The entire short-run production function shifts upward if:
A) diminishing returns are close to zero.
B) the stock of capital increases.
C) the quantity of labor increases.
D) productivity decreases.
If the marginal propensity to consume is 0.75 and marginal propensity to import is 0.15,
then the multiplier in an open economy is:
A) 2.5.
B) 4.
C) 8.3.
D) 10.
Recall the Application about the decrease in the price of wool in the 1990s to
answer the following question(s). In the 1990s, the world price of wool decreased
by about 30 percent and prices have remained relatively low since then. In 2012,
an organization in New Zealand proposed that sheep shearing be added to the
Commonwealth Games and the Olympics as a spectator sport in an effort to
increase the awareness and the demand for wool. Recall the Application. The
decrease in the price of wool would be reflected by a movement ________ on the
market supply curve for wool.
A) down and to the right
B) down and to the left
C) up and to the right
D) up and to the left
Figure 4.4
Figure 4.4 illustrates the demand for guitars. An increase in the demand for guitars is
represented by the movement from:
A) point B to point C.
B) point B to point A.
C) D1 to D0.
D) D1 to D2.
In the Solow Model, the an increase in the saving rate will result in an increase in the:
A) population.
B) investment equals population growth.
C) capital stock.
D) depreciation.
Recall Application 2, “More Disability, Less Unemployment?” to answer the following
questions:
According to the application, the changes in the federal Disability Insurance program:
A) made it easier to enter the program.
B) made the program’s benefits more generous for low-skilled workers.
C) increased the value of healthcare services.
D) All of the above characterizes the changes in the program.
Arguments against the balanced budget amendment include all of the following
EXCEPT
A) a balanced budget amendment would limit Congress from using fiscal policy during
a recession.
B) a balanced budget amendment would reduce the taxation burden on future
generations.
C) a balanced budget amendment would turn control of the federal budget over to the
Judicial Branch.
D) a balanced budget amendment would induce Congress to issue more mandates to
states to increase spending.
Which of the following is not a durable good?
A) furniture
B) automobiles
C) clothing
D) household appliances
Daily Output of Russia and Panama
Table 18.1
Refer to Table 18.1. The opportunity cost of a glove in Panama is
A) 1/8 of a hat.
B) 3/4 of a hat.
C) 4/3 hats.
D) 8 hats.
The reduction in consumption, investment or net exports that occurs when government
spending increases is known as:
A) Ricardian equivalence.
B) division of output.
C) crowding out.
D) Say’s law.
Table 6.5
Refer to Table 6.5. The labor-force participation rate is:
A) 71.43%.
B) 81.81%.
C) 90.91%.
D) 136.36%
Recall Application 2, “Economic Equality May Sustain Economic Growth,” to answer
the following questions:
According to the Application, which of the following factors contributed to a more
economic growth in a country?
A) improved income inequality
B) better political institutions
C) more openness to trade
D) All of the above are correct.
Recall Application 6, “Why Lower Drug Prices?” to answer the following
questions:
In the Application, what did Ted Koppel identify as the explanation for why (illegal)
drug prices have been dropping?
A) an increase in the supply
B) an increase in demand
C) a decrease in supply
D) a decrease in demand
Which of the following is the largest component of national income?
A) net interest
B) corporate profits
C) rental income
D) compensation of employees by firms
Financial intermediaries reduce the costs of negotiation between savers and investors
through:
A) the pooling of savers’ funds.
B) the pooling of investors’ debts.
C) the requirement of collateral in order to receive a loan.
D) the provision of deposit insurance.
Which of the following is not included in “Entitlement and mandatory spending”?
A) Defense
B) Social Security
C) Medicare
D) Medicaid
Suppose the annual growth rate of GDP in Belize is 3.5 percent. In 20 years, GDP in
Belize will double
A) 1 time.
B) 1.5 times.
C) 3.5 times.
D) 7 times.
Increases in the stock of capital are the result of decreases in
A) gross investment.
B) depreciation.
C) net investment.
D) all of the above
At full employment the unemployment rate equals the
A) cyclical unemployment rate.
B) structural unemployment rate.
C) structural unemployment rate plus the cyclical unemployment rate.
D) structural unemployment rate plus the frictional unemployment rate.