The Fed has been able to achieve a zero rate of inflation throughout most of the 1990s.
In the Full Employment and Balanced Growth Act of 1978, Congress set a target rate of
unemployment. The nation achieves this target rate
a. in most years
b. at least once a year
c. only rarely
d. in election years
e. at least once every five years
Which of the following could not serve as commodity money?
a. diamond
b. gold
c. paper
d. fur
e. silver
At the market equilibrium
a. quantity exceeds price
b. excess demand equals excess supply (and both are zero)
c. price and quantity are equal
d. each seller produces at full capacity
e. everyone who is represented along the demand curve buys the good
A country currently is using all its land to produce wheat and grapes. However, the land
most suited to growing grapes is being used to produce wheat, and the land most suited
to growing wheat is being used to produce grapes. Which of the following statements is
true?
a. Production of both wheat and grapes can be increased by shifting tracts of land to
their best uses.
b. Production of both wheat and grapes can be increased only if more land becomes
available.
c. production of wheat can increase only if production of grapes decreases.
d. Production of grapes can increase only if more labor and machinery become
available.
e. Production of neither wheat nor grapes is possible without more land becoming
available.
The aggregate supply curve describes the same relationship between price and quantity
as a microeconomic supply curve.
If output increases, which of the following would occur?
a. Prices of non-labor inputs, input requirements per unit of output, and unit costs would
all increase, and the economy would move downward along the aggregate supply curve.
b. Prices of non-labor inputs, input requirements per unit of output, and unit costs
would all decrease, and the economy would move downward along the aggregate
supply curve.
c. Prices of non-labor inputs, input requirements per unit of output, and unit costs would
all decrease, and the economy would move upward along the aggregate supply curve.
d. Prices of non-labor inputs, input requirements per unit of output, and unit costs
would all increase, and the economy would move upward along the aggregate supply
curve.
e. Prices of non-labor inputs and input requirements per unit of output would increase,
unit costs would decrease, and the economy would move downward along the
aggregate supply curve.
As a percentage of GDP, non-military government purchases have remained very low
and stable.
Which of the following is not included in the M1 money stock?
a. small time deposits
b. demand deposits
c. checking account deposits
d. travelers’ checks
e. cash in the hands of the public
The real interest rate is calculated as the
a. expected rate of inflation divided by the nominal interest rate
b. real GDP plus the expected rate of inflation
c. nominal interest rate minus real GDP
d. nominal interest rate minus the expected rate of inflation
e. real GDP multiplied by the expected rate of inflation
In the short-run macro model, adjustment toward equilibrium is facilitated by price
changes.
Which of the following would be an example of a flow variable?
a. The amount of money needed to buy a car
b. The amount of money a person has in her or her wallet
c. The amount of income a person earns each week
d. The amount of money a person has in a savings account
e. None of these are flow variables
If the market for a good is initially in equilibrium and there is a rightward shift of the
demand curve, then
a. the equilibrium price will fall
b. there will be a rightward movement along the supply curve
c. the supply curve will also shift to the right
d. the supply curve will shift to the left
e. the demand curve will shift back as consumers react to the higher equilibrium price
In the classical model, when an open economy has balanced trade, Say’s law holds.