Principles of Macroeconomics 7th Edition

ISBN 13
978-1285165912
ISBN 10
1285165918
Authors
N. Gregory Mankiw
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272 documents found.
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Exam Prep
Chapter 1 A Worker In Vietnam Can Earn $6 Per Day Making Cotton Cloth On A Hand
Ten Principles of Economics 141 25. A worker in Vietnam can earn $6 per day making cotton cloth on a hand loom. A worker in the United States can earn $85 per day making cotton cloth with a mechanical loom. What is the likely explanation for the difference
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Chapter 1 Homework This Excerpt From Commencement Address Robert Mcteer
1 WHATS NEW IN THE SEVENTH EDITION: There is an additional example about marginal benefits and marginal costs. LEARNING OBJECTIVES: By the end of this chapter, students should understand: that economics is about
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Chapter 1 Homework Economics Is Like A Science Because economists Devise Theories
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Chapter 1 Melinda Quits Her Job At A Bank, Which Pays $30,000 A Year
192 Ten Principles of Economics Scenario 1-5 Suppose that you have a choice between going to the movies with a friend for three hours or working at your job. If you go to the movies, you will spend $12 on a ticket and $6 on popcorn. If you choose
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Chapter 1 The Combination Of President Obama’s Strategies And The Federal Reserve’s
Ten Principles of Economics 161 65. In the short run, which of the following is not correct? a. Increasing the money supply increases the demand for goods and services. b. Increasing the money supply encourages firms to hire more workers. c. Lowering the money supply leads to a
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Chapter 1 The English Word That Comes From The Greek Word For
Ten Principles of Economics Multiple Choice Section 00: Introduction 1. The English word that comes from the Greek word for "one who manages a household" is a. market. b. consumer. c. producer. d. economy. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy LEARNING OBJECTIVES: ECON.MANK.15.1 -
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Chapter 1 The Success Of Decentralized Market Economies Is Primarily Due To
Ten Principles of Economics 101 47. According to Adam Smith, the success of decentralized market economies is primarily due to a. the basic benevolence of society. b. society's legal system. c. individuals' pursuit of self-interest. d. partnerships that are forged between business and government. ANSWER: c POINTS:
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Chapter 1 The Terms Equality And Efficiency Are Similar In That They Both
Ten Principles of Economics 21 19. The terms equality and efficiency are similar in that they both refer to benefits to society. However they are different in that a. equality refers to uniform distribution of those benefits and efficiency refers to maximizing benefits from scarce resources. b. equality
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Chapter 1 The Willingness Of Citizens To Pay For Vaccinations Does Not Include
Ten Principles of Economics 121 88. The willingness of citizens to pay for vaccinations does not include the benefit society receives from having vaccinated citizens who cannot transmit an illness to others. This extra benefit society gets from vaccinating its citizens is known as a. productivity. b. an
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Chapter 10 Consumption Consists Of Spending By Households On Goods And Services
Measuring a Nations Income 5671 6. Consumption consists of spending by households on goods and services, with the exception of a. purchases of intangible services. b. purchases of durable goods. c. purchases of new houses. d. spending on education. ANSWER: c POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES:
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Chapter 10 GDP Per Person Associated With A Longer Life
Measuring a Nations Income 5771 5. GDP does not reflect a. the value of leisure. b. the value of goods and services produced at home. c. the quality of the environment. d. All of the above are correct. ANSWER: d POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.15.115
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Chapter 10 Homework Why An Economy’s Total Income Equals Its Total 
economists measure the level of prices in the macroeconomy. Taken together, Chapter 10 concentrates on the quantity of output in the macroeconomy while Chapter 11 concentrates on the price of output in the macroeconomy. The purpose of this chapter is to provide students with an understanding of the measurement and
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Chapter 10 If Total Spending Rises From One Year To The Next
Measuring a Nations Income 5711 88. In the economy of Talikastan in 2015, consumption was $3000, exports were $400, GDP was $5000, imports were $500, and investment was $1400. What were Talikastans government purchases in 2015? a. $60 b. $500 c. $700 d. $1500 ANSWER: c POINTS:
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Chapter 10 The Government Computes Measures Of Income Other Than GDP
Measuring a Nations Income 5791 27. The government computes measures of income other than GDP because these other measures usually tell different stories about overall economic conditions. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.15.112 - LO: 23-2 NATIONAL STANDARDS: United States
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Chapter 10 United States GDP And GNP Are Nearly
Measuring a Nations Income 5651 84. The government of a country, which has adopted American GDP accounting conventions, reported that seasonally adjusted GDP in quarter 3 was $48 billion at an annual rate. This means that the seasonally-adjusted market value of all final goods and services produced within
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Chapter 10 Us Consumers Which Of The Following This Transaction
Measuring a Nations Income 5691 46. Which of the following items is counted as part of government purchases? a. The federal government pays the salary of a Navy officer. b. The state of Nevada pays a private firm to repair a Nevada state highway. c. The city of
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Chapter 10 Which Of The Following Is A Way To Compute GDP
Measuring a Nations Income 5611 3. Which of the following is a way to compute GDP? a. total income earned. b. total expenditures on final goods. c. add up the market values of all final goods and services. d. All of the above are correct. ANSWER: d
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Chapter 10 Which Of The Following Is Not A Correct Statement About The Growth
Measuring a Nations Income 5751 57. Refer to Table 23-5. In 2017, this countrys a. real GDP was $900, and the GDP deflator was 138.9. b. real GDP was $1250, and the GDP deflator was 128.0. c. real GDP was $900, and the GDP deflator was 128.0. d.
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Chapter 10 Which Of The Following Is The Correct Formula For The GDP Deflator
Measuring a Nations Income 5731 14. Which of the following statements about nominal GDP and real GDP is correct? a. Nominal GDP is a better gauge of economic well-being than real GDP. b. Real GDP is a better gauge of economic well-being than nominal GDP. c. Real GDP
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Chapter 10 Which Of The Following Questions Is More Likely To Be Studied By A Microeconomist
Measuring a Nations Income Multiple Choice Section 00: Introduction 1. Macroeconomists study a. the decisions of individual households and firms. b. the interaction between households and firms. c. economy-wide phenomena. d. regulations imposed on firms and unions. ANSWER: c POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES:
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Chapter 10 Which The Following Transactions Would Included
Measuring a Nations Income 5631 44. Janet bought flour and used it to bake bread she ate. ABC Bakery bought flour which it used to bake bread that customers purchased. In which case will the flour be counted as a final good? a. Janets purchase and ABC Bakerys
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Chapter 10 You Find That Your Paycheck For The Year Is Higher This Year
5810 Measuring a Nations Income 82. You find that your paycheck for the year is higher this year than last. Does that mean that your real income has increased? Explain carefully. ANSWER: Real income is nominal income adjusted for general increase in prices. If your paycheck is
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Chapter 11 An Important Difference Between The GDP Deflator And The Consumer
Measuring the Cost of Living 101 200. An important difference between the GDP deflator and the consumer price index is that a. the GDP deflator reflects the prices of goods and services bought by producers, whereas the consumer price index reflects the prices of goods and services bought by
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Chapter 11 Babe Ruth The Famous Baseball Player Earned
Measuring the Cost of Living Multiple Choice Section 00: Introduction 1. Babe Ruth, the famous baseball player, earned $80,000 in 1931. Today, the best baseball players can earn more than 400 times as much as Babe Ruth earned in 1931. However, prices have also risen since 1931. We
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Chapter 11 Compute How Much Each Of The Following Items 
Measuring the Cost of Living 221 71. In the late 1970s, U.S. nominal interest rates were high and real interest rates were low, but in the late 1990s, U.S. nominal interest rates were low and real interest rates were high. a. True b. False ANSWER: True POINTS: 1
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Chapter 11 CPIC The Newspaper Editorial Could Correct The
Measuring the Cost of Living 161 63. Refer to Table 24-13. Suppose Olivias 2009 clothing expenditure in 2010 dollars amounts to $1,440. Then X, the consumer price index for 2009, has a value of a. 120. b. 130. c. 140. d. 150. ANSWER: d POINTS: 1 DIFFICULTY: Moderate
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Chapter 11 Harrys 2014 Spending 2009 Dollars About A 40000b
Measuring the Cost of Living 141 23. Refer to Scenario 24-1. In 1975 dollars, a 1975 tennis ball cost $0.10 and a 2005 tennis ball cost a. $0.27, so tennis balls were cheaper in 1975. b. $0.27, so tennis balls were cheaper in 2005. c. $3.66, so tennis balls
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Chapter 11 Homework This Means That The Group Goods And
197 197 197 The purpose of Chapter 11 is twofold: first, to show students how to generate a price index and, second, to teach them how to employ a price index to compare dollar figures from different points in time and to adjust interest rates for inflation. In addition,
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Chapter 11 If The Nominal Interest Rate Is 4 Percent And The Real Interest 
Measuring the Cost of Living 181 105. If the nominal interest rate is 4 percent and the real interest rate is 7 percent, then the inflation rate is a. -3 percent. b. 0.75 percent. c. 3 percent. d. 11 percent. ANSWER: a POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES:
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Chapter 11 In Which Of The Following Cases Would There Be An Effect
Measuring the Cost of Living 121 10. Which of the following statements is true? a. Even if we know the values of the consumer price index for the years 2009 and 2010, we cannot calculate the inflation rate for 2010 if we do not know which year is the
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Chapter 11 Suppose Basket Goods And Services Has
Measuring the Cost of Living 41 69. For an imaginary economy, the value of the consumer price index was 138.75 in 2016, and the inflation rate was 10 percent between 2015 and 2016. The consumer price index in 2015 was a. 126.1. b. 128.8. c. 148.8. d. 152.6.
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Chapter 11 Suppose The Price Index Was 110
Measuring the Cost of Living 21 28. If the consumer price index was 96 in 2012, 100 in 2013, and 102 in 2014, then the base year must be a. 2012. b. 2013. c. 2014. d. The base year cannot be determined from the given information. ANSWER: b
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Chapter 11 The Bureau Of Labor Statistics Determines Which Prices Are Most
Measuring the Cost of Living 201 11. The Bureau of Labor Statistics determines which prices are most important to the typical consumer by surveying consumers. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.15.118 - LO: 24-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic
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Chapter 11 The Consumer Price Index Tries To Gauge How Much Incomes Must Rise
Measuring the Cost of Living 81 158. The consumer price index tries to gauge how much incomes must rise to maintain a. an increasing standard of living. b. a constant standard of living. c. a decreasing standard of living. d. the highest standard of living possible. ANSWER: b
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Chapter 11 The Table Below Applies To An Economy With Only Two Goods
Measuring the Cost of Living 61 116. Refer to Table 24-6. If the base year is 2009, then the economys inflation rate in 2010 is a. 20 percent. b. 25 percent. c. 30 percent. d. 120 percent. ANSWER: a POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.15.118 - LO:
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Chapter 11 What Is The Difference Between The Consumer Price Index
232 Measuring the Cost of Living 16. Refer to Scenario 24-6. Using 2011 as the base year, what is the inflation rate in 2011? ANSWER: The inflation rate is 20%. POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.15.118 - LO: 24-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS:
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Chapter 12 A Country Experiencing A Growth Rate Of 12% Per Year Can Go From
Production and Growth Multiple Choice Section 00: Introduction 1. The average income in a rich country, such as the United States or Japan, is more than a. 3 times, but less than 5 times, the average income in a poor country, such as Indonesia or Nigeria. b. 5
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Chapter 12 Amy Discovers A Way To Produce Water Heaters So They Are Less
Production and Growth 6151 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible
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Chapter 12 Europeans Purchased Stock In American Companies That Used The Funds 
Production and Growth 6191 57. The catch-up effect refers to the idea that a. saving will always catch-up with investment spending. b. it is easier for a country to grow fast and so catch-up if it starts out relatively poor. c. population eventually catches-up with increased output. d.
