,https://www.stuvia.com/
Chapter 1. The Science of Macroeconomics
hy hy hy hy hy
Macroeconomics hydoes hynot hytry hyto hyanswer hythe hyquestion hyof:
whyhysome hycountries hyexperience hyrapid hygrowth.
what hyis hythe hyrate hyof hyreturn hyon hyeducation.
whyhysome hycountries hyhave hyhigh hyrates hyof hyinflation.
what hycauses hyrecessions hyand hydepressions.
A hytypical hytrend hyduring hya hyrecession hyis hythat:
the hyunemployment hyrate hyfalls.
the hypopularityhyof hythe hyincumbent hypresident hyrises.
incomes hyfall.
the hyinflation hyrate hyrises.
Macroeconomics hyis hythe hystudyhyof hythe:
activities hyof hyindividual hyunits hyof hythe hyeconomy.
decisionmaking hybyhyhouseholds hyand hyfirms.
economyhyas hya hywhole.
interaction hyof hyfirms hyand hyhouseholds hyin hythe hymarketplace.
The hystudyhyof hythe hyeconomyhyas hya hywhole hyis hycalled:
household hyeconomics.
business hyeconomics.
microeconomics.
macroeconomics.
The hyability hyof hymacroeconomists hyto hypredict hythe hyfuture hycourse hyof hyeconomic hyevents:
is hyno hybetter hythan hya hymeteorologist's hyability hyto hypredict hythe hynext hymonth's hyweather.
is hymuch hybetter hythan hya hymeteorologist's hyabilityhyto hypredict hythe hynext hymonth's hyweather.
has hygotten hyworse hyover hytime.
is hyless hyprecise hythan hyit hywas hyin hythe hy1920s.
Which hyof hythe hycombinations hylisted hyis hynot hya hyU.S. hypresident hyand hyan hyimportant
hyeconomic hyissue hyof hyhis hyadministration?
President hyCarter, hyinflation
President hyReagan, hybudget hydeficits
President hyG. hyH. hyW. hyBush, hybudget hydeficits
President hyClinton, hyinflation
Page hy1
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All hyof hythe hyfollowing hyare hytypes hyof hymacroeconomics hydata hyexcept hythe:
price hyof hya hycomputer.
growth hyrate hyof hyreal hyGDP.
inflation hyrate.
unemployment hyrate.
All hyof hythe hyfollowing hyexcept hy are hyimportant hymacroeconomic hyvariables.
real hyGDP
the hyunemployment hyrate
the hymarginal hyrate hyof hysubstitution
the hyinflation hyrate
The hytotal hyincome hyof hyeveryone hyin hythe hyeconomy hyadjusted hyfor hythe hylevel hyof hybase hyyear
hyprices hyis hycalled:
a h y recession.
an hyinflation.
real hyGDP.
a hybusiness hyfluctuation.
A hymeasure hyof hyhow hyfast hythe hygeneral hylevel hyof hyprices hyis hyrising hyis hycalled hythe:
growth hyrate hyof hyreal hyGDP.
inflation hyrate.
unemployment hyrate.
market-clearing hyrate.
The hyinflation hyrate hyis hya hymeasure hyof hyhow hyfast:
the hytotal hyincome hyof hythe hyeconomyhyis hygrowing.
unemployment hyin hythe hyeconomyhyis hyincreasing.
the hygeneral hylevel hyof hyprices hyin hythe hyeconomyhyis hyrising.
the hynumber hyof hyjobs hyin hythe hyeconomyhyis hyexpanding.
