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Compared to IACs, LDCs are often characterized by:
a. higher life expectancy.
b. higher adult literacy rates.
c. higher daily calorie supply.
d. lower per capita energy consumption.
Suppose a wallet firm has been dumping its wastes into the local river. The government
finds out and insists that the firm pay for the cost of the river cleanup. As a result, we
can expect:
a. more wallets to be produced at a lower price.
b. more wallets to be produced at a higher price.
c. fewer wallets to be produced at a lower price.
d. fewer wallets to be produced at a higher price.
e. the same number of wallets to be produced at a higher price.
Exhibit 3-4 Supply curves
In Exhibit 3-4, which of the following could
have caused the shift in the supply curve from S1 to S2?
a. Increase in demand.
b. Decrease in demand.
c. Decrease in the number of suppliers in the market.
d. Decrease in wage rates.
e. Increase in materials cost.
Exhibit 16-1 Money market demand and supply curves
Starting from an equilibrium at E1 in
Exhibit 16-1, a leftward shift of the money supply curve from MS1 to MS2 would cause
an excess:
a. demand for money, leading people to sell bonds.
b. demand for money, leading people to buy bonds.
c. supply of money, leading people to sell bonds.
d. supply of money, leading people to buy bonds.
Exhibit 1A-3 Straight line
In Exhibit 1A-3, as X increases along the
horizontal axis, corresponding to points A-B on the line, the Y values decrease. The
relationship between the X and Y variables is:
a. direct.
b. inverse.
c. independent.
d. variable.
Within the framework of the aggregate expenditures model, which of the following is
true?
a. When spending on goods and services exceeds the level business decision makers
anticipated, inventories will rise.
b. Equilibrium will always occur at the full-employment level of output.
c. A nation's imports will decline as the nation's disposable income increases.
d. When spending on goods and services exceeds the level of aggregate output,
inventories will fall.
Surge Company reports the following information at December 31, 2015:
What is Surge Company's net income?
a. $ 15,000
b. $ 45,000
c. $ 55,000
d. $ 65,000
Which of the following causes the production possibilities curve to shift to the right?
a. d and e.
b. c and e.
c. A war.
d. The development of a new technology that improves productivity.
e. The discovery of oil reserves.
Deflation refers to a:
a. decreasing relative prices.
b. decreasing price level.
c. slowing down of the rate of inflation.
d. federal government policy of running budget surpluses.
An economic model is useful only if it:
a. contains no positive statements.
b. captures all the complexities of reality.
c. yields accurate predictions.
d. has both macro- and microeconomic applications.
To grow and prosper, less-developed countries must not:
a. invest in human capital.
b. build a strong infrastructure.
c. shift resources out of the production of consumer goods and into the production of
capital goods.
d. shift resources out of the production of capital goods and into the production of
consumer goods
e. improve the quality of the water supply
Which of the following is a valid statement?
a. Required reserve ratio = required reserves as a percentage to total deposits.
b. Required reserves = the maximum reserves required by the Fed.
c. Excess reserves = total reserves plus required reserves.
d. All of these.
Mathematically, the value of the spending multiplier in terms of the marginal propensity
to consume (MPC) is given by the formula:
a. MPC - 1.
b. (MPC -1) / MPC.
c. 1 / MPC.
d. 1 / (1 - MPC).
That part of disposable income not spent on consumption is defined as:
a. transitory disposable income.
b. permanent disposable income.
c. disposable income.
d. autonomous consumption.
e. saving.
A criticism of the unemployment rate is that:
a. underemployment is measured in the calculation.
b. the data includes part-time workers as fully employed.
c. discouraged workers are included in the calculation.
d. all of these are problems.
