Ceteris paribus, when households spend less but do not supply of all their additional
saving to the loanable funds market,
a. total spending will exceed below total income, satisfying Say’s law.
b. total spending will drop below total income, violating Say’s law.
c. total spending will drop below total income, thereby satisfying Say’s law.
d. total spending will equal total income, violating Say’s law.
e. this will contribute to an economic expansion.
Open market sales of bonds by the Federal Reserve do not have a direct effect on the
government budget.
Yuan recently completed his college degree and is entering the labor market for the first
time. He has been submitting applications and has been interviewed twice in the last
two weeks, but so far has not found a job. Yuan would be classified as
a. frictionally unemployed
b. seasonally unemployed
c. structurally unemployed
d. cyclically unemployed
e. not yet in the labor force
The aggregate supply curve is found by summing up the supply curves for all the
different products in the economy.
If inflation is fully anticipated and if there are no restrictions on contracts, then inflation
will not redistribute purchasing power.
The total loss associated with the 2005 Hurricanes Katrina and Rita are estimated to be
between
a. $40 and $60 billion
b. $69 and $130 billion
c. $69 and $80 billion
d. $70 and $80 billion
e. $140 and $200 billion
Which of the following is the most sensitive to interest rate changes?
a. The demand for non-durable goods.
b. The demand for inexpensive goods.
c. The demand for durable goods.
d. The demand for necessities.
e. The demand for services.
Since the late 1970s which of the following groups has become worse off?
a. Highly-skilled workers
b. Technical workers
c. Less-skilled workers
d. Scientists and other workers who require a lot of education
e. All types of workers
Which of the following would be included in the GDP Price Index, but not the
Consumer Price Index?
a. The price of a pair of shoes
b. The price of coffee
c. The price of a used car
d. The price of a bar of soap
e. The price of an aircraft carrier
If a demand shock causes the economy to move to a real GDP level that is below its full
employment level, then
a. we refer to this as a positive demand shock.
b. the economy will remain at this point in the long run.
c. the AS curve will adjust in the long run until the economy returns to full
employment.
d. the AD curve will move back to its original position in the long run.
e. the unemployment rate will decline.
A major difference between the Federal Reserve System and foreign central banks is
that the
a. Fed is considered part of our government while central banks in other countries are
not part of the government
b. Fed is completely independent of government influence while central banks in other
countries are under government influence
c. Fed deals with less money than its foreign counterparts
d. U.S. does not have a single central bank like its foreign counterparts
e. purpose of the Fed is to make a profit while other countries’ central banks exist to
serve the public.
John Maynard Keynes was the author of
a. An Economic History of the Great Depression.
b. The General Theory of Employment, Interest, and Money.
c. The Wealth of Nations.
d. The Principles of Political Economy and Taxation.
e. Macroeconomic Policy.
In Figure 3-11, suppose that initially the market is in equilibrium as defined by the
demand and supply curves D1 and S1. Which price/quantity combination could result
from a decrease in the wages paid to workers?
a. $100 and 50,000
b. $120 and 50,000
c. $75 and 75,000
d. $120 and 75,000
e. $120 and 100,000
At present, what is the approximate natural rate of unemployment in the United States?
a. 4.5 percent
b. 5.5 percent
c. 7 percent
d. 8.5 percent
e. 2.5 percent
An increase in the price level will increase the interest rate, which will decrease
investment spending and shift aggregate demand to the left.
Which of the following is not an accurate description of the point at which the labor
supply and labor demand curves meet?
a. The point at which the market for labor has cleared
b. The real wage at which the quantity of labor demanded is equal to the quantity of
labor supplied
c. The point at which there is no frictional unemployment
d. The point at which there is no unemployment
e. The wage at which the number of workers firms want to hire is equal to the number
of people who want jobs