If people assume that future rates of inflation will ________, they are said to have
adaptive expectations.
A) be higher than inflation rates of the past
B) follow the pattern of inflation rates in the past
C) be lower than inflation rates of the past
D) not be related to inflation rates of the past
The U.S. Health Resources and Services Administration (HRSA) forecasts that in 2020
A) there will be a shortage of doctors in the United States.
B) the number of doctors in the United States will decrease and the number of doctors
needed will increase.
C) the number of doctors in the United States will increase and the number of doctors
needed will decrease.
D) there will be a surplus of doctors in the United States.
The marginal rate of technical substitution is
A) the rate at which a firm is able to substitute one input for another, while keeping
total cost constant.
B) the rate at which a firm is able to substitute one input for another, while keeping the
level of output constant.
C) the rate at which a firm is able to institute positive technological changes to its
production process.
D) the rate at which a firm is able to increase its output by replacing labor with
technology.
Figure 30-1
Which of the following would cause the change depicted in the figure above?
A) European productivity rises relative to American productivity.
B) Americans decrease their preferences for goods produced in the EU relative to
American goods.
C) The European Union increases its quotas on German wristwatches.
D) The price level of goods produced in the EU increases relative to the price level of
goods produced in the United States.
In 2008, Timothy Geithner referred to investment banks, money market mutual funds,
hedge funds, and other financial firms engaged in similar activities as the
A) shadow banking system.
B) commercial banking system.
C) securitization market.
D) secondary market.
If net foreign investment is negative, which of the following must be true?
A) Capital outflows are greater than capital inflows.
B) Domestic investment must be greater than national saving.
C) Net exports are positive.
D) Private saving is greater than public saving.
What are earnings per share equal to?
A) the last dividend payment made
B) total dividend payments plus retained earnings divided by outstanding stock shares
C) the amount by which the stock’s market price has increased in the last year
D) revenues divided by the number of stockholders
If a straight line passes through the point x = 14 and y = 3 and also through the point x =
4 and y = 10, the slope of this line is
A) negative 11 divided by 6.
B) seven tenths.
C) negative seven tenths.
D) 6 divided by 11.
Figure 12-3
Suppose that investment spending decreases by $5 million, decreasing aggregate
expenditure and decreasing real GDP from GDP2 to GDP1. If the MPC is 0.8, then
what is the change in GDP?
A) -$4 million
B) -$5 million
C) -$25 million
D) -$40 million
If the marginal benefit of reducing emissions of some air pollutant is less than the
marginal cost
A) further reductions will make society better off.
B) further reduction will make society worse off.
C) pollution taxes should be imposed on producers to pay for further reductions.
D) economic efficiency will be increased if further reductions are made.
Figure 23-3
Suppose that government spending increases, shifting up the aggregate expenditure
line. GDP increases from GDP1 to GDP2, and this amount is $400 billion. If the MPC
is 0.75, then what is the distance between N and L or by how much did government
spending change?
A) $10 billion
B) $100 billion
C) $200 billion
D) $300 billion
DeShawn’s Detailing is a service that details cars at the customers’ homes or places of
work. DeShawn’s cost for a basic detailing package is $40, and he charges $75 for this
service. For a total price of $90, DeShawn will also detail the car’s engine, a service that
adds an additional $20 to the total cost of the package. What is the marginal cost of
adding the engine detailing to the basic detailing package?
A) $20
B) $30
C) $60
D) $60 plus the value of his time
Figure 4-1
Figure 4-1 shows Arnold’s demand curve for burritos.
Arnold’s marginal benefit from consuming the fourth burrito is
A) $0.
B) $1.00.
C) $2.50.
D) $3.00.
If the nominal exchange rate between the American dollar and the Canadian dollar is
0.89 Canadian dollars per American dollar, how many American dollars are required to
buy a product that costs 2.5 Canadian dollars?
A) $1.32
B) $2.23
C) $2.75
D) $2.81
There are several types of barriers to entry that can create a monopoly. Which of the
following barriers is the result of government action?
A) network externalities
B) public franchise
C) economies of scale
D) control of a key resource
Money market mutual funds sell shares to investors and use the money to buy
A) mortgage-backed securities.
B) foreign currency.
C) short-term securities.
D) overseas assets through foreign direct investment.
A financial asset is considered a security if
A) the owner of the security receives dividends and realizes a capital gain when the
asset is sold.
B) it can be sold in a secondary market.
C) its value increases after it is sold in a primary market.
D) its value is secure; that is, the owner will not suffer a financial loss when the asset is
sold.
Scenario 14-1 Consider the
information above for a simple economy. Assume there are no traveler’s checks.
M1 in this simple economy equals
A) $1,000.
B) $2,000.
C) $3,000.
D) $8,000.
Developing countries with low saving rates and poor levels of health and education are
likely to experience
A) high levels of foreign direct investment.
B) easy access to financial backing from banks.
C) rapid growth in household incomes.
D) low rates of growth in real GDP per capita.
Figure 12-6 Figure 12-6 shows the
demand, marginal cost (MC) and average total cost (ATC) curves for Jason’s House of
Apples. To maximize his profit, Jason should produce the rate of output indicated by
point
A) a.
B) b.
C) e.
D) d.