An increase in supply is graphically represented by a leftward shift of the supply curve.
a. True
b. False
If the demand for a particular agricultural product is highly elastic and bad weather
causes the supply to decrease, then we would expect the price of agricultural products
to
a. decrease and farmers’ revenues to decrease.
b. increase and the demand to decrease.
c. increase while farmers’ revenues decrease significantly.
d. increase by a large percentage while farmers’ revenues decrease only slightly.
In the equation of exchange, the letter “V” stands for
a. variance.
b. validity.
c. volume.
d. velocity.
One implication of the median voter model is that candidates running for political office
take polls because
a. everyone does it.
b. they want to know if they should maintain their current positions or modify them.
c. it is good public relations, since if the public learns that the candidate is taking polls,
the public will feel that the candidate cares what it thinks.
d. taking polls is tax deductible.
e. none of the above
Exhibit 17-1Production Function Real GDP = T (L, K), such that Real GDP = T(L + K)
Assume that the technology coefficient is equal to 0.40.
If this production function is graphed with Real GDP on the vertical axis and labor on
the horizontal axis, and capital rises from 4 units to 6 units it would cause a
a. shift upward in the production function to a higher level of Real GDP.
b. shift downward in the production function to a lower level of Real GDP.
c. movement down along the same production function to a lower level of Real GDP.
d. movement up along the same production function to a higher level of Real GDP.
Which of the following is consistent with the classical view of Say’s law?
a. Saving increases by $2 billion and investment decreases by $2 billion.
b. Saving increases by $2 billion and consumption rises by $2 billion.
c. Saving increases by $2 billion, consumption decreases by $2 billion, and investment
rises by something less than $2 billion.
d. Saving decreases by $2 billion and consumption decreases by more than $2 billion.
e. none of the above
The quantity demanded of money falls as the
a. interest rate falls.
b. interest rate rises.
c. supply of money rises.
d. none of the above, since the quantity demanded of money is unrelated to the interest
rate
When the price of Toyota Corollas rises, ceteris paribus, the demand for Corollas falls.
a. True
b. False
The simple quantity theory of money predicts that changes in
a. the money supply lead to strictly proportional changes in the price level.
b. the money supply do not affect the price level.
c. the price level lead to strictly proportional changes in velocity and GDP.
d. velocity lead to nearly proportional changes in the money supply.
The corridor is the ________________ section of the ______________________ curve
of reserves in the federal funds market.
a. vertical; demand
b. horizontal; demand
c. vertical; supply
d. horizontal; supply
A shortage in the bread market can cause the price of bread to rise.
a. True
b. False
Exhibit 38-1
The coupon rate for bond B is
a. 0.09 percent.
b. 16.7 percent.
c. 9.5 percent.
d. 11 percent.