Contractionary monetary policy to prevent real GDP from rising above potential real
GDP would cause the inflation rate to be ________ and real GDP to be ________.
A) higher; higher
B) higher; lower
C) lower; higher
D) lower; lower
Growth in aggregate demand will
A) cause deflation.
B) increase unemployment.
C) move the economy to a higher point on the short-run Phillips curve.
D) cause the short-run Phillips curve to shift to the left.
If you pay $2,000 in taxes on an income of $20,000, and a tax of $3,000 on an income
of $30,000, then over this range of income the tax is
A) regressive.
B) proportional.
C) progressive.
D) There is insufficient information to answer the question.
Which of the following statements is true?
A) An increase in demand causes a change in equilibrium price; the change in price
does not cause a further change in demand or supply.
B) A decrease in supply causes equilibrium price to rise; the increase in price then
results in a decrease in demand.
C) If both demand and supply increase there must be an increase in equilibrium price;
equilibrium quantity may either increase or decrease.
D) If demand decreases and supply increases one cannot determine if equilibrium price
will increase or decrease without knowing which change is greater.
The increased generosity of unemployment insurance programs in Canada as compared
to the United States should
A) decrease the duration of unemployment in Canada as compared to the United States.
B) increase the duration of unemployment in Canada as compared to the United States.
C) have no impact on the duration of unemployment in Canada.
D) raise the duration of unemployment in the United States.
Of the following high-income countries, which has the highest female life expectancy at
age 65?
A) Canada
B) Japan
C) the United Kingdom
D) the United States
Consider the following pairs of items:
a. shampoo and conditioner
b. iPhones and earbuds
c. a laptop computer and a desktop computer
d. beef and pork
e. air-travel and weed killer Which of the pairs listed will have cross-price elasticity of
zero?
A) a and b only
B) c only since most people cannot do without computers
C) e only
D) none of the pairs listed
Which of the following do not suffer the costs of inflation?
A) persons on fixed incomes
B) persons whose incomes rise more rapidly than inflation
C) firms that have to devote more time and labor to raising prices
D) an investor that has to pay higher taxes because of the inflation
Buyers rush to purchase stocks in California vineyards following a forecast of a 30
percent decline in this year’s grape harvest. What happens in the California wine market
as a result of this announcement?
A) The demand curve for California wine shifts to the left in anticipation of higher
prices in the future.
B) The demand curve for California wine shifts to the right in anticipation of higher
prices in the future.
C) The supply curve for California wine shifts to the right in anticipation of higher
prices in the future.
D) The supply curve for California wine shifts to the left in anticipation of lower
quantities in the future.
Potential GDP is defined as
A) the maximum of GDP that the economy can produce.
B) the amount of GDP produced if there is no frictional unemployment.
C) the level of GDP attained when all firms are producing at capacity.
D) the amount of GDP produced if there is no structural unemployment.
Tax cuts on business income ________ aggregate demand.
A) would decrease
B) would increase
C) would not change
D) may increase or decrease
In a closed economy, private saving is equal to which of the following? (Y = GDP, C =
Consumption,
G = Government purchases, T = Taxes, and TR = Transfers)
A) Y – C – T
B) Y – G – T
C) Y – G – T + TR
D) Y + TR – C – T
Figure 7-2 Suppose the U.S. government
imposes a $0.75 per pound tariff on coffee imports. Figure 7-2 shows the impact of this
tariff. With the tariff in place, the United States produces
A) 18 million pounds of coffee.
B) 20 million pounds of coffee.
C) 26 million pounds of coffee.
D) 38 million pounds of coffee.
In 2012, GDP per capita was ________ in the United States than in China, and since
1980, the growth rate of real GDP per capita has been ________ in the United States
than in China.
A) higher; higher
B) higher; lower
C) lower; higher
D) lower; lower
Table 13-3
Table 13-3 shows the demand and cost schedules for a monopolistically competitive
firm.
If this firm continues to produce, what is likely to happen to the product’s price in the
long run?
A) It will fall.
B) It will increase
C) It will remain constant.
D) It cannot be determined without information on its long-run demand curve.
In 2010, Hooverville consumed 205,000 tons of sugar. In 2011, sugar consumption rose
to 245,000 tons. Calculate the percentage change in sugar consumption.
A) 8.37%
B) 11.95%
C) 19.51%
D) 26.33%
Figure 6-10
A perfectly inelastic supply curve is shown in
A) Panel A.
B) Panel B.
C) Panel C.
D) Panel D.
When Tesla, a U.S. company, purchases Italian-made Pirelli tires for its automobiles,
the purchase is
A) both a U.S. and an Italian import.
B) a U.S. import and an Italian export.
C) a U.S. export and an Italian import.
D) neither an export nor an import for either country.
Just before, during, and after the recession of 2007-2009, net exports in the United
States
A) fell and remained negative.
B) fell, but remained positive.
C) rose and became positive.
D) rose, but remained negative.