Recall the Application about the lack of property rights in Peru, and why clear property
rights are important for economic growth in developing countries, to answer the
following question(s). Clear property rights give owners an incentive to make long-term
investments in their property, and are vital for the property owners to be able to borrow
funds.According to this Application, clear property rights
A) are important for economic growth in developed nations, but not in developing
nations.
B) hinder economic growth in developing nations.
C) have no impact on the economic growth of developed nations.
D) are important for economic growth in developing and developed nations.
Suppose that the CPI in Egypt was 111 in 2011 and 122 in 2012. The inflation rate
between those two years was approximately
A) 4.8 percent.
B) 5.5 percent.
C) 9.9 percent.
D) 11 percent.
According to the principle of diminishing returns, if the number of workers is increased
beyond the point of diminishing returns, then the additional worker:
A) increases total output by the same amount as previous workers.
B) increases total output by more than the amount of previous workers.
C) increases total output by less than the amount of previous workers.
D) decreases total output.
Employment status of the working age
population of Metropolis is approximately:
Table 6.1Given the data in Table 6.1, the labor force participation rate of Metropolis is
approximately
A) 96 percent.
B) 91 percent.
C) 83 percent.
D) 78 percent.
When generating a political business cycle, a politician chooses lower unemployment in
the ________ over inflation and crowding out in the ________.
A) short run; long run
B) short run; short run
C) long run; long run
D) long run; short run
Figure 14.4 Refer to Figure 14.4. If the Fed wants to raise the economy’s market
interest rate from 6 percent to 8 percent, it needs to ________.
A) sell government bonds
B) buy government bonds
C) increase
D) keep constant
Suppose that the CPI in Year 1 is 250 and the CPI in Year 2 is 100. The rate of inflation
between Year 1 and Year 2 is:
A) 14.28%.
B) -150%.
C) 40%.
D) -60%.
Crowding out refers to
A) increases in consumption, investment, or net exports caused by an increase in
government purchases.
B) decreases in consumption, investment, or net exports caused by an increase in
government purchases.
C) reductions in tax revenues associated with increases in tax rates.
D) increases in tax revenues associated with increases in tax rates.
Which of the following situations will arise in the domestic market following the
imposition of a voluntary export restraint?
A) Imports increase, domestic production increases, prices increase.
B) Imports decrease, domestic production increases, prices increase.
C) Imports increase, domestic production decreases, prices decrease.
D) Imports decrease, domestic production increases, prices decrease.
Assuming all excess reserves are loaned out, if the reserve ratio is 40 percent, the
money multiplier will be equal to
A) 2.
B) 2.5.
C) 4.
D) 6.
The president of the ________ Federal Reserve Bank is always a member of the
FOMC.
A) Minneapolis
B) Boston
C) Washington, D.C.
D) New York