Macroeconomics Fall 2021/2022 Test 1 Review Questions and Answers Latest Update

Macroeconomics Fall 2021/2022 Test 1 Review Questions and Answers Latest Update The questions below are examples of the questions that arise from these chapters 1, 2 3, 4 and 5. This is not intended to be a comprehensive list. Please refer to the Module notes, PowerPoint slides and the text for these chapters as well. Chapter 1 and 2 Review Questions 1) Economics is best defined as the study of A) financial decision-making. B) how consumers make purchasing decisions. C) the choices made by people faced with scarcity. D) inflation, unemployment, and economic growth. 2) Because resources are limited A) only the very wealthy can get everything they want. B) firms will be forced out of business. C) the availability of goods will be limited but the availability of services will not. D) people must make choices. 3) The knowledge and skills acquired by a worker through education and experience is a description of which factor of production? A) physical capital B) human capital C) labor D) entrepreneurship 4) Normative economics A) is the focus of most modern economic reasoning. B) answers the question "What ought to be?" C) predicts the consequences of alternative actions. D) answers the question "What is?" 5) Which of the following is an example of a normative question? A) How will an increase in the inheritance tax affect tax revenues? B) What fraction of an income tax cut will be spent on imported goods? C) Should Florida implement a state income tax to reduce its deficit? D) How will an increase in unemployment benefits affect the unemployment rate? 6) The 3 key economic questions include all of the following EXCEPT A) "what products do we produce?" B) "how do we produce these products?" C) "where should these products be produced?" D) "who consumes the products?" 7) Deciding how a society's products are distributed among its citizens answers the economic question of A) "who consumes the products produced?" B) "what products will be produced?" C) "where will the products be consumed?" D) "how will the products be produced?" 8) Deciding if a company will produce automobiles by robotics or manual labor answers the economic question of A) "who consumes the products produced?" B) "what products will be produced?" C) "where will the products be consumed?" D) "how will the products be produced?" 9) Deciding if a power company will generate electricity from wind power or coal answers the economic question of A) "who consumes the products produced?" B) "what products will be produced?" C) "where will the products be consumed?" D) "how will the products be produced?" 10) When economists assume that people are rational and respond to incentives, they mean A) people act with kindness. B) people are altruistic. C) people act in their own self-interest. D) people are selfish. 11) Macroeconomics is best described as the study of A) very large issues. B) the choices made by individual households, firms, and governments. C) the nation's economy as a whole. D) the relationship between inflation and wage inequality. 12) The study of the choices made by individual households, firms, and government is called A) macroeconomics. B) microeconomics. C) managerial economics. D) market economics. 13) The opportunity cost of a particular product is: Continues...