Question 1

From 2000 to 2001, the U.S. economy's annual growth rate slowed down abruptly.

Accepted Answer

This statement is true. The annual growth rate of the U.S. economy slowed down from 4.1% in 2000 to 0.8% in 2001 due to the dot-com bubble burst and the 9/11 attacks.

Question 2

Technological breakthroughs, such as the Internet, can be shown with a rightward shift of the aggregate supply curve.

Accepted Answer

Technological breakthroughs can increase productivity and efficiency, leading to a decrease in production costs and a rightward shift of the aggregate supply curve.

Question 3

Two of the most important macroeconomic issues are unemployment and inflation.

Accepted Answer

Unemployment and inflation are considered to be two of the most important macroeconomic issues because they can have significant impacts on the overall health of the economy and the well-being of its citizens. High unemployment can lead to reduced consumer spending and depressed economic growth, while high inflation can erode the purchasing power of money and lead to slower economic activity.

Question 4

Gross domestic product includes the sale of intermediate goods and services.

Accepted Answer

Gross domestic product only includes final goods and services, not intermediate goods and services.

Question 5

Economic aggregates are studied by microeconomists.

Accepted Answer

Economic aggregates are studied by macroeconomists, not microeconomists. Microeconomics focuses on individual markets and how households and firms make decisions.

Question 6

GDP in 2015 would not include the resale of a house built in 2000.

Accepted Answer

GDP only includes the value of newly produced goods and services in a given year. The resale of a house built in 2000 is not a newly produced good or service in 2015, so it would not be included in the GDP calculation for that year.

Question 7

Gross domestic product represents the money value of all final goods and services produced in the domestic economy within the year.

Accepted Answer

Gross domestic product (GDP) is defined as the monetary value of all final goods and services produced within the domestic economy over a specific period, typically one year.

Question 8

Aggregation involves adding together different products and services.

Accepted Answer

Aggregation is the process of combining several products or services into one comprehensive whole.

Question 9

Real GDP values current output of goods and services at their current prices.

Accepted Answer

Real GDP adjusts for inflation and measures output in constant dollars, so it is not measured at current prices.

Question 10

An increase in aggregate demand will result in inflation.

Accepted Answer

When aggregate demand increases, there is higher demand for goods and services, leading to a situation where demand outpaces supply. This leads to an increase in prices and hence inflation.

Question 11

In macroeconomics, the vertical axis in a supply-demand model measures the price level rather than a particular product's price.

Accepted Answer

In a macroeconomics supply-demand model, the vertical axis measures the price level, which is a general measure of the overall level of prices in an economy. This is different from a microeconomics supply-demand model, which measures the price of a specific product on the vertical axis.

Question 12

When Sarah watches her baby sister each Saturday, gross domestic product increases.

Accepted Answer

Sarah's act of watching over her baby sister is not a formal economic transaction, and therefore, it is not included in the calculation of GDP. GDP only includes the value of goods and services produced in a country over a specific period of time.

Question 13

Supply and demand provides the basic explanatory framework for constructing both microeconomic and macroeconomic models.

Accepted Answer

This statement is true. Supply and demand is a foundational concept in economics and is used in the construction of both microeconomic and macroeconomic models.

Question 14

During economic fluctuations, individual markets usually move in different directions.

Accepted Answer

The answer of During economic fluctuations, individual markets usually move...

Question 15

Individuals live and work in both individual and aggregate economic entities.

Accepted Answer

This statement is true. Individuals can work and operate their own businesses as individual economic entities, while also being part of larger economic entities such as corporations and industries.

Question 16

The key characteristic of macroeconomics is the process of aggregation.

Accepted Answer

Macroeconomics studies the economy as a whole, which involves the process of aggregating individual economic variables and analyzing their overall behavior and impact on the economy.

Question 17

Someone who studies the pricing policies of the Microsoft Corporation would be a microeconomist.

Accepted Answer

Microeconomics is the study of individual markets, industries, and firms, and their pricing policies. Therefore, someone who studies the pricing policies of a specific corporation, such as Microsoft, would fall under the category of microeconomist.

Question 18

Economic terms like "cost of living" and "price level" are important to ordinary individuals.

Accepted Answer

Economic terms like "cost of living" and "price level" impact an individual's purchasing power and standard of living, making them important to understand.

Question 19

Nominal GDP includes the current value of services produced in the economy.

Accepted Answer

Nominal GDP includes the current value of all final goods and services produced in an economy. Therefore, it includes the value of services produced in the economy.

Question 20

Macroeconomists pay little attention to the composition of aggregate output.

Accepted Answer

The answer of Macroeconomists pay little attention to the composition...

Quiz 21: An Introduction to Macroeconomics