Macroeconomics Is Mostly Focused On

Chapter 6

Macroeconomics is mostly focused on:the economy as a whole.
The two topics of primary concern in macroeconomics are:short-run fluctuations in output and employment and long-run economic growth.
The business cycle depicts:short-run fluctuations in output and employment.
The term “recession” describes a situation where:output and living standards decline.
Which of the following is most closely related to recessions?Negative real growth in output.
Which of the following statements is most accurate about advanced economies?Economies experience a positive growth trend over the long run but experience significant variability in the short run.
Real GDP measures the:value of final goods and services produced within the borders of a country, corrected for price changes.
If the prices of all goods and services rose, but the quantity produced remained unchanged, what would happen to nominal and real GDP?Nominal GDP would rise, but real GDP would be unchanged.
Real GDP is preferred to nominal GDP as a measure of economic performance because:nominal GDP uses current prices and thus may over- or understate true changes in output.
Harry’s Pepperoni Pizza Parlor produced 10,000 large pepperoni pizzas last year that sold for $10 each. This year Harry’s again produced 10,000 large pepperoni pizzas (identical to last year’s pizzas) but sold them for $12 each. Based on this information we can conclude that Harry’s production of large pepperoni pizzas:increased nominal GDP from last year, but real GDP was unaffected.
Harry’s Pepperoni Pizza Parlor produced 10,000 large pepperoni pizzas last year that sold for $10 each. This year Harry’s again produced 10,000 large pepperoni pizzas (identical to last year’s pizzas) but sold them for $12 each. Based on this information we can conclude that Harry’s production of large pepperoni pizzas this year:increased nominal GDP by $20,000 but left real GDP unchanged.
Why are high rates of unemployment of concern to economists?There is lost output that could have been produced if the unemployed had been working.
Unemployment describes the condition wherea person cannot get a job but is willing to work and is actively seeking work.
Higher rates of unemployment are linked with:higher crime rates as the unemployed seek to replace lost income.