Exhibit 12-1
The required reserve ratio is
a. 0.10.
b. 0.15.
c. 0.20.
d. 0.25.
e. 0.30.
Points that lie inside (or below) the PPF are
a. unattainable.
b. attainable and productive efficient.
c. attainable but productive inefficient.
d. attainable and neither productive efficient nor productive inefficient.
In the U.S., studies have shown that as real incomes have risen, per capita demand for
food has been increasing by a much lower percentage.
a. True
b. False
A fall in the expected price level leads to an expectation that real wages will
____________, which will cause people to work __________, shifting the SRAS curve
_______________.
a. rise; more; rightward
b. rise; less; leftward
c. fall; more; rightward
d. fall; less; leftward
The Fed
a. can examine the books of a member bank without warning.
b. can examine the books of a member bank after giving advance notice.
c. can examine the books of a member bank with the bank’s permission.
d. is never allowed to see the books of a privately owned bank.
The supply curve for space on a freeway is perfectly vertical at any given point in time.
a. True
b. False
Suppose the economy starts off producing Natural Real GDP. Next, aggregate supply
rises, ceteris paribus. As a result, the price level falls in the short run. In the long run,
when the economy has moved back to producing Natural Real GDP, the price level will
be
a. higher than it was in short-run equilibrium.
b. lower than it was in short-run equilibrium but higher than it was originally (before
aggregate supply rose).
c. lower than it was originally (before aggregate supply rose).
d. equal to what it was originally (before aggregate supply rose).
Which of the following is false?
a. For bond buyers, the higher the yield the better it is for them.
b. For bond buyers, the higher the price of the bond the better it is for them.
c. For bond buyers, the lower the yield the worse it is for them.
d. The term yield on a bond is the same as the term interest rate on a bond.
The downside to a bank having a high leverage ratio is that a decline in asset value
magnifies losses.
a. True
b. False
International feedback effects ________________ the impact on the unemployment rate
of __________________ monetary policy.
a. dampen; only expansionary
b. dampen; expansionary and contractionary
c. amplify; only contractionary
d. amplify; contractionary and expansionary
Here are three things you could do if you do not attend your economics class: watch
television with some friends (you value this at $25), read a good novel (you value this
at $13), or go in to work (you could earn $20 during the economics class). The
opportunity cost of going to your economics class is
a. $20, because this is the only alternative of the three where you actually receive a
monetary payment.
b. $13, because this is the lowest valued alternative forfeited.
c. $25, because this is the highest valued alternative forfeited.
d. $58, because this is the total dollar sum of the alternatives forfeited.
Velocity is the average number of times a dollar is spent to buy
a. final goods and services in a year.
b. final and intermediate goods and services in a year.
c. final goods, but not services, in a year.
d. services in a year.
If consumption changes because of a change in a factor other than the price level, then
the
a. economy moves from one point on an AD curve to another point on the same curve.
b. AD curve shifts.
c. economy moves from one point on a short-run aggregate supply (SRAS) curve to
another point on the same curve.
d. SRAS curve shifts.
e. none of the above
Suppose Smith wants one iPhone no matter what the price is between $0 and $350,
Jones wants one iPhone no matter what the price is between $0 and $200, and Griffith
wants one iPhone no matter what the price is between $0 and $450.In this case, each
individual buyer€s demand curve will be __________________ and the market demand
curve will be __________________.
a. downward sloping; vertical
b. vertical; downward sloping
c. vertical; vertical
d. downward sloping; downward sloping
Which of the following goods is an intermediate good?
a. lettuce that a restaurant buys to put on sandwiches
b. tires that a car company buys to put on the cars it produces
c. a television set that Chi-Mai buys to put in her college dorm room
d. a and b
e. b and c
If the money supply is $900, velocity is 6, then in the equation of exchange, PQ is
a. $150.
b. $1,500.
c. $2,400.
d. $3,600.
As the dollar depreciates, the foreign price of United States goods
_________________, ultimately shifting the United States AD curve _____________.
a. rises; rightward
b. rises; leftward
c. falls; rightward
d. falls; leftward
Globalization
a. is the growing integration of the national economies of the world to such an extent
that a single worldwide economy may be emerging.
b. is any type of foreign trade.
c. is specifically foreign trade between countries that have entered into a formal free
trade agreement.
d. will necessarily lead to higher unemployment rates in the United States.