1) if the aggregate income of households is $300 billion, consumption is $210 billion,
and personal taxes are $60 billion, then personal saving:
a.is $70 billion.
b.is $30 billion.
c.is $40 billion.
d.cannot be determined from the information given.
2) The amount of reserves that a commercial bank is required to hold is equal to:
A.the amount of its checkable deposits.
B.the sum of its checkable deposits and time deposits.
C.its checkable deposits multiplied by the reserve requirement.
D.its checkable deposits divided by its total assets.
3) currently (2008) the marginal tax rates of the federal personal income tax:
a.are less than corresponding average tax rates.
b.rise from 5 to 50 percent.
c.fall from 20 to 10 percent.
d.rise from 10 to 35 percent.
4) The long-run aggregate supply curve is vertical:
A.because the rate of inflation is steady in the long run.
B.because resource prices eventually rise and fall with product prices.
C.because product prices always increase at a faster rate than resource prices.
D.only when the money supply increases at the same rate as real GDP.
5) The very poorest low-income DVCs typically have relatively:
A.low rates of economic growth and relatively high rates of population growth.
B.high rates of economic growth and relatively low rates of population growth.
C.low rates of both population growth and economic growth.
D.high rates of both population growth and economic growth.
6) the main problem posed by trade blocs for nonmember nations is that:
a.member nations may achieve growth rates that exceed those of nonmember nations.
b.nonmembers must exchange their currencies for foreign monies before they can
engage in export or import transactions.
c.nonmembers face tariffs that member nations do not.
d.member nations refuse to participate in tariff negotiations sponsored by gatt.
7) If a nation’s real output is growing by 5 percent per year, its real output will double in
approximately:
A.22 years.
B.20 years.
C.14 years.
D.8 years.
8) gigantic state university raises tuition for the purpose of increasing its revenue so that
more faculty can be hired. gsu is assuming that the demand for education at gsu is:
a.decreasing.
b.relatively elastic.
c.perfectly elastic.
d.relatively inelastic.
9) an unprofitable motel will stay open in the short-run if:
a.price (average nightly room rate) exceeds average variable cost.
b.marginal revenue exceeds marginal cost.
c.price (average nightly room rate) exceeds average fixed cost.
d.marginal revenue exceeds price.
10) specialization-the division of labor-enhances productivity and efficiency by:
a.allowing workers to take advantage of existing differences in their abilities and skills.
b.avoiding the time loss involved in shifting from one production task to another.
c.allowing workers to develop skills by working on one, or a limited number, of tasks.
d.all of the means identified in the other answers.
11) the market system does not produce public goods because:
a.there is no need or demand for such goods.
b.private firms cannot stop consumers who are unwilling to pay for such goods from
benefiting from them.
c.public enterprises can produce such goods at lower cost than can private enterprises.
d.their production seriously distorts the distribution of income.
12) the basic difference between the short run and the long run is that:
a.all costs are fixed in the short run, but all costs are variable in the long run.
b.the law of diminishing returns applies in the long run, but not in the short run.
c.at least one resource is fixed in the short run, while all resources are variable in the
long run.
d.economies of scale may be present in the short run, but not in the long run.