The purchase by a foreign government of an airplane produced in the United States is
included in U.S.
A) consumption expenditures.
B) investment expenditures.
C) government purchases.
D) net exports.
If firms find that consumers are purchasing more than expected, which of the following
would you expect?
A) Aggregate expenditure will likely be greater than GDP.
B) Aggregate expenditure will likely be less than GDP.
C) The economy will adjust to macroeconomic equilibrium as inventories rise, and
production and employment fall.
D) The economy will adjust to macroeconomic equilibrium as inventories fall, and
production and employment fall.
Table 2-4
Table 2-4 shows the output per day of two gardeners, George and Jack. They can either
devote their time to mowing lawns or cultivating gardens.
Refer to Table 2-4. What is Jack’s opportunity cost of cultivating a garden?
A) half a garden cultivated
B) two lawns mowed
C) two-thirds of a garden cultivated.
D) one and a half lawns mowed
Let D = demand, S = supply, P = equilibrium price, Q = equilibrium quantity. What
happens in the market for solar panels if the government offers tax breaks to encourage
manufacturers to produce more solar panels?
A) D increases, S no change, P and Q increase
B) S increases, D no change, P decreases, Q increases
C) D and S increase, P and Q decrease
D) D no change, S increases, P decreases, Q decreases
A decrease in U.S. federal government budget deficits that lowers U.S. interest rates
relative to the rest of the world should
A) lower the trade balance.
B) decrease net exports.
C) cause the dollar to appreciate.
D) lead to a current account surplus.
E) increase foreign portfolio investment.
Table 2-4
Table 2-4 shows the output per day of two gardeners, George and Jack. They can either
devote their time to mowing lawns or cultivating gardens.
Refer to Table 2-4. What is Jack’s opportunity cost of mowing a lawn?
A) half a garden cultivated
B) two lawns mowed
C) two-thirds of a garden cultivated
D) one and a half lawns mowed
There is a federal budget deficit when
A) the government spends less that it collects in taxes.
B) the government spends more that it collects in taxes.
C) the government spends the same amount it collects in taxes.
D) taxes are too high.
If the consumption function is defined as C = 7,250 + 0.8Y, what is the marginal
propensity to save?
A) 0.2
B) 0.8
C) 5.8
D) 9.1
Under the gold standard, to increase the money supply in the country, the government
must
A) simply print more currency.
B) have enough gold to back up the increase in the money supply.
C) buy foreign currencies with dollars to increase foreign currency reserves.
D) increase the value of the country’s currency on foreign exchange markets.
One criticism of the Fed’s quantitative easing policy is that low interest rates ________
the return to saving. One key reason people save is to finance their retirement. Retired
people typically favor low-risk investments, such as bank certificates of deposit or
Treasury bonds. But with the interest rates on these assets reduced to historically low
levels, many retired people were forced to either ________ their spending or buy riskier
investments.
A) increase; increase
B) reduce; decrease
C) increase; decrease
D) reduce; increase
The purchase of a new automobile is included in
A) consumption expenditures on services.
B) consumption expenditures on nondurable goods.
C) consumption expenditures on durable goods.
D) investment expenditures.
Potential GDP is also referred to as
A) realized GDP.
B) full-employment GDP.
C) politico-economic GDP.
D) balanced-budget GDP.
Table 7-5
Table 7-5 shows the output per week for pens and pencils by Tran and Farah.
Refer to Table 7-5. Fill in the following table with the opportunity costs of producing
bows and arrows for Tran and Farah.
What are some of the reasons used to explain improvements in health, education,
democracy, and political stability in many low-income countries?
Give an example of an automatic stabilizer. Explain how automatic stabilizers work in
the case of recession.
Table 9-20
Salaries in major league baseball have soared over the last 30 to 40 years. Some of the
salary increase is due to inflation. The table above reports the consumer price index and
the median nominal salary of the New York Yankees for 1989 and 2009.
Source: USA Today Salaries Database,
asp.usatoday.com/sports/baseball/salaries/default.aspx
Refer to Table 9-20. Calculate the real median salary of the New York Yankees in both
1982-1984 dollars and 2009 dollars. Calculate the percentage increase in the median
salary of the Yankees from 1989 to 2009 in both nominal terms and in real terms.
Table 12-2
Refer to Table 12-2. Using the table above, compute aggregate expenditure and identify
the macroeconomic equilibrium.
Use the money demand and money supply model to show graphically and briefly
explain the effect on the interest rate if real GDP increases.
What variables cause the short-run aggregate supply curve to shift? For each variable,
identify whether an increase in that variable will cause the short-run aggregate supply
curve to shift to the right or to the left.
Using the money demand and money supply model, show and explain why the Federal
Reserve cannot achieve a target for both the money supply and an interest rate.
How can increases in a country’s total income improve health?