Question

6. A useful macroeconomic model A. is extremely realistic B. is simple C. never generates testable hypotheses D. provides many intricate details 7. Current macroeconomic models use microeconomic principles because A. they use the same language for all economists B. they highlight the sociological aspects of production C. the behavior of economic agents changes with policy D. we live in a democratic society 8. Why is Gross Domestic Product not a good measure of aggregate welfare? A. GDP includes the value of intermediate goods B. Trade between countries is not included in GDP C. GDP does not include the value of production done in the home D. The government calculates GDP 9. The defining features of business cycles is that they A. are inherently bad B. represent the underlying trend of real GDP C. are fluctuations about trend of real GDP D. measure prospects for future growth in the economy 10. A macroeconomic variable is PROcyclical if A. it grows faster than GDIP B. its deviations from trend generally change before the deviations from trend in GDP do trend GDP deviations from trend GDP C. its deviations from trend generally change more than the deviations from D. its deviations from trend are more often of the same sign as the

Answer 1

6) A macroeconomic model is very useful.

7) Current macroeconomic models use microeconomic models because the behavior of economic agents changes with policy.

8) why is GDP not a good measure of welfare? GDP does not include the value of production done at the home.

9) The defining feature of the business cycle is that they are fluctuation about the trend of real GDP.

10) A macroeconomic variable is Procyclical if its deviation from trend is more often of the same sign as the deviations from trend GDP.