Which of the following will result in an increase in labor productivity?
A) a decrease in the number of people attending institutions of higher education
B) a decline in the amount of human capital per worker
C) an increase in technology
D) a decline in the capital stock per hour worked
An economic expansion tends to cause the federal budget deficit to ________ because
tax revenues ________ and government spending on transfer payments ________.
A) increase; rise; falls
B) increase; fall; rises
C) decrease; rise; falls
D) decrease; fall; rises
An increase in frictional unemployment will
A) shift the long-run Phillips curve to the right.
B) increase the natural rate of unemployment.
C) shift the short-run Phillips curve to the right.
D) All of the above are correct.
E) None of the above is correct.
Figure 2-4
Figure 2-4 shows various points on three Different production possibilities frontiers for
a nation.
Consider the following events:
a. an increase in the unemployment rate
b. a decrease in a nation’s money supply
c. a war that kills a significant portion of a nation’s population Which of the events
listed above could cause a movement from Z to X?
A) a, b and c
B) a and b only
C) a and c only
D) a only
E) c only
Table 2-7
Table 2-7 shows the output per week of two people, Minnie and Mickey. They can
either devote their time to making hats or making umbrellas. What is Mickey’s
opportunity cost of making a hat?
A) 1/10 of an umbrella
B) 1/5 of an umbrella
C) 5 umbrellas
D) 10 umbrellas
Assume a closed economy, that taxes are fixed, and the marginal propensity to consume
is equal to 0.8. What is the government spending multiplier?
A) 10
B) 5
C) 4
D) 3
Monetary policy could be procyclical if the Federal Reserve
A) is late recognizing that a recession has begun and conducts expansionary monetary
policy.
B) is quick to recognize that a recession has begun and conducts expansionary
monetary policy.
C) is late recognizing that a recession has begun and does not conduct expansionary
monetary policy.
D) is quick to recognize that a recession has begun and does not conduct expansionary
monetary policy.
An example of a factor of production is
A) stock issued by Dell.
B) the computers exported by Dell.
C) a computer produced by an Dell.
D) a worker hired by Dell.
If tablet computers are considered substitutes for e-readers, the decline in the price of
tablet computers would, all else equal
A) increase the demand for e-readers.
B) decrease the demand for e-readers.
C) increase the quantity demanded for e-readers.
D) decrease the quantity demanded for e-readers.
Table 6-3
Over what range of prices is the demand inelastic?
A) over the entire range of prices
B) between $12 and $16
C) between $8 and $16
D) between $2 and $8
Before the Great Depression of the 1930s, the majority of government spending took
place at the ________ and after the Great Depression the majority of government
spending took place at the ________.
A) state and local levels; federal level
B) local level; federal level
C) federal level; state and local levels
D) federal level; state level
The use of fiscal policy to stabilize the economy is limited because
A) changes in government spending and tax rates have a small effect on aggregate
demand.
B) changes in government spending and tax rates have a small effect on interest rates.
C) the legislative process can be slow, which means that it is difficult to make fiscal
policy actions in a timely way.
D) the Internal Revenue Service (IRS) resists changes in tax rates because of all the
changes they would have to make to the tax code.
The area ________ the market supply curve and ________ the market price is equal to
the total amount of producer surplus in a market.
A) above; above
B) above; below
C) below; above
D) below; below
The basic economic problem of scarcity
A) has always existed and will continue to exist.
B) will eventually disappear as technology continues to advance.
C) is a problem only in developing economies.
D) does not apply to the wealthy in society.