Figure 3-4
Refer to Figure 3-4. At a price of $20, how many units will be supplied?
A) 400
B) 500
C) 600
D) 800
The economic growth model predicts that
A) GDP per capita of rich countries will grow more rapidly than in poor countries.
B) GDP per capita of poor countries will grow more rapidly than in rich countries.
C) Governments must centrally direct the economy for growth to occur.
D) GDP per capita of poor countries will never change.
The unemployment rate equals the number of unemployed divided by the ________, all
times 100.
A) number of employed
B) labor force
C) working-age population
D) total population
Which of the following is a macroeconomics question?
A) What determines the minimum wage?
B) What determines the production of video game consoles?
C) What factors determine the price of Oreo cookies?
D) What determines the salaries of college professors?
Suppose real GDP is $13 trillion, potential real GDP is $13.5 trillion, and Congress and
the president plan to use fiscal policy to restore the economy to potential real GDP.
Assuming a constant price level, Congress and the president would need to increase
government purchases by
A) $500 billion.
B) less than $500 billion.
C) more than $500 billion.
D) None of the above are correct. Congress must act to decrease government purchases
in this case.
In May 2012, Facebook stock sold for $38 per share in its initial public offering (IPO).
More than a year later, in June 2013, the value of Facebook stock
A) had more than doubled in price.
B) had declined by nearly 40 percent from the IPO price.
C) languished at the same $38 per share price.
D) had increased by almost 60 percent from the IPO price.
If you want to know the present value of a future payment received in one year, what
formula can you use?
A) Present value equals future payment times the current market rate of interest.
B) Present value equals future payment divided by one plus the rate of interest.
C) Present value equals one plus the rate of interest in decimals divided by future
payment.
D) Present value equals future payments times one plus the rate of interest.
Your roommate argues that he can think of no better situation than living in a
deflationary economy, as prices of goods and services would continuously fall. You
disagree and argue that during a deflation, people can be made worse off because
A) the purchasing power of people’s incomes would increase.
B) the purchasing power of the currency would decrease.
C) the value of the real interest rate will drop below the nominal interest rate.
D) borrowers will have to pay increasing amounts in real terms over time.
A higher inflation rate can lead to lower unemployment if ________ mistakenly expect
the inflation rate to be lower than it turns out to be.
A) workers, but not employers
B) employers, but not workers
C) both workers and employers
D) neither workers nor employers
Table 4-3
Refer to Table 4-3. The table above lists the marginal cost of polo shirts by Marko’s, a
firm that specializes in producing men’s clothing. If the price of polo shirts decreases
from $15 to $10
A) consumers will buy no polo shirts.
B) the marginal cost of producing the third polo shirt will increase to $25.
C) producer surplus will fall from $13 to $3.
D) there will be a shortage of polo shirts.
Who controls a sole proprietorship?
A) stockholders
B) bondholders
C) the owner
D) all of these
Table 14-1
Refer to Table 14-1. Suppose a transaction changes a bank’s balance sheet as indicated
in the T-account, and the required reserve ratio is 10 percent. As a result of the
transaction, the bank has excess reserves of
A) $0.
B) $400.
C) $3,600.
D) $4,000.
If Norwegian workers are more productive than Albanian workers, then trade between
Norway and Albania
A) cannot take place because Norwegian goods and services will be less expensive than
Albanian goods and services.
B) will take place so long as each country has a comparative advantage in a good or
service that buyers in the other country want.
C) cannot take place until Albanian workers become more productive.
D) can take place only if Albania has an absolute advantage in producing a good or
service Norwegian buyers want.