The classical model
a. relies on the equivalency of the labor, capital, and land resource markets
b. includes a land market and a labor market
c. focuses primarily on capital markets
d. focuses primarily on labor markets
e. focuses on labor, capital, and land markets
Which of the following disciplines is not a social science?
a. psychology
b. mathematics
c. economics
d. political science
e. sociology
Unemployment rates in many continental European countries have been consistently
higher compared to the United States. The difference is mostly
a. due to differing monetary policies
b. cyclical unemployment
c. frictional unemployment
d. structural unemployment
e. seasonal unemployment
If the resource prices faced by a firm rise, the result is a(n)
a. decrease in supply
b. increase in supply
c. decrease in demand
d. increase in quantity demanded
e. decrease in quantity supplied
Which of the following is a common reaction to a decrease in the interest rate?
a. An increase in oil prices.
b. A decrease in stock market prices.
c. An increase in spending on new homes.
d. An increase in military spending.
e. An increase in federal highway spending.
Market clearing in the loanable funds market
a. violates Say’s Law
b. guarantees that total spending will be just sufficient to purchase whatever output is
produced
c. means that the interest rate never changes
d. guarantees that total spending will equal the quantity of loanable funds demanded
e. requires that the government run a budget deficit
An excess supply of money in the economy implies an excess demand for
a. stocks
b. mortgages
c. consumer nondurables
d. consumer durables
e. bonds
In the short run, the price level
a. will increase if unit costs increase.
b. will increase if average markup decreases.
c. will increase if unit costs decrease.
d. is held constant by government decree.
e. will decrease if there is a negative supply shock.
A period during which GDP exceeds its potential level is best known as a(n)
a. expansion
b. contraction
c. boom
d. recession
e. depression
To the extent that the CPI does not accurately measure the true price level,
a. the BLS will change the underlying market basket of goods
b. it is useless
c. it exaggerates the true cost of living
d. it results in underindexation of social security payments
e. it underestimates the true cost of living
Excess demand occurs when
a. the actual price is greater than the equilibrium price
b. equilibrium is undefined
c. consumer wants are unlimited
d. the actual price is less than the equilibrium price
e. the market is in equilibrium
If the Fed wishes to maintain its interest rate target in the face of increased money
demand it would likely
a. increase the money supply.
b. decrease the money supply.
c. more stringently enforce already existing banking regulations.
d. propose new banking regulations.
e. become more lax when it enforces already existing banking regulations.
Excess reserves can be found by subtracting required reserves from total reserves.
In the long run, the interest rate is determined in the money market.
Each of the following would shift a nation’s production possibilities frontier outward,
but which is least likely to be accompanied by an increase in the standard of living?
a. population growth
b. increased investment in private physical capital
c. increased investment in human capital
d. technological advances
e. increased investment in infrastructure