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Chapter 12 GDP And Country Had The Higher Level
Production and Growth 6111 24. In one day Portal Computer Company made 400 laptops with 1200 hours of labor. What was its productivity? a. 1/3 laptop per hour b. 3 hours per laptop c. 1200 laptops d. 400 laptops ANSWER: a DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.122 - LO:
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Chapter 12 GDP Per Persona Population Growth And Real
Production and Growth 6091 34. The United Kingdom is a. an advanced economy, and over the past century its rate of economic growth has been higher than that of the United States. b. an advanced economy, and over the past century its rate of economic growth has been lower than
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Chapter 12 Homework Contracts Must Also Enforced Countries With Questionable
investment in capital goods affect the production of output, and in Chapter 14, we learn about some of the tools people and firms use when choosing capital projects in which to invest. In Chapter 15, we address the market for labor. The purpose of Chapter 12 is to examine the
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Chapter 12 Likewise There Will Little Incentive For Foreigners
Production and Growth 6251 49. Economists generally believe that inward-oriented policies are more likely to foster growth than outward-oriented policies. a. True b. False ANSWER: False DIFFICULTY: Difficulty: Easy LEARNING OBJECTIVES: ECON.MANK.15.123 - LO: 25-3 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC: International Trade KEYWORDS:
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Chapter 12 Other Things The Same This Decrease Will
Production and Growth 6211 104. If a newly elected government takes actions that makes its countrys courts more efficient and less corrupt, then a. producers will have greater confidence that they will benefit from their efforts. b. producers are likely to be more specialized. c. buyers and sellers
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Chapter 12 The President Of A Poor Country Has Announced That He Will Implement
Production and Growth 6231 150. The president of a poor country has announced that he will implement the following measures which he claims are designed to increase growth: 1. Reduce corruption in the legal system; 2. Reduce reliance on market forces because they allocate goods and services in
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Chapter 12 The Traditional View Of The Production Process Is That Capital
Production and Growth 6171 11. The traditional view of the production process is that capital is subject to a. constant returns. b. increasing returns. c. diminishing returns. d. diminishing returns for low levels of capital, and increasing returns for high levels of capital. ANSWER: c DIFFICULTY: Difficulty:
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Chapter 12 Which Of The Following Are Included In Her Physical Capital
Production and Growth 6131 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible
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Chapter 13 Homework Policy Law Increase Saving And Policy Law
The purpose of Chapter 13 is to show how saving and investment are coordinated by the loanable funds market. Within the framework of the loanable funds market, we are able to see the effects of taxes and government deficits on saving, investment, the accumulation of capital, and ultimately, the
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Chapter 13 If The Quantity Of Loanable Funds Demanded Exceeds The Quantity
Saving, Investment, and the Financial System 6419 6. Other things the same, when the interest rate rises, a. people would want to lend more, making the supply of loanable funds increase. b. people would want to lend less, making the supply of loanable funds decrease. c. people would want
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Chapter 13 Scenario 263 This Economys Government Running Aa
Saving, Investment, and the Financial System 6399 63. A budget surplus a. occurs when the government has debt equal to zero. b. causes government debt to increase. c. exists when government spending is greater than tax revenues. d. reduces the governments debt. ANSWER: d POINTS: 1 DIFFICULTY: Moderate
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Chapter 13 Which Of The Following Equations Represents GDP For An Open Economy
Saving, Investment, and the Financial System 6379 22. Which of the following equations represents GDP for an open economy? a. Y = C + I + G + NX b. NX = I - G c. I = Y - C + G + NX d. Y = C
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Chapter 13 Which Of The Following Statements About Mutual Funds Is Correct
Saving, Investment, and the Financial System 6359 161. Index funds a. buy all the stocks in a given stock index. b. promise to beat the market by a certain percentage known as an index. c. provide a return that is adjusted for changes in the consumer price index. d.
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Chapter 14 Homework Definition Informationally Efficient Reflecting All Available Information
The purpose of Chapter 14 is to introduce the students to some tools that people use when they participate in financial markets. We will show how people compare different sums of money at different points in time, how they manage risk, and how these concepts combine to help determine
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Chapter 14 How Long Will It Take For The Value Of A Savings
The Basic Tools of Finance 6621 156. According to the rule of 70, if the interest rate is 5 percent, how long will it take for the value of a savings account to double? a. about 3.5 years b. about 6.3 years c. about 12 years d. about 14
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Chapter 14 Most Financial Decisions Involve Two Related Elements
The Basic Tools of Finance Multiple Choice Section 00: Introduction 1. Most financial decisions involve two related elements: a. advice and consent. b. investment and taxes. c. time and risk. d. saving and consumption. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy LEARNING OBJECTIVES: ECON.MANK.15.130 - LO: 27-0
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Chapter 14 Then He Definitely Would Buy Fire Insurance Provided
The Basic Tools of Finance 6661 23. Refer to Figure 27-3. Suppose Paul begins with $900 in wealth. Starting from there, a. Paul would be willing to accept a coin-flip bet that would result in him winning $200 if the result was heads or losing $200 if the result
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Chapter 14 Thus The Likely Standard Deviation Of The Portfolios
The Basic Tools of Finance 6721 25. If stock prices follow a random walk, then stock investors can make large profits by a. buying stocks whose prices have been falling for several days. b. buying stocks whose prices have been rising for several days. c. performing fundamental analysis
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Chapter 14 You Put $150 In The Bank Two Years Ago And Forgot About 
The Basic Tools of Finance 6561 38. You put $150 in the bank two years ago and forgot about it. The bank sends you a notice that you now have $169.34 in your account. What interest rate did you earn? a. 5.50 percent b. 5.65 percent c. 6.25 percent
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Chapter 15 Cyclical Unemployment Refers Toa. The Relationship
Unemployment Multiple Choice Section 00: Introduction 1. To maintain their standard of living, most people rely on a. government assistance. b. their personal savings. c. their labor earnings. d. rental income. ANSWER: c DIFFICULTY: Difficulty: Easy LEARNING OBJECTIVES: ECON.MANK.15.135 - LO: 28-0 NATIONAL STANDARDS: United
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Chapter 15 Data On The Unemployment Rate In The U.S. Since 1960 Show 
70. Data on the unemployment rate in the U.S. since 1960 show that the economy always has some unemployment and that the amount changes from year to year. a. True b. False ANSWER: True DIFFICULTY: Difficulty: Easy LEARNING OBJECTIVES: ECON.MANK.15.136 - LO: 28-1 NATIONAL STANDARDS: United States - BUSPROG:
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Chapter 15 Homework This Implies That Unions Raise The Wage
The purpose of Chapter 15 is to introduce students to the labor market. We will see how economists measure the performance of the labor market using unemployment statistics. We will also address a number of sources of unemployment and some policies that the government might use to lower certain
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Chapter 15 How Does The Government Measure The Economy’s Rate Of Unemployment
239. What is the theory of efficiency wages? Provide four reasons that employers might pay efficiency wages. ANSWER: According to the theory of efficiency wages, firms operate more efficiently if wages are above the equilibrium level. Therefore, it may be profitable for firms to keep wages high even in
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Chapter 15 It Is Only Among The Least Skilled And Least Experienced Members
190. It is only among the least skilled and least experienced members of the labor force that minimum-wage laws cause unemployment. a. True b. False ANSWER: True DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.138 - LO: 28-3 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC: Labor Economics Minimum Wage
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Chapter 15 President Big Ego Is Running For Re-election Against Senator Pander
67. President Bigego is running for re-election against Senator Pander. Bigego proclaims that more people are working now than when he took office. Pander says that the unemployment rate is higher now than when Bigego took office. You conclude that a. one of them must be lying. b. both of
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Chapter 15 Sarah Who Does Not Have Job But
27. Who of the following would be included in the Bureau of Labor Statistics unemployed category? a. Miguel, who is on temporary layoff b. Reta, who worked only 15 hours last week c. Marisa, who neither has a job nor is looking for one d. None of the above is
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Chapter 15 Suppose That Efficiency Wages Become More Common In The Economy
6. Suppose that efficiency wages become more common in the economy. Imposing efficiency wages a. increases the quantity demanded and decreases the quantity supplied of labor. b. decreases the quantity demanded and increases the quantity supplied of labor. c. increases the quantity demanded and decreases the quantity supplied of labor.
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Chapter 15 The Bureau Of Labor Statistics’ Household Survey And Establishment
130. The Bureau of Labor Statistics household survey and establishment survey both yield the same results about total employment. a. True b. False ANSWER: False DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.136 - LO: 28-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC: Labor Economics Unemployment KEYWORDS: BLOOM'S: Comprehension
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Chapter 15 The Labor-force Participation Rate Of Aridi A In 2012 Was
111. Refer to Table 28-2. The labor-force participation rate of Aridia in 2012 was a. 50%. b. 53.3%. c. 56.25%. d. 88.9%. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.136 - LO: 28-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC: Labor Economics KEYWORDS: BLOOM'S: Application
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Chapter 15 The Natural Rate Of Unemployment Is Closely Associated With The
9. The natural rate of unemployment is closely associated with the short-run ups and downs of economic activity. a. True b. False ANSWER: False DIFFICULTY: Difficulty: Easy LEARNING OBJECTIVES: ECON.MANK.15.141 - LO: 28-0 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC: Labor Economics Unemployment KEYWORDS: BLOOM'S: Knowledge ANSWER:
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Chapter 15 These Individuals Are Called A Detached Workers And
152. Which of the following is not a commonly-cited explanation for the dramatically increasing labor-force participation rates for women from 1950 to the present? a. availability of reliable birth control b. invention of household labor-saving devices such as dishwashers and microwave ovens c. an increasing number of women who work
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Chapter 15 Wanda Quit Her Job Because She Was Unhappy At Work
28. Wanda quit her job because she was unhappy at work. Arnold was fired from his landscaping job because his company was downsizing. Who is eligible for unemployment insurance benefits? a. both Wanda and Arnold b. Wanda but not Arnold c. Arnold but not Wanda d. neither Wanda nor Arnold
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Chapter 15 When A Union Raises The Wage Above The Equilibrium Level
14. When a union raises the wage above the equilibrium level, it a. reduces both the quantity of labor supplied and the quantity of labor demanded. b. reduces the quantity of labor supplied and raises the quantity of labor demanded. c. raises the quantity of labor supplied and reduces the
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Chapter 15 Which Of The Following Is Not An Explanation For The Existence 
194. Which of the following is not an explanation for the existence of unemployment in the long run? a. it takes time for workers to search for the jobs that are best suited for them b. minimum-wage laws c. unions d. the business cycle ANSWER: d POINTS: 1 DIFFICULTY:
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Chapter 15 Workers Waiting For Jobs To Open Up Is Most Closely Associated
23. Refer to Figure 28-3. If the government imposes a minimum wage of $4, how many workers will be unemployed? a. 0 b. 3,000 c. 4,000 d. 7,000 ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.138 - LO: 28-3 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS:
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Chapter 16 Banks Often Choose Hold Reserves Excess Required Reserve
7310 The Monetary System The Monetary System 7311 70. During the early 1930s there were a number of bank failures in the United States. What did this do to the money supply? The New York Federal Reserve Bank advocated open market purchases. Would these purchases
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Chapter 16 Federal Reserve System Meets Discuss Changes The
The Monetary System 7151 Multiple Choice Section 02: The Federal Reserve System 1. Which of the following institutions is a central bank? a. the Bank of Japan b. the Bank of England c. the Federal Reserve System d. All of the above are correct. ANSWER: d
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Chapter 16 Financial Institutions And Central Banks Blooms Application 81 December
The Monetary System 7251 60. The Fed increases the reserve requirement, but it wants to offset the effects on the money supply. Which of the following should it do? a. sell bonds to increase reserves b. sell bonds to decrease reserves c. buy bonds to increase reserves d.
