1) Which of the following are included and which are excluded in calculating this years
GDP? Explain in each instance.
(a)A homeowner who mows her own lawn
(b)A decline in the average hours worked per week
(c)Business expenditures on pollution control equipment
(d)Income from illegal drug activities
(e)The person who purchases a health care product
2) other things equal, an excise tax on a product will:
a.increase its supply.
b.increase its price.
c.increase the quantity sold.
d.increase its demand.
3) Which of the following describes the identity embodied in a balance sheet?
A.Net worth plus assets equal liabilities
B.Assets plus liabilities equal net worth
C.Assets equal liabilities plus net worth
D.Assets plus reserves equal net worth
4) since 1941 personal taxes have:
a.risen absolutely, but declined as a percentage of personal income.
b.risen both absolutely and as a percentage of personal income.
c.fallen absolutely, but risen as a percentage of personal income.
d.fallen both absolutely and as a percentage of personal income.
5)
Refer to the above diagram. Suppose that, as expected, aggregate demand declines from
AD2 to AD1. A direct move of the economy from c to a would best reflect:
A.new classical economics.
B.mainstream economics.
C.the real-business-cycle theory.
D.a coordination failure.
6) If P equals the price level expressed as an index number and $V equals the value of
the dollar, then:
A.P = $V – 1.
B.$V = 1/P.
C.1 = $V/P.
D.$V = P – 1.
7)
Refer to the above table. The efficiency wage is:
A.$10.
B.$9.
C.$8
D.$6.
8) What are the relative values of price, ATC, and AVC when a monopolist experiences:
a) a profit
b) a loss but continues to produce
c) a loss but ceases production
9) Which of the following fiscal policy actions is most likely to increase aggregate
supply?
A.An increase in personal income tax rates.
B.A reduction in interest rates that encourages consumers to purchase more durable
goods.
C.An increase in transfer payments to unemployed workers.
D.An increase in government spending on infrastructure that increases private sector
productivity.
10)
Refer to the above graph. Other things equal, an increase in the price of a
complementary resource would cause a(n):
A.move from a to b on D1.
B.shift from D2 to D3.
C.shift from D3 to D2.
D.move from b to a on D1.
11) Between March 2001 and November 2002, the Fed reduced the Federal funds rate
from 5 percent to just above 1 percent. The Fed’s purpose was to:
A.prevent rising inflation.
B.reduce the public debt.
C.promote recovery from recession.
D.strengthen the international value of the dollar.