Real hyGDP hy over hytime, hyand hythe hygrowth hyrate hyof hyreal hyGDP hy .
grows; hyfluctuates
is hysteady; hyis hysteady
grows; hyis hysteady
is hysteady; hyfluctuates
Page hy2
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Two hystriking hyfeatures hyof hya hygraph hyof hyU.S. hyreal hyGDP hyper hycapita hyover hythe hytwentieth
hycentury hyare hythe:
overall hyupward hytrend hyinterrupted hyby hya hylarge hydownturn hydue hyto hythe
hyeconomic hydepression hyin hythe hy1930s.
nearlyhyconstant hylevel hywith hya hylarge hydownturn hyin hythe hy1930s.
downward hytrend hyin hythe hyfirst hyhalf hyof hythe hycentury hyfollowed hyby hythe hyupward hytrend hyin
hythe hysecond hyhalf.
constant hylevel hyin hythe hyfirst hyhalf hyof hythe hycenturyhyfollowed hybyhythe hyupward hytrend hyin
hythe hysecond hyhalf.
In hythe hyU.S. hyeconomyhytoday, hyreal hyGDP hyper hyperson, hycompared hywith hyits hylevel hyin
hy1900, hyis hyabout:
50 hypercent hyhigher.
twice hyas hyhigh.
three hytimes hyas hyhigh.
eight hytimes hyas hyhigh.
Recessions hyare hyperiods hywhen hyreal hyGDP:
increases hyslowly.
increases hyrapidly.
decreases hymildly.
decreases hyseverely.
Compared hywith hyreal hyGDP hyduring hya hyrecession, hyreal hyGDP hyduring hya hydepression:
increases hymore hyrapidly.
increases hyat hyapproximatelyhythe hysame hyrate.
decreases hyat hyapproximatelyhythe hysame hyrate.
decreases hymore hyseverely.
A hysevere hyrecession hyis hycalled hya(n):
depression.
deflation.
exogenous hyevent.
market-clearing hyassumption.
The hyannual hyinflation hyrate hyin hythe hyUnited hyStates hyaveraged:
nearlyhyzero hybetween hy1900 hyand hy1950.
nearlyhyzero hybetween hy1950 hyand hy2000.
about hy10 hypercent hybetween hy1900 hyand hy1950.
about hy10 hypercent hybetween hy1950 hyand hy2000.
Page hy3
Chapter 1. The Science of Macroeconomics
hy hy hy hy hy
Macroeconomics hydoes hynot hytry hyto hyanswer hythe hyquestion hyof:
whyhysome hycountries hyexperience hyrapid hygrowth.
what hyis hythe hyrate hyof hyreturn hyon hyeducation.
whyhysome hycountries hyhave hyhigh hyrates hyof hyinflation.
what hycauses hyrecessions hyand hydepressions.
A hytypical hytrend hyduring hya hyrecession hyis hythat:
the hyunemployment hyrate hyfalls.
the hypopularityhyof hythe hyincumbent hypresident hyrises.
incomes hyfall.
the hyinflation hyrate hyrises.
Macroeconomics hyis hythe hystudyhyof hythe:
activities hyof hyindividual hyunits hyof hythe hyeconomy.
decisionmaking hybyhyhouseholds hyand hyfirms.
economyhyas hya hywhole.
interaction hyof hyfirms hyand hyhouseholds hyin hythe hymarketplace.
The hystudyhyof hythe hyeconomyhyas hya hywhole hyis hycalled:
household hyeconomics.
business hyeconomics.
microeconomics.
macroeconomics.
The hyability hyof hymacroeconomists hyto hypredict hythe hyfuture hycourse hyof hyeconomic hyevents:
is hyno hybetter hythan hya hymeteorologist's hyability hyto hypredict hythe hynext hymonth's hyweather.
is hymuch hybetter hythan hya hymeteorologist's hyabilityhyto hypredict hythe hynext hymonth's hyweather.
has hygotten hyworse hyover hytime.
is hyless hyprecise hythan hyit hywas hyin hythe hy1920s.
Which hyof hythe hycombinations hylisted hyis hynot hya hyU.S. hypresident hyand hyan hyimportant
hyeconomic hyissue hyof hyhis hyadministration?
