________ is/are the payment for the factor of production ________.
A) Wages; capital
B) Interest; labor
C) Profit; entrepreneurship
D) Rent; capital
When Ford increases the production of cars in Australia, which of the following occurs?
A) GDP in the United States rises.
B) GNP in the United States rises.
C) GNP in Australia rises.
D) Both A and C occur.
Figure 7-2
Suppose the U.S. government imposes a $0.75 per pound tariff on coffee imports.
Figure 7-2 shows the impact of this tariff.
Refer to Figure 7-2. The increase in domestic producer surplus as a result of the tariff is
equal to
A) $11.25 million.
B) $18 million.
C) $32.5 million.
D) $45 million.
Total income in an economy is equal to
A) GDP minus net exports.
B) income minus taxes.
C) the sum of wages, interest, rent, and profit.
D) firm revenues.
Which of the following is an example of the way the financial markets in the United
States can encourage technological progress more efficiently than other countries?
A) Even when entrepreneurs cannot secure sufficient funding for projects from banks,
venture capital firms may be willing to lend money.
B) The level of legal protection for investors in the United States is relatively low.
C) Because the financial market in the United States is so large, the quantity of trading
in corporate stocks and bonds makes those investments less liquid.
D) Banks in the United States are more willing to take on risk because the government
guarantees each bank cannot lose more than $100,000 on any given loan that defaults.
Figure 4-1
Figure 4-1 shows Kendra’s demand curve for ice-cream cones.
Refer to Figure 4-1. If the market price is $3.50, what is the maximum number of ice
cream cones that Kendra will buy?
A) 1
B) 2
C) 3
D) 4
Figure 15-3
Refer to Figure 15-3. In the figure above, when the money supply shifts from MS1 to
MS2, at the interest rate of 3 percent households and firms will
A) buy Treasury bills.
B) sell Treasury bills.
C) neither buy nor sell Treasury bills.
D) want to hold more money.
Using a broader measure of the unemployment rate where discouraged workers and
part-time workers who wished to work full time were counted as unemployed, the BLS
estimates the unemployment rate in September 2011 would have ________ compared
to the measured unemployment rate.
A) increased by more than 7 percentage points
B) more than doubled
C) decreased by less than 1 percentage point
D) barely changed
In 2012, GDP per capita was ________ in the United States than in China, and since
1980, the growth rate of real GDP per capita has been ________ in the United States
than in China.
A) higher; higher
B) higher; lower
C) lower; higher
D) lower; lower
All else equal, the desired increase in the supply of smart phones for Google would
cause the equilibrium price of the smart phones to ________ and the equilibrium
quantity of the smart phones to ________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
Which of the following is a reason why decreases in the price level result in a rise in
aggregate expenditure?
A) Price level decreases cause firms and consumers to hold less money, which lowers
the interest rate. Lower interest rates raise consumption and planned investment
expenditures, which raises aggregate expenditure.
B) Price level decreases reduce real wealth, which causes consumption spending and
aggregate expenditure to rise.
C) As the price level falls, government spending rises, which raises aggregate
expenditure.
D) Price level decreases in the United States relative to other countries’ lower net
exports, which raises aggregate expenditure.
Based on the following information, what is the balance on the current account?
Exports of goods and services = $12 billion
Imports of goods and services= $14 billion
Net income on investments = -$4 billion
Net transfers = -$1 billion
Increase in foreign holdings of assets in the United States = $6 billion
Increase in U.S. holdings of assets in foreign countries = -$3 billion
A) -$7 billion
B) -$3 billion
C) -$2 billion
D) $1 billion
Commodity money
A) has value independent of its use as money.
B) has little to no value independent of its use as money.
C) is backed by a valuable commodity such as gold.
D) can be used to purchase commodities, but not services.
Productive efficiency is achieved when firms produce goods and services
A) most desired by society.
B) at the highest profit margin.
C) at the lowest cost.
D) of the highest quality.
Which of the following leads to a decrease real GDP?
A) an increase in government spending
B) an increase in the inflation rate in other countries, relative to the inflation in the
United States
C) an increase in interest rates
D) Households have increasingly optimistic expectations about future income.
In the 1980s, Japan agreed to limit the quantity of automobiles it would export to the
United States. Why did the Japanese government agree to this trade restriction?
A) Japanese automobile producers lobbied for the restrictions in order to increase the
price of their exports to the United States.
B) The Japanese government wanted to limit sales to the United States in order to make
more automobiles available for Japanese consumers.
C) The Japanese government feared that the alternative would be a tariff or quota on
imports of Japanese automobiles imposed by the U.S. government.
D) The Japanese government wanted more automobiles to be available for export to
countries other than the United States.