1. Which is a macroeconomic topic?
A. An increase in the price of gasoline
B. The monthly expenditure of a typical urban household on entertainment
C. The annual growth rate of an economy Correct
D. A hike in the wage rate of workers in a textile factory in a state
Explanation
The annual growth rate of an economy is a macroeconomic topic as it pertains to the economy as a whole. Gasoline price increases are microeconomic, affecting specific markets. Household entertainment expenditure is microeconomic, focusing on individual behavior. Wage hikes in a specific industry are also microeconomic.
2. Which characteristic is associated with a traditional economy?
A. Privately owned goods and services are standard
B. Trade is heavily dependent on bartering rather than money Correct
C. Prices and production are driven by competition
D. The government decides how to distribute capital resources
Explanation
Traditional economies rely on bartering and customs for trade, not money. Private ownership is typical in market economies. Competition-driven prices characterize market economies. Government-controlled resource distribution is a feature of command economies.
3. Which question would be studied by a macroeconomist?
A. Can a tax on alcohol reduce the number of fatalities on freeways?
B. What percentage of an individual’s consumer income is spent on medicine?
C. What is the market price of corn?
D. What is the impact of a constitutional amendment on the federal budget? Correct
Explanation
The impact of a constitutional amendment on the federal budget is a macroeconomic issue, affecting the entire economy. Alcohol tax effects on fatalities may have macro implications but focus on behavior. Medicine expenditure and corn prices are microeconomic, concerning individual markets.
4. Which is a feature of a mixed economy?
A. Government monopolizes businesses that are considered essential for economic development
B. Resources are owned publicly and privately, and there is some market regulation Correct
C. All resources are publicly owned, and decision-making is centralized
D. All decisions are primarily based on norms, customs, beliefs, and religion
Explanation
Mixed economies feature both public and private resource ownership with some government regulation. Government monopolies are not typical. Centralized public ownership defines command economies. Decisions based on customs are characteristic of traditional economies.
5. Which term describes the acquisition of skills resulting from education or experience?
A. Tools
B. Human capital Correct
C. Productivity
D. Financial capital
Explanation
Human capital refers to skills and knowledge gained through education or experience. Tools are physical capital. Productivity measures output efficiency. Financial capital refers to monetary resources.