A person has an absolute advantage in producing a good if he can
The economic behavior of government is constrained by
If the demand for good A is more elastic than the demand for good B, a small increase
in supply in both markets will cause
Which of the following would shift the aggregate expenditure line upward?
a. an increase in labor supply
b. a decrease in labor demand
c. a decrease in government spending
d. a decrease in net exports
e. an increase in autonomous consumption spending
If the U.S. interest rate falls relative to the British interest rate,
a. the U.S. demand for pounds will not change
b. the U.S. demand for pounds will decrease
c. the U.S. demand for pounds will increase
d. there will be a rightward movement along the U.S. demand curve for pounds
e. there will be a leftward movement along the U.S. demand curve for pounds
Which of the following is the most liquid asset?
a. Traveler’s checks.
b. Savings-type deposits.
c. Small time deposits.
d. Large time deposits.
e. A modern art painting.
An increase in the population will lead to
Assume that the professors at a local college have gone without a pay increase for 4
years during a tough time. Suppose that things start to look up and the President of the
college wants to make up for lost time. If the CPI in 2002 was 150 and 175 in 2006,
how much will salaries have to increase to bring the faculty back up to their real income
from 2002?
a. 175.0%
b. 150.0%
c. 25.0%
d. 16.7%
e. 14.3%
Which of the following statements concerning the slope and price elasticity of demand
along a straight-line demand curve is correct?
Refer to Figure 15-9. Suppose the economy is in equilibrium with real GDP of $7
trillion. A demand shock shifts the aggregate demand curve to AD2, increasing real
GDP to its full-employment level of $7.2 trillion. In the long run, following the shock,
we would expect the
a. aggregate demand curve to shift rightward, further increasing real GDP and the price
level
b. aggregate demand curve to shift leftward, returning real GDP to $7 trillion
c. aggregate supply curve to shift downward, returning the price level to 120
d. aggregate supply curve to shift upward, returning real GDP to $7 trillion
e. economy to remain at the new level of output of $7.2 trillion
Jobs that require more costly training generally have
The dominant forces causing changes in exchange rates in the very short run are
a. changes in relative interest rates
b. changing expectations regarding future exchange rates
c. economic fluctuations
d. the erratic spending patterns of tourists
e. changes in relative interest rates and in expectations of future exchange rates
Transfer payments are
a. payments for goods or services that individuals provide
b. funds given to people or organizations when no good or service is received in
exchange
c. included in the government purchases category of GDP
d. examples of government investment
e. used to pay state employees
An economic system in which resources are privately owned and allocated by the
market is called
If expectations of future income become more optimistic, which of the following would
occur?
a. Nothing would occur.
b. The consumption-income line would shift downward.
c. The consumption-income line would shift upward.
d. There would be an rightward movement along the consumption-income line.
e. There would be a leftward movement along the consumption-income line.
In the classical model, markets clear
a. in the short run
b. every month
c. immediately
d. in the long run
e. as soon as any shock occurs
What is the price of funds in the loanable funds market?
a. The real wage rate
b. The Consumer Price Index
c. The interest rate
d. The profit rate
e. The GDP price index