Suppose the economy goes from a point on its production possibilities frontier (PPF) to
a point directly to the left of it. Assuming that the PPF has not shifted, this could be due
to
a. a gain of resources.
b. a loss of resources.
c. technological improvement in the production of both goods.
d. a new law that interferes with productive efficiency.
Economists who favor activist monetary policy argue that
a. the economy does not always equilibrate quickly enough at the Natural Real GDP or
full-employment output and therefore needs help.
b. activist monetary policy is effective at smoothing out the business cycle.
c. activist monetary policy is flexible and flexibility is a desirable quality in monetary
policy.
d. a and b
e. a, b and c
If the workers of a firm successfully negotiate an increase in wages, which of the
following is most likely to happen?
a. The demand curve for the product the firm produces shifts rightward.
b. The demand curve for the product the firm produces shifts leftward.
c. The supply curve of the product the firm produces shifts rightward.
d. The supply curve of the product the firm produces shifts leftward.
Which of the following statements represents a correct and sequentially accurate
economic explanation?
a. If consumption falls, total expenditures on goods and services rises, and the AD curve
shifts leftward.
b. If investment increases, total expenditures on goods and services falls, and the AD
curve shifts leftward.
c. If net exports rise, total expenditures on goods and services rises, and the AD curve
shifts rightward.
d. If consumption falls, total expenditures on goods and services falls, and the AD curve
shifts leftward.
e. c and d
If resources are better suited toward the production of one good than toward another
good, then the PPF for those two goods is
a. a straight line.
b. bowed outward.
c. upward sloping.
d. any of the above
Exhibit 38-2
If the closing price of Prancer’s stock on the previous day was $55.50, what value goes
in blank (C)?
a. +0.75
b. -0.50
c. +0.50
d. +0.25
e. There is not enough information given to answer this question.
Public choice theorists say that the greater the number of potential voters in an election,
the __________ the perceived benefits of voting held by each voter, and so the
__________ the likely percentage turnout of voters.
a. greater; lower
b. greater; higher
c. smaller; lower
d. smaller; higher
If a person worked at least 15 hours per week as an “unpaid” worker in a restaurant
owned by her family, how is she classified by the Bureau of Labor Statistics?
a. as not in the labor force
b. as an unemployed person
c. as an employed person
d. as a discouraged worker
The discount rate is sometimes also known as the primary credit rate.
a. True
b. False
In the monetarist version of the AD-AS framework, starting from long-run equilibrium,
a decrease in velocity produces
a. no change in Real GDP in the short run or the long run.
b. a rise in Real GDP in both the short run and the long run.
c. a fall in Real GDP in both the short run and the long run.
d. a fall in Real GDP in the short run, but not in the long run.
e. no change in Real GDP in the short run, but a rise in the long run.
A(n) _______________ good is one in which as income rises or falls, there is no
change in the demand for the good.
a. normal
b. inferior
c. neutral
d. substitute
e. complementary
Exhibit 34-8
Assume that the current price of sugar in the United States is $300 per ton (which
includes a $100 per ton tariff on sugar imports). The government collects tariff revenues
on sugar imports in the amount of __________ million.
a. $500
b. $1,000
c. $1,500
d. $2,000
e. none of the above