ECON 3200 QUESTIONS MIDTERM FALL 2020
CHAPTER #1 QUESTIONS AND ANSWERS
1.The study of the economy as a whole is called:
A) household economics
B) business economics
C) microeconomics
D) macroeconomics
2.All of the following are types of macroeconomics data
except the:
A) price of an IBM computer
B) real GDP
C) inflation rate
D) none of the above
EXPLANATION: The price of a single good is a variable
in micro. Macro deals with aggregate/total.
3. All of the following are important macroeconomics
variables except:
A) real GDP
B) the interest rate
C) the marginal rate of substitution
D) the inflation rate
,4. Exogenous variables are:
A) variables with values given outside an economic
model
B) determined within the model
C) the outputs of the model
D) explained by the model
5. Endogenous variables are:
A) fixed at the moment they enter the model
B) determined within the model
C) the inputs of the model
D) from outside the model
6. In an economic model:
A) exogenous variables and endogenous variables are
both fixed/given when they enter the model
B) endogenous variables and exogenous variables are
both determined within the model
,C) endogenous variables affect exogenous variables.
D) none of the above
EXPLANATION: Choice ‘C’ is wrong because values of
exogenous variables affect endogenous variables - the
values of endogenous variables are determined by the
equations and values of the exogenous variables.
7. Variables that a model tries to explain are called:
A) endogenous
B) exogenous
C) market clearing
D) none of the above
8. Variables that a model takes as given are called:
A) endogenous
B) exogenous
C) market clearing
D) macroeconomic
9. Macroeconomic models are used to explain how ___
variables influence ___ variables.
A) endogenous; exogenous
B) exogenous; endogenous
C) microeconomic; macroeconomic
, D) macroeconomic; microeconomic
10. The assumption of flexible prices is a more plausible
assumption when applied to price changes that occur:
A) from minute to minute
B) from month to month
C) in the long run
D) in the short run
11. An assumption of___ is more plausible for studying
the short run behavior of the economy, while an
assumption of___ is more plausible for studying the long
run equilibrium behavior of the economy.
A) deflation; inflation
B) inflation; deflation
C) flexible prices; sticky/rigid prices
D) sticky/rigid prices; flexible prices
12. When studying the short run behavior of the economy,
an assumption of ___ is more plausible and hence, prices
are assumed to be ____ in the short run.
A) flexible prices; endogenous
B) sticky/rigid prices; endogenous
C) flexible prices; exogenous
CHAPTER #1 QUESTIONS AND ANSWERS
1.The study of the economy as a whole is called:
A) household economics
B) business economics
C) microeconomics
D) macroeconomics
2.All of the following are types of macroeconomics data
except the:
A) price of an IBM computer
B) real GDP
C) inflation rate
D) none of the above
EXPLANATION: The price of a single good is a variable
in micro. Macro deals with aggregate/total.
3. All of the following are important macroeconomics
variables except:
A) real GDP
B) the interest rate
C) the marginal rate of substitution
D) the inflation rate
,4. Exogenous variables are:
A) variables with values given outside an economic
model
B) determined within the model
C) the outputs of the model
D) explained by the model
5. Endogenous variables are:
A) fixed at the moment they enter the model
B) determined within the model
C) the inputs of the model
D) from outside the model
6. In an economic model:
A) exogenous variables and endogenous variables are
both fixed/given when they enter the model
B) endogenous variables and exogenous variables are
both determined within the model
,C) endogenous variables affect exogenous variables.
D) none of the above
EXPLANATION: Choice ‘C’ is wrong because values of
exogenous variables affect endogenous variables - the
values of endogenous variables are determined by the
equations and values of the exogenous variables.
7. Variables that a model tries to explain are called:
A) endogenous
B) exogenous
C) market clearing
D) none of the above
8. Variables that a model takes as given are called:
A) endogenous
B) exogenous
C) market clearing
D) macroeconomic
9. Macroeconomic models are used to explain how ___
variables influence ___ variables.
A) endogenous; exogenous
B) exogenous; endogenous
C) microeconomic; macroeconomic
, D) macroeconomic; microeconomic
10. The assumption of flexible prices is a more plausible
assumption when applied to price changes that occur:
A) from minute to minute
B) from month to month
C) in the long run
D) in the short run
11. An assumption of___ is more plausible for studying
the short run behavior of the economy, while an
assumption of___ is more plausible for studying the long
run equilibrium behavior of the economy.
A) deflation; inflation
B) inflation; deflation
C) flexible prices; sticky/rigid prices
D) sticky/rigid prices; flexible prices
12. When studying the short run behavior of the economy,
an assumption of ___ is more plausible and hence, prices
are assumed to be ____ in the short run.
A) flexible prices; endogenous
B) sticky/rigid prices; endogenous
C) flexible prices; exogenous
