Which of the following would be studied in macroeconomics?
a. a drop in the price of personal computers
b. an individual household’s decision on how to allocate its spending power
c. a rise in employment in movie theaters across the nation
d. total output in the nation
e. a local bank’s increase in the interest rate offered on savings deposits
An economic expansion reflects
a. any movement from disequilibrium to a new equilibrium
b. the increase in output and decrease in employment level following a recession
c. the increase in output and employment levels following a recession
d. the rising wage rates that follow economic instability
e. instability in government tax revenues.
The quantity supplied of a good
a. is the amount that sellers would provide if the firms faced no constraints
b. is the amount that sellers would provide if input prices were zero
c. must match the amount actually purchased in the market
d. is a fixed amount unaffected by the sellers’ circumstances
e. is subject to the constraints imposed by technology and input prices
Reasons for studying economics include
a. all of the following
b. to better understand world issues by applying the tools of economic analysis
c. to help design more effective solutions to society’s problems
d. to help prepare for careers in fields such as law and politics
e. to better understand the impact of world events on an individual’s life
The major reasons why economists have grown increasingly skeptical about
countercyclical fiscal policy are
a. irreversibility, forward looking behavior, and the reaction of the Federal Reserve.
b. irreversibility, forward looking behavior, and the negative effects of imports.
c. timing problems, irreversibility, and forward looking behavior,
d. timing problems, irreversibility, and the reaction of the Federal Reserve.
e. timing problems, irreversibility, forward looking behavior, and the reaction of the
Federal Reserve.
Which of the following could explain a leftward shift of the labor demand curve?
a. Firms are unable to sell all the output they produce.
b. Workers have become less productive.
c. Workers have become more productive.
d. Both (a) and (b) are correct.
e. The demand curve for the product that firms sell shifts to the right.
Because of economic scarcity
a. there are not enough jobs for everyone
b. people are afraid to become entrepreneurs
c. the government interferes in the economy
d. businesses cannot obtain the resources they need
e. people and organizations have to allocate resources carefully
If the government increases its spending or reduces its taxes in order to influence the
level of economic activity, it is engaging in
a. regulatory policy
b. antitrust policy
c. monetary policy
d. fiscal policy
e. supply-management policy
Government policies designed to increase the skills of the work force shift the labor
demand curve to the right, increasing employment and total output.
If autonomous consumption decreases, which of the following combinations of events
would be most likely to occur?
a. An upward shift of the aggregate expenditure line, a rightward shift of the money
demand curve, and a leftward shift of the aggregate demand curve
b. A downward shift of the aggregate expenditure line, a leftward shift of the money
demand curve, and a leftward shift of the aggregate demand curve
c. A downward shift of the aggregate expenditure line, a leftward shift of the money
demand curve, and a rightward shift of the aggregate demand curve
d. A downward shift of the aggregate expenditure line, a rightward shift of the money
demand curve, and a rightward shift of the aggregate demand curve
e. An upward shift of the aggregate expenditure line, a rightward shift of the money
demand curve, and a rightward shift of the aggregate demand curve.
If the dollars per peso exchange rate fell,
a. few firms would want to relocate to Mexico
b. the demand for pesos would fall
c. more Americans would travel to Mexico
d. Americans would buy fewer Mexican goods
e. the demand for pesos curve would shift inward
Over the last 50 years or so, the rate of growth of average working hours has been
mostly negative.
In the value-added approach, GDP is the sum of revenue received by all firms in the
economy.
Which of the following statements about unanticipated inflation is true?
a. It reduces average purchasing power in the economy.
b. It reduces total purchasing power in the economy.
c. It redistributes purchasing power in the economy.
d. It reduces nominal wages.
e. Its effects are spread evenly throughout the economy so that no one gains or loses
from inflation.
In Figure 4-5, at a temporary price of $4,
a. all of the following occur
b. a surplus occurs
c. the supply curve will shift leftward
d. the demand curve will shift rightward
e. equilibrium will eventually occur at approximately $3.50
One way to increase labor force participation is to cut income tax rates. Which of the
following is true given such a scenario?
a. Cutting income tax rates increases labor force participation and also allows all other
taxes to be cut
b. Cutting income tax rates may force the government to raise other taxes or cut some
programs
c. Cutting income tax rates raises more tax revenue and allows for even more
government programs
d. Cutting income tax rates puts the burden of the tax cuts on those who now join the
labor force.
e. Cutting income tax rates reduces labor force participation.