Which of the following is an example of a supply shock?
A) a surprise increase of the money supply
B) an increase in government spending
C) a sharp increase in the price of oil
D) an increase in the price level
Recall Application 2, “Economic Equality May Sustain Economic Growth,” to answer
the following questions:
According to the Application, what did Andrew Berg and Jonathan Ostry’s findings
show?
A) The found that all countries can sustain growth.
B) They found that all almost countries can grow, but none can sustain growth.
C) They found that not all countries can grow, but almost all those that do can sustain it.
D) They found that almost all countries can grow, but many find it difficult to sustain.
Even when the Obama administration succeeds with its effort to gain Congressional
approval for its stimulus proposals, it will still take time for these policies to actually
work. The time it takes for these policies to work is known as
A) inside lags.
B) outside lags.
C) automatic stabilization.
D) crowding out.
Suppose the inflation rate is 6 percent this year. If nominal wages increase by 6 percent,
real wages will
A) increase by 6 percent.
B) increase by 9 percent.
C) decrease by 12 percent.
D) not change.
Refer to Figure 8A.1. Suppose that the economy starts with a capital stock of . Then
total saving is given by point ________ and depreciation by point ________.
A) a;
B) ; a
C) c; d
D) d; c
Recall Application 2, “The Growth in Excess Reserves,” to answer the following
questions:
According to the application, what was the interest rate banks earned on excess reserves
prior to September 2008?
A) zero percent
B) the fed funds rate
C) the discount rate
D) two percent
The Mexican financial crisis of 1994 did not develop into a generalized financial
collapse thanks to:
A) the creation of the euro.
B) a large revaluation of the Mexican peso.
C) massive lending of dollars to Mexico.
D) the coordination of Mexican monetary policy with the Fed.
The importers of a good may prefer a quota over a tariff because:
A) a quota generates additional profits for importers.
B) a tariff, but not a quota, generates additional profits for importers, not the
government.
C) the government gives subsidies to those who import from other countries.
D) a quota may have more loopholes in its implementation than a tariff.
Recall the Application about the decrease in price of illegal drugs in the United
States to answer the following question(s). Recall the Application. If the decrease in
price of illegal drugs is primarily due to a change in demand, the equilibrium quantity
of drugs
A) will increase.
B) will decrease.
C) will not change.
D) may or may not change.
Of the four countries with the highest level of Gross National Income per capita (the
United States, Japan, Italy, and the United Kingdom), during the 1960-2008 period, the
fastest growing country during the whole period was:
A) the United Kingdom.
B) Japan.
C) the United States.
D) France.
If actual output exceeds potential output, ________ shifts upward over time.
A) the short-run AS curve
B) the short-run AD curve
C) the long-run AS curve
D) the long-run AD curve