Mankiw macroeconomics practice questions

Answer the following essay questions in three to four blue book pages or less.

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Mankiw macroeconomics practice questions

Visit TestBankBell. The macroeconomic problem that affects individuals most directly and severely is: A inflation. B unemployment. C low savings. D low investment. The unemployment rate in the United States since has: A never been close to zero. B gravitated toward a steady-state rate of zero. C remained constant from year to year. D equaled the natural rate of unemployment in every year. The natural rate of unemployment is: A the average rate of unemployment around which the economy fluctuates. B about 10 percent of the labor force. C a rate that never changes. D the transition of individuals between employment and unemployment. In a steady state: A no hiring or firings are occurring.

This only matters, however, when inflation is unexpected.

The economic statistic used to measure the level of prices is: A GDP. B CPI. C GNP. D real GDP. The statistic used by economists to measure the value of economic output is: A the CPI. B GDP. C the GDP deflator.

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Mankiw macroeconomics practice questions

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Because interest on checking accounts encourages people to hold money, dollars circulate less frequently. The quantity of bread consumed was higher in than in , so the CPI places a higher weight on bread. If the marginal productivity of barbers is unchanged, then their real wage is unchanged. Minimum-wage laws cause wage rigidity when they prevent wages from falling to equilibrium levels. It is the third consecutive year that the federal government has had a surplus after almost 30 years of running budget deficits. Real GDP falls because with fewer workers on the job, firms produce less. It is reasonable to assume that the objective of an economic policymaker is to maximize the economic well-being of the individual members of society. B reduces the incomes of poor working families. Figure 9—10 shows that this causes the real interest rate to rise. Give some examples of active labor market policies that help in reducing the unemployment rates. There is thus a one-to-one relationship between the inflation rate and the nominal interest rate: if inflation increases by 1 percent, then the nominal interest rate also increases by 1 percent. This may be costly if they must reprint their menus and catalogs.

Are you looking for practice material for an upcoming assignment or test in macroeconomics? Check out these macroeconomics practice quiz questions and answers and test your knowledge for the same.

D may increase, decrease, or remain constant. Which of the following is an example of frictional unemployment? The Fed could increase the money supply to offset this decrease and thereby return the economy to its original equilibrium at point A, as in Figure 9—7. D ticket to see the movie State whether I am right or wrong with an explanation for your answer. Jennifer Temple is working as a second-grade schoolteacher. Assume that a society consists of two types of workers. Depending on how one looks at the data, most unemployment can appear to be either short term or long term. Chapter 4 Money and Inflation 27 Most economists believe that this Mundell—Tobin effect is not important because real money balances are a small fraction of wealth. D income of employees. The demand for real money balances depends on the interest rate, which is the opportunity cost of holding money. The theory of liquidity preference explains how the supply and demand for real money balances determine the interest rate. But the MPK depends on the capital stock per efficiency unit of labor. For an individual, we usu- ally consider thriftiness a virtue.