In 2011, the top 50 percent of income earners in the U.S. paid about __________
percent of the total federal income taxes.
a. 57.1
b. 67.1
c. 77.1
d. 87.1
e. 97.1
Simple majority voting will generate the same result whether taxes are equally divided
or unequally divided.
a. True
b. False
If more people join carpools and travel to work together
a. the demand curve for freeway space shifts leftward.
b. the supply curve for freeway space shifts rightward.
c. the supply curve for freeway space shifts leftward.
d. a and b
e. none of the above
According to new classical theory, if policy is correctly anticipated, expectations are
formed rationally, and wages and prices are fully flexible, then an increase in aggregate
demand will change Real GDP, but not the price level.
a. True
b. False
If there is no comparative advantage in the production of either of the two goods
produced by countries 1 and 2, then
a. the benefits resulting from trade between the two countries are increased.
b. there are no gains from specialization and trade between the two countries.
c. one country must be more productive in producing all goods than the other.
d. each country should specialize in the production of a particular good.
e. none of the above
The higher the opportunity cost of making a new friend, the more likely one is to make
a new friend,€ceteris paribus€.
a. True
b. False
Regulatory capital arbitrage is a means of
a. using borrowed funds to increase the returns that can be earned with a given amount
of capital.
b. specifying the amount of capital that financial institutions should hold based on the
riskiness of their different assets.
c. determining mortgage rates for sub-prime borrowers.
d. changing the composition of assets in such a way as to lower the overall amount of
capital a financial institution holds for a given level of assets.
In the production function Real GDP = T (L, K), the T represents the _____________
coefficient, the L represents ________________ and the K represents
_______________.
a. tax; labor; capital
b. technology; labor; capital
c. technology; labor; knowledge
d. technology; livestock; knowledge
There are two universities, A and B, in a city. Tuition rises at University A and, as a
result, the demand for attending University B rises. It follows that educational services
at the two universities are
a. complements.
b. normal goods.
c. inferior goods.
d. substitutes.
e. none of the above
Exhibit 9-8
Suppose that at a given price level the following values exist in a hypothetical
economy:
Consumption = $7,000 billion
Investment = $1,900 billion
Government Purchases = $1,700 billion
Exports = $300 billion
Imports = $300 billion
Assume that the level of total expenditures is equal to the value of goods and services
that suppliers want to sell.
The level of total expenditures (TE) in this economy is currently ______________
billion.
a. $10,600
b. $10,900
c. $11,200
d. $8,900
If Bank A borrows from Bank B, reserves in the banking system __________. If Bank A
borrows from the Fed, reserves in the banking system __________.
a. rise; fall
b. fall; remain unchanged
c. remain unchanged; remain unchanged
d. remain unchanged; rise
e. rise; remain unchanged
A bank initially has $190 million in assets and $150 million in liabilities.The banks net
worth (capital) is _____________ million.If the bank’s assets increase by 10% and its
liabilities do not change, its capital increases by ____________ .
a. $340; 10%
b. $40; 47.5%
c. $40; 10%
d. $40; 32.2%
Exhibit 39-8
Assume that E1 represents the initial
equilibrium in the market for grain X. As a result of a breakthrough in genetic
engineering that develops an insect-resistant variety of grain X,
a. the supply curve shifts leftward.
b. the equilibrium quantity increases.
c. the equilibrium price rises.
d. all of the above
e. a and c
Logrolling
a. is vote trading among elected officials.
b. eliminates the influence of special interest groups.
c. puts downward pressure on federal spending.
d. b and c
e. all of the above
Which of the following statements is false?
a. A call option will sell for a fraction of the cost of the stock.
b. A futures contract can be written for a commodity (such as wheat), or for a currency.
c. A futures contract gives the owner the right, but not the obligation, to buy or sell a
commodity at a specified price on a given future date.
d. The specified price at which an option gives the owner the right to buy a stock at is
called the stick price.
In the case of nonexcludable goods, economists contend that the market ___________
produce these goods because of the ________________________.
a. will; free rider problem
b. will not; law of diminishing marginal utility
c. will not; law of diminishing marginal returns
d. will not; free rider problem.
An increase in labor’s productivity will cause the SRAS curve to shift __________ and
the price level to __________.
a. leftward; increase
b. rightward; decrease
c. rightward; increase
d. leftward; decrease
Neoclassical growth theory does not emphasize how __________ contribute to growth.
a. the quantity of capital
b. technological changes
c. the quantity of labor
d. factors limiting population growth
e. a and c
Reductions in private spending as a result of increased government spending or the
need to finance a budget deficit is called
a. pushing in.
b. rushing forth.
c. crowding in.
d. crowding out.
Technological advances make it possible to
a. produce goods without using any resources.
b. obtain the same output by using more resources.
c. obtain the same output by using fewer resources.
d. lower labor productivity.