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The main subject of macroeconomics deals with:
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| The factors that influence the production of particular products, and the behavior of individual industries. |
| Household income and the determination of individual prices. |
| The sum of individual decisions, or the aggregate behavior of consumers, firms, and the economy as a whole. |
| The reasons behind the flexibility of prices and the tendency of all markets to converge toward equilibrium--where quantity supplied equals quantity demanded. |
| All of the above. |
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The prolonged period of unemployment that existed during the Great Depression gave rise to the following thinking in the economics discipline:
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| The classical revolution. |
| The Marxist Revolution. |
| The Keynesian Revolution. |
| The monetarist revolution. |
| The reversal of diminishing returns. |
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Which of the following ideas was central in Keynesian theory?
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| The invisible hand. The forces of supply and demand ensure that a market will quickly adjust to deviations from equilibrium. |
| Self-correcting prices and wages determine the level of output and employment in the economy. |
| Fiscal policy can and should be used to correct any deviations of output away from the full-employment level of output. |
| Manipulation of the money supply is an ideal tool to correct the level of aggregate demand for goods and services. |
| The use of monetary policy does more harm than good, particularly in an economy of our size. |
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The use of Keynesian policies to fine tune the economy in the 1960s led to:
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| Superb rates of growth in output accompanied by low inflation in the 1970s. |
| A period of stable and continued growth in output and employment that has lasted through the 1990s. |
| Disillusionment in the 1970s and early 1980s. |
| A convergence of views of macroeconomists about how the macroeconomy works. |
| The Great Depression. |
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What is stagflation?
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| Stagflation means low inflation accompanied by low unemployment. |
| Stagflation means high inflation accompanied by high unemployment. |
| Stagflation means low inflation accompanied by high unemployment. |
| Stagflation means high inflation accompanied by low unemployment. |
| Stagflation is the regulation by government of inflation and unemployment. |
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Which of the following assertions is true?
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| Macroeconomic goals are clear to all policy makers. |
| Hyperinflation is a period of high inflation accompanied by high unemployment. |
| A recession is a period, at least three months long, of continued decrease in output (and employment). |
| Hyperinflations are a common occurrence, but economists seldom pay attention to this problem. |
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Which of the following policy measures are considered fiscal policy measures?
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| The government cuts taxes or raises spending to get the economy out of a slump. |
| The government changes the quantity of money supplied to affect the price level, interest rates, and exchange rates. |
| The government stimulates aggregate supply to stimulate the potential growth of output and income. |
| The government does nothing. |
| The government restricts imports and stimulates exports. |
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Refer to the figure below. Which of the following money flows corresponds to the letter G? 
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| Taxes. |
| Transfers. |
| Purchases of goods and services. |
| Dividends, profits, and rent. |
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Refer to the figure below. Which flow arrow(s) represent taxes?
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| F and G. |
| D and E. |
| E and F. |
| E only. |
| G only. |
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Refer to the figure below. Which arrow(s) represent(s) flows of money associated with purchases of foreign-made goods and services, or imports?
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| Both A and B. |
| A only. |
| B only. |
| C |
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All of the following are debt instruments, or promissory notes issued by a borrower, except one. Which one?
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| Treasury bonds. |
| Treasury notes. |
| Treasury bills. |
| Corporate Stocks. |
| Corporate bonds. |
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The logic behind the aggregate supply and aggregate demand curves is:
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| Identical to the market supply and market demand curves. |
| More abstract than the logic of individual supply and demand curves. |
| More complex than the logic of market supply and demand. |
| Less abstract and complex than the logic of market supply and demand. |
| Irrational because it is impossible to sum all microeconomic decisions. |
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The aggregate supply curve is drawn on the assumption that:
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| All input prices are fixed. |
| All prices are changing. |
| The aggregate price level remains constant. |
| A change in the overall price level must result in a change in relative prices. |
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Which of the following terms apply to the characteristics of the typical business cycle?
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| Regular, recurrent, symmetric. |
| Irregular, recurrent, symmetric. |
| Regular, single-episode, asymmetric. |
| Irregular, recurrent, asymmetric. |
| Irregular, single-episode, asymmetric. |
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Refer to the figure below. During which period of time is the economy in a recession in this business cycle? 
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| The period from A to B. |
| The period from C to D. |
| The period from C to E. |
| The period from D to E. |
| From D to F. |
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Refer to the figure below. The period from A to B is part of:
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| A recession. |
| A recovery. |
| A boom. |
| A contraction. |
| A depression. |
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Refer to the figure below. The relationship between output and unemployment is as follows:
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| As output rises from A to B, unemployment rises. |
| As output falls from C to D, unemployment falls. |
| As output rises from E to F, unemployment falls. |
| Aggregate output and (un)employment don't appear to be related at all, thus it is difficult to establish the direction of unemployment as aggregate output changes. |
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Since 1970, which economic period(s) show particularly high inflation?
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| 1973 IV - 1975 IV and 1979I - 1981 IV. |
| Ever since 1983, the rate of inflation has been quite high. |
| 1997 IV was the period with the highest inflation rate since 1970. |
| There are no periods of inflation after 1970. |
