Which of the following is part of an economic model?
A) assumptions
B) norms
C) opinions
D) preferences of economic agents
In January, buyers of gold expect that the price of gold will fall in February. What
happens in the gold market in January, holding everything else constant?
A) The demand curve shifts to the right.
B) The quantity demanded increases.
C) The quantity demanded decreases
D) The demand curve shifts to the left.
When the Federal Reserve increases the money supply, at the previous equilibrium
interest rate households and firms will now have
A) more money than they want to hold.
B) less money than they want to hold.
C) the amount of money that they want to hold.
D) to sell Treasury bills.
During the recession phase of the business cycle,
A) production is usually rising.
B) interest rates are usually falling.
C) unemployment is usually falling.
D) income is usually rising.
Figure 19-12
Refer to Figure 19-12. The graph above, depicts supply and demand for U.S. dollars
during a trading day. At a fixed exchange rate of 0.30 pounds per dollar, the dollar is
________ versus the pound. A ________ of the dollar would correct the fundamental
disequilibrium that exists in this market.
A) undervalued; devaluation
B) undervalued; revaluation
C) overvalued; revaluation
D) overvalued; devaluation
How does the owner of a sole proprietorship relate to the business?
A) The owner and the business are separate legal entities.
B) The owner and the business are not separate legal entities.
C) The assets of the owner are considered separate from the asset of the business.
D) None of these describe the legal relationship of the owner to the business.
A transfer payment is a payment by the government to an individual
A) for a service.
B) for an investment good.
C) for a consumption good.
D) for which the government does not receive a good or service in return.
E) for a debt owed.
The provision of the Patient Protection and Affordable Care Act (ACA) which states
that every firm with more than 200 full-time employees must offer health insurance to
its employees and must automatically enroll them in the plan is the ________ provision.
A) employer mandate
B) state health exchanges
C) individual mandate
D) regulation of health insurance
Which of the following statements about an entrepreneur is true?
A) purchases other factors of production in the output market
B) develops the vision for the firm and funds the producing unit
C) sells his entrepreneurial services in the output market
D) does not face personal risk
Federal Reserve Board Chairmen Paul Volcker, Alan Greenspan, and Ben Bernanke all
have focused on which of the following as their main goal of monetary policy?
A) high employment
B) price stability
C) economic growth
D) stability of financial markets
Table 3-1
Refer to Table 3-1. The table above shows the demand schedules for Kona coffee of
two individuals (Luke and Ravi) and the rest of the market. At a price of $6, the
quantity demanded in the market would be
A) 36 lb.
B) 68 lb.
C) 89 lb.
D) 123 lb.
The term “market” in economics refers to
A) a place where money changes hands.
B) a legal institution where exchange can take place.
C) a group of buyers and sellers of a product and the arrangement by which they come
together to trade.
D) an organization which sells goods and services.
Which of the following statements about capital markets is true?
A) The U.S. capital market is currently larger than all other capital markets combined.
B) At one time, the U.S. capital market was larger than all other capital markets
combined, but that is no longer the case.
C) There are currently large capital markets in Europe, but none in Asia.
D) The largest capital markets in the world today are in East Asia and Latin America.
Figure 16-7
Refer to Figure 16-7. Given that the economy has moved from A to B in the graph
above, which of the following would be the appropriate fiscal policy to achieve
potential GDP?
A) increase taxes
B) increase government spending
C) contractionary fiscal policy
D) decrease interest rates
In order to avoid the imposition of other types of trade barriers, foreign producers will
sometimes agree to limit their exports to a country. What are these types of agreements
called?
A) involuntary export restraints
B) voluntary export restraints
C) implicit quotas
D) sanctions
M2 includes M1 plus
A) currency in circulation, checking account deposits in banks, and holdings of
traveler’s checks.
B) savings account balances, money market deposit accounts in banks,
small-denomination time deposits, and noninstitutional money market fund shares.
C) checking account deposits, large-denomination time deposits, and noninstitutional
money market fund shares.
D) currency in circulation, savings account balances, and small-denomination time
deposits.
The major assets on a bank’s balance sheet are its
A) checking and savings account deposits.
B) loans, and checking and savings account deposits.
C) reserves, loans, and holdings of securities.
D) reserves, checking and savings account deposits.
E) reserves, loans, and checking account deposits.
The opportunity cost of taking an on-line history class is
A) the knowledge and enjoyment you receive from taking the class.
B) the value of the time spent on line.
C) equal to the highest value of an alternative use of the time and money spent on the
class.
D) zero because there is no classroom time involved if you are enrolled in the course.
E) the cost of tuition and fees only.