AnswersMO-EconomicsIntroduction to Macroeconomics

Introduction to Macroeconomics Answers

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Which best describes the purpose served by economic models within an economic system?

A
Models identify patterns.
B
Models determine the business cycle.
C
Models control change.
D
Models define global demand.
3

The aggregate is

A
a type of economic system.
B
the total number of goods demanded or supplied.
C
a form of revenue.
D
the total profit made on sales.
5

What is the relationship between aggregate demand and the price level?

A
They are inversely related.
B
They are directly related.
C
They are unrelated.
D
They fluctuate randomly.
6

A long-run equilibrium occurs when long-run aggregate supply and aggregate demand meet. What does having long-run equilibrium indicate about a society?

A
The society’s supply and demand have stagnated.
B
The society is using all of its resources efficiently.
C
The society’s needs are being fully met.
D
The society is not using all of its resources effectively.
7

In microeconomics, what occurs when equilibrium is reached?

A
Prices decline.
B
Prices increase.
C
Prices are set.
D
Prices fluctuate.
8

A long-run equilibrium occurs when long-run aggregate supply and aggregate demand meet. What does having long-run equilibrium indicate about a society?

A
The society’s supply and demand have stagnated.
B
The society is using all of its resources efficiently.
C
The society’s needs are being fully met.
D
The society is not using all of its resources effectively.
9

Which best describes what occurs in the product market?

A
the exchange of labor for capital
B
the exchange of goods and services for factors of production
C
the exchange of goods and services for money
D
the exchange of money for factors of production
10

The circular flow model examines interactions between which two groups?

A
households and firms
B
households and consumers
C
firms and producers
D
firms and government

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