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Chapter 16 Homework Fed Wants Lower The Supply Money Sells
forms money takes, how the banking system helps create money, and how the Federal Reserve controls the quantity of money. An understanding of money is important because the quantity of money affects inflation and interest rates in the long run, and production and employment in the short run. forms money
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Exam Prep
Chapter 16 Starting From The Situation As Depicted By The T-account
The Monetary System 7211 75. Refer to Table 29-3. If all banks in the economy have the same reserve ratio as this bank, then an increase in reserves of $150 for this bank has the potential to increase deposits for all banks by a. $287.25. b. $1,614.71. c.
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Chapter 16 This Buying Would Reduce Reserves B Buying Bonds
The Monetary System 7271 100. Refer to Scenario 29-2. Suppose that the Bank of Tazi changes the reserve requirement to 3 percent. Assuming that the banks still want to hold the same percentage of excess reserves what is the value of the money supply after the change in
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Chapter 16 Us Paper Money Commodity Money C Us Paper
The Monetary System 7111 25. Treasury Bonds are a. liquid, but not a store of value. b. a store of value, but not liquid. c. both liquid and a store of value. d. neither liquid nor a store of value. ANSWER: c POINTS: 1 DIFFICULTY: Easy LEARNING
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Chapter 16 When The Fed Purchases $1000 Worth Of Government Bonds From
The Monetary System 7231 15. When the Fed purchases $1000 worth of government bonds from the public, the U.S. money supply eventually increases by a. more than $1000. b. exactly $1000. c. less than $1000. d. None of the above are correct. ANSWER: a POINTS: 1 DIFFICULTY:
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Chapter 16 Which Of The Following Is Not Included In M1
The Monetary System 7131 66. Which of the following is not included in M1? a. a $5 bill in your wallet b. $100 in your checking account c. $500 in your savings account d. All of the above are included in M1. ANSWER: c POINTS: 1 DIFFICULTY:
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Exam Prep
Chapter 17 Economic Variables Whose Values Are Measured
96. Economic variables whose values are measured in goods are called a. dichotomous variables. b. nominal variables. c. classical variables. d. real variables. ANSWER: d POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.15.148 - LO: 30-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC: Measuring Output KEYWORDS: BLOOM'S: Knowledge
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Chapter 17 Homework Real Interest Rate Inflation Rate Nominal Interest
Students will also find that there are numerous costs to the economy from high inflation, but that there is not a consensus on the importance of these costs when inflation is moderate. Students will also find that there are numerous costs to the economy from high inflation, but that there
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Chapter 17 If The Real Interest Rate Is 6 Percent And The Price Level
218. If the real interest rate is 6 percent and the price level is falling at a rate of 2 percent, what is the nominal interest rate? a. 4 percent b. 6 percent c. 8 percent d. 10 percent ANSWER: a POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.15.148 -
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Chapter 17 Prices In The U.S. Have Risen On Average About
Money Growth and Inflation Multiple Choice Section 00: Introduction 1. Over the past 80 years, prices in the U.S. have risen on average about a. 2 percent per year. b. 4 percent per year. c. 3.6 percent per year. d. 6 percent per year. ANSWER:
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Chapter 17 The Primary Reason People Hold Money Isa. To Keep Wealth
20. In the long run, money demand and money supply determine a. the value of money and the real interest rate. b. the value of money but not the real interest rate. c. the real interest rate but not the value of money. d. neither the value of money nor
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Exam Prep
Chapter 17 The Principle Of Monetary Neutrality Implies That An Increase
137. The principle of monetary neutrality implies that an increase in the money supply will a. increase real GDP and the price level. b. increase real GDP, but not the price level. c. increase the price level, but not real GDP. d. increase neither the price level nor real GDP.
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Exam Prep
Chapter 17 This Means That The Rate At Which Money Changed Hands
177. During the 2008 financial crisis velocity decreased. This means that the rate at which money changed hands a. decreased. Other things the same, a decrease in velocity decreases the price level. b. decreased. Other things the same, a decrease in velocity increases the price level. c. increased. Other things
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Chapter 17 U.S. Prices Rose At About The Same Rate As In The 1970s
5. In the 1990s, U.S. prices rose at about the same rate as in the 1970s. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.15.151 - LO: 30-0 NATIONAL STANDARDS: United States - Analytic - Skills TOPICS: DISC: Price Level Concepts Inflation KEYWORDS: BLOOM'S: Knowledge
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Chapter 17 What Changes Nominal Variables? What Changes Real Variables
60. According to the classical dichotomy, what changes nominal variables? What changes real variables? ANSWER: The classical dichotomy argues that nominal variables are determined primarily by developments in the monetary system such as changes in money demand and supply. Real variables are largely independent of the monetary system and
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Chapter 17 When Inflation Rises, People Tend To Go To The Bank
12. The shoeleather cost of inflation refers to a. the redistributional effects of unexpected inflation. b. the time spent searching for low prices when inflation rises. c. the waste of resources used to maintain lower money holdings. d. the increased cost to the government of printing more money. ANSWER:
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Chapter 17 You Respectfully Tell Your Grandfather That Committing The
19. The quantity equation is expressed as _____. The rate at which money changes hands is known as _____. ANSWER: M x V = P x Y, velocity POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.15.148 - LO: 30-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC: Money QTM
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Chapter 18 Homework Definition Purchasing Power Parity Theory Exchange Rates Whereby
how these variables are determined simultaneously. The purpose of Chapter 18 is to develop the basic concepts macroeconomists use to study open economies. It addresses why a nations net exports must equal its net capital outflow. It also addresses the concepts of the real and nominal exchange rate and develops
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Chapter 18 If Prices In The United States Increase By A Smaller Percentage Than
Open-Economy Macroeconomics: Basic Concepts 7713 71. If the Kenyan nominal exchange rate declines, and prices are unchanged in Kenya and abroad, then the Kenyan real exchange rate a. does not change. b. rises. c. declines d. None of the above is necessarily correct. ANSWER: c POINTS: 1
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Chapter 18 Jason Plans To Buy Shrimp In Florida And Sell Them In Manhattan
Open-Economy Macroeconomics: Basic Concepts 7733 33. To increase domestic investment, a country must increase its saving. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.156 - LO: 31-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC: Consumption,Saving,and Investment Investment KEYWORDS: BLOOM'S:
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Chapter 18 The Us Has Trade Deficit 100 Billion D
Open-Economy Macroeconomics: Basic Concepts Multiple Choice Section 00: Introduction 1. Which type(s) of economies interact with other economies? a. only closed economies b. only open economies c. closed economies and open economies d. neither closed nor open economies ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy
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Chapter 18 If Chileans Buy More U.S. Stocks And Bonds And U.S. Residents
Open-Economy Macroeconomics: Basic Concepts 7593 104. A Japanese bank buys U.S. government bonds, this purchase a. increases U.S. net capital outflow and has no affect on Japanese net capital outflow. b. increases U.S. net capital outflow and increases Japanese net capital outflow. c. increases U.S. net capital outflow,
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Chapter 19 A Decrease In The Budget Deficit Causes Domestic Interest Rates
13. A decrease in the budget deficit causes domestic interest rates a. and investment to rise. b. to rise and investment to fall. c. to fall and investment to rise. d. and investment to fall. ANSWER: c DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.162 - LO: 32-3 NATIONAL STANDARDS: United
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Chapter 19 A Large And Sudden Movement Of Funds Out Of A Country Is Called
112. A large and sudden movement of funds out of a country is called a. arbitrage. b. capital flight. c. crowding out. d. capital mobility. ANSWER: b DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.162 - LO: 32-3 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC: International Trade KEYWORDS: BLOOM'S:
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Chapter 19 A Limit On The Quantity Of A Good Produced Abroad That Can
63. Refer to Figure 32-5. Starting from 3% and .75, an increase in the government budget surplus can be illustrated as a move to a. 4% and 1 b. 4% and .5 c. 2% and 1 d. 2% and .5 ANSWER: d DIFFICULTY: Difficulty: Challenging LEARNING OBJECTIVES: ECON.MANK.15.162 -
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Chapter 19 Homework How To Build A Model To Explain An Open Economy’s Trade Balance
314 WHATS NEW IN THE SEVENTH EDITION: A new In the News box on Is a Strong Currency Always in a Nation's Interest? has been added. LEARNING OBJECTIVES: By the end of this chapter, students
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Chapter 19 Homework The Other Possibilities High Foreign Demand For
Chapter 19/A Macroeconomic Theory of the Open Economy 325 2. The NCO curve will also shift left. 3. The real interest rate in Brazil will fall. 4. The supply of reals (the real is
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Chapter 19 Many U.S. Business Leaders Argue That The Current State Of U.S
A Macroeconomic Theory of the Open Economy Multiple Choice Section 00: Introduction 1. Over the past three decades, the United States has a. generally had, or been very near to a trade balance. b. had trade deficits in about as many years as it has trade
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Chapter 19 Since Net Capital Outflow Must Equal Net Exports
42. In the long run import quotas do not affect the size of net exports. a. True b. False ANSWER: True DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.162 - LO: 32-3 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC: International Trade Quotas KEYWORDS: BLOOM'S: Knowledge ANSWER: True DIFFICULTY: Difficulty:
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Chapter 19 The Open Economy Macroeconomic Model Net Capital
98. In the open-economy macroeconomic model, if net capital outflow increases then a. the demand for dollars in the market for foreign-currency exchange shifts right. b. the demand for dollars in the market for foreign-currency exchange shifts left. c. the supply of dollars in the market for foreign-currency exchange shifts
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Chapter 19 Which Direction Does Shift Since The Budget Deficit
16. In the market for foreign-currency exchange, the source of the supply of dollars is _________. The supply curve is _________ because _____________. ANSWER: net capital outflow, vertical, net capital outflow does not depend on the exchange rate. DIFFICULTY: Difficulty: Challenging LEARNING OBJECTIVES: ECON.MANK.15.160 - LO: 32-1 NATIONAL STANDARDS:
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Chapter 19 Which Increases The Quantity Of Loanable Funds Demanded
47. If interest rates rise in the U.S., then other things the same a. foreigners would buy more U.S. bonds which increases the quantity of loanable funds demanded in the U.S. b. foreigners would buy more U.S. bonds which reduces the quantity of loanable funds demanded in the U.S. c.
