Gold, silver and furs, when used as money, are referred to as
a. fiat money
b. precious money
c. paper currency
d. commodity money
e. exchange money
An excise tax on cigarettes
Deleveraging is the process of reducing leverage, and therefore reducing the risk to
capital from any further declines in asset prices.
Reducing the government’s budget deficit will certainly increase economic growth.
The average percentage markup in the economy
a. is greater, the more competitive are market conditions
b. is greater, the less competitive are market conditions
c. is unaffected by the competitive conditions of the economy
d. tends to be highly unstable from year to year
e. tends to be stable from year to year, ensuring that the price level is stable from year to
year
In the expenditure approach to measuring GDP, we add the values of all
a. intermediate goods in addition to all final goods purchased
b. goods and services purchased by each type of final user
c. goods and services purchased in the United States
d. goods and services purchased by intermediate and final users
e. goods and services purchased by the private sector.
A bank wants to get rid of excess reserves by making loans because
a. it will be penalized if it does not get rid of the reserves
b. the reserves do not earn interest
c. it is afraid it will lose the excess reserves
d. firms will not borrow from a bank with excess reserves
e. the bank has too many liabilities
The group within the Federal Reserve System that determines the general course for the
nation’s money supply is the
a. Federal Monetary Oversight Committee
b. Federal Advisory Council
c. Board of Governors
d. Department of Commerce
e. Federal Open Market Committee
A stock variable
If the government lowered the capital gains tax, what would be the effect in the
loanable funds market? (Assume the government does not run a budget deficit.)
a. Both the supply and demand for funds would increase, lowering the interest rate and
raising investment spending.
b. The supply of funds would decrease, raising the interest rate and lowering investment
spending.
c. The supply of funds would decrease, lowering both the interest rate and investment
spending.
d. The supply of funds would increase, lowering both the interest rate and investment
spending.
e. The supply of funds would increase, lowering the interest rate and raising investment
spending.
If one firm sets the market price
In the short-run macro model, rising GDP and a falling interest rate are most likely to
be the result of a(n)
a. increase in the money supply
b. decrease in the money supply
c. increase in government purchases
d. decrease in government purchases
e. decrease in taxes
Figure 2-3 shows the production possibilities frontier for a music processing plant that
can produce both compact disks and cassettes. At which point would the plant be
under-utilizing its resources?
Figure 2-3
Specialization of labor typically leads to higher levels of productive inefficiency in an
economy.
Disposable income is best defined as
a. income adjusted for inflation
b. nominal income
c. the income remaining after bills have been paid
d. income after taxes have been paid and transfers received
e. income paid in dollars that are worthless
Economics is