1.Macroeconomics, as opposed to microeconomics, includes thestudy of what determines the level of

A. employment in a specific industry

B.employment in the economy

C.output of a specific firm

D.output of a specific industry.

2.The unemployment rate is an important economic statistic thatcan tell us about the health of the economy. If the unemploymentrate turns out to be high or higher than anticipated, we wouldexpect

A.it is more likely that an incumbent president will bere-elected.

B.that stock prices are more likely to fall.

C.that jobs are less difficult to find.

D.that investors will be more optimistic about the economy.

3.Which of the following statements is always true about theU.S. economy?

A.Each year, many new jobs are created, but few existing jobsare destroyed, and the unemployed find jobs quickly.

B.Each year, few new jobs are created, but few existing jobs aredestroyed, keeping unemployment low.

C.Each year, many new jobs are created and many existing jobsare destroyed.

D.Each year few jobs are created, and therefore it takes theunemployed a long time to find a new job.

4.In examining the national income accounts of the closedeconomy of the country X you see that this year it had taxes of$100 billion, transfers of $40 billion, and government purchases ofgoods and services of $80 billion. You also notice that last yearit had taxes of 120 billion, private saving of $50 billion, andinvestment of $80 billion. Thus, in ___ year, the country X have abudget ____ of _____ billion?

A.this year; deficit; $20

B.this year; surplus; $20

C. last year; deficit; $30

D.last year; surplus; $40

5.We can illustrate the economic growth model using theper-worker production function, which is the relationship between______, holding the level of technology constant.

A.real GDP per capita and capital per capita

B.real GDP per hour worked and capital per hour worked

C.nominal GDP per capita and capital per capita

D.nominal GDP per hour worked and capital per hour worked

6.Why has productivity growth in the U.S. been more rapid thanin the other industrialized countries?

A.Because of the greater flexibility of U.S. labor markets andthe greater efficiency of the financial system.

B.Because the U.S. government has more restrictive but also moreeffective regulations that makes the labor and output markets moreefficient.

C.Because the opportunity cost of being unemployed is lower inthe U.S. than in other countries.

D.All of the above.

7.The slope of the consumption function is equal to

A.the change in consumption divided by the change in disposableincome.

B.the change in consumption divided by the change in personalincome.

C,the change in disposable income divided by the change inconsumption.

D.the change in national income divided by the change inconsumption.

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