A policy change that changes the natural rate of unemployment changes
a. neither the long-run Phillips curve nor the long-run aggregate supply curve.
b. both the long-run Phillips curve and the long-run aggregate supply curve.
c. the long-run Phillips curve, but not the long-run aggregate supply curve.
d. the long-run aggregate supply curve, but not the long-run Phillips curve.
Who of the following would be included in the Bureau of Labor Statistics’
“unemployed” category?
a. Miguel, who is on temporary layoff
b. Reta, who worked only 15 hours last week
c. Marisa, who neither has a job nor is looking for one
d. None of the above is correct.
Table 4-10
The following table shows the number of cases of water each seller is willing to sell at
the prices listed.
RefertoTable4-10.If the four suppliers listed are the only suppliers in this market and
the market demand schedule is:
the equilibrium price and quantity are
a. $0.00 and 1200 cases
b. $3.00 and 300 cases
c. $6.00 and 600 cases
d. $9.00 and 600 cases
Figure26-3.The figure shows two demand-for-loanable-funds curves and two
supply-of-loanable-funds curves.
RefertoFigure26-3.A shift of the supply curve from S1to S2is called
a. an increase in the supply of loanable funds.
b. an increase in the quantity of loanable funds supplied.
c. a decrease in the supply of loanable funds.
d. a decrease in the quantity of loanable funds supplied.
A Finnish corporation builds a factory the produces ceiling fans in the United States.
This is an example of Finish
a. foreign direct investment that increases Finnish net capital outflow.
b. foreign direct investment that decreases Finnish net capital outflow.
c. foreign portfolio investment that increases Finnish net capital outflow.
d. foreign portfolio investment that decreases Finnish net capital outflow.
Which of the following statements is correct?
a. Productivity is a determinant of human capital per worker.
b. Technological knowledge is a determinant of productivity.
c. Human capital and technological knowledge are the same thing.
d. All of the above are correct.
Ashley eats two bananas during a particular day. The marginal benefit she enjoys from
eating the second banana
a. can be thought of as the total benefit Ashley enjoys by eating two bananas minus the
total benefit she would have enjoyed by eating just the first banana.
b. determines Ashley’s marginal cost of the first and second bananas.
c. does not depend on how many bananas Ashley has already eaten.
d. cannot be determined unless we know how much she paid for the bananas.
Which of the following is among the four industries with the largest employment in the
United States today?
a. lumber
b. men’s clothing
c. communications
d. cotton goods
If a person chooses self-sufficiency, then she can only consume what she produces.
a. True
b. False
When interest rates fall
a. firms want to borrow more for new plants and equipment and households want to
borrow more for homebuilding.
b. firms want to borrow more for new plants and equipment and households want to
borrow less for homebuilding.
c. firms want to borrow less for new plants and equipment and households want to
borrow more for homebuilding.
d. firms want to borrow less for new plants and equipment and households want to
borrow less for homebuilding.
Which of the following is correct?
a. Short run fluctuations in economic activity happen only in developing countries.
b. During economic contractions most firms experience rising profits.
c. Recessions come at irregular intervals and are easy to predict.
d. When real GDP falls, the rate of unemployment rises.
Government corruption
a. impedes the coordinating power of markets and discourages investment.
b. impedes the coordinating power of markets but does not discourage investment.
c. does not impede the coordinating power of markets, but does discourage investment.
d. can neither impede the coordinating power of markets nor discourage investment.
In 1980, the U.S. misery index was
a. much higher than average.
b. slightly higher than average.
c. about average.
d. below average.
When economists are trying to help improve the world, they are
a. in the realm of positive economics rather than normative economics.
b. in the realm of macroeconomics rather than microeconomics.
c. scientists.
d. policy advisers.
Figure 4-24
The diagram below pertains to the demand for turkey in the United States.
RefertoFigure4-24.All else equal, the approach of Thanksgiving would cause a move
from
a. DAto DB.
b. DBto DA.
c. x to y.
d. y to x.
Other things the same, if a country saves less, then
a. net capital outflow rises, so net exports rise.
b. net capital outflow rises, so net exports fall.
c. net capital outflow falls, so net exports rise.
d. net capital outflow falls, so net exports fall.
