1) A system of fixed exchange rates is more likely to result in exchange controls than is
a system of flexible (floating) exchange rates.
2) growth of real gdp in the united states has averaged slightly more than 5 percent
annually since 1950.
3) barriers to free trade impair efficiency in the international allocation of resources.
4) minimum efficient scale varies by industry.
5) Other things equal, an expansionary monetary policy will shift the economy’s
aggregate demand curve to the right.
6) unemployment compensation payments are an example of a transfer payment.
7) The following information. Assume that by devoting all its resources to the
production of X, nation Alpha can produce 40 units of X. By devoting all its resources
to Y, Alpha can produce 60Y. Comparable figures for nation Beta are 60X and 40Y.
Refer to the above information. Alpha should specialize in Y and Beta in X.
8)
refer to the above diagram. at the profit-maximizing output total revenue will be 0gld.
9)
refer to the above diagram. minimum efficient scale:
a.occurs at some output greater than q3.
b.is achieved at q1.
c.is achieved at q3.
d.cannot be identified in this diagram.
10)
Refer to the above diagram, in which Qf is the full-employment output. A
contractionary fiscal policy would be most appropriate if the economy’s present
aggregate demand curve were at:
A.AD0.
B.AD1.
C.AD2.
D.AD3.
11)
At equilibrium in the above market for money, the total amount of money demanded is:
A.$500.
B.$480.
C.$460.
D.$440.
12) In recent years the industrially advanced nations as a group have provided foreign
aid amounting to about what percentage of their aggregate outputs?
A..25 percent
B..7 percent
C.1 percent
D.2 percent
13) which of the following is correct?
a.there is no firm mathematical relationship between marginal utility and total utility.
b.total utility is equal to the change in marginal utility from consuming an additional
unit of a product.
c.if marginal utility is diminishing and is a positive amount, total utility will increase.
d.if marginal utility is diminishing, total utility must also be diminishing.
14) When a bank loan is repaid the supply of money:
A.is constant, but its composition will have changed.
B.is decreased.
C.is increased.
D.may either increase or decrease.
15) the major source of tax revenue for the federal government is:
a.personal income taxes.
b.property taxes.
c.corporate income taxes.
d.sales and excise taxes.
16)
refer to the above diagram. at quantity q3:
a.maximum willingness to pay exceeds minimum acceptable price.
b.the sum of consumer and producer surplus is maximized.
c.minimum acceptable price exceeds maximum willingness to pay.
d.an efficiency loss (or deadweight loss) of a + b occurs.
17) demand-pull inflation:
a.occurs when prices of resources rise, pushing up costs and the price level.
b.occurs when total spending exceeds the economy’s ability to provide output at the
existing price level.
c.occurs only when the economy has reached its absolute production capacity.
d.is also called cost-push inflation.
18)
Refer to the above diagram pertaining to two nations and a specific product. In
equilibrium, the nation represented by lines FA and FC will:
A.export H to the country represented by lines GB and GD
B.import H from the country represented by lines GB and GD
C.pay price F for its imports
D.receive price G for its exports
19)
Refer to the above diagram. Suppose that, as expected, aggregate demand declines from
AD2 to AD1. A direct move of the economy from c to a would best reflect:
A.new classical economics.
B.mainstream economics.
C.the real-business-cycle theory.
D.a coordination failure.
20) Population will necessarily fall if the:
A.birthrate exceeds the replacement rate.
B.replacement rate exceeds the birthrate.
C.birthrate exceeds the total fertility rate.
D.total fertility rate exceeds the birthrate.
21) which of the following is a positive statement?
a.the humidity is too high today.
b.it is too hot to jog today.
c.the temperature is 92 degrees today.
d.summer evenings are nice when it cools off.
22) Which of these pairs of financial institutions are most alike in terms of their main
lines of business?
A.commercial banks and thrifts.
B.insurance companies and mutual fund companies.
C.thrifts and securities firms.
D.pension fund companies and commercial banks.
23) Explain the concept of statistical discrimination and give an example of it. How can
it lead to discrimination even in the absence of prejudice?
24) State at least one economic benefit to increased international trade.
25) Someone says to you: Inflation benefits the rich and hurts the poor and asks for
your assessment as an economist. What would be your response?
26) Describe the legal protections and potential advantages of taking the lead in
innovation.
27) Describe two basic differences between the mainstream and monetarist economic
theories.
28) Suppose Frank is considering purchasing an asset that will have a future value of
$1000 in 7 years. The interest rate is 6% and the price of the asset is $600. Should
Frank buy the asset? Why or why not?
29) If the political system follows the median voter model, why will many people likely
still be dissatisfied by the extent of government involvement? What do some people do
to remedy this?
30) Calculate the multiplier when the MPS is .5, .25, .10. What is the relationship
between MPS and the multiplier?