The sum of payments made to resource owners for the use of their resources is:
a. gross domestic product.
b. net domestic product.
c. national income.
d. personal income.
e. disposable personal income.
Jamal (now age 54) lost his job. He has very specialized skills that are no longer in
demand. Jamal’s unemployment is best classified as:
a. cyclical.
b. structural.
c. seasonal.
d. frictional.
e. voluntary.
Which of the following is included in the study of macroeconomics?
a. Salaries of college professors.
b. Computer prices.
c. Unemployment in the nation.
d. Silver prices.
The unemployment rate measures the percentage of:
a. people in the civilian labor force who are without jobs and actively seeking jobs.
b. the U.S. population that is out of work and actively seeking a job.
c. the civilian noninstitutionalized population that is out of work and actively seeking a
job.
d. people over age 21 who are without jobs and actively seeking jobs.
Which of the following actions by the Fed would increase the money supply?
a. Reducing the required reserve ratio.
b. Selling government bonds in the open market.
c. Increasing the discount rate.
d. None of these.
Which of the following statements is true?
a. The national debt is the current year’s amount by which the government is spending
more than it collects as taxes.
b. Deficits are financed by the government issuing for sale more government securities.
c. The debt ceiling refers to the amount of debt at which the government is officially
declared as being bankrupt.
d. Internal national debt is the portion of the national debt owed to foreigners.
Which of the following statements is true?
a. The national debt as a percentage of GDP is greater today than during any other
period in our nation’s history.
b. A sizeable external national debt will transfer purchasing power away from
foreigners to domestic citizens.
c. Keynesian theory assumes a total crowding out effect associated with deficit
spending.
d. U.S. national debt is 12 times its size in 1980.
According to supply-side fiscal policy, reducing tax rates on wages and profits will:
a. create demand-pull inflation.
b. lower the price level but may trigger a recession.
c. result in stagflation.
d. reduce both unemployment and inflation.
The market shown in Exhibit 4-2 is initially in equilibrium at E3. Changes in market
conditions result in a new equilibrium at E4. This change is stated as a(n):
a. increase in demand and an increase in supply.
b. decrease in demand and a decrease in quantity supplied.
c. increase in quantity demanded and an increase in quantity supplied.
d. decrease in supply and a decrease in quantity demanded.
e. increase in supply and an increase in quantity demanded.
Which of the following is a belief of the monetarists?
a. They think the Great Depression was made worse by poor conduct of monetary
policy.
b. They do not believe monetary policy is transmitted to the economy only through its
effect on interest rates and planned investment.
c. They believe that the interest-investment curve is vertical.
d. All of these.
According to the law of supply:
a. more of a good is desired by consumers as the price falls.
b. less of a good is desired by consumers as the price rises.
c. more of a good will be offered by suppliers as the price rises.
d. less of a good will be offered by suppliers as the price rises.
Exhibit 2-15 Production possibilities curve
In Exhibit 2-15, if the economy moves from
point L to point M, the opportunity cost of producing 10 more capital goods is:
a. 40 less consumer goods.
b. 25 less consumer goods.
c. 15 less consumer goods.
d. 15 more consumer goods.
e. 25 more consumer goods.
The natural rate hypothesis argues that the economy will:
a. self-correct to the natural rate of inflation.
b. require expansionary fiscal policy to reach the natural rate of unemployment.
c. self-correct to the natural rate of unemployment.
d. require expansionary monetary policy to reach the natural rate of unemployment.
External benefits cause the market to:
a. underallocate resources.
b. be more efficient.
c. set excessively high prices.
d. have persistent shortages.
Assuming the economy is experiencing a recessionary gap, classical economists predict
that:
a. wages will remain fixed.
b. monetary policy will sell government securities.
c. higher wages will shift the short-run aggregate supply curve leftward.
d. lower wages will shift the short-run aggregate supply curve rightward.
e. none of these.
Matchthefollowingbusinessformswiththeircharacteristicsbelow.
a. Sole proprietorship
b. Partnership
c. Corporation
Control most private resources in the U.S.
A third party is:
a. the party to which a contractual agreement is meant to benefit.
b. a person, or persons, who are unintentionally affected by a market transaction.
c. the third person in a three-way contract.
d. the person who owns the property right in a contract.
e. when the government attempts to mediate a dispute between management and labor.
According to the classification in the text, which of the following is not an industrially
advanced country (IAC)?
a. Singapore.
b. Hong Kong.
c. United Arab Emirates.
d. Ireland.
A nation can accelerate its economic growth by:
a. reducing the number of immigrants allowed into the country.
b. adding to its stock of capital.
c. printing more money.
d. imposing tariffs and quotas on imported goods.
When an economy is operating well below its full-employment capacity and the
marginal propensity to consume is 0.75, a $10 billion increase in investment spending
will cause the equilibrium output to rise by:
a. $5 billion.
b. $10 billion.
c. $20 billion.
d. $40 billion.