If the Fed wants to lower the interest rate, it will
a. increase the money supply
b. decrease the money supply
c. increase money demand
d. decrease money demand
e. simply set a lower market interest rate
Claire was trying to decide if she should buy a share of stock in her favorite company or
a bond issued by that same company. She discussed the dilemma with her father. Her
father made the following five statements. All of them are accurate except for one.
Which one is the exception?
A rightward shift of the economy’s labor supply curve would result from a(n)
a. cut in income tax rates or an increase in welfare benefits to the needy
b. cut in income tax rates or a cut in benefits to the needy
c. increase in income tax rates or a cut in benefits to the needy
d. increase in income tax rates or an increase in benefits to the needy
e. cut in income tax rates or a freeze on benefits to the needy
After examining Figure 8-3, it is possible to conclude that
a. people do not save money nor pay taxes in this model
b. firms purchase resources from households and other firms in this model
c. households are the only ones who purchase and firms the only ones who sell in this
model
d. completion of a sale represents a break in the flow of goods and services, and inputs
in this model
e. all households and firms individually receive the same amount of money in this
model
The profit-maximizing price for the firm in Figure 11-3 is
The cost of cyclical unemployment is
a. spread broadly among the U.S. population
b. the inflationary impact of increased federal expenditures on the unemployed
c. growing as the U.S. population ages
d. especially felt by recent college graduates
e. the lost output that results
Use the table below to find the marginal propensity to consume.
a. 0.50
b. 0.60
c. 0.65
d. 0.75
e. 0.80
The most appropriate type of labor market to analyze
A flow variable
An individual seller’s producer surplus on a unit of a good is
Which of the following is a reason why an American would demand British pounds?
a. To purchase British real estate
b. To purchase Japanese semiconductors
c. To purchase French government bonds
d. To purchase stocks on the New York Stock Exchange
e. To purchase a ticket to see a British film in the U.S.
If the economy is operating at an unemployment rate above the full employment rate,
a. actual output is above potential output
b. actual output is below potential output
c. frictional unemployment has been eliminated
d. structural unemployment has been eliminated
e. actual output equals potential output
The country that suffered an extreme inflation rate of 89,700,000,000,000,000,000,000
percent in November 2008 was
a. England
b. Zimbabwe
c. Germany
d. Egypt
e. the former Soviet Union