Imports are products produced in the home country and sold in another country.
The World Trade Organization was formed to enforce GATT and other international
trade agreements.
Recall Application 3, “The Effectiveness of Committees,” to answer the following
questions:
According to the application, individuals make decisions quicker than committees.
A prolonged budget deficit when the economy is at full employment will eventually
crowd out investment spending.
Unemployment insurance benefits are typically temporary and completely reimburses
the worker’s lost earnings.
There is an exchange rate between any two countries that use different currencies.
GDP measures the total income of all of the citizens of a country.
At a 3.5 percent annual growth rate it would take 20 years for GDP per capita to double.
Who serves as the chairperson to the FOMC?
A) the chairperson of the Board of Governors
B) the Vice President of the United States
C) the President of the Federal Reserve Bank of New York
D) the Secretary of the U.S. Department of Treasury
Recall Application 2, “Two Approaches to Determining the Causes of Recessions,” to
answer the following questions:
According to the application, a recession can be caused by:
A) a decrease in ether aggregate demand or aggregate supply.
B) an increase in aggregate demand or a decrease in aggregate supply.
C) a decrease in aggregate demand or an increase in aggregate supply.
D) an increase in either aggregate demand or aggregate supply.
The quantity of a product that consumers are willing and able to buy at a given price is
called the:
A) quantity demanded.
B) quantity supplied.
C) demand for a good.
D) demand schedule.
The Dominican Republic-Central American Free Trade Association includes:
A) the U.S.
B) Honduras.
C) Costa Rica.
D) all of the above.
The debt to GDP ratio in 2011 was:
A) 67.7 percent.
B) 95.2 percent.
C) 111.4 percent.
D) 45.8 percent.
A $50 billion increase in both government spending and taxes will
A) increase GDP by more than $50 billion.
B) increase GDP by $50 billion.
C) increase GDP by less than $50 billion.
D) not change the level of GDP.
A decrease in personal income taxes will lead to:
A) no change in aggregate demand.
B) an increase in aggregate demand.
C) a decrease in aggregate demand.
D) a decrease in aggregate supply.
If prices increase by 4 percent and wages increase by 4 percent, the:
A) real wage has not changed.
B) nominal wage has not changed.
C) nominal wage has increased by 8 percent.
D) real wage has increased.
Those who believe that wages adjust quickly to clear the labor market also believe that:
A) the AS curve is upward sloping.
B) the AD curve is steep.
C) the AD curve is flat.
D) the AS curve is vertical.
Jerome has a “C” average in his philosophy course and a “B” average in his economics
course. He decides to study an extra hour for his philosophy exam. This is an example
of
A) thinking at the margin.
B) using assumptions to simplify.
C) ceteris paribus.
D) caveat emptor.
An increase in the money supply, holding all else constant will cause:
A) a decrease in the velocity of money.
B) no change to the velocity of GDP.
C) an increase in the velocity of money.
D) an increase in the velocity of GDP.
When a government chooses to have a zero deficit with regards to revenues and
spending, it is operating with what kind of budget?
A) a conservative budget
B) a slow economy budget
C) a taxpayer-based budget
D) a balanced budget
Recall Application 2, “The Growth in Excess Reserves,” to answer the following
questions:
Based on what you learned from the application, the Fed can increase incentives for
banks to lend less and decrease the money supply by:
A) lowering the interest rate for excess reserves.
B) raising the interest rate for excess reserves.
C) lowering the reserve requirement.
D) All of the above are correct.
In a simple economy without government or foreign trade, any income not consumed is
called
A) investment.
B) net investment.
C) saving.
D) depreciation.
Recall the Application about European soccer stars choosing to play for clubs in
countries with lower tax rates to reduce their taxes to answer the following question(s).
A study conducted by economists Henrik Jacobsen Kleven, Camille Landais,and
Emmanuel Saez found that top tax rates and tax breaks do matter when soccer stars
choose where to locate.
Recall the Application. If country A has a lower overall income tax rate than country B,
and labor can freely and easily move between the two countries, ________ in country B
will tend to ________.
A) labor supply; increase
B) labor supply; decrease
C) labor demand; increase
D) labor demand; decrease
An increase in a firm’s capital stock ________ in the marginal benefit of hiring labor.
A) will cause an increase
B) will cause a decrease
C) will cause no change
D) may cause an increase, a decrease, or no change