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Chapter 19 Which Of The Following Increases Net Capital Outflow
8. In the open-economy macroeconomic model, which of the following increases net capital outflow? a. a fall in the real exchange rate, but not a fall in the real interest rate b. a fall in the real interest rate, but not a fall in the real exchange rate c. both
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Chapter 19 Which Of The Following Would Do The Most To Reduce A Trade Deficit
162. Which of the following will decrease U.S. net capital outflow? a. capital flight from the United States b. the government budget deficit increases c. the U.S. imposes import quotas d. None of the above is correct. ANSWER: b DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.162 - LO: 32-3 NATIONAL
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Chapter 2 Economists Speaking Like Policy Advisers Make
Thinking Like an Economist 343 10. Normative statements are not a. descriptive. b. prescriptive. c. claims about how the world should be. d. made by economists speaking as policy advisers. ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.7 - LO: 2-2 NATIONAL STANDARDS: United States -
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Chapter 2 Homework Iv The News Actual Economists And Virtual
way. They will see how economists employ the scientific method, the role of assumptions in model building, and the application of two specific economic models. Students will also learn the important distinction between two roles economists can play: as scientists when we try to explain the economic world and as
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Chapter 2 In The Markets For Goods And Services In The Circular-flow Diagram
Thinking Like an Economist 243 79. In the circular-flow diagram, another name for goods and services produced by firms is a. factors of production. b. output. c. inputs. d. resources. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy LEARNING OBJECTIVES: ECON.MANK.15.6 - LO: 2-1 NATIONAL STANDARDS: United States -
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Chapter 2 One Economist Believes That Prior The Civil
Thinking Like an Economist 363 53. The president of the United States receives tax policy advice from economists in the a. Federal Reserve. b. Department of Justice. c. Department of the Treasury. d. Congressional Budget Office. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Easy LEARNING OBJECTIVES: ECON.MANK.15.7 - LO:
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Chapter 2 The More Coffee Person Drinks Per Day
Thinking Like an Economist 383 2. Which of the following is not an example of a graph of a single variable? a. a pie chart b. a bar graph c. a time-series graph d. a scatterplot ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.10 - LO:
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Chapter 2 What Is The Opportunity Cost Of Moving From Point L To Point M
Thinking Like an Economist 303 194. Refer to Figure 2-7. If this economy devotes all of its resources to the production of engines, then it will produce a. 0 engines and 40 tvs. b. 10 engines and 35 tvs. c. 40 engines and 0 tvs. d. 40 engines and
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Chapter 2 Which Of The Following Combinations Of Points Are Both Efficient
Thinking Like an Economist 323 230. Refer to Figure 2-13. Which of the following combinations of points are both efficient and attainable for this economy? a. G, H b. F, I, L c. F, G, H, I, L d. J, K ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Easy
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Chapter 2 Which These Statements About Economic Models Correct A
Thinking Like an Economist 223 38. An example of a price that changes only infrequently is the price of a. stocks on the New York Stock Exchange. b. crude oil. c. residential real estate. d. magazines sold at newsstands. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Easy LEARNING OBJECTIVES:
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Chapter 2 Draw A Production Possibilities Frontier Showing Increasing
Thinking Like an Economist 463 133. Draw a production possibilities frontier showing increasing opportunity cost of hammers in terms of horseshoes. a. On the graph, identify the area of feasible outcomes and the area of infeasible outcomes. b. On the graph, label a point that is efficient and a
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Chapter 2 What Is The Opportunity Cost Of Moving From Point R To Point Q
Thinking Like an Economist 475 24. Refer to Figure 2-14. What is the opportunity cost of moving from point R to point Q? ANSWER: 80 bushels of apples POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.6 - LO: 2-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC:
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Chapter 20 A Candidate For Political Office Announces The Following Policies Which
Aggregate Demand and Aggregate Supply 121 22. A candidate for political office announces the following policies which, he says, economics clearly demonstrates will lead to higher output in the long run: 1. increase immigration from abroad 2. make trade more open between the US and other countries. a. 1
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Chapter 20 Demand And Aggregate Supply 65 When The Dollar
Aggregate Demand and Aggregate Supply 61 45. Other things the same, when the price level falls, interest rates a. rise, which means consumers will want to spend more on homebuilding. b. rise, which means consumers will want to spend less on homebuilding. c. fall, which means consumers will want
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Chapter 20 Homework Figure Traces Through The Effects Shift Short Run
352 Chapter 20/Aggregate Demand and Aggregate Supply e. In the late 1980s, OPEC began to lose control over the oil market as members began cheating on the agreement. Oil prices fell, which led to a rightward shift of the short-run aggregate-supply curve. This caused both unemployment and inflation
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Chapter 20 Homework Us Dollar Increases Us Goods Become More
337 WHATS NEW IN THE SEVENTH EDITION: There is a new In the News box on What Have We Learned? LEARNING OBJECTIVES: By the end of this chapter, students should understand: three
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Chapter 20 If Countries That Imported Goods And Services From The United States
Aggregate Demand and Aggregate Supply 101 131. If countries that imported goods and services from the United States went into recession, we would expect that U.S. net exports would a. rise, making aggregate demand shift right. b. rise, making aggregate demand shift left. c. fall, making aggregate demand shift
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Chapter 20 Keynes Explained That Recessions And Depressions Occur Because 
Aggregate Demand and Aggregate Supply 221 120. According to the In the News article, macroprudential tools a. allow a central bank to alter lending for specific industries. b. allow a central bank to alter taxes. c. limit a central banks power to act independently of the political process. d.
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Chapter 20 Misperceptions Theory Helps Explain What Feature Of The Aggregate Demand
Aggregate Demand and Aggregate Supply 255 21. Misperceptions theory helps explain what feature of the aggregate demand and aggregate supply model? ANSWER: why the short run aggregate-supply curve slopes upward POINTS: 1 DIFFICULTY: Difficulty: Easy LEARNING OBJECTIVES: ECON.MANK.15.167 - LO: 33-4 NATIONAL STANDARDS: United States - BUSPROG: Analytic
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Chapter 20 Stagflation Results From Continued Decreases In Aggregate Demand
Aggregate Demand and Aggregate Supply 241 54. Stagflation results from continued decreases in aggregate demand. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.15.169 - LO: 33-5 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC: Price Level Concepts KEYWORDS: BLOOM'S: Application ANSWER: False
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Chapter 20 The Aggregate-demand Curve Shows That A Decrease In The Price Level
Aggregate Demand and Aggregate Supply 41 40. The model of aggregate demand and aggregate supply a. is different from the model of supply and demand for a particular market, in that we cannot focus on the substitution of resources between markets to explain aggregate relationships. b. is different from
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Chapter 20 This Inconsistent With Monetary Neutrality Because A Monetary
Aggregate Demand and Aggregate Supply 21 33. Which of the following is correct concerning recessions? a. They come at fairly regular and predictable intervals. b. They are associated with comparatively large increases in investment spending. c. They are any period when real GDP growth is less than average. d.
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Chapter 20 This Increase Wages Shifts The Short Run Aggregate Supply
Aggregate Demand and Aggregate Supply 181 42. Refer to Optimism. In the long run, the change in price expectations created by optimism shifts a. long-run aggregate supply right. b. long-run aggregate supply left. c. short-run aggregate supply right. d. short-run aggregate supply left. ANSWER: d POINTS: 1 DIFFICULTY:
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Chapter 20 When The Actual Change In The Price Level Differs From Its Expected Change
Aggregate Demand and Aggregate Supply 141 63. Other things the same, if the price level is lower than expected, then some firms believe that the relative price of what they produce has a. decreased, so they increase production. b. decreased, so they decrease production. c. increased, so they increase
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Chapter 20 Which Of The Following Both Shift Aggregate Demand Left
Aggregate Demand and Aggregate Supply 81 91. Suppose a fall in stock prices makes people feel poorer. The decrease in wealth would induce people to a. decrease consumption, shown as a movement to the left along a given aggregate-demand curve. b. increase consumption, shown as a movement to the
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Chapter 20 Which Of The Following Explains Why Production Rises In Most Years
Aggregate Demand and Aggregate Supply Multiple Choice Section 00: Introduction 1. Which of the following explains why production rises in most years? a. increases in the labor force b. increases in the capital stock c. advances in technological knowledge d. All of the above are correct. ANSWER:
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Chapter 20 Which Of The Following Would Cause Prices And Real GDP To Rise 
Aggregate Demand and Aggregate Supply 161 6. Which of the following would cause prices and real GDP to rise in the short run? a. an increase in the expected price level b. an increase in the money supply c. a decrease in the capital stock d. an increase in
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Chapter 20 Which Of The Following Would Cause Stagflation
Aggregate Demand and Aggregate Supply 201 82. Which of the following would cause stagflation? a. aggregate demand shifts right b. aggregate demand shifts left c. aggregate supply shifts right d. aggregate supply shifts left ANSWER: d POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.15.168 - LO: 33-5 NATIONAL STANDARDS:
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Chapter 21 Don’t You Remember Your Economics 101 A Dwight
112. If Congress increases taxes to balance the federal budget, then to prevent unemployment and a recession the Fed will a. reduce interest rates by increasing the money supply. b. increase interest rates by decreasing the money supply. c. increase interest rates by increasing the money supply. d. reduce interest
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Chapter 21 Economists Who Are Skeptical About The Relevance Of “liquidity Traps” 
194. The Fed can influence the money supply by a. changing how much it lends to banks. b. changing the interest rate it pays banks on the reserves they are holding. c. using open-market operations. d. All of the above are correct. ANSWER: d POINTS: 1 DIFFICULTY: Moderate LEARNING
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Chapter 21 Explain The Logic According To Liquidity Preference Theory By Which
51. Explain the logic according to liquidity preference theory by which an increase in the money supply changes the aggregate demand curve. ANSWER: When the money supply increases, the interest rate falls. As the interest rate falls people will want to spend more and firms will want to build
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Chapter 21 Fiscal Policy Affects The Economy In The Short Run While Monetary
69. According to a 2009 article in The Economist, the multiplier effect and crowding-out effect would exactly offset each other when the economy is a. operating at full capacity. b. in recession. c. experiencing zero inflation. d. experiencing high rates of inflation. ANSWER: a POINTS: 1 DIFFICULTY: Moderate LEARNING
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Chapter 21 Homework Thus Aggregate Demand Increases Less Than The
The purpose of Chapter 21 is to address the short-run effects of monetary and fiscal policies. In Chapter 20, we found that when aggregate demand or short-run aggregate supply shifts, it causes fluctuations in output. As a result, policymakers sometimes try to offset these shifts by shifting aggregate demand
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Chapter 21 If The Federal Reserve’s Goal Is To Stabilize Aggregate Demand,
22. If the Federal Reserves goal is to stabilize aggregate demand, then in response to an increase in money demand, the Federal Reserve will _____ the money supply. ANSWER: increase POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.15.171 - LO: 34-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC:
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Chapter 21 People Might Withdraw Money From Interest Bearing
71. Refer to Figure 34-2. Assume the money market is always in equilibrium, and suppose r1 = 0.08; r2 = 0.12; Y1 = 13,000; Y2 = 10,000; P1 = 1.0; and P2 = 1.2. Which of the following statements is correct? a. When r = r2, nominal output is higher
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Exam Prep
Chapter 21 The Actual MPC Was Larger Than The
71. If the MPC is 0, then the multiplier is a. 0. b. 1. c. infinite. d. None of the above is correct. ANSWER: b POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.15.172 - LO: 34-2 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC: Fiscal Policy Fiscal Multipliers KEYWORDS:
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Chapter 21 The Aggregate-demand Curve Could Shift From AD1 To AD2 As A Result
Figure 34-7 31. Refer to Figure 34-7. The aggregate-demand curve could shift from AD1 to AD2 as a result of a. an increase in government purchases. b. a decrease in net exports. c. households saving a smaller fraction of their income. d. a decrease in the price
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Exam Prep
Chapter 21 The Fed Is Concerned About Stock Market Booms Because The Booms
155. The Fed is concerned about stock market booms because the booms a. increase consumption spending. b. increase investment spending. c. increase both consumption and investment spending. d. None of the above is correct. ANSWER: c POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.15.171 - LO: 34-1 NATIONAL STANDARDS: United
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Exam Prep
Chapter 21 Which Of The Following Events Shifts Aggregate Demand Rightward
Figure 34-6. On the left-hand graph, MS represents the supply of money and MD represents the demand for money; on the right-hand graph, AD represents aggregate demand. The usual quantities are measured along the axes of both graphs.