If a bank has a reserve ratio of 8 percent, then
a. government regulation requires the bank to use at least 8 percent of its deposits to
make loans.
b. the bank’s ratio of loans to deposits is 8 percent.
c. the bank keeps 8 percent of its deposits as reserves and loans out the rest.
d. the bank keeps 8 percent of its assets as reserves and loans out the rest.
When the government reduces taxes, which of the following decreases?
a. consumption
b. take-home pay
c. household saving
d. None of the above is correct.
One problem with the consumer price index stems from the fact that, over time,
consumers tend to buy larger quantities of goods that have become relatively less
expensive and smaller quantities of goods that have become relatively more expensive.
This problem is called
a. price-change neglect.
b. unmeasured quality change.
c. substitution bias.
d. relative bias.
Which of the following is not correct about most economic models?
a. They are composed of equations and diagrams.
b. They contribute very little to economists’ understanding of the real world.
c. They omit many features of the real-world economy.
d. In constructing models, economists make assumptions.
Suppose that monetary neutrality holds. Of the following variables, which ones do not
change when the money supply increases?
a. real interest rates
b. inflation
c. the price level
d. real output
e. real wages
f. nominal wages
In the late 1960’s, Milton Friedman and Edmund Phelps argued that a tradeoff between
inflation and unemployment
a. existed in the long run and the short run.
b. existed in the long run but not the short run.
c. existed in the short run but not the long run.
d. did not exist.
An increase in the reserve requirement increases reserves and decreases the money
supply.
a. True
b. False
In a particular production process, if the quantities of all inputs used are increased by
60%, then the quantity of output increases by 60% as well. This means that
a. the production process cannot be enhanced by technological advances.
b. no mathematical representation of the relevant production function can be
formulated.
c. the relevant production function has the limits-to-growth property.
d. the relevant production function has constant-returns-to-scale.
In 2009 Congress passed legislation providing states with funds to build roads and
bridges. It also instituted tax cuts. Which of these shifts aggregate demand right?
a. only the increased funding for states
b. only the tax cuts
c. both the increased funding for states and the tax cuts
d. neither the increased funding for states nor the tax cuts
If the price of ice cream rose to $30 per gallon, consumers would purchase fewer
gallons of ice cream than if the price were $4 per gallon. If the price of chocolate sauce
fell to $0.50 per can, consumers would purchase more chocolate sauce than if the price
were $5 per can. These relationships illustrate the
a. law of supply.
b. law of demand.
c. difference between normal and inferior goods.
d. difference between substitute and complement goods.
Which of the following transactions would be included in GDP for 2015?
a. In February 2015, Amanda sells a 2009 Hyundai to Isabella.
b. In March 2015, Amanda buys a ticket to visit a zoo in Florida. She visits the zoo in
February 2016.
c. In November 2015, Isabella eats onions that she harvested from her backyard garden
in October 2015.
d. All of the above are correct.
The use of money allows trade to be roundabout.
a. True
b. False
When the U.S. real interest rate falls, purchasing U.S. assets becomes
a. more attractive to both U.S. and foreign residents.
b. more attractive to U.S. residents and less attractive to foreign residents.
c. less attractive to U.S. residents and more attractive to foreign residents.
d. less attractive to both U.S. residents and foreign residents.
The economy’s inflation rate is the
a. price level in the current period.
b. change in the price level from the previous period.
c. change in the gross domestic product from the previous period.
d. percentage change in the price level from the previous period.
Figure 4-20
RefertoFigure4-20. At a price of $20, which of the following statements is notcorrect?
a. The market is in equilibrium.
b. Equilibrium price is equal to equilibrium quantity.
c. There is no pressure for price to change.
d. The quantity of the good that is bought and sold is 600 units.
An example of a perfectly competitive market would be the
a. cable TV market.
b. soybean market.
c. breakfast cereal market.
d. shampoo market.
The consumer price index was 200 in 2008 and 190 in 2009. The nominal interest rate
during this period was 4.5 percent. What was the real interest rate during this period?
a. – 0.75 percent
b. – 0.5 percent
c. 9.5 percent
d. 9.75 percent