The most liquid asset(s) of all is (are)
a. cash in the hands of the public
b. cash in the hands of banks
c. demand deposits held by households and businesses at commercial banks
d. travelers’ checks
e. credit cards
The economist that gave us the proposition that ‘supply creates its own demand” was
a. Adam Smith
b. Jean Baptiste Say
c. Marc Lieberman
d. John Maynard Keynes
e. Robert Hall
The events of September 11, 2001 had a major direct impact on the economy’s GDP.
One of the major reasons why the US trade deficit with China has grown in the last 10
years is that
a. the Yuan is seriously undervalued relative to where it would need to be to lead to a
zero trade deficit.
b. the yuan is seriously overvalued relative to where it would need to be to lead to a
zero trade deficit.
c. currency markets can never bring trade into balance, even in the long run.
d. US productivity has fallen recently.
e. the U.S. has suffered two sharp recessions.
The major reasons why economists have grown increasingly skeptical about
countercyclical fiscal policy are
a. irreversibility, forward looking behavior, and the reaction of the Federal Reserve.
b. irreversibility, forward looking behavior, and the negative effects of imports.
c. timing problems, irreversibility, and forward looking behavior,
d. timing problems, irreversibility, and the reaction of the Federal Reserve.
e. timing problems, irreversibility, forward looking behavior, and the reaction of the
Federal Reserve.
A recession occurs only if there are two consecutive quarters of declining real GDP.
When there is an improvement in technology, holding all else constant,
In an Israeli factory, each worker can produce 2/5 of a shirt in an hour or 1/10 of a pair
of pants in an hour. If there are 500 workers in the factory, what is opportunity cost of
producing one shirt?
a. 1 pair of pants
b. 4 pairs of pants
c. 1/2 pair of pants
d. 1/4 pair of pants
e. 2 pairs of pants
In a typical economy, the dollar value of the total output for a period will equal the sum
of consumption spending, planned investment spending, government spending, and net
tax revenue.
If consumption of a good creates positive externalities, then
An increase in the discount rate will lead to a decrease in the money supply.
When finding GDP algebraically, what is the final, unique equation that can be used?
a. GDP = C + I + G + NX
b. GDP = AE + NX + T
c. GDP = C + I + G + NX
d. GDP = Y + T + G
e. GDP = C + I + NX
Property law
If the money demand curve shifts rightward, the AD curve also shifts rightward.