The supply curve for a foreign currency typically
a. is horizontal
b. is vertical
c. slopes downward
d. slopes upward
e. none of the above.
An increase in the price level
a. increases investment spending, thereby shifting the AD curve to the left
b. does not shift the AD curve
c. causes the government’s budget deficit to fall
d. increases investment spending, thereby shifting the AD curve to the right
e. shifts the AS curve outward
The reform of the welfare system passed by Congress and signed by President Clinton
changed the benefits for welfare recipients as it
a. decreased the number of people eligible for benefits, increased the benefit amount for
those still eligible, and set a maximum coverage period of five years
b. decreased the number of people eligible for benefits, cut the benefit amount for those
still eligible, and set a maximum coverage period of three years
c. increased the number of people eligible for benefits, cut the benefit amount for those
still eligible, and set a maximum coverage period of three years
d. decreased the number of people eligible for benefits, cut the benefit amount for those
still eligible, and set a maximum coverage period of five years
e. froze the number of people eligible for benefits, cut the benefit amount for those still
eligible, and set a maximum coverage period of three years
A person has a comparative advantage if
a. she can produce everything more cheaply than her co-worker can
b. she can produce everything at a faster rate than her co-worker can
c. she can produce a good with a smaller opportunity cost than her co-worker can
d. she sees through corporate and government manipulation
e. she gets rich through inheritance
If the government announces a big tax cut, which of the following combinations of
events would be most likely to occur?
a. An upward shift of the aggregate expenditure line, a rightward shift of the money
demand curve, and a rightward shift of the aggregate demand curve
b. A downward shift of the aggregate expenditure line, a leftward shift of the money
demand curve, and a leftward shift of the aggregate demand curve
c. An upward shift of the aggregate expenditure line, a leftward shift of the money
demand curve, and a rightward shift of the aggregate demand curve
d. A downward shift of the aggregate expenditure line, a rightward shift of the money
demand curve, and a rightward shift of the aggregate demand curve
e. An upward shift of the aggregate expenditure line, a rightward shift of the money
demand curve, and a leftward shift of the aggregate demand curve.
The labor supply curve shows
a. how much output a firm will supply with a given amount of labor
b. how much labor a firm will want to hire at each wage rate
c. how much output people will want to buy if they supply a given amount of labor
d. how much labor a firm will need with a given amount of machinery and equipment
e. how many people will want jobs at each wage rate
The overall performance of the economic system as a whole is the focus of
a. international finance
b. labor economics
c. microeconomics
d. macroeconomics
e. public economics
The national debt
a. can be paid off without major economic effects
b. need never be paid off
c. is no more serious a problem than is a corporation’s debt
d. should not exist during a period of economic prosperity
e. is the simple sum of post budget deficits
The consumer price index includes all of the following goods and services except
a. bonds of US corporations
b. French wine
c. Japanese VCRs
d. used cars
e. toiletries
If the unit cost of output for a computer is $2,000 and if firms’ average markup is 10
percent, what is the total cost to the consumer?
a. $2,000
b. $2,010
c. $2,020
d. $2,200
e. $20.
If the government increases taxes, which of the following will occur in the short run?
a. An increase in GDP, an increase in the price level, an increase in money demand and
an increase in the interest rate.
b. An increase in GDP, an increase in the price level, a decrease in money demand and
an increase in the interest rate.
c. An increase in GDP, a decrease in the price level, an increase in money demand and
an increase in the interest rate.
d. A decrease in GDP, a decrease in the price level, a decrease in money demand and a
decrease in the interest rate.
e. A decrease in GDP, an increase in the price level, an increase in money demand and a
decrease in the interest rate.
Which of the following will decrease the amount of a good that is traded in the market?
a. price floors and price ceilings
b. excise taxes, price floors, and subsidies
c. excise taxes
d. subsidies
e. price floors, price ceilings, and excise taxes
If Pat pays $500 for a one-year bond that carries an interest rate of 10 percent per year,
how much will she be repaid at the end of the year?
a. $600
b. $510
c. $620
d. $550
e. $500