Given the consumption function C = $100 billion + 0.75 ($300 billion), autonomous
consumption is equal to:
a. $100 billion.
b. $225 billion.
c. $300 billion.
d. $325 billion.
e. $400 billion.
An entity’s assets come from three primary sources: creditors, investors, and profits
retained in the business.
a. True
b. False
Which of the following is an example of market failure?
a. Public goods.
b. Externalities.
c. Lack of competition.
d. all of these.
As a general rule, a recession occurs when there is a six consecutive month fall in:
a. nominal GDP.
b. real GDP.
c. the price level.
d. the trade balance.
Which of the following cause(s) economic growth?
a. c and d.
b. d and e.
c. The production of more scarce goods
d. A technological improvement
e. The production of more capital goods
Anything can be money if it acts as a:
a. unit of account.
b. store of value.
c. medium of exchange.
d. All of these must be correct.
If a person is taxed $1,000 on an income of $10,000, taxed $2,000 on an income of
$20,000, and taxed $3,000 on an income of $30,000, this person is paying a(n):
a. progressive tax.
b. regressive tax.
c. proportional tax.
d. poll tax.
e. excise tax.
The relationship between consumption and disposable income is the:
a. spending function.
b. consumption function.
c. autonomous consumption.
d. household consumer spending
e. household spending function.
One concern over external national debt is that interest and principal payments transfer
wealth overseas. The percentage of the national debt held in recent years by foreigners
is approximately:
a. 5 percent.
b. 10 percent.
c. 20 percent.
d. 30 percent.
e. 50 percent.
Assuming that clothing is a normal good, an increase in consumer income, other things
being equal, would:
a. increase the demand for clothing.
b. decrease the demand for clothing.
c. increase the quantity of clothing demanded.
d. decrease the quantity of clothing demanded
Which of the following statements is true?
a. A sales tax on food is a regressive tax.
b. The largest source of federal government tax revenue is individual income taxes.
c. The largest source of state and local governments tax revenue is sales and excise
taxes.
d. All of the above are true.
e. None of the above are true.
A downward movement along the investment demand curve would be caused by a(n):
a. increase in the expected rate of return on investment caused by an increase in
business confidence.
b. decrease in the expected rate of return on investment caused by a decrease in
business confidence.
c. increase in the rate of interest.
d. decrease in the rate of interest.