Quiz 1

1 ) Macroeconomics focuses on a set of variables called
A) micros.
B) marginals.                                                Best Assignment Help !
C) partials.                                                              Only at theassignmentdepot.com
D) aggregates.

2) When the actual unemployment rate is likely to exceed the natural rate of unemployment, as in the time intervals between t 1 and t 2 and t 3 and t 4 in Figure 1-1 above, we can expect that
A) inflation is speeding up and real GDP is likely to exceed natural GDP.
B) inflation is slowing down and real GDP is likely to fall below natural GDP.
C) inflation is speeding up and natural GDP is likely to exceed real GDP.
D) inflation is slowing down and real GDP is likely to exceed natural GDP.

3) When the actual real GDP exceeds the natural real GDP as in Figure 1-2 above, we expect to find that unemployment is
A) high and inflation is high.
B) low and inflation is high.                       Flat 40% Discount on your first assignment 
C) low and inflation is low.                                         Only at theassignmentdepot.com
D) high and inflation is low.

4) The natural level of real GDP is that level of
A) real GDP at which the price level will continue increasing.
B) nominal GDP at which the price level will remain constant.
C) real GDP at which there is no tendency for inflation to accelerate or decelerate.
D) Nominal real GDP at which the price level will continue to decrease.

5) Which of the following is a criterion for judging the desirability of any given level of actual real GDP?
A) Actual real GDP is too low if it causes the unemployment rate to be higher than necessary.
B) Actual real GDP is too high if it strains a nation's ability to produce and puts upward pressure on the inflation rate.
C) Actual real GDP is at a desirable level if there is no tendency for inflation to accelerate or decelerate.
D) All of the above.

6) The output gap is zero when
A) Actual real GDP > Natural real GDP.
B) Actual real GDP = Natural real GDP.                                    Excellent Marks Guaranteed !!
C) Actual real GDP < Natural real GDP.                                         Only at theassignmentdepot.com
D) Natural real GDP = 0.

7) Business cycles in the United States
A) tend to occur at regular intervals and are periodic.
B) tend to recur at irregular intervals, but are usually of the same length.
C) were quite common before World War II but have not occurred in the postwar period.
D) tend to have expansions that last longer than the recessions.

8) When actual real GDP is equal to the natural real GDP, the unemployment rate is
A) zero.
B) at its "natural" rate.                        
C) accelerating.                                                                    
D) decelerating.                        
                          
9) Suppose that the natural rate of unemployment is 5.7 percent. If unemployment has for some time been varying between 5.1 and 5.3 percent, we should be at an actual real GDP ________ the natural real GDP, and should expect inflation to be ________.
A) below, slowing down
B) below, speeding up                                            Before Time delivery 
C) above, slowing down                             Only at theassignmentdepot.com                            
D) above, speeding up   
 
10) The period of the business cycle between the peak and the trough is the
A) recession.
B) expansion.
C) recovery.
D) All of the above may fall between the peak and the trough.

11) The period of the business cycle which follows the trough is the
A) recession.
B) expansion.
C) peak.
D) All of the above may follow the trough.
 
12) Approaching a business cycle peak, actual real GDP ________ natural real GDP, which causes inflation to ________.
A) exceeds, remain constant
B) exceeds, accelerate                                                         100% Customer Satisfaction 
C) is less than, decelerate                                                      Only at theassignmentdepot.com
D) equals, accelerate
 
13) Given the path of natural real GDP growth, economists prefer an economy such as ________, in which the real GDP gaps are ________.
A) Stabilia's, minimized
B) Stabilia's, maximized
C) Volatilia's, minimized
D) Volatilia's, maximized

14) Our business cycle experiences suggest that a macroeconomic policy designed to lower the average rate of inflation will require ________ in actual real GDP and an accompanying ________ in the unemployment rate.
A) an increase, increase
B) an increase, decrease
C) a reduction, increase
D) a reduction, decrease

15) For which of the following variables should policymakers set a target rate of zero?
A) productivity growth
B) inflation rate                                   No Advance Payment !
C) unemployment rate                 Only at theassignmentdepot.com
D) None of the above

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