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Suppose the current interest rate is 5% and you pay $250 for a bond. What is the total
payment that should be made to you in one year?
a. $12.50
b. $262.50
c. $237.50
d. $255.00
e. $267.50
From 1929 to 1933, U.S. output dropped by about
a. 10 percent
b. 20 percent
c. 25 percent
d. 50 percent
e. 75 percent
Economic growth caused by increased employment creates a trade-off between income
and
a. present-day living standards
b. research and development expenditures
c. investment in physical capital
d. future living standards
e. leisure time
If an excise tax is imposed on automobiles,
a. the demand curve will shift upward and the market price will increase
b. the supply curve will shift downward and the market price will increase
c. the supply curve will shift upward and the market price will increase
d. the equilibrium quantity supplied will increase
e. the equilibrium quantity demanded will increase
Use the table below to determine the marginal propensity to save (MPS).
a. 0
b. 0.1
c. 0.2
d. 0.5
e. 1.0
Economics is the study of
a. how to start a business
b. how to make money in stocks, bonds, and real estate
c. choice under conditions of abundance
d. choice under conditions of scarcity
e. multinational business
When the government is running a budget surplus,
a. the demand for loanable funds includes only business investment spending
b. the supply of loanable funds includes only business investment spending
c. the loanable funds market cannot be in equilibrium
d. the supply of loanable funds includes only household saving
e. there will be an excess supply of loanable funds
Consider the market for ground beef represented by Figure 3-12, which is initially in
equilibrium at point J. Assume that ground beef is an inferior good. Which of the
following could explain a movement to a new equilibrium at point M?
a. a change in tastes away from hamburgers combined with an increased price for cattle
feed
b. an increase in buyers' incomes combined with a cost-saving technological
improvement
c. a decrease in the price of hot dogs combined with an increased price for labor
d. a decrease in buyers' incomes combined with a decrease in the number of acres
owned by cattle ranches
e. a drop in the population combined with a increased price for an alternate form of
packaged beef
If the price of a bond increases, the interest rate (or rate of return on the bond)
decreases.
If the tax multiplier is -4.0, what is the marginal propensity to consume?
a. 0.66
b. 0.75
c. 0.50
d. 0.80
e. 0.25
