A firm’s profit is
The Bureau of Labor Statistics releases its employment report
a. on the first Friday of every month.
b. on the first Friday of every quarter.
c. once every four months.
d. on the first Friday every two months.
e. once every six months.
Which of the following would be included in the GDP Price Index, but not the
Consumer Price Index?
a. The price of a pair of shoes
b. The price of coffee
c. The price of a used car
d. The price of a bar of soap
e. The price of an aircraft carrier
A country currently is using all its land to produce wheat and grapes. However, the land
most suited to growing grapes is being used to produce wheat, and the land most suited
to growing wheat is being used to produce grapes. Which of the following statements is
true?
A rise in aggregate expenditure is always
a. smaller than the rise in income that causes it
b. larger than the rise in income that causes it
c. the same as the rise in income that causes it
d. smaller than the increase in consumer spending that causes it
e. smaller than investment spending
A nation should only import those goods for which it has
a. lower opportunity costs than its trading partner
b. higher opportunity costs than its trading partner
c. zero transaction costs
d. lower costs of production than its trading partner
e. absolute advantage in production compared to its trading partner
A family on a trip budgets $800 for sit-down restaurant meals and fast food. If the price
of a fast food meal for the family is $20, how many such meals can the family buy if
they do not eat at restaurants?
A perfectly competitive firm
Countercyclical fiscal policy has a serious problem with
a. overshooting the desired impact by a factor of 10.
b. the irreversibility of actions.
c. the tendency of the Federal Reserve to immediately counter Congressional action.
d. the courts as it has been held to be unconstitutional.
e. overshooting the desired impact by a factor of 3.
If the price of a British pound increases, more Britons will be willing to supply pounds
to the foreign exchange market.
The natural rate of unemployment
a. is always constant.
b. is always equal to 5%.
c. can vary over time and from country to country.
d. has been rising in recent years in the U.S.
e. is very similar across countries
Which of the following best describes the term deflation?
a. A falling inflation rate
b. A negative price level
c. A negative inflation rate
d. An increasing inflation rate
e. A positive inflation rate
Which of the following is not part of M2?
a. savings-type deposits
b. no institutional money market mutual fund balances
c. small time deposits
d. large time deposits (over $100,000)
e. cash held by the public
Since the value of the multiplier is always at least 1, which of the following is correct?
a. The size of the vertical shift in the aggregate expenditure line is always equal to the
change in GDP
b. The size of the vertical shift in the aggregate expenditure line is always less than the
change in GDP
c. The size of the vertical shift in the aggregate expenditure line is always greater than
the change in GDP
d. The size of the vertical shift in the aggregate expenditure line is always equal to or
smaller than the change in GDP
e. The MPC is always bigger than 1
Which of the following would lead the Fed to increase the money supply under an
interest rate rule?
a. an unexplained decrease of money demand
b. an increase in taxes
c. a decrease in spending that caused the money demand curve to decrease
d. an increase in spending that caused the money demand curve to increase
e. a decrease in government spending
A local store noticed that when it increased the price of milk from $2.50 to $3.50 per
gallon, it sold the same amount of milk per week (165 gallons). Since everything else
remained the same, we would say the
If a monopoly arises as a natural monopoly