President hyCarter, hyinflation
President hyReagan, hybudget hydeficits
President hyG. hyH. hyW. hyBush, hybudget hydeficits
President hyClinton, hyinflation
Page hy1
,https://www.stuvia.com/
All hyof hythe hyfollowing hyare hytypes hyof hymacroeconomics hydata hyexcept hythe:
price hyof hya hycomputer.
growth hyrate hyof hyreal hyGDP.
inflation hyrate.
unemployment hyrate.
All hyof hythe hyfollowing hyexcept hy are hyimportant hymacroeconomic hyvariables.
real hyGDP
the hyunemployment hyrate
the hymarginal hyrate hyof hysubstitution
the hyinflation hyrate
The hytotal hyincome hyof hyeveryone hyin hythe hyeconomy hyadjusted hyfor hythe hylevel hyof hybase hyyear
hyprices hyis hycalled:
a h y recession.
an hyinflation.
real hyGDP.
a hybusiness hyfluctuation.
A hymeasure hyof hyhow hyfast hythe hygeneral hylevel hyof hyprices hyis hyrising hyis hycalled hythe:
growth hyrate hyof hyreal hyGDP.
inflation hyrate.
unemployment hyrate.
market-clearing hyrate.
The hyinflation hyrate hyis hya hymeasure hyof hyhow hyfast:
the hytotal hyincome hyof hythe hyeconomyhyis hygrowing.
unemployment hyin hythe hyeconomyhyis hyincreasing.
the hygeneral hylevel hyof hyprices hyin hythe hyeconomyhyis hyrising.
the hynumber hyof hyjobs hyin hythe hyeconomyhyis hyexpanding.
Real hyGDP hy over hytime, hyand hythe hygrowth hyrate hyof hyreal hyGDP hy .
grows; hyfluctuates
is hysteady; hyis hysteady
grows; hyis hysteady
is hysteady; hyfluctuates
Page hy2
,https://www.stuvia.com/
Two hystriking hyfeatures hyof hya hygraph hyof hyU.S. hyreal hyGDP hyper hycapita hyover hythe hytwentieth
hycentury hyare hythe:
overall hyupward hytrend hyinterrupted hyby hya hylarge hydownturn hydue hyto hythe
hyeconomic hydepression hyin hythe hy1930s.
nearlyhyconstant hylevel hywith hya hylarge hydownturn hyin hythe hy1930s.
downward hytrend hyin hythe hyfirst hyhalf hyof hythe hycentury hyfollowed hyby hythe hyupward hytrend hyin
hythe hysecond hyhalf.
constant hylevel hyin hythe hyfirst hyhalf hyof hythe hycenturyhyfollowed hybyhythe hyupward hytrend hyin
hythe hysecond hyhalf.
In hythe hyU.S. hyeconomyhytoday, hyreal hyGDP hyper hyperson, hycompared hywith hyits hylevel hyin
hy1900, hyis hyabout:
50 hypercent hyhigher.
twice hyas hyhigh.
three hytimes hyas hyhigh.
eight hytimes hyas hyhigh.
Recessions hyare hyperiods hywhen hyreal hyGDP:
increases hyslowly.
increases hyrapidly.
decreases hymildly.
decreases hyseverely.
Compared hywith hyreal hyGDP hyduring hya hyrecession, hyreal hyGDP hyduring hya hydepression:
increases hymore hyrapidly.
increases hyat hyapproximatelyhythe hysame hyrate.
decreases hyat hyapproximatelyhythe hysame hyrate.
decreases hymore hyseverely.
A hysevere hyrecession hyis hycalled hya(n):
depression.
deflation.
exogenous hyevent.
market-clearing hyassumption.
The hyannual hyinflation hyrate hyin hythe hyUnited hyStates hyaveraged:
nearlyhyzero hybetween hy1900 hyand hy1950.
nearlyhyzero hybetween hy1950 hyand hy2000.
about hy10 hypercent hybetween hy1900 hyand hy1950.
about hy10 hypercent hybetween hy1950 hyand hy2000.
Page hy3
