TEST BANK FOR
MACROECONOMICS, 10TH
EDITION N. GREGORY MANKIW
,Chapter 1. The Science of Macroeconomics
1. Macroeconomics does not try to answer the question of:
A) why some countries experience rapid growth.
B) what is the rate of return on education.
C) why some countries have high rates of inflation.
D) what causes recessions and depressions.
2. A typical trend during a recession is that:
A) the unemployment rate falls.
B) the popularity of the incumbent president rises.
C) incomes fall.
D) the inflation rate rises.
3. Macroeconomics is the study of the:
activities of individual units of the economy.
decisionmaking by households and firms.
economy as a whole.
interaction of firms and households in the marketplace.
4.The study of the economy as a whole is called:
household economics.
business economics.
microeconomics.
macroeconomics.
5.The ability of macroeconomists to predict the future course of economic events:
is no better than a meteorologist's ability to predict the next month's weather.
is much better than a meteorologist's ability to predict the next month's weather.
has gotten worse over time.
is less precise than it was in the 1920s.
6.Which of the combinations listed is not a U.S. president and an important economic
issue of his administration?
President Carter, inflation
President Reagan, budget deficits
President G. H. W. Bush, budget deficits
President Clinton, inflation
Page 1
,7.All zof zthe zfollowing zare ztypes zof zmacroeconomics zdata zexcept zthe: z
price zof za zcomputer. z
growth zrate zof zreal zGDP. z
inflation zrate. z
unemployment zrate. z
8. zAll zof zthe zfollowing zexcept are zimportant zmacroeconomic zvariables.
real zGDP z
the zunemployment zrate z
the zmarginal zrate zof zsubstitution z
the zinflation zrate z
9. The ztotal zincome zof zeveryone zin zthe zeconomy zadjusted zfor zthe zlevel zof zbase zyear
zprices zis zcalled: z
A) a zrecession. z
B) an zinflation. z
C) real zGDP. z
D) a zbusiness zfluctuation. z
10. A zmeasure zof zhow zfast zthe zgeneral zlevel zof zprices zis zrising zis zcalled zthe: z
A) growth zrate zof zreal zGDP. z
B) inflation zrate. z
C) unemployment zrate. z
D) market-clearing zrate. z
11. The zinflation zrate zis za zmeasure zof zhow zfast: z
A) the ztotal zincome zof zthe zeconomy zis zgrowing. z
B) unemployment zin zthe zeconomy zis zincreasing. z
C) the zgeneral zlevel zof zprices zin zthe zeconomy zis zrising. z
D) the znumber zof zjobs zin zthe zeconomy zis zexpanding. z
12. zReal zGDP over ztime, zand zthe zgrowth zrate zof zreal zGDP .
A) grows; zfluctuates z
B) is zsteady; zis zsteady z
C) grows; zis zsteady z
D) is zsteady; zfluctuates z
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z2
, 13. Two zstriking zfeatures zof za zgraph zof zU.S. zreal zGDP zper zcapita zover zthe ztwentieth
zcentury zare zthe: z
A) overall zupward ztrend zinterrupted zby za zlarge zdownturn zdue zto zthe
zeconomic zdepression zin zthe z1930s. z
B) nearly zconstant zlevel zwith za zlarge zdownturn zin zthe z1930s. z
C) downward ztrend zin zthe zfirst zhalf zof zthe zcentury zfollowed zby zthe zupward
ztrend zin zthe zsecond zhalf. z
D) constant zlevel zin zthe zfirst zhalf zof zthe zcentury zfollowed zby zthe zupward
ztrend zin zthe zsecond zhalf. z
14. In zthe zU.S. zeconomy ztoday, zreal zGDP zper zperson, zcompared zwith zits zlevel zin
z1900, zis zabout: z
A) 50 zpercent zhigher. z
B) twice zas zhigh. z
C) three ztimes zas zhigh. z
D) eight ztimes zas zhigh. z
15. Recessions zare zperiods zwhen zreal zGDP: z
A) increases zslowly. z
B) increases zrapidly. z
C) decreases zmildly. z
D) decreases zseverely. z
16. Compared zwith zreal zGDP zduring za zrecession, zreal zGDP zduring za zdepression: z
A) increases zmore zrapidly. z
B) increases zat zapproximately zthe zsame zrate. z
C) decreases zat zapproximately zthe zsame zrate. z
D) decreases zmore zseverely. z
17. A zsevere zrecession zis zcalled za(n): z
A) depression. z
B) deflation. z
C) exogenous zevent. z
D) market-clearing zassumption. z
18. The zannual zinflation zrate zin zthe zUnited zStates zaveraged: z
A) nearly zzero zbetween z1900 zand z1950. z
B) nearly zzero zbetween z1950 zand z2000. z
C) about z10 zpercent zbetween z1900 zand z1950. z
D) about z10 zpercent zbetween z1950 zand z2000. z
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z3
MACROECONOMICS, 10TH
EDITION N. GREGORY MANKIW
,Chapter 1. The Science of Macroeconomics
1. Macroeconomics does not try to answer the question of:
A) why some countries experience rapid growth.
