In response to accounting scandals in 2002, the federal government passed legislation
requiring that corporate directors have a certain level of expertise with financial
information and mandating that chief executive officers personally certify the accuracy
of financial statements. What is the name of this legislation?
A) the Accountant Reliability Act
B) the 24th amendment to the Constitution
C) the Kennedy-Lott Act
D) the Sarbanes-Oxley Act
In August 1979, President Jimmy Carter appointed ________ as chairman of the Board
of Governors of the Federal Reserve System.
A) Ben Bernanke
B) Alan Greenspan
C) G. William Miller
D) Paul Volcker
Figure 30-4
The equilibrium exchange rate is at A, $3/pound. Suppose the British government pegs
its currency at $4/pound. Speculators expect that the value of the pound will drop and
this shifts the demand curve for pounds to D2. After the shift,
A) there is a shortage of pounds equal to 600 million.
B) there is a surplus of pounds equal to 400 million.
C) there is a shortage of pounds equal to 400 million.
D) there is a surplus of pounds equal to 600 million.
E) there is a shortage of pounds equal to 200 million.
Expansionary monetary policy to prevent real GDP from falling below potential real
GDP would cause the inflation rate to be ________ and real GDP to be ________.
A) higher; higher
B) higher; lower
C) lower; higher
D) lower; lower
The consumer price index is the
A) cost of a market basket of goods and services typically consumed in the base year.
B) cost of a market basket of goods and services typically consumed in the current
period.
C) average of the prices of the goods and services purchased by a typical urban family
of four.
D) average of the prices of new final goods and services produced in the economy over
a period of time.
Successful price discrimination cannot take place if
A) the market is perfectly competitive.
B) the market can be segmented into different buyer groups.
C) customers are not able to resell the product.
D) the demand curve facing the firm is downward sloping.
Which of the following are implicit costs for a typical firm?
A) the cost of labor
B) the opportunity cost of capital owned and used by the firm
C) the cost of energy used in production
D) a business licensing fee
If, when a firm doubles all its inputs, its average cost of production decreases, then
production displays
A) diminishing returns.
B) economies of scale.
C) diseconomies of scale.
D) declining fixed costs.
Suppose the U.S. dollar is backed by one-sixth of an ounce of gold and the British
pound is backed by one-third of an ounce of gold. The exchange rate between the U.S.
dollar and the British pound equals ________ per pound.
A) $0.50
B) $1.00
C) $1.50
D) $2.00
Consider the following pieces of information:
a. According to Bonnie Reyes, president and chief operating officer of Better Investing,
a national organization of investment clubs, women have traditionally made up about
60 percent of the membership of investment clubs. By contrast, less than a third of
team-managed mutual funds on Wall Street have even one woman on the management
team.
b. Research conducted by professors E. Brooke Harrington and Max Planck concluded
that mixed investment clubs, on average, outperformed the typical single-sex
investment club.
c. The lack of gender diversity in Wall Street could be influenced by its reputation,
according to professor Harrington, “for being inhospitable to women.”
Source: Michael Hulbert, “Strategies: At some Funds, a Gender Communications
Gap,” The New York Times, October 7, 2007, Sunday Money, page 5. The information
presented is an example of
A) economic discrimination.
B) a negative feedback loop.
C) marginal productivity theory.
D) the absence of comparable worth.
If the number employed is 190 million, the number unemployed is 10 million, and the
working-age population is 250 million, then the labor force participation rate is
A) 4%.
B) 5.2%.
C) 60%.
D) 76%.
E) 80%.
Which of the following would cause the dollar to appreciate?
A) an increase in the demand for dollars
B) a decrease in the demand for dollars
C) an increase in the supply of dollars
D) an increase in the demand for imports from foreign countries
Jeremy is thinking of starting up a small business selling NASCAR memorabilia. He
asks his friend, Carmen, if she’d like to join him in setting up a partnership to start the
business. What is one disadvantage in joining the partnership that Carmen should
consider?
A) Carmen should realize that profits in the partnership will be reduced by dividend
payments to shareholders.
B) Carmen should realize that, as an owner of the business, she will be personally
responsible for the debts of the business.
C) Carmen should realize that the profits of the business will also be taxed as dividend
income, so she faces the potential for double taxation of that business income.
D) Carmen should realize that the Jeremy will have complete control over the business
because it was his idea.
Figure 15-6
In the figure above, if the economy is at point A, the appropriate monetary policy by the
Federal Reserve would be to
A) lower interest rates.
B) raise interest rates.
C) lower income taxes.
D) raise income taxes.
Technological advancements have led to lower prices and an increase in the sale of
digital cameras. How does this affect the digital photo printing paper market?
A) The demand curve for digital photo printing paper shifts to the right.
B) The demand curve for digital photo printing paper shifts to the left.
C) The supply curve for digital photo printing paper shifts to the right.
D) The supply curve for digital photo printing paper shifts to the left.
Figure 3-5
In a free market such as that depicted above, a surplus is eliminated by
A) a price increase, increasing the supply and decreasing the demand.
B) a price decrease, decreasing the supply and increasing the demand.
C) a price decrease, decreasing the quantity supplied and increasing the quantity
demanded.
D) a price increase, increasing the quantity supplied and decreasing the quantity
demanded.
A tax bracket is
A) the percent of taxable income paid in taxes at a specific income bracket.
B) the income range within which a particular tax rate applies.
C) the type of tax structure for which a range of taxes applies.
D) the range, from the high to the low tax rate, of a particular type of tax.
Accumulating debt poses a problem for the U.S. federal government because
A) it is currently in danger of defaulting on the debt.
B) a large debt-to-GDP ratio causes crowding out.
C) building roads and bridges do not yield enough benefits to justify their cost.
D) the debt has to ultimately be paid off.