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The sum of durable goods, nondurable goods, and services equals
a. investment.
b. fixed investment.
c. government purchases.
d. consumption.
e. net exports.
Exhibit 2-8
For Maria, the opportunity cost of producing one unit of good Y is ___________ unit(s)
of good X.
a. 2.00
b. 1.00
c. 10.00
d. 0.50
Exhibit 10-4
Marginal propensity to consume is equal to
a. AF divided by C0A.
b. C0A divided by AF.
c. AF divided by C0F.
d. C0F divided by AF.
e. none of the above
Rational (political) ignorance refers to
a. some voters choosing not to vote in elections.
b. the fact that some voters are not smart enough to be informed on political issues.
c. the state of not acquiring information about politics and government because the
costs of acquiring the information are greater than the benefits.
d. political candidates deliberately saying "dumb" things during their campaign.
e. none of the above
If the economy is in the liquidity trap, people think that
a. the money supply will soon rise.
b. bond prices have nowhere to go but up.
c. bond prices will not change.
d. bond prices have nowhere to go but down.
e. none of the above
_______________________ specifies the relation between technology and the factor
inputs to output.
a. Neoclassical growth theory
b. Meta-ideas
c. The LRAS curve
d. A production function
In a two-country world, many economists argue that an increase in the real interest rate
in the domestic economy (relative to the real interest rate in the foreign economy)
a. tends to decrease domestic Real GDP.
b. tends to increase domestic Real GDP.
c. tends to have no impact on domestic Real GDP.
d. has an indeterminable impact on domestic Real GDP given the above information.
Based on the given change, what word (rises or falls) should go in blank (9) and blank
(10), respectively, to summarize the resulting impact on short run equilibrium?
a. rises; rises
b. falls; falls
c. rises; falls
d. falls; rises
The cyclical unemployment rate is defined as the __________ unemployment rates.
a. sum of the structural and the frictional
b. difference between the structural and the frictional
c. difference between the existing (actual) and the natural
d. sum of the natural and the frictional
Nonactivists argue against the use of discretionary monetary policy and rules-based
monetary policy.
a. True
b. False
The coordinates of point A are 20 units of X and 36 units of Y. The coordinates of point
B are 22 units of X and 30 units of Y. With X on the horizontal axis and Y on the
vertical axis, the slope of the line between points A and B is
a. + 3.00
b. + .20
c. + 0.33
d. - 0.33
e. - 3.00
To identify whether fiscal policy is expansionary or contractionary, one should focus on
the cyclical deficit.
a. True
b. False
An open market purchase by the Fed
a. decreases the supply of money.
b. increases the supply of money.
c. decreases the demand for money.
d. increases the demand for money.
If autonomous consumption rises by $60 and, as a result, Real GDP rises by $240, then
the marginal propensity to consume is
a. 0.25.
b. 0.75.
c. 0.05.
d. 0.95.
e. none of the above
A decline in housing prices can help to push the economy into a recessionary gap.
a. True
b. False
