The unemployment rate in the United States is typically lower than in Western Europe
because the United States has tougher requirements for the unemployed to receive
government payments.
In economics, the optimal level of pollution is the level for which the net benefit from
reducing the pollution is the greatest.
A decrease in government spending will result in a decrease in the price level and a
decrease in real GDP in the long run.
Suppose the extra cost to a doctor of keeping her office open on Saturdays is $800.
Then, the doctor should not stay open on Saturdays if keeping the office open can only
bring in additional revenue of $800.
If some monopolistically competitive firms exit their market after suffering short-run
losses, the demand curves of remaining firms will shift to the right.
Increasing opportunity cost along a bowed out production possibilities frontier occurs
because
A) of inefficient production.
B) of ineffective management by entrepreneurs.
C) some factors of production are not equally suited to producing both goods or
services.
D) of the scarcity of factors of production.
James Meade, who won the Nobel Prize in Economics in 1977, argued that positive
externalities resulted from
A) reducing emissions of sulfur dioxide.
B) producing automobiles and automobile tires.
C) home owners in the Northeast moving to the South and Southwest United States.
D) apple growing and beekeeping.
The multiplier is calculated as the change in ________ / change in ________.
A) real GDP; autonomous expenditure
B) autonomous expenditure; real GDP
C) nominal GDP; autonomous expenditure
D) real GDP; induced spending
Assume that both the demand curve and the supply curve for DVD players shift to the
left but the demand curve shifts more than the supply curve. As a result
A) both the equilibrium price and quantity of DVD players will decrease.
B) the equilibrium price of DVD players will decrease; the equilibrium quantity may
increase or decrease.
C) the equilibrium price of DVD players may increase or decrease; the equilibrium
quantity will decrease.
D) the equilibrium price of DVD players will increase; the equilibrium quantity may
increase or decrease.
Which of the following is not an advantage of starting a new business as a
proprietorship?
A) The owner has complete control over the business.
B) A proprietorship has few government rules and regulations to comply with.
C) Business profits are only taxed once, not twice.
D) A proprietorship can easily attain additional funding.
Dollar bills in the modern economy serve as money because
A) they are backed by the gold stored in Fort Knox.
B) they can be redeemed for gold by the central bank.
C) they have value as a commodity independent of their use as money.
D) people have confidence that others will accept them as money.
Fiat money
A) has no or very little value except as money.
B) is rarely used in modern economies.
C) functions well only if can be redeemed for gold or other precious metals.
D) serves well as a medium of exchange, but not as a store of value.
An increase in government purchases of $200 billion will shift the aggregate demand
curve to the right by
A) $200 billion.
B) less than $200 billion.
C) more than $200 billion.
D) None of the above are correct. This policy shifts the long-run aggregate supply
curve.
Figure 15-9
Figure 15-9 shows
the demand and cost curves for a monopolist. What is the difference between the
monopoly’s price and perfectly competitive industry’s price?
A) The monopoly’s price is higher by $9.50.
B) The monopoly’s price is higher by $13.
C) The monopoly’s price is higher by $3.50.
D) The monopoly’s price is higher by $21.
The difference between GDP and disposable income is
A) national income.
B) actual investment spending.
C) net taxes.
D) unplanned investment spending.
In 2004, hurricanes destroyed a large portion of Florida’s grapefruit crop. How did this
affect the market price and market quantity of grapefruit?
Explain how “net capital flows” are related to “net foreign investment,” “net foreign
direct investment,” and “net foreign portfolio investment.”
In Year 1 suppose the economy is at potential GDP and that the federal budget deficit
equals $100 billion. In Year 2 the federal budget deficit rises to $150 billion, but the
cyclically adjusted budget deficit falls to $75 billion. How can the actual budget deficit
rise and the cyclically adjusted budget deficit fall?
Explain how the decision by parents to not immunize their children, hoping that their
children will not get sick because other parents have had their children immunized, is
an example of free riding. How is this behavior dangerous to the public?
Table 29-1
Use the information in the table to prepare a balance of payments account and find the
value of the statistical discrepancy. Assume that the balance on the capital account is
zero.
What is the difference between aggregate expenditure and aggregate demand?