If the multiplier = 2.5, the MPS would be
A) 0.25.
B) 0.4.
C) 0.6.
D) 0.75.
If the economy is in long run equilibrium at full employment, the level of overall
economic activity:
A) is positively affected by changes in the price level.
B) is not affected by changes in the price level.
C) is negatively affected by changes in the price level.
D) is only affected by changes in aggregate demand.
The economy moves from a short-run equilibrium to the long-run equilibrium through:
A) improvements in technology.
B) supply shocks.
C) demand shocks.
D) adjustments in wages and prices.
It is possible for an economy to become more productive and per-capita output to
increase if
A) new ideas are generated.
B) inventions are developed.
C) technology is improved.
D) all of the above
Which of the following is not included as part of government purchases?
A) transfer payments
B) benefits of airport security personnel
C) salaries of US postal employees
D) military spending
Recall the Application about the method used by the Commerce Department to
determine if imported products are being sold at lower prices in the United States than
in their countries of origin to answer the following question(s).
According to this Application, because of the method used to determine if foreign
companies are selling products at lower prices in the United States than in their own
domestic markets, the Commerce Department
A) has never found a foreign country guilty of dumping products.
B) virtually always finds that accused foreign countries are guilty of dumping their
products.
C) has a success rate of over 90 percent in accurately determining if countries are
dumping products.
D) is better equipped than its foreign counterparts in quickly and accurately identifying
countries that are dumping product.
Suppose nation A produces only two goods, apples and oranges. If nation A produces
only apples, it can make 16 apples per day. If nation A produces only oranges, it can
make 4 oranges per day. If the country has a constant production trade-off between
apples and oranges, then the opportunity cost of one apple in nation A is:
A) .25 oranges.
B) 4 oranges.
C) 16 oranges.
D) 2 oranges.
Recall Application 2, “The Value of an Annuity,” to answer the following questions:
Based on the Application, would an individual who expects to live less than 10 years
choose a $35,000 per year annuity over the lump sum payment?
A) Always.
B) Yes, but only if the interest rates are zero.
C) Never.
D) Yes, but only if the interest rates are high.
The decrease in the scarcity of a product usually results in:
A) an increased number of sizes.
B) more colors being available.
C) lower prices.
D) more stores selling the product.
In equilibrium, the quantity of labor demanded is ________ the quantity of labor
supplied.
A) greater than
B) less than
C) equal to
D) the primary determinant of
In a fixed exchange rate system, an increase in the exchange rate at which a currency is
pegged is called a(n)
A) appreciation.
B) devaluation.
C) revaluation.
D) depreciation.