1) Which of the following is a true statement?
A.firms and resource suppliers generally find it easier to reduce prices than to raise
them.
B.as the price level increases, interest rates will rise and therefore consumption and
investment spending will also rise.
C.an initial increase in aggregate demand may cause a further increase in aggregate
demand because higher prices mean higher incomes.
D.a decline in aggregate demand will primarily affect real output and employment if
prices are inflexible downward.
2) inflation affects:
a.both the level and the distribution of income.
b.neither the level nor the distribution of income.
c.the distribution, but not the level, of income.
d.the level, but not the distribution, of income.
3)
Refer to the above information. If the real interest rate is 9 percent, the equilibrium
GDP will be:
A.$600.
B.$500.
C.$400.
D.$300.
4)
refer to the above diagram. the vertical intercept:
a.is 40.
b.is 50.
c.is 60.
d.cannot be determined from the information given.
5)
Refer to the above data. This firm is:
A.selling its product in a purely competitive market.
B.selling its product in an imperfectly competitive market.
C.hiring workers in a purely competitive market.
D.hiring workers in an imperfectly competitive market.
6) The fear of unwanted price wars may explain why many firms are reluctant to:
A.reduce wages when a decline in aggregate demand occurs.
B.reduce prices when a decline in aggregate demand occurs.
C.expand production capacity when an increase in aggregate demand occurs.
D.provide wage increases when labor productivity rises.
7)
suppose elroy’s budget line is as shown on the above diagram. if his tastes change in
favor of coke and against popcorn, the budget line will:
a.become steeper.
b.become flatter.
c.shift rightward.
d.be unaffected.
8) the slope of the typical production possibilities curve:
a.is positive.
b.increases as one moves southeast along the curve.
c.is constant as one moves down the curve.
d.decreases as one moves southeast along the curve.
9) What percentage of the public debt is held by foreign individuals and institutions?
A.50 percent
B.18 percent
C.42 percent
D.25 percent
10)
refer to the above figure. an increase in the number of highly skilled and educated
potential immigrants would:
a.increase mb and increase the optimal quantity of immigrants.
b.reduce mb and reduce the optimal quantity of immigrants.
c.increase mc and increase the optimal quantity of immigrants.
d.reduce mc and reduce the optimal quantity of immigrants.
11) (last word) a study found that the incidence of skin cancer increases along with the
amount of time people work under fluorescent light, leading some people to conclude
that fluorescent lighting is a cause of skin cancer. but further analysis found that people
who work in offices, where fluorescent light is common, suffer more sunburn on their
vacations than other workers. the sunburns, not the fluorescent light, were the cause of
the higher incidence of skin cancer. the original conclusion illustrates:
a.the fallacy of composition.
b.confusion of correlation and causation.
c.identifying marginal costs and marginal benefits.
d.biases and loaded terminology.
12) In the quintile distribution of income, the term “quintile” represents:
A.5 percent of the income receivers.
B.10 percent of the income receivers.
C.20 percent of the income receivers.
D.25 percent of the income receivers.
13) Answer the next question(s) on the basis of the following table for a particular
country in which C is consumption expenditures, Ig is gross investment expenditures, G
is government expenditures, X is exports, and M is imports. All figures are in billions of
dollars. Each question is independent of the other questions.
Refer to the above table. The interest-rate effect of changes in the price level is shown
by columns:
A.(1) and (4) of the table.
B.(5) and (6) of the table.
C.(1) and (3) of the table.
D.(2) and (4) of the table.
14)
refer to the above diagram. the decline in price from p1to p2will:
a.increase total revenue by d
b.increase total revenue by b + d
c.decrease total revenue by a
d.increase total revenue by d – a
15) the letters a, b, and c designate three successively larger plant sizes.
refer to the above data. in the long run the firm should use plant size “a” for:
a.all possible levels of output.
b.10 to 30 units of output.
c.30 to 60 units of output.
d.all outputs greater than 40.
16) the principle that a firm should produce up to the point where the marginal revenue
from the sale of an extra unit of output is equal to the marginal cost of producing it is
known as the:
a.output-maximizing rule.
b.profit-maximizing rule.
c.shut-down rule.
d.break-even rule.
17) If Congress were to pass a law exempting interest on saving from taxation, the:
A.supply of loanable funds would decrease and the equilibrium interest rate rise.
B.supply of loanable funds would increase and the equilibrium interest rate fall.
C.demand for loanable funds would increase and the equilibrium interest rate rise.
D.equilibrium interest rate would be unaffected.
18)
refer to the above diagram. if labor is the only variable input, the marginal product of
labor is at a:
a.maximum at point a
b.minimum at point a
c.maximum at point b
d.maximum at point c
19) The price of government bonds and the interest rate received by a bond buyer are:
A.positively related.
B.unrelated.
C.negatively related.
D. independent of Federal Reserve open-market operations.