Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Hyperinflation refers to an inflation rate which exceeds 5 percent per month.
Uncertainty about the future is likely to increase current consumption spending.
An excess supply of dollars will cause an appreciation of the pound relative to the
dollar.
Positive relationships are also referred to as inverse relationships.
Full-employment output is the level of output that is produced when the labor market is
in equilibrium.
Macroeconomics is the study of individual economic markets.
The government strives to operate at neither a deficit nor surplus budget in order to
keep the federal budget
A) balanced.
B) equal to inflation.
C) in line with the stock market.
D) equal to that of other countries.
Checking account balances are included in
A) M1 only.
B) M2 only.
C) both M1 and M2.
D) neither M1 nor M2.
Recall the Application about how the process of securitization in financial markets led
to a rise in the rate of home ownership in the U.S. housing market to answer the
following question(s).Recall the Application. Securitization refers to
A) the federal insurance received by home buyers to protect them from declining home
values.
B) the practice of purchasing loans, repackaging them, and selling them to the financial
markets.
C) the stocks and bonds used as collateral when one financial institution sells mortgages
to another financial institution.
D) the process used by the Federal Reserve to insure home builders against bank
failures.
Which of the following is an example of a real wage?
A) $2400 per month (using 1990 prices)
B) $12 per hour
C) ¬120 million per year
D) All of the above are examples of nominal wages.
A method used to determine the contribution to economic growth from increased
capital, labor and technological progress is called:
A) growth accounting.
B) production function.
C) technological progress.
D) economic growth.
Table 2.1 A group of people has formed a house cleaning and yard
maintenance business. The number of houses or yards that they can clean or maintain in
any given day is depicted in Table 2.1. The opportunity cost of cleaning the first house
in a day is:
A) 0 yards maintained.
B) 1 yard maintained.
C) 2 yards maintained.
D) 20 yards maintained.
When wages or benefits are automatically increased based on the reported inflation rate,
it is called the ________ adjustment.
A) natural flow of money
B) cost-of-living
C) change in exports
D) change in imports
An important source of increasing labor productivity is:
A) an increase in the ratio of capital to labor.
B) an increase in the ratio of labor to capital.
C) a decrease in the ratio of capital to labor.
D) faster growth in the labor force than in the capital stock.
The GDP for the nation of Economia is currently below potential output. If the
adjustment to the long-run equilibrium occurs slowly, the government of Economia is
likely to pursue a policy of
A) increasing government spending to increase aggregate demand.
B) decreasing the money supply to increase aggregate demand.
C) taking no action and allowing the economy to adjust naturally.
D) decreasing government spending to increase aggregate demand.
What is most affected by the expected rate or pace of economic growth?
A) unemployment
B) investment spending
C) government purchases
D) exports
Assuming a constant level of capital in the economy, a rapid increase in population is
likely to:
A) raise both real GDP and real GDP per capita.
B) raise real GDP, but lower real GDP per capita.
C) lower real GDP, but increase real GDP per capita.
D) lower both real GDP and real GDP per capita.
Which of the following trade agreements, which took effect in 1994 and was
implemented over a 15-year period, eliminates all tariffs and other trade barriers
between its members?
A) North American Free Trade Agreement
B) World Trade Organization
C) Asian Pacific Economic Cooperation
D) GATT
If C = 100 + 0.6Y and I = 50, then the equilibrium level of income is:
A) 450.
B) 375.
C) 525.
D) 390.
Table 5.3
Refer to Table 5.3. Suppose this economy produces only the two goods X and Y. If year
1 is the base year, the percentage growth rate in Real GDP between year 2 and year 3 is:
A) about 17 percent.
B) about 90 percent.
C) about 52 percent.
D) about 2 percent.
Net investment equals:
A) GDP minus final sales.
B) gross investment minus final sales.
C) gross investment minus depreciation.
D) depreciation plus GDP.
To explore the rationale for specialization, economists use the
A) marginal principle.
B) principle of opportunity cost.
C) real-nominal principle.
D) principle of marginal exchange.
Specialization and exchange result from differences in productivity that lead to
A) opportunity cost.
B) comparative advantage.
C) absolute advantage.
D) self-sufficiency.
When inflation increases, the:
A) demand for money increases.
B) the quantity demanded for money increases.
C) the demand for money decreases.
D) the quantity demanded for money decreases.
What kind of investment instrument is an IRA, and when is the income earned from an
IRA taxed?
Is it possible for nominal wages to decrease while real wages increase?
What factors determine the level of the interest rate on alternative assets?
What is the difference between income and wealth?
Normative economic analysis answers what question?
