Figure 20-7
In Figure 20-7, there are three aggregate expenditure functions (C + I + G + X − IM)
for an open economy. Which of the following would cause a movement from C to B?
a. a European economic expansion
b. an appreciation of the dollar
c. a depreciation of the dollar
d. an increase in the money supply
In economic analysis, which of the following is considered an injection?
a. saving
b. taxes
c. imports
d. exports
For many years the U.S. government imposed quotas on cheap, Middle Eastern oil
imports. The U.S. consumer consequently paid $3 billion more per year for oil
products. A likely rationale for such a policy is
a. people in the oil industry deserved the transfer.
b. conservation.
c. one cannot be dependent on foreign supplies of so crucial a resource.
d. American oil was of higher quality and deserved a higher price.
Table 11-1
Table 11-1 shows demand and total cost schedules for the monopolist Monopoliteria.
Monopoliteria’s profit-maximizing price per unit in dollars is
a. 1.
b. 3.
c. 5.
d. 4.
e. 6.
Beginning in the mid-1970s, Congress deregulated several industries including airlines
and trucking.
a. True
b. False
In the traditional view, stocks are ____ than bonds to the firm that issues them and ____
than bonds to the investor who purchases them.
a. less risky; less risky
b. less risky; riskier
c. riskier; less risky
d. riskier; riskier
If a country is in a major recessionary phase of the business cycle, one can expect that
its currency will
a. revalue.
b. devalue.
c. appreciate.
d. depreciate.
Figure 20-5
Which of the graphs in Figure 20-5 are consistent with an appreciation of the U.S.
dollar caused by an increase in U.S. interest rates?
a. 1
b. 2
c. 3
d. 4
The difference between economic profit and accountant’s definition of profit is that an
economist’s total cost counts the ____ of inputs.
a. absolute value
b. overheads
c. opportunity cost
d. gross cost
Union leaders who focus on increasing the size of their union will generally accept a
wage just above the competitive level.
a. True
b. False
The addition of imports reduces the value of the multiplier.
a. True
b. False
If saving exceeds investment, then the level of GDP will
a. increase.
b. remain constant.
c. decrease.
d. rise above potential GDP.
While their respective subject matters differ greatly, both microeconomists and
macroeconomists rely on the same basic tools; that is, both rely on
a. government contracts to promote research and publications.
b. demand-and-supply analysis.
c. the economic theory of John Maynard Keynes.
d. consumer protection laws and antitrust legislation.
Technically speaking, in what year did the “Great Recession” end?
a. 1933
b. 1935
c. 2007
d. 2009
e. It had not ended as of 2011.
The reserves supply schedule has a positive slope because
a. the Fed lowers the discount rate as interest rates rise.
b. the Fed makes more money available at higher interest rates.
c. as interest rates rise, banks will find loans more profitable.
d. as interest rates rise, people will demand more loans.
In the U.S., the share of taxes ____ during the early years of George W. Bush’s
presidency and ____ since then.
a. decreased; increased somewhat
b. decreased; further decreased
c. increased; further increased
d. increased; decreased somewhat
e. increased; remained constant
Which of the following would be cures for the U.S. trade deficit?
a. Americans saving less and spending more
b. a severe recession in Europe and Asia
c. a severe recession in the United States
d. a tax cut
e. All of the above are correct.
The portion of income which is earned in the form of wages for labor is about
a. 15%
b. 35%
c. 51%
d. 60%
One of the major reasons why nations trade is that
a. nations choose to trade for largely unknown reasons.
b. resources are not equally distributed across the planet.
c. nations wish to exert cultural influence abroad.
d. nations wish to copy others, and need imports to study.
Environmental destruction is peculiar to centrally planned economies.
a. True
b. False
Direct controls that impose equal percentage reductions in emissions on all firms in the
area
a. impose the same costs on all firms.
b. minimize the cost of pollution reduction.
c. penalize firms that have already incurred some costs to reduce pollution.
d. are the fairest way to distribute the burden
Figure 7-1
Of the graphs in Figure 7-1, which best represents marginal physical product?
a. 1
b. 2
c. 3
d. 4
Pollution is an example of a negative externality.
a. True
b. False
In a monetary system, people will exchange a good for
a. another good.
b. a service.
c. money.
d. gold or other precious metals.
In a capitalist market economy, the decision to save is made by the same people who
make the major investment decisions.
a. True
b. False
A product that is produced in 2015 and not sold until 2016 will be counted in the GDP
for
a. both 2015 and 2016.
b. neither 2015 nor 2016.
c. 2015.
d. 2016.
A straight-line demand curve has an elasticity that becomes smaller as we move from
left to right along the schedule.
a. True
b. False
A minority of American women work outside of the home.
a. True
b. False
Which of the following factors is always present in consumer decision making?
a. taxes
b. high prices
c. scarcity
d. changing consumer tastes
e. cost-of-living adjustments to income
Chronic trade deficits lead to a growing public debt.
a. True
b. False
Use the law of diminishing marginal utility to explain why Domino’s and Pizza Hut
allow the purchase of a second pizza for only $4 when one pays full price (around $10)
for the first pizza. Why not simply charge $7 a pizza instead?
An increase in the average price level will lead to a decrease in the demand for reserves.
a. True
b. False
Externalities can be either detrimental or beneficial to others.
a. True
b. False