B) what is the rate of return on education.
C) why some countries have high rates of inflation.
D) what causes recessions and depressions.
2. A typical trend during a recession is that:
A) the unemployment rate falls.
B) the popularity of the incumbent president rises.
C) incomes fall.
D) the inflation rate rises.
3. Macroeconomics is the study of the:
activities of individual units of the economy.
decisionmaking by households and firms.
economy as a whole.
interaction of firms and households in the marketplace.
4.The study of the economy as a whole is called:
household economics.
business economics.
microeconomics.
macroeconomics.
5.The ability of macroeconomists to predict the future course of economic events:
is no better than a meteorologist's ability to predict the next month's weather.
is much better than a meteorologist's ability to predict the next month's weather.
has gotten worse over time.
is less precise than it was in the 1920s.
6.Which of the combinations listed is not a U.S. president and an important economic
issue of his administration?
President Carter, inflation
President Reagan, budget deficits
President G. H. W. Bush, budget deficits
President Clinton, inflation
Page 1
,7.All zof zthe zfollowing zare ztypes zof zmacroeconomics zdata zexcept zthe: z
price zof za zcomputer. z
growth zrate zof zreal zGDP. z
inflation zrate. z
unemployment zrate. z
8. zAll zof zthe zfollowing zexcept are zimportant zmacroeconomic zvariables.
real zGDP z
the zunemployment zrate z
the zmarginal zrate zof zsubstitution z
the zinflation zrate z
9. The ztotal zincome zof zeveryone zin zthe zeconomy zadjusted zfor zthe zlevel zof zbase zyear
zprices zis zcalled: z
A) a zrecession. z
B) an zinflation. z
C) real zGDP. z
D) a zbusiness zfluctuation. z
10. A zmeasure zof zhow zfast zthe zgeneral zlevel zof zprices zis zrising zis zcalled zthe: z
A) growth zrate zof zreal zGDP. z
B) inflation zrate. z
C) unemployment zrate. z
D) market-clearing zrate. z
11. The zinflation zrate zis za zmeasure zof zhow zfast: z
A) the ztotal zincome zof zthe zeconomy zis zgrowing. z
B) unemployment zin zthe zeconomy zis zincreasing. z
C) the zgeneral zlevel zof zprices zin zthe zeconomy zis zrising. z
D) the znumber zof zjobs zin zthe zeconomy zis zexpanding. z
12. zReal zGDP over ztime, zand zthe zgrowth zrate zof zreal zGDP .
A) grows; zfluctuates z
B) is zsteady; zis zsteady z
C) grows; zis zsteady z
D) is zsteady; zfluctuates z
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z2
, 13. Two zstriking zfeatures zof za zgraph zof zU.S. zreal zGDP zper zcapita zover zthe ztwentieth
zcentury zare zthe: z
A) overall zupward ztrend zinterrupted zby za zlarge zdownturn zdue zto zthe
zeconomic zdepression zin zthe z1930s. z
B) nearly zconstant zlevel zwith za zlarge zdownturn zin zthe z1930s. z
C) downward ztrend zin zthe zfirst zhalf zof zthe zcentury zfollowed zby zthe zupward
ztrend zin zthe zsecond zhalf. z
D) constant zlevel zin zthe zfirst zhalf zof zthe zcentury zfollowed zby zthe zupward
ztrend zin zthe zsecond zhalf. z
14. In zthe zU.S. zeconomy ztoday, zreal zGDP zper zperson, zcompared zwith zits zlevel zin
z1900, zis zabout: z
A) 50 zpercent zhigher. z
B) twice zas zhigh. z
C) three ztimes zas zhigh. z
D) eight ztimes zas zhigh. z
15. Recessions zare zperiods zwhen zreal zGDP: z
A) increases zslowly. z
B) increases zrapidly. z
C) decreases zmildly. z
D) decreases zseverely. z
16. Compared zwith zreal zGDP zduring za zrecession, zreal zGDP zduring za zdepression: z
A) increases zmore zrapidly. z
B) increases zat zapproximately zthe zsame zrate. z
C) decreases zat zapproximately zthe zsame zrate. z
D) decreases zmore zseverely. z
17. A zsevere zrecession zis zcalled za(n): z
A) depression. z
B) deflation. z
C) exogenous zevent. z
D) market-clearing zassumption. z
18. The zannual zinflation zrate zin zthe zUnited zStates zaveraged: z
A) nearly zzero zbetween z1900 zand z1950. z
B) nearly zzero zbetween z1950 zand z2000. z
C) about z10 zpercent zbetween z1900 zand z1950. z
D) about z10 zpercent zbetween z1950 zand z2000. z
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z3
