Where do economic agents such as individuals, firms and nations, interact with each
other?
A) in public locations monitored by the government
B) in any arena that brings together buyers and sellers
C) in any physical location people where people can physically get together for selling
goods, such as shopping malls
D) in any location where transactions can be monitored by consumer groups and taxed
by the government
It is ________ difficult to effectively time fiscal policy than monetary policy because
________.
A) more; fiscal policy can be quickly decided and changed
B) more; fiscal policy takes longer to implement
C) less; monetary policy takes longer to decide and change
D) less; monetary policy takes longer to implement
Because the copyright on the L. Frank Baum book The Wonderful Wizard of Oz expired
many years ago, the actual written words from the book are in the public domain, which
means
A) any publisher can now can claim copyright of Baum’s words.
B) only the first publisher to reissue the book can claim copyright of Baum’s words.
C) no publisher can claim copyright of Baum’s words, but the book can be reissued by
any publisher.
D) no publisher can claim copyright of Baum’s words because the book can never be
reissued.
The largest liability on the balance sheet of most banks is its
A) loans.
B) holdings of securities.
C) deposits with the Federal Reserve.
D) checking account and savings account deposits of its customers.
E) vault cash.
Few firms in the United States are monopolies because
A) few firms experience economies of scale.
B) of antitrust laws.
C) when a firm earns profits, other firms will enter its market.
D) most products that firms produce have substitutes.
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 person hired by a corporation’s board of directors to run the day-to-day operations
of the corporation is known as the
A) chairman of the board.
B) chief executive officer.
C) owner-manager.
D) corporate governor.
In the United States in 2012, the percentage of firms that employed more than 200
workers and did not offer health insurance as a fringe benefit to the workers was about
A) 2%.
B) 29%.
C) 44%.
D) 98%.
Banks keep ________ of checking deposits as reserves because on a typical day
withdrawals ________ deposits.
A) more than 100%; are much greater than
B) exactly 100%; are about the same as
C) less than 100%; are about the same as
D) exactly 100%; are much greater than
E) less than 100%; are much greater than
The drawback to calculating real GDP using base-year prices is that
A) real GDP in one year is not comparable to real GDP in another year.
B) relative prices change over time and these are not reflected in base-year prices, and
this distorts GDP.
C) relative prices change over time and these changes are reflected in base-year prices.
D) quality changes are reflected in base-year prices.
If a hospital knows that an insurance company will pay for most of a patient’s bill, the
hospital has more of an incentive to require additional medical procedures and tests,
even if the patient may not require them. This is an example of
A) moral hazard.
B) the principle-agent problem.
C) asymmetric information.
D) adverse selection.
The real power within the Federal Reserve lies with the
A) Federal Reserve District banks.
B) Board of Governors.
C) Council of Economic Advisors.
D) Council of Monetary Advisors.
Inelastic supply occurs whenever the elasticity of supply value is
A) negative and < -1.
B) any positive number.
C) positive and > 1.
D) positive and < 1.
Decreases in the price level will
A) lower consumption because goods and services are less affordable.
B) raise consumption because goods and services are more affordable.
C) raise consumption because real wealth increases.
D) lower consumption because real wealth decreases.
Figure 16-5
Suppose the firm represented in the diagram decides to act as a monopolist and charge a
single price. What is the profit maximizing quantity produced and what is the price
charged?
A) Q = 240 units; P = $28
B) Q = 320 units; P = $24
C) Q = 480 units; P = $16
D) Q = 560 units; P = $12
The real wage equals the nominal wage ________ the CPI, all times 100.
A) divided by
B) times
C) minus
D) plus
How would the equilibrium interest rate respond to a change from an income tax to a
consumption tax?
A) The equilibrium interest rate would rise.
B) The equilibrium interest rate would fall.
C) The equilibrium interest rate would be unaffected.
D) The equilibrium interest rate may rise or fall based on whether the demand or supply
of loanable funds changes.
The majority of dollars spent by government prior to the Great Depression was
spending at the ________ level. In the post World War II period, two-thirds to three
quarters of all dollars spent by government in the United States are spent at the
________ level.
A) federal; state and local
B) state and local; federal
C) state and local; state
D) local; state
A balance sheet
A) measures flows of income and expenditure over a given period of time.
B) measures assets, liabilities, and net worth at a giving instance in time.
C) equates flows of revenue with flows of expenditure.
D) None of the above are correct.
The labor force equals the number of people
A) employed.
B) unemployed.
C) employed plus unemployed.
D) in the working-age population.