanation: Normative Statements Involve Value Judgments (What Should Be). ―Should‖ Is A Strong
Indicator Of Normative Content.
14. An Increase In Aggregate Demand In The Short Run Tends To:
A) Decrease Real GDP And Increase Unemployment.
B) Increase Real GDP And Decrease Unemployment.
C) Have No Effect On Real GDP.
D) Instantly Reduce The Price Level.
PAGE 9
, Answer: B
Explanation: In The Short Run, An Increase In Aggregate Demand Typically Raises Output And Employment (Lowe
Unemployment).
15. Economists Use The Concept Of Ceteris Paribus To:
A) Include Every Variable In A Complex Model.
B) Simplify Analysis By Holding Other Factors Constant.
C) Prove That Macroeconomics Is Always Correct.
D) Eliminate The Role Of Theory In Economics.
Answer: B
Explanation: ―Ceteris Paribus‖ Means ―All Other Things Being Equal,‖ Allowing Economists To Focus On
One Relationship At A Time.
16. If A Macroeconomic Model Assumes Wage Stickiness, It Implies:
A) Wages Are Very Flexible In The Short Run.
B) Wages Do Not Adjust Immediately To Shifts In Labor Demand Or Supply.
C) Wages Are Never Influenced By Supply And Demand.
D) Unemployment Cannot Exist.
Answer: B
Explanation: Sticky Wages Mean Wages Are Slow To Adjust, Creating Short-Run Unemployment Or Labor Market
Imbalances.
PAGE
10
MACRO ECONOMICS
, Macroeconomics, 11th Edition Abel [All Lessons
Included]
Complete Chapter Solution Manual
are Included (Ch.1 to Ch.15)
Rapid Download
Quick Turnaround
Complete Chapters Provided
, Table Of Contents
Part 1: Introduction
1. Introduction To Macroeconomics
2. The Measurement And Structure Of The National Economy
Part 2: Long-Run Economic Performance
3. Productivity, Output, And Employment
4. Consumption, Saving, And Investment
5. Saving And Investment In The Open Economy
6. Long-Run Economic Growth
7. The Asset Market, Money, And Prices
Part 3: Business Cycles And Macroeconomic Policy
8. Business Cycles
9. The IS–LM/AD–AS Model: A General Framework For Macroeconomic Analysis
10. Classical Business Cycle Analysis: Market-Clearing Macroeconomics
11. Keynesianism: The Macroeconomics Of Wage And Price Rigidity
Part 4: Macroeconomic Policy: Its Environment And Institutions
12. Unemployment And Inflation
13. Exchange Rates, Business Cycles, And Macroeconomic Policy In The Open Economy
14. Monetary Policy And The Federal Reserve System
15. Government Spending And Its Financing
.
PAGE 3
,CHAPTER 1: INTRODUCTION TO MACROECONOMICS (30 QUESTIONS)
1. Which Of The Following Best Describes The Scope Of Macroeconomics?
A) It Studies Individual Consumers And Firms.
B) It Focuses On The Behavior Of Large Corporations Only.
C) It Examines National Economic Aggregates And Overall Economic Performance.
D) It Only Deals With The Study Of Inflation.
Answer: C
Explanation: Microeconomics Studies Individual Agents, Whereas Macroeconomics Looks At Aggregates
(GDP, Inflation, Unemployment, Etc.) At The National Or Global Level.
2. A Primary Concern Of Macroeconomics Is:
A) Determination Of A Firm’s Profit-Maximizing Output.
B) Understanding How Individual Preferences Affect Consumption Of Specific Goods.
C) Analysis Of The Overall Price Level And National Output.
D) Market Structure And Firm Behavior In Oligopolies.
Answer: C
Explanation: While Microeconomics Focuses On Individual Markets, Macroeconomics Deals With Broad
Indicators Such As Aggregate Price Levels (Inflation) And National Output (GDP).
3. Which Of The Following Is A Key Macroeconomic Goal?
A) Minimizing The Costs Of Production For Individual Firms.
PAGE 4
,B) Achieving High And Stable Rates Of Economic Growth.
C) Maximizing The Utility Of Individual Consumers.
D) Managing The Internal Organization Of Firms.
Answer: B
Explanation: Major Macroeconomic Policy Goals Typically Include Stable Growth, Low Unemployment,
And Stable Prices.
4. The Difference Between ―Positive‖ And ―Normative‖ Economics Is Best Described As:
A) Positive Economics Deals With Value Judgments; Normative Economics Deals With Facts.
B) Positive Economics Deals With ―What Is‖; Normative Economics Deals With ―What Ought To Be.‖
C) They Are The Same Thing In Macroeconomics.
D) Normative Economics Is Always Wrong.
Answer: B
Explanation: Positive Economics Analyzes Facts And Cause-Effect Relationships; Normative Economics
Incorporates Value Judgments And Policy Recommendations.
5. Macroeconomists Rely On Models Primarily To:
A) Predict Precise Future Economic Events Without Error.
B) Simplify Complex Real-World Phenomena Into Core Relationships.
C) Eliminate The Role Of Assumptions In Economics.
