Chapter 1 economics

1. In countries like _____________ the command economy predominates.

• China and Vietnam

• Germany and France

• Cuba and North Korea

• South Africa and Kenya

In which of the following countries will the national government have the greatest influence with

respect to the nation's economy?

• China

• Cuba

• Canada

• Chile

In the first chapter of The Wealth of Nations, Smith introduces the idea of the __________, which

means the way in which the work required to produce a good or service is divided into a number of tasks

that are performed by different workers.

• division of labor

• interconnected economy

• task economy

• modern economy

In the ____________, households work and receive payment from firms.

• financial investment market

• financial capital market

• labor market

• savings market

Macroeconomic topics do not usually include:

• the profit maximizing decisions of an individual manufacturer.

• the rate of inflation

• the rate of unemployment

• economic growth

The basic difference between macroeconomics and microeconomics is that:

• microeconomics looks at the forest (aggregate markets) while macroeconomics looks at the trees

  (individual markets

• macroeconomics is concerned with groups of individuals while microeconomics is concerned with

  single countries

• microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned

  with the forest (aggregate markets).

• macroeconomics is concerned with generalization while microeconomics is concerned with

  specialization

If macroeconomics looks at the economy as a whole, it focuses on which of the following?

• households

• business firms

• unemployed people

• the division of labor

Which of the following best describes a fiscal policy tool?

• government spending

• bank lending

• financial capital markets

• household spending

The two main tools of macroeconomic policy include monetary policy, and fiscal policy, which involves

__________ spending.

• business

• government

• household

• capital market

In the ______________, households receive goods and services and pay firms for them.

• labor market

• financial capital market

• goods and services market

• savings market