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Exhibit 1A-5 Straight line
In Exhibit 1A-5, the slope for straight line
CD is:
a. 5.
b. 1.
c. -1.
d. -5.
Deadweight loss is the net loss of:
a. consumer surplus.
b. producer surplus.
c. disequilibrium surplus.
d. both a and b.
Last year the Jones family earned $40,000. This year their income is $42,000. In an
economy with an inflation rate of 10 percent, which of the following is correct?
a. The Jones' nominal income and real income have both fallen.
b. The Jones' nominal income and real income have both risen.
c. The Jones' nominal income has increased and their real income has fallen.
d. The Jones' nominal income has decreased and their real income has risen.
The money multiplier equals:
a. 1 / excess reserves.
b. excess reserves / loans.
c. required reserve ratio / excess reserves.
d. 1 / actual reserves.
e. 1 / required reserve ratio.
Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss
As shown in Exhibit 3A-1, if the market price falls from $3.00 to $2.00, then:
a. consumer surplus increases.
b. producer surplus increases.
c. deadweight loss is eliminated.
d. all of these are true.
Travel by bus and pawn-shop services would be expected to be examples of:
a. normal goods. c. substitute goods.
b. inferior goods. d. complementary goods.
Which of the following is most likely to shift the demand curve for electricity to the
left?
a. consumers becoming more energy conscious.
b. an increase in income.
c. a decrease in the price of electricity.
d. an increase in the price of natural gas, a substitute source of energy.
Any point on the production possibilities curve illustrates:
a. minimum production combinations.
b. maximum production combinations.
c. economic growth.
d. a nonfeasible production combination.
The speculative demand for money is the stock of money that people hold to:
a. pay their predictable, everyday expenses.
b. pay for any unexpected expenses that may occur.
c. buy stocks, bonds, and other financial assets.
d. buy the foreign currencies needed to purchase imports.
Which of the following is not a common characteristic of IACs?
a. Market-based economies.
b. Large stocks of technologically advanced capital.
c. Well-educated labor.
d. Low per capita energy consumption.
When the price level falls, the total quantities of goods and services demanded:
a. decreases.
b. stays the same.
c. increases.
d. increases and then decreases.
e. decreases and then increases.
Within the Keynesian aggregate expenditures model, which of the following
autonomous changes would decrease the equilibrium output?
a. A decrease in investment spending.
b. An increase in net exports.
c. An increase in government spending.
d. An increase in consumption expenditures
Distinguish macroeconomics and microeconomics.
Who runs the Federal Reserve System? Describe the organizational structure of the Fed.
A shift in the investment demand curve can be caused by a change in the expectations
of profits by businessmen.
An inflationary gap occurs when aggregate expenditures are too high to achieve full
employment.
Using supply and demand analysis, customers will stand in line for gasoline when a
price ceiling is in force, even if the price ceiling is at a level higher than the equilibrium
price.
The President and the Congress jointly determine the nation's monetary policies, and
the Fed is required by law to implement those policies.
The classical economists believed there was no role for government to play in restoring
full employment.
Under a progressive tax system, the tax rate increases as income increases.
When actual real GDP output is below full-employment real GDP, the GDP measures
the cost of cyclical unemployment.
As discussed in the text, a bank can extend new loans equal to the amount by which its
excess reserves increase.