D) Ensure That Economic Policies Never Fail.
Answer: B
Explanation: Economic Models Are Abstractions Designed To Highlight The Most Important Relationships
And Simplify The Complex Real-World Economy.
PAGE 5
,6. An Exogenous Variable In A Macroeconomic Model Is:
A) Determined Within The Model.
B) Determined By Forces Outside The Model.
C) Always Constant Over Time.
D) Unrelated To Any Real-World Data.
Answer: B
Explanation: Exogenous Variables Come From Outside The Model And Are Taken As Given, Whereas
Endogenous Variables Are Determined By The Model Itself.
PAGE 6
,7. In The Short Run, Macroeconomists Tend To Be More Concerned With:
A) The Classical Dichotomy.
B) Business Cycle Fluctuations In Output And Employment.
C) Only The Long-Term Growth Rate Of The Economy.
D) Rapid Technological Change.
Answer: B
Explanation: The Short-Run Approach Emphasizes Business Cycles And Short-Term Changes In Output And
Employment, Whereas Long-Run Analysis Focuses On Growth Trends.
8. Business Cycles Refer To:
A) Seasonal Fluctuations In Agricultural Output.
B) Recurring Periods Of Expansions And Recessions In The Economy.
C) The Daily Fluctuations Of Stock Prices.
D) One-Time Downturns In An Economy Due To Specific Events.
Answer: B
Explanation: Business Cycles Are Expansions (Booms) And Recessions (Contractions) In Aggregate
Economic Activity Over Time.
9. Which Of The Following Is NOT Typically A Macroeconomic Policy Tool?
A) Fiscal Policy
B) Monetary Policy
C) Price Discrimination
D) Government Spending And Taxation
PAGE 7
,Answer: C
Explanation: Price Discrimination Is A Microeconomic Concept. Fiscal (Government Spending/Taxes) And
Monetary (Central Bank Actions) Policies Are Macro Tools.
10. In Classical Macroeconomic Theory, Markets:
A) Do Not Adjust And Require Government Intervention.
B) Are Always In Disequilibrium.
C) Tend To Clear Through Flexible Prices And Wages.
D) Are Regulated By Labor Unions Alone.
Answer: C
Explanation: The Classical Approach Assumes That Wages And Prices Are Flexible, Leading To Market
Clearing In The Long Run.
11. According To Keynesian Economics, Recessions Often Occur Because:
A) Prices And Wages Adjust Instantly To Clear Markets.
B) Aggregate Demand Can Fall Below The Economy’s Capacity To Produce.
C) The Government Always Balances Its Budget.
D) Households And Firms Have No Impact On The Macroeconomy.
Answer: B
Explanation: Keynes Emphasized That Insufficient Aggregate Demand Can Lead To Underemployment And
Recessions, And That Prices/Wages May Be Sticky In The Short Run.
PAGE 8
,12. Monetary Policy Is Primarily Conducted By:
A) Congress Or The Legislative Branch.
B) The Country’s Central Bank (E.G., Federal Reserve).
C) Individual Commercial Banks.
D) Private Corporations.
Answer: B
Explanation: Central Banks (Like The Federal Reserve In The U.S.) Set Monetary Policy Via Interest Rates,
Open Market Operations, Etc.
13. Which Of The Following Is An Example Of A Normative Economic Statement?
A) ―The Unemployment Rate Is Currently 5%.‖
B) ―Reducing Inflation Often Requires Higher Interest Rates.‖
C) ―The Government Should Aim For Lower Unemployment Than It Does Now.‖
D) ―Net Exports Increased Last Quarter.‖
Answer: C
Explanation: Normative Statements Involve Value Judgments (What Should Be). ―Should‖ Is A Strong
Indicator Of Normative Content.
14. An Increase In Aggregate Demand In The Short Run Tends To:
A) Decrease Real GDP And Increase Unemployment.
B) Increase Real GDP And Decrease Unemployment.
C) Have No Effect On Real GDP.
D) Instantly Reduce The Price Level.
PAGE 9
, Answer: B
Explanation: In The Short Run, An Increase In Aggregate Demand Typically Raises Output And Employment (Lowe
Unemployment).
15. Economists Use The Concept Of Ceteris Paribus To:
A) Include Every Variable In A Complex Model.
B) Simplify Analysis By Holding Other Factors Constant.
C) Prove That Macroeconomics Is Always Correct.
D) Eliminate The Role Of Theory In Economics.
Answer: B
Explanation: ―Ceteris Paribus‖ Means ―All Other Things Being Equal,‖ Allowing Economists To Focus On
One Relationship At A Time.
16. If A Macroeconomic Model Assumes Wage Stickiness, It Implies:
A) Wages Are Very Flexible In The Short Run.
B) Wages Do Not Adjust Immediately To Shifts In Labor Demand Or Supply.
C) Wages Are Never Influenced By Supply And Demand.
D) Unemployment Cannot Exist.
Answer: B
Explanation: Sticky Wages Mean Wages Are Slow To Adjust, Creating Short-Run Unemployment Or Labor Market
Imbalances.
PAGE
10