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Chapter 21 Which Of The Following Fed Actions Would Both Decrease The Money Supply
34. According to liquidity preference theory, the money-supply curve is a. upward sloping. b. downward sloping. c. vertical. d. horizontal. ANSWER: c POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.15.171 - LO: 34-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC: Money Theory of Liquidity Preference KEYWORDS: BLOOM'S: Knowledge
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Chapter 21 Which Of The Following Shifts Aggregate Demand To The Right
113. According to liquidity preference theory, an increase in the price level shifts the a. money demand curve rightward, so the interest rate increases. b. money demand curve rightward, so the interest rate decreases. c. money demand curve leftward, so the interest rate decreases. d. money demand curve leftward, so
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Exam Prep
Chapter 21 With Respect To Their Impact On Aggregate Demand For The U.S. Economy
The Influence of Monetary and Fiscal Policy on Aggregate Demand Multiple Choice Section 00: Introduction 1. Shifts in the aggregate-demand curve can cause fluctuations in a. neither the level of output nor the level of prices. b. the level of output, but not in the level
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Exam Prep
Chapter 22 Friedman And Phelps Believed That The Natural Rate Of Unemployment
The Short-Run Trade-off between Inflation and Unemployment 8665 13. Friedman and Phelps believed that the natural rate of unemployment was constant. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.177 - LO: 35-2 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC: Employment
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Homework Help
Chapter 22 Homework Phillips Curve Shown Figure 11 The Economy
400 Chapter 22/The Short-Run Trade-off between Inflation and Unemployment d. From 2007 to 2009, as the decline in aggregate demand raised unemployment, it also reduced the inflation rate from about 3 percent to about 1 percent. e. From 2010 to 2012, unemployment fell and the inflation rate rose
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Chapter 22 Homework The Expected Rate Inflation One Variable That
389 WHATS NEW IN THE SEVENTH EDITION: The section on A Financial Crisis Takes Us for a Ride Along the Phillips Curve has been updated. LEARNING OBJECTIVES: By the end of this chapter,
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Exam Prep
Chapter 22 Phillips Curves Shift Left There Is No Change
8684 The Short-Run Trade-off between Inflation and Unemployment Problems 1. As the aggregate demand curve shifts to the right, what happens to the price level and output? What do these changes imply happens to the inflation rate and the unemployment rate? ANSWER: The price level and output
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Exam Prep
Chapter 22 Samuelson And Solow D All The Above Are
The Short-Run Trade-off between Inflation and Unemployment 8545 71. Refer to Figure 35-7. Starting from C and 3, in the long run, an increase in money supply growth moves the economy to a. A and 1. b. back to C and 3. c. D and 4. d. F and
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Exam Prep
Chapter 22 The Arguments Of Friedman And Phelps Would Suggest That Other Things 
The Short-Run Trade-off between Inflation and Unemployment 8645 57. The arguments of Friedman and Phelps would suggest that other things the same, a country that pursues a disinflationary policy that the public does not find completely credible a. should not see an increase in the unemployment rate even in
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Exam Prep
Chapter 22 Typical Estimates Of The Sacrifice Ratio Suggest That A One-percentage
The Short-Run Trade-off between Inflation and Unemployment 8625 16. Typical estimates of the sacrifice ratio suggest that a one-percentage-point reduction in the inflation rate requires a. a sacrifice of 5 percent of annual output. b. a sacrifice of 5 percent of government spending. c. an increase in the unemployment
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Exam Prep
Chapter 22 Which Of The Following Would Be Lower In The Long Run
The Short-Run Trade-off between Inflation and Unemployment 8565 114. In the long run, a decrease in the money supply growth rate a. shifts the short-run Phillips curve left so inflation returns to its original rate. b. shifts the short-run Phillips curve left so unemployment returns to its natural rate.
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Exam Prep
Chapter 22 Which Of The Following Would Cause The Price Level To Rise And Output
The Short-Run Trade-off between Inflation and Unemployment 8605 33. A favorable supply shock will cause a. unemployment to rise and the short-run Phillips curve to shift right. b. unemployment to rise and the short-run Phillips curve to shift left. c. unemployment to fall and the short-run Phillips curve to
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Exam Prep
Chapter 22 Which Of The Following Would We Not Expect If Government Policy Moved 
The Short-Run Trade-off between Inflation and Unemployment 8485 33. In the long run, policy that changes aggregate demand changes a. both unemployment and the price level. b. neither unemployment nor the price level. c. only unemployment. d. only the price level. ANSWER: d POINTS: 1 DIFFICULTY: Difficulty: Moderate
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Exam Prep
Chapter 22 Which The Following Events Could Explain The
The Short-Run Trade-off between Inflation and Unemployment 8585 155. The long-run Phillips curve would shift to the left if a. the money supply growth rate increased or labor markets become more flexible. b. the money supply growth rate increased but not if labor markets become more flexible. c. labor
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Exam Prep
Chapter 22 While The Inflation Rate Depends Primarily Upon Government Spending
The Short-Run Trade-off between Inflation and Unemployment Multiple Choice Section 00: Introduction 1. Closely watched indicators such as the inflation rate and unemployment are released each month by the a. Bureau of the Budget. b. Bureau of Labor Statistics. c. Department of the Treasury. d. President's Council of
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Chapter 23 Fed Required Follow Rule That Stabilizes The Price
8840 Six Debates over Macroeconomic Policy Problems 1. Why is it desirable, if possible, to use policy to offset the effects of a decrease in aggregate demand? ANSWER: Because a decrease in aggregate demand wastes resources. Unemployment rises and factories are idle. POINTS: 1 DIFFICULTY: Difficulty: Moderate
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Exam Prep
Chapter 23 Feds Policy Raise A The Price Level And
Six Debates over Macroeconomic Policy Multiple Choice Section 01: Should Monetary and Fiscal Policymakers Try to Stabilize the Economy? 1. Fluctuations in employment and output result from changes in a. aggregate demand only. b. aggregate supply only. c. aggregate demand and aggregate supply. d. neither aggregate demand nor
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Exam Prep
Chapter 23 Government Expenditures Might Not Spent Wisely Quickly Since
Six Debates over Macroeconomic Policy 8823 20. Proponents of zero-inflation policies acknowledge that the public is unconcerned about the inflation rate. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy LEARNING OBJECTIVES: ECON.MANK.15.183 - LO: 36-4 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC:Monetary
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Homework Help
Chapter 23 Homework There Are Various Ways Change The Tax
The purpose of Chapter 23 is to provide both sides of six leading debates over macroeconomic policy. It employs information and tools that students have accumulated in their study of this text. This chapter may help students take a position on the issues addressed or, at least, it may
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Exam Prep
Chapter 23 If Inflation Were High In Some Country And Lawmakers In That Country
Six Debates over Macroeconomic Policy 8763 23. Inflation reduction has the highest cost when the efforts are a. credible so that the sacrifice ratio is low. b. credible so that the sacrifice ratio is high. c. unexpected so that the sacrifice ratio is high. d. unexpected so that
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Exam Prep
Chapter 23 If The Economy Starts From Long-run Equilibrium And Aggregate Demand 
Six Debates over Macroeconomic Policy 8743 25. Suppose that the central bank must follow a rule that requires it to increase the money supply when the price level falls and decrease the money supply when the price level rises. If the economy starts from long-run equilibrium and aggregate
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Exam Prep
Chapter 23 Which Of The Following Does The U.S. Currently Have
Six Debates over Macroeconomic Policy 8803 13. Double taxation means that both a. wage income and interest income are taxed, which is currently the case in the United States. b. wage income and interest income are taxed, which is not currently the case in the United States. c.
