Which of the following would you expect to result in faster economic growth?
A) the invention of new computers that increase labor productivity
B) a decrease in the average level of education in the economy
C) a decrease in the stock of capital per worker
D) a decrease in research and development spending
In the aggregate expenditure model, ________ has both an autonomous component and
an induced component.
A) planned investment spending
B) consumption spending
C) government spending
D) net export spending
When an investor buys a corporate bond, the ________ the bond is a loan to the
corporation.
A) interest on
B) face value of
C) coupon payment on
D) dividend payment on
Assuming no change in the nominal exchange rate, how will a decrease in the price
level in the United States relative to France affect the real exchange rate between the
two countries? (Assume the United States is the “domestic” country.)
A) The real exchange rate will rise.
B) The real exchange rate will fall.
C) The real exchange rate will be unaffected.
D) The impact on the real exchange rate cannot be predicted.
Which of the following is part of the secondary market?
A) New York Stock Exchange
B) the over-the-counter market
C) NASDAQ
D) all of these
Table 2-9
Table 2-9 shows the number of labor hours required to produce a wristwatch and a
pound of rice in Japan and Thailand.
Refer to Table 2-9. Does either Japan or Thailand have an absolute advantage and if so,
in what product?
A) Thailand has an absolute advantage in rice.
B) Japan has an absolute advantage in rice.
C) Thailand has an absolute advantage in both products.
D) Japan has an absolute advantage in wristwatches.
Economic models
A) make no assumptions in order to remain as accurate as possible.
B) are simplified versions of reality.
C) can not be used to analyze real-world issues.
D) magnify the complexity of economic issues in order to provide useful data.
In order to be binding a price floor
A) must lie above the free market equilibrium price.
B) must lie below the free market equilibrium price.
C) must coincide with the free market equilibrium price.
D) must be high enough for firms to earn a profit.
In the first half of 2011, automobile sales in the United States were lower than they
were in the first half of 2010. The decrease in auto sales impacts GDP because new
automobiles are counted as ________ when purchased by households and ________
when purchased by businesses.
A) nondurable goods; durable goods
B) consumption; investment
C) investment; consumption
D) durable goods; nondurable goods
If an increase in autonomous consumption spending of $25 million results in a $100
million increase in equilibrium real GDP, then
A) the MPC is 0.25
B) the MPC is 0.75
C) the MPC is 0.8
D) the MPC is 2.5
Costa Rica is a leading exporter of bananas. What explains the comparative advantage
of this country in banana production?
A) climate and soil conditions in Costa Rica which are well-suited for banana
production
B) investment by multinational firms such as Chiquita Brands International and the
Dole Food Company
C) a large supply of unskilled labor
D) positive externalities
If firms sell exactly what they expected to sell, all of the following will be true except
A) aggregate expenditure will be greater than GDP.
B) there is no unplanned change in inventories.
C) inventories will not change, and GDP and employment will remain stable.
D) aggregate expenditure will be equal to GDP.
Although the pegged exchange rate between the yuan and the dollar has ________ the
yuan, China has been reluctant to abandon the peg for fear that abandoning the peg
would ________.
A) undervalued; reduce exports
B) undervalued; reduce imports
C) overvalued; increase imports
D) overvalued; reduce exports
A black market is a market where buying and selling take place
A) at prices that violate government price regulations.
B) in non-licensed shops and warehouses.
C) after regular office hours.
D) on foreign soil.
In Thailand in the late 1990s, there was pressure for the value of the baht to decline as
foreign investors began to
A) sell off investments they had made in Thailand and traded in their baht for dollars.
B) sell off investments they had made in Thailand and traded in their dollars for baht.
C) increase their investments in Thailand and exchanged their baht for dollars.
D) increase their investments in Thailand and exchanged their dollars for baht.
A small economy increased its capital per hour worked (K/L) from $40,000 to $50,000.
As a result, real GDP per worker (Y/L) grew from $20,000 to $25,000. If the economy
increases its capital per hour worked by another $10,000 to $60,000, but there is no
change in technology, by how much more and in what direction will output per worker
change?
A) Output per worker will increase by exactly $5,000.
B) Output per worker will increase by more than $5,000.
C) Output per worker will increase by less than $5,000.
D) Output per worker will fall by more than $5,000.
If you own a $1,000 face value bond with one year remaining to maturity and a five
percent coupon rate and new bonds are paying 12 percent, what is the most you can get
for your old bond?
A) $1,120
B) $1,000
C) $937.50
D) impossible to determine without additional information
Which of the following is a microeconomics question?
A) When will the government better secure the borders?
B) Why hasn’t the federal government raised the minimum wage?
C) How does Fiat decide on the price of the 500 Pop model?
D) What determines the level of U.S. imports and exports?