1111 1112 1113 1114 1115 The topics studied in macroeconomics include inflation Incorrect unemployment Incorrect economic growth Incorrect inflation unemployment and economic growth True Answer Correct The topics studied in macroeconomics include inflation True Answer Correct monopolies Incorrect spillovers like pollution Incorrect mergers Incorrect Macroeconomics involves the study of the overall behavior of the economy True Answer Correct individual decision makers in the economy Incorrect different market structures that exist in the economy Incorrect cost and production decisions made by firms Incorrect Macroeconomics focuses on the economy as a whole True Answer Correct individual decisions Incorrect wages Incorrect the allocation of scarce resources Incorrect The topics studied in macroeconomics include the price of a motorcycle Incorrect the wages of engineers Incorrect the average price level in the economy True Answer Correct how much ice cream consumers buy Incorrect 1116 1117 1118 1119 Which of the following is most likely a macroeconomics question rather than a microeconomics question Is the national unemployment rate rising or falling True Answer Correct Are consumers buying more bottled water and less fruit juice Incorrect Are salaries for nurses rising or falling Incorrect Should a tax be levied on each ton of carbon a factory emits Incorrect Which of the following is a microeconomic question rather than a macroeconomic question Will a decrease in the income tax rate lift the nation out of a recession Incorrect Will an increase in consumer spending create inflation Incorrect Will a decrease in the income tax rate create a budget deficit Incorrect Will an increase in the cigarette tax cause a decrease in the number of packs sold True Answer Correct Increasing the total amount of available productive resources is the focus of macroeconomics True Answer Correct fiscal policy Incorrect monetary policy Incorrect microeconomics Incorrect Which of the following would most likely be a microeconomic question Should I go to business school or take a job True Answer Correct What determines the overall salary levels paid to workers in a given year Incorrect What government policies should be adopted to promote full employment and growth in the economy as a whole Incorrect What determines the level of output for the economy as whole Incorrect 1120 1121 1122 1123 Which of the following would NOT be classified as a macroeconomic question How many people are employed in the economy as a whole Incorrect What determines the overall level of prices in the economy as a whole Incorrect What determines the overall trade in goods services and financial assets between the United States and the rest of the world Incorrect What determines the cost to a university or college of offering a new course True Answer Correct Which of the following questions is appropriate to the study of microeconomics How does the aggregate price level affect overall consumer spending Incorrect How does the level of interest rates affect investment spending Incorrect How much will Sony charge for the new game system to be introduced later this year True Answer Correct How does the GDP affect overall government spending Incorrect Which of the following questions is appropriate to the study of macroeconomics How does the aggregate price level affect overall consumer spending True Answer Correct How does the level of interest rates affect Delta s decision to buy a new airplane Incorrect How much will Sony charge for the new game system to be introduced later this year Incorrect What determines whether Wachovia opens a new office in Beijing Incorrect Efficiency in the use of available productive resources is the focus of macroeconomics Incorrect fiscal policy Incorrect monetary policy Incorrect microeconomics True Answer Correct 1124 1125 1126 1127 Macroeconomics is nothing but a simple aggregation of all the microeconomic parts Do you agree or disagree 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 True Answer Correct Agree because macroeconomics is exactly equal to the sum total of all the microeconomic units Incorrect Don t agree because these two disciplines deal with completely independent issues Incorrect Don t agree because it is microeconomics which is an aggregation of all the macroeconomic parts Incorrect If all of the households and businesses in the economy start saving more during economic hard times then aggregate income will fall hurting everyone in the economy This is known as the quantity theory Incorrect the crowding out theory Incorrect the paradox of thrift True Answer Correct the permanent income hypothesis Incorrect The concept that the whole is greater than the sum of its parts best characterizes microeconomics Incorrect economics in general Incorrect macroeconomics True Answer Correct business forecasting Incorrect A key insight into macroeconomics is that in the short run the combined effect of individual decisions is very much the same as what one individual intended Incorrect very different from what any one individual intended True Answer Correct beneficial to the economy as a whole Incorrect always perverse on the economy as a whole Incorrect 1128 A rubbernecking traffic jam is an example of microeconomics in action Incorrect 1130 In the paradox of thrift individual behavior that has a large aggregate impact True Answer Correct the paradox of thrift Incorrect an outcome smaller than the sum of its parts Incorrect What do a rubbernecking traffic jam and the paradox of thrift have in common In both cases individual behavior has large negative consequences for the whole of society True Answer Correct In both cases seemingly bad behavior ends up harming everyone Incorrect In both cases seemingly careless behavior leads to good times for all Incorrect In both cases government intervention can only make matters worse Incorrect firms that are pessimistic about the future lay off the most saving conscientious workers Incorrect when families and business are feeling pessimistic about the future they spend more today Incorrect increased saving by individuals increases their chances of becoming unemployed True Answer Correct profligate behavior during economic tough times has large negative consequences for society Incorrect In contrast to the conclusions drawn from microeconomics many economists would
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