If property rights are not well enforced, all of the following are likely to occur except
A) fewer goods and services will be produced.
B) economic efficiency will be reduced.
C) an economy will produce inside its production possibilities frontier.
D) a significant number of people will be willing to risk their funds by investing them
in local businesses.
The price level in the economy between 2012 and 2013 rose from 100 to 105. Between
2013 and 2014, the price level rose from 105 to 110.25. How does the short-run Phillips
curve predict the unemployment rate will change as a result?
A) The unemployment rate will decrease since inflation decreased.
B) The unemployment rate will decrease since inflation increased.
C) The unemployment rate will increase since inflation increased.
D) The unemployment rate would not change since there is no change in the rate of
inflation.
Table 9-18
Refer to Table 9-18. Looking at the table above, what is the rate of growth of real
average hourly earnings from 2012 to 2013?
A) 7.7%
B) 6.25%
C) 4%
D) -4%
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.
Suppose Congress increased spending by $100 billion and raised taxes by $100 billion
to keep the budget balanced. What will happen to real equilibrium GDP?
A) Real equilibrium GDP will fall.
B) Real equilibrium GDP will rise.
C) There will be no change in real equilibrium GDP.
D) Real equilibrium GDP will initially rise, but then fall below its previous equilibrium
value.
Which of the following is motivated by an equity concern?
A) Some U.S. colleges have cut back on merit scholarships since these programs siphon
money from need-based programs, thus harming lower-income students with greater
financial need.
B) Following the removal of subsidies in urban water use, household demand for water
decreased quite significantly in Bogor, Indonesia.
C) In November 2003, the Federal Communications Commission implemented the
“local number portability” rule which gives cell phone customers the option of keeping
their number when they switch carriers within the same geographic region.
D) The United States protects intellectual property rights, allowing inventors to prevent
others from using their inventions without payment.
An increase in the equilibrium quantity of a product will result
A) when the quantity supplied of the product exceeds the quantity demanded.
B) when there is an increase in supply and an increase in demand for the product.
C) when there is an increase in supply and a decrease in demand for the product.
D) when there is an decrease in demand and a decrease in the cost of inputs used to
make the product.
Technological advancements have led to lower prices and an increase in the sale of
color laser printers. How does this affect the market for laser printer ink cartridges?
A) The demand curve for laser printer ink cartridges shifts to the right.
B) The demand curve for laser printer ink cartridges shifts to the left.
C) The quantity of laser printer ink cartridges demanded increases.
D) The quantity of laser printer ink cartridges demanded decreases.
If the slope of the per-worker production function is 1/2 in a given range, how will a
$10,000 increase in capital per hour worked affect real GDP per hour worked in the
same given range?
A) Real GDP per hour worked will increase by $5,000.
B) Real GDP per hour worked will increase by $20,000.
C) Real GDP per hour worked will increase by $10,000.
D) Real GDP per hour worked will decrease by $20,000.
In the United States, out-of-pocket spending on health care per person
A) has been rising since 1965.
B) has been falling since 1965.
C) has remained fairly steady since 1965.
D) fell from 1965 through 1995, then began to rise from 1995 to the present.
Figure 16-4
Refer to Figure 16-4. In the graph above, suppose the economy is initially at point A.
The movement of the economy to point B as shown in the graph illustrates the effect of
which of the following policy actions by the Congress and the president?
A) an increase in transfer payments
B) an increase in interest rates
C) an increase in the marginal income tax rate
D) an open market purchase of Treasury bills
If full-employment GDP is equal to $4.2 trillion, what does the long-run aggregate
supply curve look like?
A) It is a horizontal line at $4.2 trillion of GDP.
B) It is a vertical line at a level of GDP below $4.2 trillion.
C) It is a vertical line at $4.2 trillion of GDP.
D) It is a vertical line at a level of GDP above $4.2 trillion.