A(n) ________ is a trade policy by which a nation agrees to limit its exports of a good
in order to avoid more restrictive trade policies.
A) tariff
B) voluntary export restraint
C) import quota
D) import ban
Suppose that technological advancement makes labor more productive. What is likely
to happen wages and to potential output?
A) Wages increase and potential output increases.
B) Wages increase and potential output decreases.
C) Wages decrease and potential output increases.
D) Wages decrease and potential output decreases.
In 2010, which of the following countries had the highest share of investment spending
in GDP?
A) China
B) the United States
C) Germany
D) France
If the government prints a $500 bill and it takes the government $2.50 to print the $500
bill, then the $497.50 net revenue that the government raises is called:
A) seignorage.
B) a Treasury bond.
C) federal funds.
D) a subsidy.
Figure 11.2
Refer to Figure 11.2. The consumption functions and :
A) have the same marginal propensity to consume.
B) have the same marginal propensity to save.
C) differ in terms of the amount of consumption that does not depend on income.
D) all of the above
Figure 4.5 illustrates a set of supply and demand curves for hamburgers. A decrease in
supply and a decrease in quantity demanded are represented by a movement from
A) point a to point d.
B) point c to point d.
C) point c to point a.
D) point to point c.
Figure 7.1
Refer to Figure 7.1. Start from initial equilibrium. If the economy experiences increased
immigration, the new real wage could be ________ and the new amount of labor
employed could be ________.
A) Z; C
B) Y; A
C) X; C
D) Z; A
If a computer company will sell a laptop only if the price is $400 or higher, then $400 is
known as:
A) the minimum supply price.
B) the input cost price.
C) the minimum production cost.
D) the minimum average cost.
The returns to education are
A) lowest in developing nations.
B) highest in developed nations.
C) highest in developing nations.
D) never reflected in the wages of workers.
When GDP is measured in “current prices” it is known as the
A) real GDP.
B) nominal GDP.
C) real GNP.
D) nominal GNP.
Recall Application 1, “Increasing Life Expectancy and Aging Populations Spur Costs of
Entitlement Programs,” to answer the following questions:
According to the application, some economists suggest that in order to reduce the
burden of entitlement programs on future generations, the government should:
A) eliminate social security.
B) make retiring illegal.
C) print money to help pay for the costs.
D) make people save and invest for the future.
Arguments for the balanced budget amendment include all of the following EXCEPT
A) a balanced budget amendment would exert fiscal discipline on the federal
government.
B) a balanced budget amendment would increase capital formation.
C) a balanced budget amendment would limit Congress from using fiscal policy during
a recession.
D) a balanced budget amendment would reduce the taxation burden on future
generations.
The level of output produced when the labor market is in equilibrium is called
A) natural output.
B) target output.
C) product market equilibrium output.
D) full-employment output.
If the consumption function is C = 100 + 0.9Y, then the multiplier is:
A) 10.
B) 0.9.
C) 9.
D) 1/9.
Ceteris paribus is the Latin expression meaning:
A) other variables are held fixed.
B) let buyer beware.
C) think at the margin.
D) for every action there is an equal and opposite reaction.
According to the U.S. Secret Service, approximately $2.6 billion of U.S. paper currency
in circulation is counterfeit. Undetected counterfeit currency which is spent and
circulated in the marketplace is an example of the counterfeit currency being used as a
A) medium of exchange.
B) commodity money.
C) store of value.
D) bank reserve.
Which of the following would prevent a farmer from making improvements to land to
make it more valuable?
A) the lack of property rights
B) a government that enforces contracts
C) the lack of education
D) the presence of a market economy
Which of the following curves is drawn as a vertical line?
A) the short-run aggregate supply curve
B) the long-run aggregate supply curve
C) the short-run aggregate demand curve
D) the long-run aggregate demand curve
Suppose that the Surgeon General releases a study suggesting that orange juice
consumption increases the risk for diabetes. As a result of the study, we could predict
that the demand curve for orange juice will ________ and the equilibrium price will
________.
A) increase; increase
B) increase; decrease
C) decrease; decrease
D) decrease; increase
Which of the following uses of tax revenues collected by the government leads to
increased capital deepening?
A) building roads
B) increased foreign aid
C) Medicare payments
D) Social Security payments