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1 Copyright © 2024 Pearson Education, Inc.Macroeconomics, 11e (Abel/Bernanke/Croushore) Chapter 1 Introduction to Macroeconomics 1.1 What Macroeconomics Is About 1) Which of the following is not a topic of macroeconomics?

• Why nations have different rates of growth.
• What causes inflation and what can be done about it?
• What factors contribute to the presence of monopolies in the economy?
• Why unemployment periodically reaches very high levels.

Answer: C

Diff: 1

Topic: Section: 1.1

Question Status: Previous Edition

2) The two major reasons for the tremendous growth in output in the U.S. economy over the last 125 years are

• population growth and low inflation.
• population growth and increased productivity.
• low unemployment and low inflation.
• low inflation and low trade deficits.

Answer: B

Diff: 1

Topic: Section: 1.1

Question Status: Previous Edition

3) The amount of output produced per unit of labor input is called

• the marginal revenue product of labor.
• average labor productivity.
• a util.
• unit labor cost.

Answer: B

Diff: 1

Topic: Section: 1.1

Question Status: New

4) The main reason that the United States has such a high standard of living is

• low unemployment.
• high average labor productivity.
• low inflation.
• high government budget deficits.

Answer: B

Diff: 1

Topic: Section: 1.1

Question Status: Previous Edition

Macroeconomics 11e Andrew Abel, Ben Bernanke, Dean Croushore (Test Bank All Chapters, 100% Original Verified, A+ Grade) 1 / 4

2 Copyright © 2024 Pearson Education, Inc.5) Which of the following factors are most important for determining the economic growth of a country?

• The country's level of resources
• The independence of the country's central bank
• The country's rates of saving and investment
• The level of sophistication of a country's financial markets

Answer: C

Diff: 1

Topic: Section: 1.1

Question Status: Previous Edition

6) Average labor productivity is the

• amount of workers per machine.
• amount of machines per worker.
• ratio of employed to unemployed workers.
• amount of output per worker.

Answer: D

Diff: 1

Topic: Section: 1.1

Question Status: Previous Edition

7) In analyzing macroeconomic data during the past year, you have discovered that average labor productivity fell, but total output increased. What was most likely to have caused this?

• There is nothing unusual in this outcome because this is what normally occurs.
• The capital—output ratio probably rose.
• There was an increase in labor input.
• Unemployment probably increased.

Answer: C

Diff: 2

Topic: Section: 1.1

Question Status: Previous Edition

8) In which of the following periods did average labor productivity in the United States grow the fastest?

• 1929 to 1935
• 1949 to 1973
• 1973 to 1995
• 1995 to 2007

Answer: B

Diff: 1

Topic: Section: 1.1

Question Status: Revised

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3 Copyright © 2024 Pearson Education, Inc.9) The most direct effect of an increase in the growth rate of average labor productivity would be an increase in

• the inflation rate.
• the unemployment rate.
• the long-run economic growth rate.
• imported goods.

Answer: C

Diff: 1

Topic: Section: 1.1

Question Status: Previous Edition

10) Short-run contractions and expansions in economic activity are called

• recessions.
• expansions.
• deficits.
• the business cycle.

Answer: D

Diff: 1

Topic: Section: 1.1

Question Status: Previous Edition

11) The business cycle describes the

• progression of an industry's structure from monopoly to perfect competition.
• progression of an industry's structure from perfect competition to monopoly.
• expansion and contraction of an individual industry within the economy.
• expansion and contraction of economic activity in the economy as a whole.

Answer: D

Diff: 1

Topic: Section: 1.1

Question Status: New

12) When national output rises, the economy is said to be in

• an expansion.
• a deflation.
• an inflation.
• a recession.

Answer: A

Diff: 1

Topic: Section: 1.1

Question Status: Previous Edition

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4 Copyright © 2024 Pearson Education, Inc.13) When national output declines, the economy is said to be in

• an expansion.
• a deflation.
• an inflation.
• a recession.

Answer: D

Diff: 1

Topic: Section: 1.1

Question Status: Previous Edition

14) Which of the following best describes a typical business cycle?

• Economic expansions are followed by economic contractions.
• Inflation is followed by unemployment.
• Trade surpluses are followed by trade deficits.
• Stagflation is followed by inflationary economic growth.

Answer: A

Diff: 1

Topic: Section: 1.1

Question Status: Previous Edition

15) Recessions

• are always followed by long periods of high rates of real economic growth.
• almost never last more than two consecutive quarters.
• cause the unemployment rate to increase.
• do not occur in developed countries, including the United States.

Answer: C

Diff: 1

Topic: Section: 1.1

Question Status: Previous Edition

16) During recessions, the unemployment rate ________ and output ________.

• rises; falls
• rises; rises
• falls; rises
• falls; falls

Answer: A

Diff: 1

Topic: Section: 1.1

Question Status: Previous Edition

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