If two economists disagree on an issue and their disagreement is based on personal
value judgments, then this controversy is a normative one.
The demand deposit multiplier is always less than 10.
The Federal Reserve Open Market Committee meets about ____ times a year.
a. 8.
b. 12.
c. 4.
d. 2.
e. 24.
The welfare loss due to a price floor
In a labor market diagram, the point at which the labor supply curve crosses the labor
demand curve is
a. the point at which all workers are employed at the salary at which they would prefer
to be employed
b. the point at which all jobs are filled at the wage employers prefer to pay
c. the point at which everyone who wants to work is able to find a job
d. a point at which we have excess labor supply, causing unemployment
e. the point at which excess demand for labor drives the wage rate upward
A shock that could trigger a recession is a
a. large increase in oil prices
b. stock market bubble
c. sudden increase in military spending
d. large decrease in oil prices
e. sudden decrease in the interest rate
Congress created the Federal Deposit Insurance Corporation to
a. sell insurance to individuals who have bank accounts
b. inject reserves into the economy more quickly
c. develop a better working relationship between bank managers and government
officials
d. charge higher interest rates to banks
e. reimburse those who lose their bank deposits
If the U.S. purchased $100 billion in foreign assets and foreigners purchased $50 billion
of U.S. assets, which of the following is true?
a. Net exports equal -$50 billion.
b. Exports total $100 billion.
c. There is a trade deficit.
d. Net exports equal $50 billion.
e. Imports total $50 billion.
If real disposable income increased by $10,000 and real consumption spending
increased by $7,500, what is the marginal propensity to consume (MPC)?
a. 0.25
b. 1.0
c. 0.75
d. 1.75
e. 1.25
The profit-maximizing, or loss-minimizing, output for the firm in Figure 11-3 is
According to the information in Figure 2-11,
The federal funds rate is determined in a market and targeted by the Fed
For which of the following types of goods would demand be most price-elastic?
The terms of trade
a. equal the equilibrium price in a competitive market
b. equal a nation’s imports minus its exports
c. determine whether specialization according to comparative advantage is
economically rational
d. are equal to 1.0 in market equilibrium
e. determine how the gains from international trade are distributed among countries
Money in the U.S. has value primarily because it is fiat money.
Suppose Bob and Tom are writing jokes for a their new TV show. Suppose there are
two types of jokes, political jokes and jokes about celebrities. The number of jokes that
can be produced by each person in each category are listed in Figure 2-12. From this
table you can tell that
Figure 2-12
How retail gasoline stations behave in a local market is an example of a
macroeconomic issue.
In the classical model, taxes and spending are treated as two separate variables.
Roughly what fraction of total spending is consumption spending?
a. One-half
b. One-eighth
c. Two-fifths
d. One-quarter
e. Two-thirds