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Exam Prep
Chapter 23 Which Of The Following Is True Of Stimulus Policy Enacted 
Six Debates over Macroeconomic Policy 8723 5. Supporters of using government expenditures to respond to recession a. argue that monetary policy should be used first. To respond to a recession the Fed would increase the money supply. b. argue that monetary policy should be used first. To respond
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Exam Prep
Chapter 23 Which Of The Programs Below Would Not Transfer Wealth From Young
Six Debates over Macroeconomic Policy 8783 14. Which of the programs below would not transfer wealth from young to old generations? a. Taxes are reduced as a result of cutting expenditures on education. b. Taxes are raised to improve government infrastructure such as roads and bridges. c. Taxes
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Chapter 3 Homework Friday Has Absolute Advantage Catching Fish Since
goods that other people produce. Because of specialization, total output rises, and through trade we are all able to share in the bounty. This is as true for countries as it is for individuals. Because everyone can gain from trade, restrictions on trade tend to reduce welfare. goods that other
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Exam Prep
Chapter 3 If Bintu And Juba Both Spend All Of Their Time Making Bowls
Interdependence and the Gains from Trade 547 99. Refer to Figure 3-7. If Bintu must work 2 hours to make each cup, then her production possibilities frontier is based on how many hours of work? a. 2 hours b. 4 hours c. 8 hours d. 16 hours
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Exam Prep
Chapter 3 The Values In The Table Represent The Amounts Of Lemonade And Pizzas
Interdependence and the Gains from Trade 527 67. Refer to Table 3-17. If the production possibilities frontier is a straight line, then ? must be a. 180. b. 200. c. 220. d. 240. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.12 - LO: 3-1 NATIONAL
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Chapter 3 This Is Lower Than Indonesia’s Opportunity Cost Of Producing Rice
Interdependence and the Gains from Trade 687 245. Which of the following is not correct? a. Economists are generally united in their support of free trade. b. The conclusions of Adam Smith and David Ricardo on the gains from trade have held up well over time. c. David
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Exam Prep
Chapter 3 Which Of The Following Combinations Of Bolts And Nails Could Uzbekistan
Interdependence and the Gains from Trade 667 207. Refer to Figure 3-21. Suppose Uzbekistan decides to increase its production of bolts by 10. What is the opportunity cost of this decision? a. 1/2 nail b. 2 nails c. 5 nails d. 20 nails ANSWER: d POINTS: 1
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Exam Prep
Chapter 3 Which Of The Following Combinations Of Emeralds And Rubies Could
Interdependence and the Gains from Trade 627 136. Refer to Table 3-30. Varick has a comparative advantage in the production of a. wheat. b. cloth. c. both goods. d. neither good. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.13 - LO: 3-2 NATIONAL STANDARDS: United
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Chapter 3 Which Of The Following Combinations Of Pies And Tarts Could Maxine
Interdependence and the Gains from Trade 647 171. Refer to Figure 3-17. Suppose Maxine decides to increase her production of tarts by 5. What is the opportunity cost of this decision? a. 2/5 pie b. 2 pies c. 5/2 pies d. 10 pies ANSWER: d POINTS: 1
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Exam Prep
Chapter 3 Which Of The Following Represents Zimbabwe’s And Portugal’s
Interdependence and the Gains from Trade 507 31. Refer to Table 3-6. Which of the following represents Zimbabwes and Portugals production possibilities frontiers when each country has 60 minutes of machine time available? a. Zimbabwe Portugal
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Exam Prep
Chapter 4 A Newspaper’s Classified Ads Are An Example Of A Market
2. In a market economy, supply and demand determine both the quantity of each good produced and the price at which it is sold. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Easy LEARNING OBJECTIVES: ECON.MANK.15.16 - LO: 4-0 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS:
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Exam Prep
Chapter 4 Holding The Nonprice Determinants Of Supply Constant
8. Holding the nonprice determinants of supply constant, a change in price would a. result in either a decrease in supply or an increase in supply. b. result in a movement along a stationary supply curve. c. result in a shift of demand. d. have no effect on the quantity
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Homework Help
Chapter 4 Homework Demand Will Not Affected The Result Rise
Chapter 4/The Market Forces of Supply and Demand 67 SOLUTIONS TO TEXT PROBLEMS: Quick Quizzes 1. A market is a group of buyers (who determine demand) and a group of sellers (who determine supply) of a particular good or service. A perfectly competitive market is one
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Chapter 4 Homework The Schedule Will Also Make Easier For
51 WHATS NEW IN THE SEVENTH EDITION: The In the News feature Price Increases after Disasters has been updated with a new article. LEARNING OBJECTIVES: By the end of this chapter, students should understand:
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Exam Prep
Chapter 4 Individual Supply Curves Are Summed Vertically To Obtain The Market
62. Individual supply curves are summed vertically to obtain the market supply curve. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Difficulty: Easy LEARNING OBJECTIVES: ECON.MANK.15.19 - LO: 4-3 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC: Supply and Demand Supply KEYWORDS: BLOOM'S: Knowledge ANSWER: False POINTS:
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Exam Prep
Chapter 4 John Buys Six Cowboy Movies When The Price Is $10 Each
67. Refer to Figure 4-3. If these are the only two consumers in the market, then the market quantity demanded at a price of $15 is a. 0 units. b. 10 units. c. 15 units. d. 25 units. ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.18 -
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Chapter 4 Price Will Rise B Price Will Fall C Price
122. If consumers often purchase muffins to eat while they drink their latts at local coffee shops, what would happen to the equilibrium price and quantity of latts if the price of muffins falls? a. Both the equilibrium price and quantity would increase. b. Both the equilibrium price and quantity
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Exam Prep
Chapter 4 The Technology Improves While All Other Factors Remain Constant
21. Refer to Table 4-15. If only Brook Mountain and Cascade Waters operate in this market, what is the market quantity supplied when the price is $3.00 per case? ANSWER: 100 cases POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.19 - LO: 4-3 NATIONAL STANDARDS: United States - BUSPROG:
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Exam Prep
Chapter 4 Two Goods Are Substitutes When A Decrease In The Price Of
106. Two goods are substitutes when a decrease in the price of one good a. decreases the demand for the other good. b. decreases the quantity demanded of the other good. c. increases the demand for the other good. d. increases the quantity demanded of the other good. ANSWER:
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Exam Prep
Chapter 4 What Is The Equilibrium Quantity In This Market
83. Refer to Figure 4-20. If price is $25, then quantity demanded and quantity supplied, respectively, are a. 500 units and 500 units. b. 500 units and 800 units. c. 600 units and 600 units. d. 800 units and 500 units. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate
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Exam Prep
Chapter 4 When We Move Along A Given Demand Curve
33. When we move along a given demand curve, a. only price is held constant. b. income and price are held constant. c. all nonprice determinants of demand are held constant. d. all determinants of quantity demanded are held constant. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES:
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Exam Prep
Chapter 4 Which Of The Following Characteristics Is Required For A Perfectly
41. Which of the following characteristics is required for a perfectly competitive market? a. The goods offered for sale are exactly the same. b. There are so many buyers and sellers that no single buyer or seller has any influence over the market price. c. It is difficult for new
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Exam Prep
Chapter 4 Which Of The Following Events Would Cause A Movement
47. Which of the following events would cause a movement upward and to the right along the supply curve for mangos? a. The number of sellers of mangos increases. b. There is an advance in technology that reduces the cost of producing mangos. c. The price of fertilizer decreases, and
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Exam Prep
Chapter 4 Which Of The Following Movements Would Illustrate The Effect
158. Refer to Figure 4-25. All else equal, the return of college students to campus in the fall would cause a move from a. x to y. b. y to x. c. SA to SB. d. SB to SA. ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging LEARNING OBJECTIVES: ECON.MANK.15.19
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Exam Prep
Chapter 4 A Group Of Buyers And Sellers Of A Particular Good Or Service
ANSWER: ANSWER: ANSWER: (a) (b) (c) (d) (e) (f) DD'SPe'PeQe Qe'quantitypriceD' DSPePe'Qe' QequantitypriceDS'SPe'PeQe Qe'quantitypriceDD'SPe'PeQe Qe'quantitypriceDS'SPe'PeQe Qe'quantitypriceDD'SPe'PeQe Qe'quantityprice (c) (d) (e) (f) DD'SPe'PeQe Qe'quantitypriceD' DSPePe'Qe' QequantitypriceDS'SPe'PeQe Qe'quantitypriceDD'SPe'PeQe Qe'quantitypriceDS'SPe'PeQe Qe'quantitypriceDD'SPe'PeQe Qe'quantityprice (c) (d) (e) (f) DD' S Pe' Pe Qe Qe' quantity price D' D S Pe Pe' Qe' Qe quantity price D S'S Pe' Pe Qe Qe' quantity price DD' S Pe' Pe Qe Qe' quantity price D S'S Pe' Pe Qe Qe' quantity price DD' S Pe' Pe Qe Qe' quantity price
Principles of Macroeconomics 7th Edition
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Exam Prep
Chapter 4 If Corn Is An Input Into The Production Of Ethanol
83. Suppose there is a decrease in the price of corn. If corn is an input into the production of ethanol, we would expect the supply curve for ethanol to a. shift rightward. b. shift leftward. c. become flatter. d. remain unchanged. ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Moderate
Principles of Macroeconomics 7th Edition
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Exam Prep
Chapter 5 A T-shirt Maker Would Be Willing To Supply 75 T-shirts
54. A t-shirt maker would be willing to supply 75 t-shirts per day at a price of $18.00 each. At a price of $20.00, the t- shirt maker would be willing to supply 100 t-shirts. Using the midpoint method, the price elasticity of supply for t- shirts is about a.
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Exam Prep
Chapter 5 Between Which Two Prices Is Price Elasticity Of Demand Most Inelastic
7. Suppose the price of natural gas, a typical fuel for heating homes, rises in January in Alaska. Would you expect the price elasticity of demand for natural gas to more inelastic immediately after the price increase or at some point in the future? ANSWER: The price elasticity of
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Exam Prep
Chapter 5 Elasticity Of Demand Is Closely Related To The Slope
Table 5-4 The following table shows the demand schedule for a particular good. Price Quantity $20 0 $16 3 $12 6 $8 9 $4 12 $0 15 113. Refer to Table 5-4. Using the midpoint method, what is the price elasticity of demand when price rises from
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Exam Prep
Chapter 5 Get Smart University Is Contemplating An Increase 
188. Get Smart University is contemplating an increase in tuition to enhance revenue. If GSU feels that raising tuition would enhance revenue, it is a. ignoring the law of demand. b. assuming that the demand for university education is elastic. c. assuming that the demand for university education is inelastic.
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Exam Prep
Chapter 5 He Would Do If The Price Of His Favorite Toothpaste Increased
33. Suppose that Juan Carlos is filling out a survey that he received in the mail. The survey asks him what he would do if the price of his favorite toothpaste increased. Juan Carlos reports that he would switch to a different brand. The survey asks what he would do
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Homework Help
Chapter 5 Homework This Means Less Revenue For Farmers Because
85 WHATS NEW IN THE SEVENTH EDITION: There are no major changes to this chapter. LEARNING OBJECTIVES: By the end of this chapter, students should understand: the meaning of the elasticity of demand.
