Suppose that a $4 billion increase in government spending increases Real GDP by $60
billion, and that a $3 billion tax reduction increases Real GDP by $68 billion.In this
situation, the tax multiplier is _______________ the government spending multiplier.
a. less than
b. greater than
c. equal to
d. none of the above
Exhibit 38-1
The yield on bond A is approximately
a. 7.5 percent.
b. 0.06 percent.
c. 6.0 percent.
d. 0.075 percent.
Which of the following is false?
a. Special interest legislation is necessarily bad legislation in the sense that it does not
(because it cannot) ever benefit the general public.
b. A special interest group is a subset of the general population that holds usually
intense preferences for or against a particular government service, activity, or policy.
c. Congressional districts can be thought of as special interest groups for certain
purposes.
d. Special interest groups are likely to argue for their specific policies or programs by
claiming they serve the best interests of the general public.
Exhibit 17-1Production Function Real GDP = T (L, K), such that Real GDP = T(L + K)
Assume that the technology coefficient is equal to 0.40.
If there are 20 units of capital and 16 units of labor, ________ units of output (Real
GDP) will be produced.
a. 36
b. 5.6
c. 4
d. 14.4
Exhibit 10-3
The multiplier is
a. 4.
b. 5.
c. 10.
d. 1.
e. none of the above
Which of the following is true?
a. If MPC = 0.50, then the multiplier is 2.00.
b. If MPC = 0.82, then the multiplier is 1.25.
c. If MPS = 0.35, then the multiplier is 2.86.
d. If MPC = 0.97, then the multiplier is 3.33.
e. a and c
Exhibit 7-3
Investment is equal to
a. $850.
b. $1,250.
c. $200.
d. $2,200.
e. $1,050.
A common measure of inflation is the percentage change in the CPI of adjacent years.
a. True
b. False
If consumption increases,
a. the SRAS curve will shift rightward, which will push the price level up.
b. the SRAS curve will shift leftward, which will push the price level up.
c. the AD curve will shift leftward, which will push the price level down.
d. the AD curve will shift rightward, which will push the price level up.
The California gold rush resulted in
a. an increase in the amount of money in circulation and higher prices throughout the
country.
b. no change in the amount of money in circulation and higher prices throughout the
country.
c. an increase in the amount of money in circulation and higher prices only in
California.
d. no change in the amount of money in circulation and higher prices only in California.
Exhibit 10-8
Autonomous consumption (Co) is equal to
a. $3
b. $30
c. $300.
d. $3,000.
Exhibit 15-4
Assume that people have only two choices when it comes to holding their wealth: in
money or in bonds.
In the row of this table containing blank (C), people are holding ______________ of
their wealth in bonds and ________________ of their wealth in money.
a. too much; too little
b. too little; too much
c. just the right amount; too little
d. just the right amount; too much
e. just the right amount; just the right amount
Exhibit 34-9
For country X, the opportunity cost of producing one unit of good B is __________
unit(s) of good A.
a. 3
b. 1/10
c. 1/2
d. 1/3
e. 10
The “voluntary bumping plan” used by airlines to resolve the problem of overbooked
flights was developed by economist
a. Adam Smith.
b. John Maynard Keynes.
c. Alan Greenspan.
d. Julian Simon.