If there is an excess supply of money in the economy,
a. there is also an excess demand for money
b. there is also an excess demand for bonds
c. there is also an excess supply of bonds
d. the interest rate will rise
e. the Fed must intervene to restore equilibrium
The first paper currency issued by the U.S. government was known as the
a. Federal Reserve note
b. treasury bill
c. greenback
d. pound
e. gold certificate
The amount of a commodity that buyers in the market would like to purchase at a
particular price is
a. equilibrium
b. quantity supplied
c. quantity produced
d. infinite
e. quantity demanded
If the dollars per euro exchange rate increased,
a. Americans would purchase fewer European goods
b. more U.S. firms would want to relocate to Europe
c. more American tourists would travel to Europe
d. the demand for euros would increase
e. Europeans would become more highly respected
Since the Federal Reserve Banking Act of 1978, what has been the Fed’s chief
responsibility?
a. Encouraging investment
b. Regulating foreign trade
c. Minimizing the interest payments on the national debt
d. Achieving a low and stable rate of inflation
e. Keeping the interest rate low.
Which of the following would cause the production function to shift upward?
a. A decrease in the capital stock
b. A decrease in human capital
c. An increase in population
d. An increase in human capital
e. Diminishing returns to labor.
The labor demand curve slopes downward because
a. firms wish to hire fewer workers as the wage rate increases
b. households wish to hire fewer workers as the wage rate decreases
c. firms wish to hire more workers as the wage rate increases
d. firms wish to supply fewer workers as the wage rate increases
e. households wish to provide fewer hours of work as the wage rate decreases
Government outlays
a. are the same as “G” in the short-run macro model.
b. do not include transfer payments.
c. are always smaller than government purchases.
d. are always greater than government purchases.
e. tend to decline in the long run.
The fact that total wealth is fixed at any point in time is referred to as the
a. budget constraint.
b. wealth constraint.
c. wealth effect.
d. hard asset effect.
e. income effect.
U.S. residents bear the burden of unemployment equally.
The supply of loanable funds curve is downward sloping.
If the government increases funding to college work-study programs, which of the
following would happen in the labor market?
a. Wages will increase and the labor force will increase.
b. The labor force will decrease but there will be an ambiguous change in the wage.
c. Wages will decrease and the labor force will increase.
d. The labor force will increase but there will be an ambiguous change in the wage.
e. Wages will increase and the labor force will decrease.
Economists disagree about whether increasing the minimum wage is a good idea,
because they put different weight on the importance that the negative impacts have
relative to the positive impacts. As such, the disagreements are usually over
a. normative issues
b. positive issues
c. the mathematical calculations in an economic model
d. whether microeconomics or macroeconomics is more important
e. whether economic theory is useful in explaining the behavior of actors in the
economy