Test Bank for Macroeconomics 5th Edition Charles I Jones

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Macroeconomics 5th Edition Test Bank

1. A central topic of study in macroeconomics is ________, while a central topic of study in microeconomics is ________.

a. the cosmos; particle physics

b. the overall performance of an economy; an individual market

c. an individual market; the overall performance of an economy

d. the performance of international trade; the individual firm

e. consumer behavior; firm behavior

ANS: B DIF: Easy REF: 1.1 TOP: I.

MSC: Remembering

2. The three main variables we discuss in the short run are

a. economic fluctuations, the real exchange rate, and unemployment.

b. economic fluctuations, inflation, and international trade.

c. economic fluctuations, inflation, and unemployment.

d. interest rates, money supply, and taxes.

e. economic fluctuations, interest rates, and productivity.

ANS: C DIF: Easy REF: 1.1 TOP: I.

MSC: Remembering

3. Macroeconomics is to microeconomics what ________ is to ________.

a. cosmology; particle physics d. chemistry; organic chemistry

b. particle physics; cosmology e. biology; zoology

c. physics; biology

ANS: A DIF: Easy REF: 1.1 TOP: I.

MSC: Applying

4. Which of the following does macroeconomics endeavor to answer?

i. Why is the typical person in the United States today more than 10 times richer than the typical person in the United States a century ago?

ii. Why has the unemployment rate been nearly twice as high in Europe as in the United States in recent years?

iii. What determines the rate of inflation? What determines how rapidly the overall price level in an economy increases?

a. i only d. i and ii

b. i, ii, and iii e. ii and iii

c. ii only

ANS: B DIF: Easy REF: 1.1 TOP: I.

MSC: Applying

5. Which of the following does macroeconomics NOT endeavor to answer?

i. Why is the typical person in the United States today more than 10 times richer than the typical person in the United States a century ago?

ii. Why has the unemployment rate been nearly twice as high in Europe as in the United States in recent years?

iii. Why has the price of orange juice risen sharply?

a. ii and iii d. i, ii, and iii

b. i only e. iii only

c. ii only

ANS: E DIF: Easy REF: 1.1 TOP: I.

MSC: Applying

6. Which of the following does macroeconomics endeavor to answer?

i. What role does the government play in recessions, booms, and determining the rate of inflation?

ii. What causes an increase in the price of Exxon stock? iii. How does a dairy farmer react to rising milk prices?

a. i only d. i, ii, and iii

b. ii only e. ii and iii

c. iii only

ANS: A DIF: Easy REF: 1.2 TOP: II.

MSC: Applying

7. Which of the following does macroeconomics endeavor to answer?

i. How does a dairy farmer react to rising wheat prices?

ii. What will the impact of steel tariffs be on the price of washing machines? iii. What are potential causes of financial crises?

a. i only d. i, ii, and iii

b. ii only e. ii and iii

c. iii only

ANS: C DIF: Easy REF: 1.1 TOP: II.

MSC: Applying

8. Which of the following does macroeconomics endeavor to answer?

i. What role does the government play in recessions, booms, and determining the rate of inflation?

ii. What caused the currency crises in Mexico in the mid-1990s and in many Asian economies at the end of the 1990s?

iii. How does a dairy farmer react to rising milk prices?

a. iii only d. i, ii, and iii

b. ii only e. i and iii

c. i and ii

ANS: C DIF: Moderate REF: 1.1 TOP: II.

MSC: Applying

9. Which of the following lists the four steps we use to study macroeconomic behavior in the correct order?

a. (1) document the facts; (2) develop a model; (3) compare the predictions of the model to the original facts; (4) use the model to make other predictions that may eventually be tested

b. (1) document the facts; (2) use the model to make other predictions that may eventually be tested; (3) compare the predictions of the model to the original facts; (4) develop a model

c. (1) compare the predictions of the model to the original facts; (2) develop a model; (3) document the facts; (4) use the model to make other predictions that may eventually be tested

d. (1) develop a model; (2) document the facts; (3) compare the predictions of the model to the original facts; (4) use the model to make other predictions that may eventually be tested.

e. None of these answers is correct.

ANS: A DIF: Easy REF: 1.2 TOP: II.

MSC: Remembering

10. ________ are inputs to the model and generally are fixed over time, while ________ are the outcomes of the model.

a. Shocks; parameters

b. Endogenous variables; exogenous variables

c. Endogenous variables; shocks

d. Exogenous variables; endogenous variables

e. Parameters; system variables

ANS: D DIF: Easy REF: 1.2 TOP: II.

MSC: Remembering

11. Which of the following questions should a successful model predict?

i. How do changes in government policies change the labor market?

ii. How does money supply influence inflation? iii. How does investment affect economic growth?

a. ii only d. i and ii

b. i, ii, and iii e. i and iii

c. iii only

ANS: B DIF: Moderate REF: 1.2 TOP: II.

MSC: Applying

12. Which of the following questions should a successful model predict?

i. How do changes in government policies change the labor market?

ii. How does money supply influence inflation? iii. How does a change in the inflation rate affect unemployment?

a. iii only d. i and ii

b. ii only e. i and iii

c. i, ii, and iii

ANS: C DIF: Moderate REF: 1.2 TOP: II.

MSC: Applying

13. Which of the following questions should a successful model predict?

i. Why, in general, do Americans have higher incomes than Africans? ii. How much less unemployment is there during an economic expansion? iii. Why does the United States have a lower unemployment rate than Europe?

a. i and ii d. i, ii, and iii

b. ii only e. i and iii

c. iii only

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