The demand curve for a foreign currency
a. slopes upward
b. slopes downward
c. is horizontal
d. has a slope of 45 degrees
e. is vertical
Because it lowers the amount of output per person, unemployment results in
a. a shift in the economy’s production possibilities frontier
b. increased workers’ incomes
c. optimism about economic growth
d. a lower standard of living
e. rapid inflation
In the short run, the price level
a. will decrease if unit costs and markups both increase throughout the economy
b. will remain stable if unit costs increase throughout the economy
c. is unimportant in macroeconomics
d. will increase if unit costs increase throughout the economy
e. is determined by the Fed.
Which of the following would not cause the consumption-income line to shift upward?
a. An increase in income
b. An increase in autonomous consumption
c. A decrease in the interest rate
d. Greater optimism about economic conditions
e. An increase in household wealth
Whenever spending changes, which of the following dampens the overall effect on
GDP?
a. A change in the money supply.
b. A change in taxes.
c. A change in the interest rate.
d. A change in the public’s expectations.
e. None of the above.
If two economists disagree about the magnitude of employment effects of a proposed
change in government policy, the difference in opinion
a. must be positive in nature
b. must be normative in nature
c. is more likely to be normative than positive
d. is more likely to be positive than normative
e. would be neither positive nor normative in nature
If sellers decide to sell more calculators by mass producing them and lowering the price
so consumers will buy more, the supply and demand curves will both shift to the right.
The means of payment function of money refers to the common unit for measuring how
much something is worth
Which of the following is a reason why the money demand curve might shift?
a. an increase in the interest rate
b. a change in the money supply
c. open market purchases of bonds by the Federal Reserve
d. changes in the required reserve ratio
e. new methods of making payments that replace money
A low rate of inflation, whereby prices increase so slowly from week to week that we
hardly notice the change, is referred to as
a. zero inflation
b. creeping inflation
c. nominal inflation
d. real inflation
e. episodic inflation
What would a rightward shift of the labor demand curve indicate?
a. Firms want to hire more workers than before at any given wage rate.
b. Households want to supply more hours of work than before at any given wage rate.
c. Firms want to pay a lower wage rate than before at any given level of employment.
d. Households want to supply fewer hours of work than before at any given wage rate.
e. Firms want to hire less workers than before at any given wage rate.
Which of the following are considered sources of bias in the CPI?
a. Prices changing too rapidly; substitution, new technologies; and quality changes.
b. Prices changing too rapidly; substitution; quality changes; and growth in discounting.
c. Quality changes; new technologies; prices changing too rapidly; and growth in
discounting.
d. Substitution; new technologies; prices changing too rapidly; and growth in
discounting.
e. Quality changes; new technologies; substitution; and growth in discounting.
If the Fed conducts an open market purchase of bonds, which of the following will
happen?
a. The interest rate will decrease, the aggregate expenditure line will shift upward, and
the aggregate demand curve will shift leftward.
b. The interest rate will increase, the aggregate expenditure line will shift upward, and
the aggregate demand curve will shift rightward.
c. The interest rate will decrease, the aggregate expenditure line will shift upward, and
the aggregate demand curve will shift rightward.
d. The interest rate will decrease, the aggregate expenditure line will shift downward,
and the aggregate demand curve will shift rightward.
e. The interest rate will increase, the aggregate expenditure line will shift downward,
and the aggregate demand curve will shift leftward.
If there is an increase in the demand for automobiles, and at the same time auto workers
receive a substantial raise, what will happen to equilibrium price and quantity in the
automobile market?
a. Price and quantity will rise.
b. Price and quantity will fall.
c. Price will rise; quantity will fall.
d. Quantity will rise; price change cannot be determined.
e. Price will rise; quantity change cannot be determined.