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Figure 4.5 illustrates a set of supply and demand curves for hamburgers. An increase in
supply and an increase in demand are represented by a movement from
A) point d to point .
B) point d to point a.
C) point c to point a.
D) point to point c.
In the long run
A) prices are sticky.
B) the economy operates at full employment.
C) increases in government spending do not effect other uses of output.
D) increases in the money supply increase the level of output.
Money is an imperfect store of value because of:
A) currency devaluations.
B) tax fraud.
C) inflation.
D) double coincidence of wants.
When the economy is in a liquidity trap, the adjustment process without active policy:
A) may fail because interest rates cannot fall any further.
B) will succeed because interest rates are already low.
C) will require an increase in the money supply to get the economy back to full
employment.
D) becomes more effective with lower interest rates.
Figure 19.3 Refer to Figure 19.3. The market for yen is currently at Point A. An
increase in the U.S. interest rates causes the equilibrium to move to point ________.
A) C
B) A
C) B
D) D
Suppose consumers save 3 percent of their incomes. If the government collects 1 dollar
in taxes from each taxpayer, private saving will ________ per taxpayer.
A) decrease by 3 cents
B) decrease by 97 cents
C) increase by $1
D) increase by 97 cents
A change in the quantity demanded of a product is the result of a change in:
A) the price of the product.
B) the price of related goods.
C) consumer income.
D) the cost of producing the product.
Suppose the public expects a 4 percent inflation rate, while the Federal Reserve
unexpectedly allows the money growth rate to be 5 percent. In the short run, we expect
that
A) real interest rates will remain constant.
B) real interest rates may increase or decrease.
C) real interest rates will decrease.
D) real interest rates will increase.
The argument that raising the employment tax leads to more employment is most likely
to hold if the
A) labor demand curve is vertical.
B) labor supply curve has a steep slope.
C) labor supply curve has a relatively flat slope.
D) labor supply curve has the same slope as labor demand.
On what kind of income is our tax system based?
A) real
B) nominal
C) adjusted
D) inflationary
