Refer to Figure 9-13. A decreased labor demand on the graph would
a. increase total output
b. decrease total output at a constant rate
c. decrease total output at an increasing rate
d. decrease total output at a decreasing rate
e. not change total output
This year, Shirts Inc. purchased $1,000 worth of silk from the Silky Silkworm
Company, $100 worth of buttons from Barney’s Buttons, and $200 worth of thread from
Tracy’s Thread Company. Shirts Inc. sold the shirts they produced for $2,000. As a
result of these transactions, how much did Shirts Inc. contribute to GDP this year?
a. $700
b. $1,300
c. $2,000
d. $2,700
e. $3,300
If Johanna purchases a bond for $4,500 that promises to pay her $5,000 one year later,
what is the interest rate on the bond?
a. 5.3 percent
b. 5.6 percent
c. 10.0 percent
d. 11.1 percent
e. 10.5 percent
Refer to Figure 15-13. Beginning at point A, suppose a supply shock shifts the
aggregate supply curve to AS2. In the long run, we would expect
a. an increase in the price level and a decrease in real GDP
b. an increase in the price level and a return of real GDP to its full-employment level
c. a decrease in the price level to below its level at point A, and a return of real GDP to
its full-employment level
d. the price level and real GDP to return to their original levels at point A
e. aggregate demand to increase until full employment is restored.
If the Fed lowered the required reserve ratio,
a. excess reserves would decrease
b. the money supply would decrease
c. the money supply would increase
d. banks would borrow more from the Fed
e. loans would earn more interest
Which of the following would be a redistributive cost of inflation?
a. Additional trips to the bank
b. Reprinting menus and price tags
c. Comparison shopping
d. The real amount paid back for a loan compared to the expected real payments
e. The actual nominal rate on a loan compared to the expected nominal rate
Politically, one reason trade restrictions are common is that
a. the many beneficiaries of free trade each gain a small amount whereas the few losers,
lose enough to lobby for restrictions.
b. the beneficiaries of free trade collectively gain a small amount whereas the few
losers, collectively lose much more.
c. the few beneficiaries of free trade each gain a large amount and the many losers, lose
enough to lobby for restrictions.
d. foreign corporations bribe politicians.
Occupational licensing
Economists who focus on long-run growth suggest that the government could lower
taxes on labor income in order to increase employment.
Monopolistically competitive firms are similar to perfectly competitive firms in the
sense that both face horizontal demand curves for their product.
Mike is an automobile worker. Because of technological changes in the way
automobiles are produced and the increased use of automation, Mike was recently laid
off and is currently seeking another job. Mike is best described as being
a. frictionally unemployed
b. structurally unemployed
c. seasonally unemployed
d. not in the labor force
e. cyclically unemployed
A decrease in income taxes can help growth and harm growth at the same time.
Refer to Figure 11-6. Which point represents the value of equilibrium GDP?
a. A
b. B
c. C
d. D
e. E or F
Private investment during a year includes
a. the value of inventories plus the values of stocks and bonds
b. spending on plant and equipment, new housing construction, and changes in
inventories
c. stocks and bonds purchased by firms
d. spending on plant and equipment plus government spending plus household spending
on stocks and bonds
e. spending on plant and equipment
A sunk cost is one that