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The production function is the mathematical representation of the technological
relationship between:
A) output and government policy.
B) inputs and output.
C) government policy changes and inflation.
D) the rate of capital accumulation and national output.
Discouraged workers are workers who leave the labor force because of:
A) their inability to find jobs.
B) the difficulty of finding transportation.
C) difficulty of finding appropriate childcare.
D) All of the above are correct.
If the marginal propensity to save is 0.20, then the value of the tax multiplier is
A) -5.
B) -4.
C) 5.
D) 1.2.
Figure 2.1
On the production possibilities curve in Figure 2.1 the gain from decreasing
manufacturing production from 500 tons to 300 tons is:
A) 700 tons of agriculture.
B) 500 tons of agriculture.
C) 200 tons of agriculture.
D) 100 tons of agriculture.
Which of the following is not included in the U.S. current account?
A) exports of services
B) change in foreign private assets held in the United States
C) net investment income
D) imports of goods
The marginal principle states that one should
A) increase the level of an activity if the marginal benefit exceeds its marginal cost.
B) decrease the level of an activity if the marginal cost exceeds the marginal benefit.
C) if possible pick the level at which the marginal benefit equals the marginal cost.
D) all of the above
Convergence refers to the hypothesis that:
A) rich countries must always bail out poor countries.
B) saving must be equal to investment in the macroeconomy.
C) it is easier for a country to grow relatively quickly if it starts out poor.
D) none of the above
If the marginal propensity to import is 0.2, then a $1,000 increase in income will:
A) decrease net exports by 200.
B) increase net exports by 1000.
C) increase net exports by 200.
D) decrease net exports by 2000.
An increase in the U.S. interest rate relative to the British interest rate will cause a(n):
A) increase in demand for dollars and an increase in the demand for British pounds.
B) decrease in demand for dollars and an increase in the supply of British pounds.
C) increase in demand for dollars and an increase in the supply of British pounds.
D) increase in demand for dollars and a reduction in the supply of British pounds.
Recall the Application about the government of Mexico City repainting highway lane
lines to transform a 4-lane highway into a 6-lane highway to answer the following
question(s).
If a variable is 100 and then increases to 150, then using the average value approach its
percentage growth is:
A) -50 percent.
B) 15 percent.
C) 40 percent.
D) 50 percent.
An example of a consumption tax is
A) sales tax.
B) Social Security tax.
C) an income tax.
D) transfer payments.
________ unemployment occurs naturally in the labor market as workers search for
jobs.
A) Cyclical
B) Frictional
C) Structural
D) Inflationary
When displaced workers require retraining before entering the labor force again, it is
the result of ________ unemployment.
A) cyclical
B) frictional
C) structural
D) seasonal
