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1. Story: Workers at a car-manufacturing plant in Flint, Michigan are laid off
because the economy is weak and GM cars aren't selling well. GM isn't sure when
the plant will reopen. What type of unemployment describes the workers'
situation?
2. Globalization that allows governments to pursue expansionary policies can be
dangerous because it can lead to:
3. Macroeconomics is:
4. Which of the following types of unemployment is considered to be the most
controllable through demand-side macroeconomic policy?
5. If banks hold excess reserves whereas before they did not, the money
multiplier:
6. Using the expenditure approach, gross domestic product equals:
7. How do investment in technology and investment in capital differ?
8. The interest rate is the price paid for use of a:
9. If the reserve requirement is 20 percent, and banks keep no excess reserves,
an increase in an initial inflow of $100 into the banking system will cause an
increase in the money supply of:
10. Suppose farmers can use their land to grown either wheat or corn. The law of
supply predicts that an increase in the market price of wheat will cause:
11. According to Keynes, why might deflation create problems for an economy?
12. When interest rates rise, people are:
13. According to the Classical growth model, an economy that increases its
saving will grow:
14. Suppose that consumer spending is expected to decrease in the near future.
If output is at potential output, which of the following policies is most
appropriate according to the AS/AD model?
15. Which of the following topics is best characterized as a macroeconomic
issue?
16. If income increases more rapidly than expected, then:
17. In which of the following situations is a budget surplus most likely to
occur?
18. The largest expenditure component of GDP is:
19. Which of the following is the path through which contractionary monetary
policy works?
20. As a country develops economically, what changes usually take place in the
goods it exports?

3. 21. What would make foreigners want to buy more from the United States?
22. The depreciation of currency will:
23. The government of Crossland wants to influence its exchange rate. It will do
so by buying and selling:
24. If a country wants to prevent its exchange rates from falling, it could:
25. Central banks are responsible for:
26. Quotas and tariffs can:
27. Between 2007 and 2009, the U.S. unemployment rate rose from under 5 percent
to over 8 percent. A Keynesian economist would most likely blame this increase
in unemployment on:
28. U.S. imports involve an:
29. The law of demand states that quantity demanded of a good is inversely
related to the price of that good. Therefore, as the price of a good goes:
30. According to Keynes, market economies: