For which of the following goods is demand most sensitive to interest rate changes?
a. Refrigerators
b. Shoes
c. Corn
d. Textbooks
e. Motor oil
If minimum average cost is the same over a large range of output,
The percentage change in quantity demanded divided by the percentage change in
income is referred to as the
Men and women in a particular industry are equally qualified. If one employer has a
preference for male employees, then in the long run
To say that the demand for labor is a derived demand means that
As long as price is greater than average variable cost, a firm maximizes its profit by
producing that quantity of output for which
In an expansion,
a. federal budget deficits tend to rise
b. federal budget deficits tend to fall
c. the federal debt tends to rise faster than in a recession
d. federal government tax receipts tend to fall
e. there is pressure on the Fed to monetize the debt
Excess reserves can be found by subtracting required reserves from total reserves.
The Federal Reserve Banking Act of 1978
a. attempted to guarantee stability of the banking system
b. was a reaction to the savings and loan crisis
c. added full employment to the list of objectives for the Fed
d. strengthened deposit insurance programs
e. pledged the Fed to keep the inflation rate low
Factors that cause the CPI to exaggerate the inflation rate do not include
a. the tendency of consumers to substitute relatively cheaper goods for those that have
become relatively more expensive
b. political pressure from unions and retirees on the Bureau of Labor Statistics to
overstate the inflation rate
c. the introduction of new technologies that make it easier to obtain the same standard
of living
d. improvements over time on the quality of products
e. the increase in purchases from discount stores
When positive spending shocks occur, transfer payments automatically fall.
If the expenditure multiplier is 3.5 and investment spending increases by $2,000 billion,
what will be the change in GDP?
a. $2,000 billion
b. $5,000 billion
c. $571.4 billion
d. $3,500 billion
e. $7,000 billion
In Figure 4-5, if the government imposes a price floor of $2, the result will be
Short-run movements along the Phillips curve
a. remind us of the dangers of confusing various types of unemployment
b. may determine long-run shifts of the same curve
c. are usually brief and dramatic
d. respond to different assumptions about consumer confidence
e. lead to long-run movements along the same curve