ECO 285 – Macroeconomics
Dr. D. Foster – Fall 2015
Homework #2 Quiz
20 true/false [This is an individual assignment – do your own work.]
1. According to Stossel, it is our intuition to think that without government, business would treat
workers like dogs.
2. According to Stossel, about 75% of the workforce makes more than minimum wage.
3. One of the most successful of the “utopian experiments” mentioned by Stossel was the Dharma
Initiative in Hawaii.
4. John Maynard Keynes is usually cited as the “founder” of macroeconomics.
5. As a general rule, business cycles are quite predictable.
6. The expansion and contraction of business inventories creates a rather short cycle called the
“Kuznets Wave.”
7. Economic growth through the 1980s and 1990s was known as “The Great Moderation.”
8. It is generally accepted that the Natural Bureau of Economic Research determines the dates of peaks
and troughs of the business cycle.
9. A hallmark of the Keynesian theory is that the business cycle has exogenous causes and that we
should respond with only minimal government policy.
10. The theory that the successive election of a public administration will lead to economic fluctuations
is known as the “Real Business Cycle Theory.”
11. The Austrian School theory of the business cycle is referred to as ASBC.
12. The Austrian School attributes business cycles to credit expansion by the banking system.
13. Those that believe Say’s Law is wrong hold that an economy can experience a general glut of goods
and services during a depression.
14. The two flows in the circular flow model are the flow of physical inputs and the flow of physical
outputs.
15. The idea of the circular flow was illustrated in the video with the example of a large museum that
built visitor displays and sold food and gift shop items.
16. In the circular flow model, households are assumed to own all the economic resources in the
economy.
17. The critique of the circular flow notes that it ignores the beginning and end of the economic
process.
18. General equilibrium analysis is generally considered a “bottom-up” approach to understanding the
economy.
19. General equilibrium theory dates back to the works of Leon Walras.
20. General equilibrium theory is used to analyze single markets.
Name:
ECO 285 – Macroeconomics
Dr. D. Foster – Fall 2015
Homework #2 Quiz
Please use the following to record your answers and copy it in with your homework:
Quiz #2
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100 word summary of either Stossel Chapter 3 or Chapter 4:
Word count =
100-150 word reaction essay to the other chapter of Stossel than you summarized (i.e., C4 or C3):
Word count =
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