A large technological improvement will shift the short-run aggregate supply curve to
the right.
Excess supply in an unregulated market will cause the price of a product to fall.
According to the real business cycle theory, technological progress is responsible for
fluctuations in output.
Inflation makes money an imperfect store of value.
Trade is only beneficial if a nation has an absolute advantage in producing all products.
When the inflation rate exceeds 50 percent per month, the economy is experiencing:
A) hyperinflation.
B) unanticipated inflation.
C) hyperdeflation.
D) anticipated inflation.
Which of the following is a factor that economists have identified that can shift the
natural rate of unemployment?
A) changes in demographics
B) changes in labor productivity
C) institutional changes
D) All of the above are correct.
Recall Application 2, “How Fast to Sail?” to answer the following questions:
Based on the Application, the marginal cost of sailing a ship faster is:
A) more cargo delivered per year.
B) more fuel cost incurred.
C) less fuel costs incurred.
D) less cargo delivered per year.
By the first years of the 21st century, the rate of inflation in the United States had fallen
to between ________ percent.
A) 1 and 2
B) 4 and 5
C) 5 and 6
D) 8 and 10
Diminishing (marginal) returns to labor implies that:
A) as labor increases output increases.
B) as output increases, labor increases.
C) as labor increases, output decreases.
D) as labor increases, labor productivity decreases.
Figure 18.3
Refer to Figure 18.3. With a tariff, the per unit government revenue is:
A) $0.
B) $2.
C) $8.
D) $10.
Recall Application 3, “A Closer Look at the 2009 Stimulus Package,” to answer the
following questions:
According to the Application, the 2009 stimulus package was also known as:
A) the Recovery and Reinvestment Act of 2009.
B) the Quantitative Easing Act of 2009.
C) the Banking and Automobile Industry Bailout of 2009.
D) the Discovery and Investment act of 2009.
An individual who cannot find a job because his or her job skills have become obsolete
is an example of:
A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) seasonal unemployment.
Daily Output of Russia and Panama
Table 18.1
Refer to Table 18.1. The opportunity cost of a hat in Russia is
A) 1/3 of a glove.
B) 1/2 of a glove.
C) 2 gloves.
D) 3 gloves.
Figure 1A.1
Refer to Figure 1A.1. If the hours worked per week is 20, the income per week is
A) 50.
B) 100.
C) 150.
D) 200.
Figure 14.1 Refer to Figure 14.1. Which of the following events can not cause a
movement from Point E to Point A?
A) an increase in income
B) an increase in the price level
C) a decrease in the interest rate
D) none of the above
Table 13.1
Refer to Table 13.1. First Commercial Bank’s total loans equal $ ________.
A) 1,050,000
B) 1,200,000
C) 1,150,000
D) 1,250,000
Recall the Application about the links between presidential elections and
macroeconomic performance to answer the following question(s). Early theories on the
links between presidential elections and macroeconomic performance focused on
incumbent presidents trying to manipulate the economy in their favor to gain reelection.
Subsequent research began to incorporate other factors. The first innovation was
recognizing that political parties can have different goals or preferences on how to
manipulate the economy. In the United States, Republicans historically have been more
concerned about fighting inflation, whereas Democrats have concentrated on reducing
unemployment. The second major innovation was recognizing that the public would
anticipate that politicians will try to manipulate the economy before an election.
The classic political business cycle would have a politician following
A) expansionary policies before an election, and contractionary policies after the
election.
B) contractionary policies before an election, and expansionary policies after the
election.
C) expansionary policies before and after an election.
D) contractionary policies before and after an election.
Figure 18.1
Refer to Figure 18.1. The opportunity cost of hang gliders in the United States is
A) 1/4 of a bicycle.
B) 1/3 of a bicycle.
C) 3 bicycles.
D) 4 bicycles.
What gives money value under a fiat system?
A) Fiat money is backed by gold.
B) The supply of fiat money is controlled by the government.
C) Fiat money is also a commodity.
D) Fiat money is the same as Treasury bonds.
Figure 4.3 illustrates the demand for tacos. If people expect the price of tacos to
decrease in the near future, this would most likely bring about a movement from
A) point a to point .
B) point c to point a.
C) D2 to D0.
D) D0 to D1.
If each of us could produce everything we needed for ourselves, we would be
considered to be ________.
What happens to the real value of money in an economy experiencing hyperinflation?
Suppose that the government increases a tax paid by employers for hiring workers (for
example, social security). What are the likely effects on real wages, output and
employment? What are the likely magnitudes of these effects?
Define the Phillips Curve. Graphically illustrate the relationship between the inflation
rate and the unemployment rate.
Describe the changes in the variables that will cause demand for a product to decrease,
shifting the demand curve to the left.
What is meant by the term “marginal change”?
Distinguish M1 from M2.
Consider two individuals, Ozzy and Sharon, who produce toy boats and yoyos. Ozzy’s
and Sharon’s hourly productivity are as follows:
Who has the absolute advantage or comparative advantage in the production of yoyos
or boats?