Macroeconomics Question Paper

Question 1 . Using a market-clearing model to analyze the demand for haircuts is ______ because the price of a haircut usually changes ______.
Answer
Selected Answer: unrealistic; infrequently
Correct Answer: unrealistic; infrequently . Question 2 . Which of the following is not the correct combination for a U.S. president and an important economic issue of his administration?
Answer
Selected Answer:
President Clinton, inflation
Correct Answer:
President Clinton, inflation . Question 3 . Macroeconomic models are used to explain how ______ variables influence ______ variables.
Answer
Selected Answer: exogenous; endogenous
Correct Answer: exogenous; endogenous . Question 4 . The total income of everyone in the economy adjusted for the level of prices is called:
Answer
Selected Answer: real GDP.
Correct Answer: real GDP. . Question 5 . A period of falling prices is called:
Answer
Selected Answer: a recession.
Correct Answer: deflation. . Question 6 . The inflation rate is a measure of how fast:
Answer
Selected Answer: prices in the economy are rising.
Correct Answer: prices in the economy are rising. . Question 7 . Exogenous variables are:
Answer
Selected Answer: fixed at the moment they enter the model.
Correct Answer: fixed at the moment they enter the model. . Question 8 . In the relationship expressed in functional form, Y = G(K, L), Y stands for real GDP, K stands for the amount of capital in the economy, and L stands for the amount of labor in the economy. In this case G( ):
Answer
Selected Answer: is the function telling how the variables in the parenthesis determine real GDP.
Correct Answer: is the function telling how the variables in the parenthesis determine real GDP. . Question 9 . The inflation rate in the United States averaged about:
Answer
Selected