________ save a ________ of their income. This ________ capital in their economy
and raises economic growth.
A) Developing countries; large proportion; decreases
B) Developing countries; small proportion; increases
C) High-income countries; large proportion; increases
D) High-income countries; small proportion; increases
If the federal government implements programs so that the unemployed are more
quickly matched with jobs, then
A) the natural rate of unemployment will increase.
B) the natural rate of unemployment will decrease.
C) the natural rate of unemployment will not change.
D) the natural rate of unemployment could either increase or decrease.
China’s exchange rate system from 1994 through 2005 is an example of
A) a floating exchange rate system.
B) a managed float exchange rate system.
C) a fixed exchange rate system.
D) a flexible exchange rate system.
E) the Bretton Woods System.
The revenue received from the sale of an additional unit of a product
A) is a marginal benefit to the firm.
B) is called profit.
C) is called gross sales.
D) is called a net gain.
Gross domestic product is calculated by summing up
A) the total quantity of goods and services in the economy.
B) the total quantity of goods and services produced in the economy during a period of
time.
C) the total market value of goods and services in the economy.
D) the total market value of final goods and services produced in the economy during a
period of time.
Jeremy is thinking of starting up a small business selling NASCAR memorabilia. He is
considering setting up his business as a sole proprietorship. What is one advantage to
Jeremy of setting up his business as a sole proprietorship?
A) As a sole proprietor, Jeremy would face limited liability.
B) As a sole proprietor, Jeremy would have the ability to share risk with shareholders.
C) As a sole proprietor, Jeremy would have both ownership and control over the
business.
D) All of the above would be advantages of setting up his business as a sole
proprietorship.
Table 2-8
Table 2-8 shows the output per month of two people, Wilma and Betty. They can either
devote their time to making marble statues or making marble benches.
Refer to Table 2-8. Which of the following statements istrue?
A) Wilma has a comparative advantage in making both products.
B) Betty has a comparative advantage in making both products.
C) Betty has a comparative advantage in making statues and Wilma in making benches.
D) Betty has a comparative advantage in making benches and Fred in making statues.
Economists who believe the supply-side effects of tax cuts are small essentially believe
that
A) tax cuts mainly affect aggregate demand.
B) tax cuts mainly affect aggregate supply.
C) tax cuts will increase the quantity of labor supplied.
D) tax cuts will result in relatively small changes in the price level.
The process of bundling financial assets together and buying and selling these bundles
in a secondary financial market is called
A) open market operations.
B) securitization.
C) fractional reserve lending.
D) seigniorage.
The income effect of a price change results in a
A) shift of the demand curve when income changes.
B) movement along the demand curve due to a change in relative prices.
C) shift of the demand curve due to a change in purchasing power brought about by the
price change.
D) movement along the demand curve due to a change in purchasing power brought
about by the price change.
Full employment is not considered to be zero unemployment, because
A) some cyclical unemployment always exists.
B) some people do not want a job.
C) there are not enough jobs for everyone who wants one.
D) people do not find jobs instantaneously.
Consumption spending is $22 million, planned investment spending is $7 million,
actual investment spending is $7 million, government purchases are $9 million, and net
export spending is $3 million. Based on this information, which of the following is
true?
A) There was an unplanned change in inventories.
B) Aggregate expenditure is equal to GDP.
C) Aggregate expenditure is greater than GDP.
D) Aggregate expenditure is less than GDP.
Figure 2-4
Figure 2-4 shows various points on three different production possibilities frontiers for
a nation.
Refer to Figure 2-4. A movement from ________ is the result of advancements in
plastic production technology.
A) V to X
B) W to X
C) Z to W
D) Y to Z
The small group of East Asian countries that experienced high rates of growth in the
1980s and 1990s are referred to as
A) newly industrializing countries.
B) countries with low standards of living.
C) education-deprived countries.
D) industrial countries.
Table 9-7
Refer to Table 9-7. Suppose that the data in the table above reflect price levels in the
economy. What is the inflation rate between 2012 and 2013?
A) 2.9%
B) 3.5%
C) 4.6%
D) 5%
E) 7.5%
Figure 16-1
Refer to Figure 16-1. Suppose the economy is in a recession and expansionary fiscal
policy is pursued. Using the static AD–AS model in the figure above, this would be
depicted as a movement from
A) A to B.
B) B to C.
C) C to B.
D) B to A.
E) A to E.
Suppose the Fed pursues a policy that leads to higher interest rates in the United States.
How will this policy affect real GDP in the short run if the United States is an open
economy? This policy
A) reduces investment spending, consumption spending and net exports, all of which
reduce GDP.
B) reduces investment spending and consumption spending, both of which reduce GDP.
Net exports rise which increases GDP.
C) reduces investment spending and consumption spending, both of which reduce GDP.
Net exports fall which increases GDP.
D) increases investment spending, consumption spending, and net exports, all of which
increase GDP.
Assume that the price for lawn care has fallen and sales of lawn care services have also
fallen. One can conclude that
A) the law of supply has been violated.
B) the number of lawn care service companies has increased.
C) the demand for lawn care service has decreased.
D) lawn care services are deliberately charging low prices because they want to
discourage people from maintaining their own lawns.