Macro Trivia

Macroeconomics is the study of​ ________ while microeconomics studies​ ________.

• large biological​ systems; political implications of nanotechnology

• the overall economic performance of the​ world; the economy of a single country

• the overall economic activity and​ prices; an individual​ firm, household, or market

• an individual​ firm; the overall economic performance of a nation

• firm ​ behavior; market behavior

Real GDP measures​ ________.

• how slowly interest rates grow.

• the percentage of income produced by workers and firms

• how rapidly the overall level of prices is rising.

• the total market value of actual goods and services produced in an economy over a year

• the total hours the average U.S. citizen works a year

The term​ "business cycle" refers to​

• the rising and later declining of the purchasing power of the dollar

• the tendency for rich economies to be inevitably outpaced by other economies

• the slowing and eventual accelerating of economic growth

• the opening and eventual closing down of businesses

• the acquiring of raw materials and ultimate selling of a finished product

The unemployment rate​ measures, at a point in​ time, the​

• percentage of workers who do not have a job but are looking for work

• percentage of workers who are looking for work

• percentage of workers who stop working

• percentage of workers who do not have a job

• none of the above

Which of the following is a flow​ variable?

• The amount of money in your wallet that you can spend on groceries.

• The amount of money you have spent purchasing music downloads instead of groceries.

• The amount of groceries purchased per week at the supermarket.

• The amount of groceries in your refrigerator.

How do macroeconomists distinguish between nominal and real values of​ variables?  

• Nominal variables are always adjusted to reflect seasonal variation while real variables are not.

• Nominal variables are measured in quantities of goods and​ services; real variables are measured in market prices because that is how they are really counted.

• Nominal variables are measured in market​ prices; real variables are measured in quantities of goods and services.

• Real variables are always adjusted to reflect seasonal variation while nominal variables are not.

Does nominal GDP or real GDP provide a better picture of changes in economic activity and economic​ well-being? ​ Why?

• Either measure provides an equally good picture of changes in economic activity because they move in the same direction.

• Real GDP provides a better picture because it measures actual changes in quantities of goods and services.

• Nominal GDP provides a better picture because it measures market values of goods and services.

• Nominal GDP provides a better picture because it includes​ inflation, which can harm economic​ well-being.

An example of a nominal variable is​ ....

• expenditures in terms of the quantities of actual goods

• income measured at current market prices

• all of the above

• none of the above

Monetary policy involves changing taxes or government​ spending.

• True

• False

Fiscal policy involves changing the money supply or interest rates.

• True

• False