Macroeconomics is nothing but a simple aggregation of all the microeconomic parts." Do you or do you not agree with this statement?
Don't agree, because there is a lot more to the study of macroeconomics than the sum of its individual microeconomic parts.
If all the households and businesses in the economy start saving more during economic hard times, that results in a fall in aggregate income hurting everyone in the economy. This is known as:
the paradox of thrift.
The topics studied in macroeconomics include:
inflation, unemployment and economic growth.
Which of the following is a microeconomic question rather than a macroeconomic question?
Will an increase in the cigarette tax cause a decrease in the number of smokers?
The relationships between a country's level of saving and investment have:
an effect on a country's trade balances.
If a country is experiencing a trade deficit, most likely one would find that its investment spending is:
greater than its level of saving.
A trade surplus occurs:
when the value of goods and services a country imports is less than the value of goods and services it exports.
If an economy is open, this means that:
trading with other countries makes up a portion of its economy.
When overall price levels rise over time, this is referred to as:
inflation.
When an economy's overall production grows faster than its population, this is referred to as:
long-run growth per capita.
When an economy is in an expansion, unemployment:
tends to fall, and overall prices tend to rise.
When an economy is operating between the business cycle trough and the business cycle peak, this is considered to be:
an expansion
Economic recessions are _______________ and economic expansions are _______________.
short run in nature, long run in nature
When economists measure economic growth, they often use:
real GDP.
During the Great Depression, unemployment rates reached as high as:
25%.
Changes in interest rates and the money supply in an effort to change overall spending in an economy is:
monetary policy.
Keynesians argue that a lack of spending is:
possible and can lead to prolonged recessions.
Fiscal policy involves:
deliberate changes in taxation and/or government spending.
Fiscal and monetary policies:
are used to correct for short-term economic fluctuations.
An open economy is an economy:
which trades goods and services with other countries.
If a country has a trade deficit, does it indicate that the country has a serious problem?
No. Trade deficits occur when a country has higher investment spending relative to its level of saving.
In the long run the overall price level is mainly determined by:
changes in the money supply.
Price stability refers to a situation where:
the overall cost of living is changing very slowly.
Inflation affects people adversely because:
inflation causes money to lose its value over time if the overall price level is rising.
If the economy grew at a 3% rate this year and average prices grew ______, people would be better off this year compared with last year.
slower than 3%
If workers nominal wages have risen by 50% over a ten-year period and prices have increased by 40% in that same period, then we can safely conclude that the real wages of the workers have:
increased.
A pattern of expansion, then recession, then expansion again is a(n):
business cycle.
Economic theory in 1936 changed dramatically with the publication of:
The General Theory of Employment, Interest and Money by John Maynard Keynes.
Fiscal policy attempts to affect the level of overall spending in the economy by changes in:
taxes and spending.
If macroeconomic policy has been successful over a period of time, it is likely that the economy has not seen:
severe recessions.