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Exam Prep
Chapter 5 If An Increase In Income Results In A Decrease In The Quantity Demanded
Figure 5-13 10. Refer to Figure 5-13. Between point A and point B, price elasticity of demand using the midpoint method is equal to a. 0.71. b. 0.85. c. 1.18. d. 1.40. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.23 - LO: 5-1 NATIONAL STANDARDS:
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Exam Prep
Chapter 5 Operation Meth Bust And Say Would Reduce
32. In the early 1970s, OPECs goal was to a. decrease the world-wide price of oil so that the quantity demanded increased, thus raising total revenues for OPEC members. b. increase the world-wide price of oil by reducing the quantity of oil supplied. c. increase the world-wide price of
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Exam Prep
Chapter 5 Some Firms Eventually Experience Problems With Their Capacity
14. Some firms eventually experience problems with their capacity to produce output as their output levels increase. For these firms, a. market power is substantial. b. supply is perfectly inelastic. c. supply is more elastic at low levels of output and less elastic at high levels of output. d. supply
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Exam Prep
Chapter 5 The Good Luxury C The Market For The
Table 5-1 Good Price Elasticity of Demand A 1.9 B 0.8 73. Refer to Table 5-1. Which of the following is consistent with the elasticities given in Table 5-1? a. A is a luxury and B is a necessity. b. A is a good after an increase
Principles of Macroeconomics 7th Edition
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Exam Prep
Chapter 5 The Income Elasticity Of Demand Is Defined As The Percentage
36. If a firm is facing elastic demand, then the firm should decrease price to increase revenue. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.23 - LO: 5-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC: Elasticity Price Elasticity of Demand KEYWORDS:
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Exam Prep
Chapter 5 The Price Elasticity Of Demand Between Point A And Point B
226. Refer to Figure 5-5. Using the midpoint method, demand is unit elastic between prices of a. $20 and $40. b. $40 and$50. c. $40 and$60. d. $50 and$70. ANSWER: c POINTS 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.23 - LO: 5-1 NATIONAL STANDARDS: United States - BUSPROG:
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Exam Prep
Chapter 5 The Price Elasticity Supply Zero Then A
89. If the price elasticity of supply is zero, then a. supply is more elastic than it is in any other case. b. the supply curve is horizontal. c. the quantity supplied is the same, regardless of price. d. a change in demand will cause a relatively small change in
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Exam Prep
Chapter 5 Tyler Purchases 5 Pounds Of Hot Dogs Per Month When His Monthly
47. Food and clothing tend to have a. small income elasticities because consumers, regardless of their incomes, choose to buy relatively constant quantities of these goods. b. small income elasticities because consumers buy proportionately more of both goods at higher income levels than they buy at low income levels. c.
Principles of Macroeconomics 7th Edition
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Exam Prep
Chapter 5 When Studying How Some Event Or Policy Affects A Market
Elasticity and Its Application Multiple Choice Section 00: Introduction 1. In general, elasticity is a measure of a. the extent to which advances in technology are adopted by producers. b. the extent to which a market is competitive. c. how firms profits respond to changes in market
Principles of Macroeconomics 7th Edition
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Exam Prep
Chapter 5 When The Price Of Good Rises To 70 The
148. Refer to Figure 5-3. Jenna says she would buy 10 gallons of gas per week regardless of the price. If this is true, then Jenna's demand for gas is represented by demand curve a. A. b. B. c. C. d. D. ANSWER: a POINTS: 1 DIFFICULTY: Difficulty:
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Exam Prep
Chapter 6 A Price Ceiling Is A Legal Minimum On The Price At Which A Good
1636 Supply, Demand, and Government Policies 14. A price ceiling is a legal minimum on the price at which a good or service can be sold. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1 NATIONAL STANDARDS: United States - BUSPROG:
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Exam Prep
Chapter 6 A Tax Levied On The Sellers Of Blueberries
1536 Supply, Demand, and Government Policies 17. If a tax is levied on the sellers of a product, then there will be a(n) a. downward shift of the demand curve. b. upward shift of the demand curve. c. decrease in quantity demanded. d. increase in quantity demanded. ANSWER:
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Exam Prep
Chapter 6 Andrew Effectively Pay Acquire One Unit The
1576 Supply, Demand, and Government Policies 94. Refer to Figure 6-22. The price paid by buyers after the tax is imposed is a. $3.00. b. $3.50. c. $5.00. d. $6.00. ANSWER: c POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.15.28 - LO: 6-2 NATIONAL STANDARDS: United States -
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Chapter 6 Government Policies 74 Refer Figure 618 The Effective
1556 Supply, Demand, and Government Policies 59. If the government removes a $2 tax on buyers of cigars and imposes the same $2 tax on sellers of cigars, then the price paid by buyers will a. not change, and the price received by sellers will not change. b. not
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Chapter 6 Homework Elasticity And Tax Incidence When Supply
The purpose of Chapter 6 is to consider two types of government policiesprice controls and taxes. Price controls set the maximum or minimum price at which a good can be sold while a tax creates a wedge between what the buyer pays and what the seller receives. These policies
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Chapter 6 Long Lines At Gas Stations In The United States Were Primarily A Result
1496 Supply, Demand, and Government Policies 168. Refer to Table 6-5. Suppose the government imposes a price ceiling of $3 on this market. What will be the size of the shortage in this market? a. 0 units b. 30 units c. 45 units d. 75 units ANSWER: d
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Chapter 6 Opponents Of The Minimum Wage Point Out That The Minimum Wage
1516 Supply, Demand, and Government Policies 208. The minimum wage has its greatest impact on the market for a. female labor. b. older labor. c. black labor. d. teenage labor. ANSWER: d POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1 NATIONAL STANDARDS: United States - BUSPROG:
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Chapter 6 Sellers Of A Good Bear The Larger Share Of The Tax Burden When A Tax
1616 Supply, Demand, and Government Policies 170. Suppose that the demand for picture frames is highly inelastic, and the supply of picture frames is highly elastic. A tax of $1 per frame levied on picture frames will decrease the effective price received by sellers of picture frames by a.
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Chapter 6 The Impact Of The Minimum Wage Depends On The Skill
1656 Supply, Demand, and Government Policies 74. In an unregulated labor market, the wage adjusts to balance labor supply and labor demand. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC: Labor
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Chapter 6 The Price Paid By Buyers In A Market Will Increase If The Government
1596 Supply, Demand, and Government Policies 130. Refer to Figure 6-27. Suppose a tax of $3 per unit is imposed on this market. How much will sellers receive per unit after the tax is imposed? a. $16 b. between $16 and $20 c. between $20 and $22 d. $22
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Exam Prep
Chapter 6 What Are The Equilibrium Price And Equilibrium Quantity In The Market
Supply, Demand, and Government Policies 1695 12. Refer to Figure 6-31. If the government set a price floor at $17, would there be a shortage or surplus, and how large would be the shortage/surplus? ANSWER: A price floor set at $17 would result in a surplus of 10
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Chapter 6 When A Binding Price Ceiling Is Imposed On A Market To Benefit
1416 Supply, Demand, and Government Policies 33. When a binding price ceiling is imposed on a market to benefit buyers, a. every buyer in the market benefits. b. every buyer and seller in the market benefits. c. every buyer who wants to buy the good will be able to
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Exam Prep
Chapter 6 When A Binding Price Floor Is Imposed On A Market To Benefit Sellers
1436 Supply, Demand, and Government Policies 71. When a binding price floor is imposed on a market to benefit sellers, a. every seller in the market benefits. b. all buyers and sellers benefit. c. every seller who wants to sell the good will be able to do so, but
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Exam Prep
Chapter 6 Which Of The Following Price Controls Would Cause A Surplus Of 20 Units
1456 Supply, Demand, and Government Policies 105. Refer to Figure 6-6. In which of the following cases would sellers have to develop a rationing mechanism? a. a price ceiling set at $8 b. a price ceiling set at $6 c. a price floor set at $8 d. a price
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Exam Prep
Chapter 6 Which The Following Events Could Transform The Price
Supply, Demand, and Government Policies Multiple Choice Section 00: Introduction 1. Which of the following is not correct? a. Economists have two roles: scientist and policy adviser. b. As scientists, economists develop and test theories to explain the world around them. c. Economic policies rarely have effects that
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Chapter 6 Would This Binding Price Floor C Why Would
1676 Supply, Demand, and Government Policies 133. Who bears the majority of a tax burden depends on whether the tax is placed on the buyers or the sellers. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.15.28 - LO: 6-2 NATIONAL STANDARDS: United States
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Chapter 6 If The Horizontal Line On The Graph Represents A Price Ceiling
1476 Supply, Demand, and Government Policies 137. Refer to Figure 6-13. If the government imposes a price floor of $7 on this market, then there will be a. no surplus. b. a surplus of 10 units. c. a surplus of 15 units. d. a surplus of 20 units.
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Chapter 7 A Decrease In Demand Will Cause An Increase In Producer Surplus
Consumers, Producers, and the Efficiency of Markets 1953 29. All else equal, a decrease in demand will cause an increase in producer surplus. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.15.31 - LO: 7-2 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS:
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Chapter 7 A Sharp Reduction In The Supply Of Steak Would
Consumers, Producers, and the Efficiency of Markets 1933 125. Steak and chicken are substitutes. A sharp reduction in the supply of steak would a. increase consumer surplus in the market for steak and decrease producer surplus in the market for chicken. b. increase consumer surplus in the market
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Exam Prep
Chapter 7 Assume Allen Rational Deciding How Many Hours Tutor
Consumers, Producers, and the Efficiency of Markets 1793 137. Refer to Figure 7-8. If the government imposes a price floor of $100 in this market, then consumer surplus will decrease by a. $150. b. $325. c. $650. d. $675. ANSWER: b POINTS: 1
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Chapter 7 Buyers Who Value This Good More Than The Equilibrium Price
Consumers, Producers, and the Efficiency of Markets 1913 88. Refer to Figure 7-26. At the equilibrium price, producer surplus is a. $600. b. $900. c. $1,200. d. $1,800. ANSWER: b POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.15.32 - LO: 7-3 NATIONAL STANDARDS: United States - BUSPROG: Analytic
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Chapter 7 Homework Consumers Producers And The Efficiency Markets
121 rkets WHATS NEW IN THE SEVENTH EDITION: There is a new In the News feature on "The Invisible Hand Can Park Your Car." LEARNING OBJECTIVES: By the end of this chapter, students should understand:
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Chapter 7 Homework The Effect Falling Production Costs The Market
132 Chapter 7/Consumers, Producers, and the Efficiency of Markets 3. Figure 4 shows producer and consumer surplus in a supply-and-demand diagram. 4. An allocation of resources is efficient if it maximizes total surplus, the sum of consumer surplus and producer surplus. But efficiency may not be the only goal
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Exam Prep
Chapter 7 How Much Is The Combined Total Cost Of All Participating
Consumers, Producers, and the Efficiency of Markets 1833 64. Refer to Figure 7-11. If the supply curve is S and the demand curve shifts from D to D, what is the increase in producer surplus due to new producers a. $625 b. $2,500 c. $3,125
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Exam Prep
Chapter 7 Janine Is Willing To Pay 55 Cents, For 1 Pound Of Bananas
Consumers, Producers, and the Efficiency of Markets 1753 65. You are offered a free ticket to see the Chicago Cubs play the Chicago White Sox at Wrigley Field. Assume the ticket has no resale value. Willie Nelson is performing on the same night, and his concert is your
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Chapter 7 Moving Production From A High-cost Producer To A Low-cost Producer
Consumers, Producers, and the Efficiency of Markets 1873 14. Total surplus is represented by the area below the a. demand curve and above the price. b. price and up to the point of equilibrium. c. demand curve and above the supply curve, up to the equilibrium quantity. d.
