Figure 10-3
Refer to Figure 10-3. Which of the following is consistent with the graph depicted
above?
A) Taxes are changed so that real interest income is taxed rather than nominal interest
income.
B) An expected recession decreases the profitability of new investment.
C) The government runs a budget deficit.
D) Technological change increases the profitability of new investment.
The minimum amount that investors must earn on the funds they invest in a firm,
expressed as a percentage of the amount invested, is referred to as
A) the explicit costs of production.
B) net worth.
C) net income.
D) a normal rate of return.
Table 14-2
Refer to Table 14-2. Suppose a transaction changes a bank’s balance sheet as indicated
in the following T-account, and the required reserve ratio is 10 percent. As a result of
the transaction, the bank can make a maximum loan of
A) $0.
B) $800.
C) $7,200.
D) $8,000.
If wages and prices adjust slowly, we would expect expansionary monetary policy to be
A) less likely to reduce the natural unemployment rate.
B) more likely to reduce inflation.
C) more likely to affect the unemployment rate.
D) more likely to result in a vertical short-run Phillips curve.
The federal government debt as a percentage of GDP fell during the period
A) 2002 – 2007.
B) 1980-1992.
C) during World War I and World War II.
D) 1997-2001.
E) the Great Depression.
A rapid increase in the price of oil will tend to
A) shift short-run aggregate supply to the left.
B) shift long-run aggregate supply to the left.
C) shift long-run aggregate supply to the right.
D) shift aggregate demand to the right.
Table 8-27
The components of national income for an economy are represented in Table 8-27
above. All values are in billions of dollars.
Refer to Table 8-27. What is the level of personal income for this economy?
A) $1,140 billion
B) $1,010 billion
C) $990 billion
D) $860 billion
Which of the following would increase the natural rate of unemployment?
A) an increase in the number of younger, less skilled workers in the economy
B) a reduction in the generosity of unemployment insurance programs
C) restrictions on the ability of unions to negotiate wage changes with companies
D) an increase in government-sponsored programs that train unemployed workers so
they can find new jobs quickly
Which of the following is not a consequence of the Fed changing the reserve
requirement?
A) Changes in the ratio are easily incorporated into banks’ routine management.
B) Decreasing the ratio will increase excess reserves.
C) Increasing the ratio will decrease the amount of reserves banks have to loan.
D) Changes in the ratio effectively places a tax on banks’ deposit taking and lending
activities.
Figure 3-1
Refer to Figure 3-1. An increase in taste or preference would be represented by a
movement from
A) A to B.
B) B to A.
C) D1 to D2.
D) D2 to D1.
If disposable income increases by $100 million, and consumption increases by $90
million, then the marginal propensity to consume is
A) 0.9.
B) 0.8.
C) 0.75.
D) 0.6.