Test Bank, For Macroeconomics 11th Edition By N. Gregory Mankiw..pdf

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Chapter 1. The Science of Macroeconomics
m m m m m




Macroeconomicsmdoesmnotmtrymtomanswermthemquestionmof:
whymsomemcountriesmexperiencemrapid mgrowth.
what mismthemratemof mreturnmonmeducation.
whymsomemcountriesmhavemhighmratesmof minflation.
what mcausesmrecessionsmand mdepressions.


Amtypicalmtrend mduringmamrecessionmismthat:
themunemployment mratemfalls.
thempopularitymof mthemincumbent mpresident mrises.
incomesmfall.
theminflationmratemrises.


Macroeconomicsmismthemstudymof mthe:
activitiesmof mindividualmunitsmof mthemeconomy.
decisionmakingmbymhouseholdsmand mfirms.
economymasmamwhole.
interactionmof mfirmsmand mhouseholdsminmthemmarketplace.


Themstudymof mthemeconomymasmamwholemismcalled:
household meconomics.
businessmeconomics.
microeconomics.
macroeconomics.


Themabilitymof mmacroeconomistsmtompredict mthemfuturemcoursemof meconomicmevents:
ismnombettermthanmammeteorologist'smabilitymtompredict mthemnext mmonth'smweather.
ismmuchmbettermthanmammeteorologist'smabilitymtompredict mthemnext mmonth'smweather.
hasmgottenmworsemovermtime.
ismlessmprecisemthanmit mwasminmthem1920s.


Whichmof mthemcombinationsmlisted mismnotmamU.S.mpresident mand manmimportant meconomicm
issuemof mhismadministration?
President mCarter,minflation
President mReagan,mbudget mdeficits
President mG.mH.mW.mBush,mbudget mdeficits
President mClinton,minflation




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Allmof mthemfollowingmaremtypesmof mmacroeconomicsmdatamexceptmthe:
pricemof mamcomputer.
growthmratemof mrealmGDP.
inflationmrate.
unemployment mrate.


Allmof mthemfollowingmexceptm aremimportant mmacroeconomicmvariables.
realmGDP
themunemployment mrate
themmarginalmratemof msubstitution
theminflationmrate


Themtotalmincomemof meveryoneminmthemeconomymadjusted mformthemlevelmof mbasemyearmpricesmis
mcalled:

am recession.
anminflation.
realmGDP.
ambusinessmfluctuation.


A mmeasuremof mhow mfast mthemgeneralmlevelmof mpricesmismrising mismcalled mthe:
growthmratemof mrealmGDP.
inflationmrate.
unemployment mrate.
market-clearingmrate.


Theminflationmratemismammeasure mof mhowmfast:
themtotalmincomemof mthemeconomymismgrowing.
unemployment minmthemeconomymismincreasing.
themgeneralmlevelmof mpricesminmthemeconomymismrising.
themnumbermof mjobsminmthemeconomymismexpanding.


RealmGDPm overmtime,mand mthemgrowthmratemof mrealmGDPm .
grows;mfluctuates
ismsteady;mismsteady
grows;mismsteady
ismsteady;mfluctuates




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Twomstrikingmfeaturesmof mamgraphmof mU.S.mrealmGDPmpermcapitamovermthemtwentiethmcenturyma
remthe:
overallmupward mtrend minterrupted mbymamlargemdownturnmduemtomthemeconomicmde
pressionminmthem1930s.
nearlymconstant mlevelmwithmamlargemdownturnminmthem1930s.
downward mtrend minmthemfirst mhalf mof mthemcenturymfollowed mbymthemupward mtrend minmthems
econd mhalf.
constant mlevelminmthemfirst mhalf mof mthemcenturymfollowed mbymthemupward mtrend minmthems
econd mhalf.


InmthemU.S.meconomymtoday,mrealmGDPmpermperson,mcompared mwithmitsmlevelminm1900,misma
bout:
50mpercent mhigher.
twicemasmhigh.
threemtimesmasmhigh.
eight mtimesmasmhigh.


RecessionsmaremperiodsmwhenmrealmGDP:
increasesmslowly.
increasesmrapidly.
decreasesmmildly.
decreasesmseverely.


Compared mwithmrealmGDPmduringmamrecession,mrealmGDPmduringmamdepression:
increasesmmoremrapidly.
increasesmat mapproximatelymthemsamemrate.
decreasesmat mapproximatelymthemsamemrate.
decreasesmmoremseverely.


A mseveremrecessionmismcalled ma(n):
depression.
deflation.
exogenousmevent.
market-clearingmassumption.


ThemannualminflationmrateminmthemUnited mStatesmaveraged:
nearlymzerombetweenm1900mand m1950.
nearlymzerombetweenm1950mand m2000.
about m10mpercent mbetweenm1900mand m1950.
about m10mpercent mbetweenm1950mand m2000.




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