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Exam Prep
Chapter 7 Producer Surplus Isa. Represented On A Graph By The Area Below 
Consumers, Producers, and the Efficiency of Markets 1853 97. Refer to Figure 7-17. If the supply curve is S and the demand curve is D, what is total producer surplus at the equilibrium price? a. $202.50 b. $405 c. $810 d. $1,215 ANSWER: b POINTS: 1 DIFFICULTY:
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Chapter 7 Welfare Economics Explains Which Of The Following In The Market
Consumers, Producers, and the Efficiency of Markets Multiple Choice Section 00: Introduction 1. Which of the following statements is correct? a. Buyers always want to pay less and sellers always want to be paid more. b. Buyers always want to pay less and sellers always want
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Chapter 7 What Do Economists Call The Highest Amount A Consumer Will Pay 
1972 Consumers, Producers, and the Efficiency of Markets Problems 1. What do economists call the highest amount a consumer will pay to purchase a good? ANSWER: The (maximum) willingness to pay. POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.15.30 - LO: 7-1 NATIONAL STANDARDS: United States -
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Chapter 7 When The Price P1 Consumer Surplus Isa
Consumers, Producers, and the Efficiency of Markets 1773 105. Which of the following will cause a decrease in consumer surplus? a. an increase in the number of sellers of the good b. a decrease in the production cost of the good c. sellers expect the price of the
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Chapter 7 Which Causes The Equilibrium Price To Increase From $50 To $70
Consumers, Producers, and the Efficiency of Markets 1893 51. Refer to Figure 7-21. When the price is P1, area A represents a. total benefit. b. producer surplus. c. consumer surplus. d. None of the above is correct. ANSWER: d POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.15.32
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Chapter 7 Who Experiences The Largest Loss Of Consumer Surplus When
Consumers, Producers, and the Efficiency of Markets 1733 29. Refer to Table 7-2. If the market price is $3.80, a. Davids consumer surplus is $4.70 and total consumer surplus for the five individuals is $9.50. b. Megans consumer surplus is $1.70 and total consumer surplus for the five
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Chapter 7 You Must Pay The Same Price For Both Sets Of Lessons
Consumers, Producers, and the Efficiency of Markets 1813 30. Refer to Table 7-11. If the price is $1,l50, who would be willing to supply the product? a. Abby and Bobby b. Abby, Bobby, and Dianne c. Carlos, Dianne, and Evaline d. Dianne and Evaline only ANSWER: c
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Exam Prep
Chapter 8 Assume The Price Gasoline 200 Per
Application: The Costs of Taxation 2131 26. The deadweight loss from a tax a. does not vary in amount when the price elasticity of demand changes. b. does not vary in amount when the amount of the tax per unit changes. c. is larger, the larger is the amount
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Chapter 8 Economists Edward Prescott And Lee Ohanian Claimed That
Application: The Costs of Taxation 2191 69. In a 2012 Wall Street Journal column, economists Edward Prescott and Lee Ohanian claimed that, in order to promote faster economic growth, the government should a. increase tax rates on individuals with high incomes, and leave tax rates on other individuals unchanged.
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Chapter 8 Homework The Price Received Sellers Declines Ps
2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or
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Chapter 8 If T Represents The Size Of The Tax On A Good And Q Represents
Application: The Costs of Taxation 2011 38. If T represents the size of the tax on a good and Q represents the quantity of the good that is sold, total tax revenue received by government can be expressed as a. T/Q. b. T+Q. c. TxQ. d. (TxQ)/Q. ANSWER:
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Chapter 8 In Which Of The Following Cases Will The Tax Cause
Application: The Costs of Taxation 2151 63. Refer to Figure 8-17. Suppose the government imposes a $1 tax in each of the four markets represented by demand curves D1, D2, D3, and D4. The deadweight will be the smallest in the market represented by a. D1. b. D2. c.
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Chapter 8 Ronald Reagan Believed That Reducing Income Tax Rates Would
Application: The Costs of Taxation 2171 35. The Laffer curve relates a. the tax rate to tax revenue raised by the tax. b. the tax rate to the deadweight loss of the tax. c. the price elasticity of supply to the deadweight loss of the tax. d. government welfare
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Exam Prep
Chapter 8 The Loss Of Producer Surplus For Those Sellers Of The Good
Application: The Costs of Taxation 2031 77. Refer to Figure 8-1. Suppose the government imposes a tax of P' - P'''. The deadweight loss due to the tax is measured by the area a. J+K+L+M. b. J+K+L+M+N. c. I+Y. d. I+Y+B. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate
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Chapter 8 The Optimal Tax Is Difficult To Determine Because Although Revenues
Application: The Costs of Taxation 2211 56. The optimal tax is difficult to determine because although revenues rise and fall as the size of the tax increases, deadweight loss continues to increase. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.37 - LO:
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Chapter 8 The Per-unit Burden Of The Tax On Sellers Is
Application: The Costs of Taxation 2091 199. Refer to Figure 8-9. The per-unit burden of the tax on sellers is a. $20. b. $200. c. $300. d. $500. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.35 - LO: 8-1 NATIONAL STANDARDS: United States - BUSPROG:
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Chapter 8 The Response Of Buyers To A Change In The Price
Application: The Costs of Taxation 2111 238. Refer to Figure 8-12. Suppose a $3 per-unit tax is placed on this good. The amount of deadweight loss resulting from this tax is a. $7.50. b. $15.00. c. $22.50. d. $45.00. ANSWER: a POINTS: 1 DIFFICULTY: Difficulty: Challenging LEARNING OBJECTIVES:
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Chapter 8 To Fully Understand How Taxes Affect Economic Well-being
Application: The Costs of Taxation Multiple Choice Section 00: Introduction 1. In 1776, the American Revolution was sparked by anger over a. the extravagant lifestyle of British royalty. b. the crimes of British soldiers stationed in the American colonies. c. British taxes imposed on the American colonies. d.
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Exam Prep
Chapter 8 What Are The Equilibrium Price And Equilibrium Quantity
2228 Application: The Costs of Taxation Figure 8-26 26. Refer to Figure 8-26. What are the equilibrium price and equilibrium quantity in this market? ANSWER: The equilibrium price is $4, and the equilibrium quantity is 80 units. POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.35
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Chapter 8 What Happens To Producer Surplus When The Tax Is Imposed
Application: The Costs of Taxation 2051 115. Refer to Figure 8-4. The tax results in a loss of consumer surplus that amounts to a. $105. b. $140. c. $170. d. $210. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Challenging LEARNING OBJECTIVES: ECON.MANK.15.35 - LO: 8-1 NATIONAL STANDARDS: United
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Chapter 8 Which Of The Following Results Is Most Likely
Application: The Costs of Taxation 2071 158. Refer to Figure 8-8. The tax causes consumer surplus to decrease by the area a. A. b. B+C. c. A+B+C. d. A+B+C+D+F. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.35 - LO: 8-1 NATIONAL STANDARDS: United States - BUSPROG:
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Chapter 9 An Important Factor In The Decline Of The U.S. Textile
Application: International Trade Multiple Choice Section 00: Introduction 1. An important factor in the decline of the U.S. textile industry over the past 100 or so years is a. foreign competitors that can produce quality textile goods at low cost. b. lower prices of goods that
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Chapter 9 Costa Rica Allows Trade With The Rest Of The World
Application: International Trade 2265 36. Costa Rica allows trade with the rest of the world. We can determine whether Costa Rica has a comparative advantage in producing pharmaceuticals if we a. know whether Costa Rica imports or exports pharmaceuticals. b. compare the world price of pharmaceuticals to the
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Chapter 9 Homework Figure Shows The Market For T Shirts Text Ilia
Chapter 9/Application: International Trade 171 Questions for Review 1. If the domestic price that prevails without international trade is above the world price, the country does not have a comparative advantage in producing the good. If the domestic price is below the world price, the country has a
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Chapter 9 Homework Nafta The Us Economy Achieved And Maintained
WHATS NEW IN THE SEVENTH EDITION: A new In the News feature on Threats to Free Trade has been added. LEARNING OBJECTIVES: By the end of this chapter, students should understand: what
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Exam Prep
Chapter 9 If Belgium Exports Chocolate To The Rest Of The World
Application: International Trade 2445 16. If Belgium exports chocolate to the rest of the world, then Belgian chocolate producers benefit from higher producer surplus, Belgian chocolate consumers are worse off because of lower consumer surplus, and total surplus in Belgium increases because of the exports of chocolate. a.
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Chapter 9 Iso Land Ends Exporting Steel D Creates Losers But
Application: International Trade 2365 189. The nation of Aquilonia has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing incense, exporting steel, and neither importing nor exporting rugs. We can conclude
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Chapter 9 Paul Krugman Argued Favor Of A Protectionism Based
Application: International Trade 2425 11. Countries that restrict foreign trade are likely to a. forgo the additional surplus that trade allows, but will probably enjoy economies of scale. b. forgo the additional surplus that trade allows, but will be compensated by a higher rate of technological change. c.
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Chapter 9 The Change In Total Surplus In This Market Because Of Trade Is
Application: International Trade 2325 106. Refer to Figure 9-9. Consumer surplus in this market before trade is a. A. b. A + B. c. A + B + D. d. C. ANSWER: b POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.41 - LO: 9-2 NATIONAL STANDARDS: United
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Chapter 9 The Following Diagram Shows The Domestic Demand And Domestic Supply
Application: International Trade 2405 Figure 9-22 The following diagram shows the domestic demand and domestic supply in a market. In addition, assume that the world price in this market is $40 per unit. 24. Refer to Figure 9-22. With free trade, consumer surplus is a.
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Chapter 9 What Would Happen If There Were A Decrease In The Price
Application: International Trade 2305 72. Refer to Figure 9-5. Without trade, consumer surplus amounts to a. $810. b. $1,620. c. $3,240. d. $6,480. ANSWER: c POINTS: 1 DIFFICULTY: Difficulty: Moderate LEARNING OBJECTIVES: ECON.MANK.15.41 - LO: 9-2 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: DISC: International Trade
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Chapter 9 When A Country Allows International Trade And Becomes An Exporter
Application: International Trade 2285 33. When a country allows international trade and becomes an exporter of a good, a. domestic producers of the good become better off. b. domestic consumers of the good become worse off. c. the gains of the winners exceed the losses of the losers.
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Chapter 9 When A Country That Exported A Particular Good Abandons A Free-trade
Application: International Trade 2385 229. When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an importer of a particular good, a. producer surplus increases and total surplus increases in the market for that good. b. producer surplus increases and total surplus decreases in the
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Chapter 9 When A Country That Imports A Particular Good Imposes An Import 
Application: International Trade 2345 145. A tariff on a product makes a. domestic sellers better off and domestic buyers worse off. b. domestic sellers worse off and domestic buyers worse off. c. domestic sellers better off and domestic buyers better off. d. domestic sellers worse off and domestic
Principles of Macroeconomics 7th Edition

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