Prisoners in World War II POW camps traded products for other products, a process
referred to as
A) barter.
B) rationing.
C) central planning.
D) advantage exchange.
Refer to Figure 8A.1. Capital deepening occurs as long as
A) total saving exceeds depreciation.
B) depreciation exceeds total saving.
C) total saving and depreciation are equal.
D) the level of Y is increasing.
Returns on Investment
Table 12.2
Referring to Table 12.2, if the nominal interest rate is 3.5 percent and there is no
inflation, which investments will be undertaken?
A) B, C, D, E
B) B, D, E
C) D, E
D) C, E
When after seeing the current mortgage interest rates and immediately deciding to start
the search for a new house, you are using:
A) microeconomics to evaluate the merits of public policies.
B) microeconomics to understand markets and predict changes.
C) microeconomics to understand marginal changes in the macroeconomy.
D) microeconomics to make managerial and personal decisions.
Which of the following isnot an economic decision in a modern economy?
A) Who consumes the products produced?
B) What will be produced?
C) Where will the products produced be consumed?
D) How will we produce it?
Runs on banks occur when
A) banks make an unusually high number of profitable loans.
B) depositors are confident that the bank will not go bankrupt.
C) many depositors attempt to withdraw their funds simultaneously.
D) banks keep 100 percent of their deposits on hand.
Suppose that steak is a normal good. When income decreases, the equilibrium quantity
of steak will ________ and the equilibrium price of steak will ________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
Suppose that the U.S. has an open economy and is currently at full employment. When
the federal government decreases spending on Medicare, crowding in will not take the
form of:
A) an increase in investment spending.
B) an increase in consumption spending.
C) an increase in net exports.
D) an increase in government spending.
Recall the Application about how to estimate the shifts in the natural rate of
unemployment to answer the following question(s).
According to the Application, the natural rate of unemployment in the United States
was approximately 5 percent in the mid 1960s, ________ in the late 1970s and early
1980s, and ________ in the late 1980s until the year 2000.
A) peaked; declined
B) rose; continued to rise
C) fell; rose again
D) remained at 5 percent; began to rise
Recall Application 2, “The Confucius Curve?” to answer the following questions:
According to the application, when Yu Juo was asked what should be done when the
government had insufficient funds, his response was:
A) cut tax rates from 20 to 10 percent.
B) raise tax rates from 10 to 20 percent.
C) cut tax rates from 50 to 20 percent.
D) print currency.
If the U.S. real exchange rate is 125, the U.S. price index is 140, and the Japanese price
index is 165, what is the yen to dollar exchange rate?
A) 106.06
B) 125.65
C) 147.32
D) 184.80
A decrease in price level will
A) shift the planned expenditures curve upward.
B) shift the planned expenditures curve downward.
C) cause a movement down along the planned expenditures curve.
D) cause a movement up along the planned expenditures curve.
Recall Application 2, “Increased Political Independence for the Bank of England
Lowered Inflation Expectations,” to answer the following questions:
According to the application, the way to measure inflation expectations in England was
to compare:
A) interest rates of inflation adjusted bonds and non-inflation adjusted bonds.
B) interest rates of inflation adjusted mutual funds and non-inflation adjusted mutual
funds.
C) interest rates of inflation adjusted stock prices and non-inflation adjusted stock
prices.
D) nominal GDP growth rates and real GDP growth rates.
An increase in the income tax rate will cause the C + I + G line to become:
A) flatter and the equilibrium income to decrease.
B) steeper and the equilibrium income to decrease.
C) flatter and the equilibrium income to increase.
D) steeper and the equilibrium income to increase.
The costs associated with recalculating prices and printing new price lists when there is
inflation are known as
A) shoe leather costs.
B) menu costs.
C) chain-index costs.
D) diminishing costs.