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If the CPI for 2008 was 112, the typical market basket purchased that year would cost
a. 12 percent more than the same market basket purchased the previous year
b. 112 percent more than the same market basket purchased the previous year
c. 12 percent more than the same market basket purchased in the base year
d. 112 percent more than the same market basket purchased in the base year
e. more than the same market basket purchased during any previous year
If Americans expect the dollar price of the British pound to rise, this expectation will
cause
a. a rightward movement along the U.S. demand curve for pounds
b. a leftward shift of the U.S. demand curve for pounds
c. a rightward shift the U.S. demand curve for pounds
d. a leftward movement along the U.S. demand curve for pounds
e. no change in the U.S. demand curve for pounds
In the classical model, an increasing demand for labor will
a. cause an expansion with higher employment and a higher real wage.
b. cause a shortage of labor because the labor market always clears.
c. cause a recession with lower employment and a lower real wage.
d. cause a recession because wages are fixed in the short run.
e. cause an expansion with lower employment and a higher real wage.
To determine the total change in deposits as a result of an injection of reserves, we must
a. sum the number of loans a bank has made
b. multiply the injection of reserves by 10
c. multiply the number of loans by the expenditure multiplier
d. sum the reserves of each bank
e. multiply the injection of reserves by the demand deposit multiplier
Because households have limited incomes, they must
a. rarely take vacations
b. live below the poverty line
c. allocate their spending carefully
d. gamble in casinos frequently
e. save for the future
The 4-year term of the president of the Fed is coterminous with the 4-year term of the
president of the U.S.
A decline in real income
a. can occur only if there is a decline in nominal income
b. can occur only if there is an increase in the price level
c. can occur only if there is either a decline in nominal income or an increase in the
price level
d. cannot occur if there is either an increase in nominal wages or a decline in the price
level
e. can occur only if there is a decline in the price level
The short-run macro model is used most often to determine changes in
a. nominal output
b. net output
c. gross output
d. financial output
e. real output.
Refer to Figure 9-8. If the economy starts at point X, growth in the capital stock will
cause the economy to move
a. toward point A
b. toward point B
c. toward curve C
d. toward curve D
e. nowhere; it will remain at point X
Suppose that initially the market for DVDs is at point A on demand curve D2 in Figure
3-3. If the price of cassette tapes decreased,
a. the demand curve will shift to D3
b. equilibrium will move to point B on demand curve D1
c. equilibrium will move to point C on demand curve D1
d. there will be no change from point A
e. the demand curve will shift to D2
Federal revenue as a percentage of GDP dropped significantly in the early 2000s
because
a. of increased transfer payments due to the recession.
b. of decreased transfer payments due to the recession.
c. of tax-rate decreases passed by the Bush administration and Congress as well as
recessionary impacts.
d. of tax-rate increases passed by the Bush administration and Congress as well a
recessionary effects.
e. of tax-rate increases passed by the Bush administration .
