Suppose the dollar appreciates in the foreign exchange markets.What is the impact on
U.S. Real GDP?
a. It must rise because dollar appreciation shifts the U.S. AD curve leftward.
b. It must fall because dollar appreciation shifts the U.S. SRAS curve rightward.
c. It must remain constant since dollar appreciation does not affect either the U.S. AD
curve or the U.S. SRAS curve.
d. It may rise, fall, or remain constant depending on whether the U.S. AD curve shifts
leftward by more, less, or an amount equal to the rightward shift of the U.S. SRAS
curve.
Exhibit 11-4
If a person’s taxable income is $90,000, how much does he pay in taxes?
a. $17,600.
b. $19,250.
c. $8,780.
d. $22,500.
Buchanan and Wagner assert that there is a political bias toward contractionary fiscal
policy and not expansionary fiscal policy.
a. True
b. False
Which of the following statements is false?
a. Economists who advocate discretionary monetary policy argue that it is more likely
to achieve the desired economic results because the monetary authority has the
flexibility to shape the best monetary policy to the existing circumstances.
b. Here is an example of zero crowding out: The government spends $100 more and the
private sector doesn€t spend any less.
c. Here is an example of complete crowding out: The government spends $100 more
and the private sector spends $100 less.
d. Not all economists believe that rule-based monetary policy is preferable to
discretionary monetary policy.
e. none of the above
Economist B believes that if tax rates are cut, tax revenue is likely to fall.This
economist most likely believes that the percentage decrease in tax rates will
______________________________ percentage rise in the tax base.
a. be larger than the resulting
b. be equal to the resulting
c. be smaller than the resulting
d. occur long after the
e. a and d
A theory is a perfect description of reality.
a. True
b. False
An economy growing at a steady rate of 3.1 percent per year doubles in size
approximately every __________ years.
a. 40
b. 23
c. 32
d. 16
The number of employed persons plus the number of unemployed persons equals the
number of persons
a. in the total population.
b. in the civilian noninstitutional population.
c. in the civilian labor force.
d. not in the labor force.
e. none of the above
A recessionary gap exists when AD and SRAS
a. fail to intersect.
b. intersect to the right of Natural Real GDP.
c. intersect to the left of Natural Real GDP.
d. both have a positive slope.
Exhibit 3-3
Good Y
A shift in demand from D1 to D2 can NOT occur from a change in the
a. population.
b. price of a substitute for good Y.
c. average income of good Y buyers.
d. price of good Y.
The more nearly horizontal the aggregate supply curve, the
a. greater the change in Real GDP for a given change in autonomous spending.
b. smaller the change in Real GDP for a given change in autonomous spending.
c. larger the multiplier.
d. smaller the multiplier.
e. a and c