Which of the following is infrastructure?
a. Highways.
b. Bridges.
c. Airports.
d. All of these.
When the discount rates fall, the cost:
a. of loans to bankers’ best customers goes down.
b. of loans between banks falls.
c. of international loans falls.
d. to banks of borrowing from the Fed falls.
e. to savings and loans of borrowing money from the public falls.
Other things being equal, the effect of an increase in the price of Coca-Cola would
cause a(n):
a. upward movement along the demand curve for Coca-Cola.
b. leftward shift in the demand curve for Coca-Cola.
c. downward movement along the demand curve for Coca-Cola.
d. rightward shift in the demand curve for Coca-Cola.
Using the income approach, an estimate of the value of capital worn out producing GDP
is:
a. indirect business taxes.
b. capital consumption allowance or depreciation.
c. gross private domestic investment.
d. capital erosion estimate.
If the marginal propensity to save (MPS) is 0.50, the value of the spending multiplier is:
a. 1.
b. 2.
c. 4.
d. 9.
The ratio of the change in GDP to an initial change in aggregate expenditures (AE) is
the:
a. spending multiplier.
b. permanent income rate.
c. marginal expenditure rate.
d. marginal propensity to consume.
Suppose there are only three people in the economy: Jane, Harry, and Bob. The
individual demand for corn for each of these consumers is given in Exhibit 3-1. The
total quantity demanded of corn if the market price is $5 is ____.
a. 3
b. 25
c. 17
d. 8
e. 26
Exhibit 1A-2 Straight line
In Exhibit 1A-2, the slope of straight line
CD is:
a. positive.
b. zero.
c. negative.
d. variable.
Exhibit 5-3 Expenditure approach National income accountBillions of
dollars
Personal consumption expenditures (C) $1,000
Exports (X) 120
Federal government spending (G) 200
State and local government spending (G) 400
Imports (M) 20
Gross private domestic investment (I) 75 As shown in Exhibit 5-3, total expenditures by
businesses for fixed investment (capital) and inventories is:
a. $1,000 billion.
b. $100 billion.
c. $400 billion.
d. $20 billion
e. $75 billion.
The speculative demand curve for money is:
a. downward sloping.
b. upward sloping.
c. vertical.
d. horizontal.
e. spiral.
According to the classical economists, which of the following would make prolonged
unemployment impossible?
a. Flexible prices, wages, and interest rates.
b. Activist government policies.
c. Stable investment demand.
d. A steadily growing money supply.
A price floor (support price) set above equilibrium:
a. is a minimum legal price set by government above equilibrium.
b. causes the quantity supplied to exceed the quantity demanded.
c. creates a surplus.
d. can represent the effect of a minimum wage.
e. all of these.
Exhibit 3-5 Supply for Tucker’s Cola Data Quantity supplied per week
(millions of gallons)Price per
gallon
6 $3.00
5 2.50
4 2.00
3 1.50
2 1.00
1 .50
As shown in Exhibit 3-5, the price and quantity supplied by sellers of Tucker’s Cola
have a(n) ____ relationship.
a. direct.
b. inverse.
c. negative.
d. zero.