If Chris can produce a service using fewer resources than Pat would, then Chris
If the Federal Reserve sells $1,000 in bonds and, as a result, the money supply
decreases by $2,500, what is the required reserve ratio?
a. 0.4
b. 2.5
c. 0.5
d. 0.1
e. 0.2
A firm’s labor demand curve is derived from the demand for the goods and services it
produces.
According to Figure 16-6, all of the following statements are correct except
Figure 16-6
a. Chile has the absolute advantage in the production of bicycles
b. Chile has the comparative advantage in the production of bicycles
c. India has the comparative advantage in the production of bicycles
d. India has the absolute advantage in the production of wagons
e. India has the comparative advantage in the production of wagons
A typical market supply curve
If the marginal propensity to consume is 2/3 and autonomous consumption spending
increases by $3 trillion, what is the change in GDP?
a. $3 trillion
b. $1 trillion
c. -$3 trillion
d. $9 trillion
e. -$9 trillion
When nations trade according to their comparative advantages,
a. one nation has an absolute advantage in producing all goods
b. all opportunity costs of production are the same
c. world economic efficiency falls
d. at least one country is made better off through trade
e. at least one country is made worse off through trade
The marginal approach to profit
If investment spending decreases by $500 billion and if MPC = 0.6,
a. equilibrium GDP will rise by $1,250 billion
b. equilibrium GDP will fall by $500 billion
c. equilibrium GDP will fall by $1,250 billion
d. equilibrium GDP will rise by $500 billion
e. nothing will happen in the short run
Fiscal policy is
a. a change in money supply designed to change total spending.
b. a change in interest rates designed to change total spending.
c. a change in government purchases or net taxes designed to change total spending.
d. a change in government regulations designed to change total spending.
e. a change in policy stance by the Federal Reserve designed to change total spending.
To construct a graph that would enable us to find equilibrium GDP, we would need to
plot
a. the consumption-income line
b. a line showing the sum of consumption and investment at each income level
c. the investment spending line
d. the consumption-income line and the government expenditures line
e. an aggregate expenditure line and the 45-degree line from the origin
Creating money is the same as creating wealth.
If a ship-building company purchases $250 million worth of steel in one year but does
not use it, this is considered investment spending.
Which of the following is the relationship between the required reserve ratio (RRR) and
the demand deposit multiplier?
a. The demand deposit multiplier = 1/RRR
b. The demand deposit multiplier = RRR ´ change in reserves
c. The demand deposit multiplier = 1/(1 + RRR)
d. RRR = demand deposit multiplier
e. The demand deposit multiplier = 1/(1 – RRR).
Macroeconomics studies the determination of
