If nominal GDP increased, which of the following could also have occurred?
a. Both prices and real GDP decreased.
b. Prices remained the same and real GDP decreased.
c. Prices decreased and real GDP remained the same.
d. Prices increased and real GDP decreased.
e. Both prices and real GDP remained the same.
Which of the following functions is not performed by financial markets?
A firm can maximize profit by hiring labor up to the point where
Refer to Figure 14-2. If the interest rate is 8 percent,
a. there is an excess supply of money equal to $100 billion
b. there is an excess demand for money
c. there is an excess supply of money equal to $400 billion
d. the Fed will decrease the money supply
e. the interest rate will tend to rise
Suppose a computer manufacturer purchases a $100 case from a supplier, a $300
computer chip from another supplier, and sells the computers for $1000. How much did
the company contribute to GDP?
a. $1000
b. $900
c. $700
d. $600
e. $400
Perfect competition is characterized by a(n)
Which of the following is the best example of an intermediate good?
a. military uniforms purchased by the government
b. flour purchased by a bakery for the production of bread
c. a new computer purchased by a software developer
d. screwdrivers purchased by a homeowner for home repairs
e. aprons purchased by restaurant chefs
As long as the loanable funds market clears, Say’s law holds..
Which of the following is a cost of providing federal deposit insurance?
a. Banks have more incentive to monitor loans with the result that their profits have
declined and many have failed.
b. There are no significant costs to the insurance, only benefits.
c. Banks have less incentive to act responsibly with the result that they have made
riskier loans and some have failed.
d. The insurance makes it more difficult to regulate banks.
e. The insurance makes it more difficult for the fed to run open market operations.
A quota is a
a. tax imposed on each unit of an exported good
b. tax imposed on each unit of an imported good
c. change in the terms of trade between two nations
d. result of opportunity cost differentials between two nations
e. restriction on the quantity of a good that may be imported
What happens to a production possibilities frontier (with capital goods on the vertical
axis and consumption goods on the horizontal axis) when there is technological
improvement?
a. The entire frontier shifts outward.
b. The upper part shifts outward while the lower part shifts inward.
c. Nothing; there is no movement of the frontier.
d. The entire frontier shifts inward.
e. The lower part of the curve shifts outward while the upper part shifts inward.
Bill can cook dinner in 45 minutes and mow the lawn in 1.5 hours. Eileen can cook
dinner in 1.5 hours and mow the lawn in 2 hours. Which of the following statements is
correct?
In measuring the sensitivity of demand, the