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When a mall Santa Claus loses his job at the end of the Christmas season, this is an
example of
a. frictional unemployment
b. structural unemployment
c. frictional unemployment
d. seasonal unemployment
e. economic unemployment
Assume that U.S. agricultural land is used either to raise cattle for beef or to grow
wheat. Figure 2-2 represents the production possibility frontier for beef and wheat.
Production at point H is
Figure 2-2
a. unattainable given
currently available technology and resources
b. attainable by more fully employing already available resources
c. attainable by using better technology which is already available
d. attainable if beef production drops to zero
e. attainable if all available resources are used to produce wheat
Aggregate expenditure includes final spending by households, businesses, and
government on final goods and services.
If the required reserve ratio is 0.05 and the Fed sells a $2,000 bond directly to an
individual who pays for it with a check, what will happen to the money supply?
a. The money supply will increase by $2,000.
b. The money supply will decrease by $2,000.
c. The money supply will increase by $100.
d. The money supply will decrease by $100.
e. The money supply will decrease by $200.
Who was the economist that began modern macroeconomics?
a. Adam Smith
b. Paul Samuelson
c. Milton Friedman
d. John Maynard Keynes
e. Ben Bernanke
Which of the following groups exerts the most control over the money supply in the
United States?
a. The executive branch of government
b. The legislative branch of government
c. The judicial branch of government
d. The Federal Reserve
e. The U.S. Treasury Department
A society is saving lives (productively) efficiently if
a. there are no unemployed resources in the health care sector
b. there are no unemployed resources anywhere in the economy
c. there is no way to save more lives
d. there is no way to save more lives without sacrificing some other goods or services
e. the opportunity cost of saving one more life is zero
For the capital stock to grow, production of capital goods must
a. exceed the inflation rate
b. exceed 15 percent of GDP
c. exceed the depreciation of existing capital
d. increase from the previous year
e. exceed the growth of the labor force
What do all expansions and recessions since 1950 have in common?
a. Changes in oil prices.
b. Changes in interest rates.
c. Changes in spending.
d. Changes in productivity.
e. None of the above.
Positive economics deals with
a. value judgments
b. how the economy does work
c. how the economy should work
d. how the federal government should operate
e. what the price level should be
Which of the following categories of unemployment arises from macroeconomic
causes?
a. Temporary unemployment
b. Underemployment
c. Structural unemployment
d. Frictional unemployment
e. Cyclical unemployment
If there is a large increase in the price of oil, which of the following would most likely
occur in the short run?
a. The aggregate demand curve shifts upward, the price level rises, and output
increases.
b. The aggregate supply curve shifts downward, the price level falls, and output
increases.
c. The aggregate demand curve shifts downward, the price level falls, and output falls.
d. The aggregate demand curve shifts upward, output remains unchanged, and the price
level rises.
e. The aggregate supply curve shifts upward, the price level rises, and output falls.
When using real GDP per capita to measure the standard of living, it is difficult to
capture the value of
a. education
b. leisure time
c. clean environment
d. how income is distributed
e. all of the above
Factor payments are
a. amounts paid to resource owners for the use of their resource
b. amounts paid for goods
c. another term for revenues
d. the amount households put into savings
e. payments made to workers who are employed only part time
Refer to Figure 5-1 above. If the economy reaches point B on the graph, it is going
through a(n)
a. peak
b. trough
c. expansion
d. boom
e. recession
If income changes, that leads to a movement along the money demand curve.
