If net exports are positive,
A) net foreign investment is also positive.
B) capital inflows must be greater than capital outflows.
C) net foreign investment is negative.
D) Both A and B are correct.
A period of expansion in the business cycle ends when
A) real GDP is equal to potential GDP.
B) the business cycle reaches its peak.
C) the business cycle reaches its trough.
D) real GDP is less than potential GDP.
By 2013, ________ members of the European Union were using the euro as their
currency.
A) 12
B) 17
C) 28
D) 57
The way in which a corporation is structured and the impact a corporation’s structure
has on the firm’s behavior is referred to as
A) corporate taxation.
B) structure composition theory.
C) structural behavior.
D) corporate governance.
An article in the Wall Street Journal in early 2001 noted two developments in the
market for laser eye surgery. The first development concerned side effects from the
surgery, including blurred vision. The second development was that the companies
renting eye-surgery machinery to doctors had reduced their charges. In the market for
laser eye surgeries, these two developments
A) decreased demand and decreased supply, resulting in a decrease in the equilibrium
quantity and an increase in the equilibrium price of laser eye surgeries.
B) decreased demand and increased supply resulting in an increase in both the
equilibrium quantity and the equilibrium price of laser eye surgeries.
C) decreased demand and increased supply, resulting in a decrease in the equilibrium
price and an uncertain effect on the equilibrium quantity of laser eye surgeries.
D) decreased demand and increased supply, resulting in a decrease in both the
equilibrium price and the equilibrium quantity of laser eye surgeries.
If a vineyard wants to raise funds to purchase a new bottling machine, it does so in the
A) factor market.
B) output market.
C) product market.
D) alcoholic beverages market.
If the best surgeon in town is also the best at cleaning swimming pools, then according
to economic reasoning, this person should
A) pursue the activity he enjoys more.
B) specialize in cleaning swimming pools because it is more labor-intensive.
C) split his time evenly between being a surgeon and cleaning swimming pools.
D) specialize in being a surgeon because its opportunity cost is lower.
Which of the following describes the national security argument for protectionism?
A) Nearly all industries can make some claim to strategic importance so such trade
restrictions can get out of hand.
B) Increases in economic surplus outweigh the decreases in consumer surplus that
result from protectionism.
C) Some goods should be insulated from foreign competition to ensure an adequate
supply of these goods in the event of an international conflict.
D) Private companies (for example, Coca-Cola) should not be forced to reveal their
trade secrets to foreign companies.
Table 12-4
Given the consumption schedule in the table above, the marginal propensity to consume
is
A) 0.5.
B) 0.6.
C) 0.75.
D) 0.8.
________ dictates the lowest wage that firms may pay for labor.
A) A maximum wage requirement
B) A minimum wage law
C) The black market wage
D) A price ceiling wage
Figure 7-3 Since 1953 the
United States has imposed a quota to limit the imports of peanuts. Figure 7-3 illustrates
the impact of the quota. Without the quota, the domestic price of peanuts equals the
world price which is $2.00 per pound. What is the quantity of peanuts demanded by
domestic consumers in the absence of a quota?
A) 10 million pounds
B) 28 million pounds
C) 30 million pounds
D) 40 million pounds
Farmers can raise either goats or ostriches on their land. Which of the following would
cause the supply of goats to decrease?
A) an increase in the price of ostriches
B) a decrease in the price of goats
C) an increase in the demand for goats
D) an increase in the price of ostrich feed
In a closed economy, public saving plus private saving is equal to
A) investment.
B) taxes minus transfers.
C) the budget surplus.
D) the budget deficit.
The health care system in ________ is referred to as socialized medicine, under which
the government owns most of the hospitals and employs most of the doctors.
A) Canada
B) Japan
C) the United Kingdom
D) the United States
Between 1950 and 2009, the average length of recessions in the United States was
A) 11 months.
B) two years.
C) three months.
D) eighteen months.