Figure 4.7 If demand and supply rise in Figure 4.7, then the equilibrium:
A) price rises.
B) price falls.
C) quantity rises.
D) quantity falls.
Firms consider the ________ wage when considering whether to hire additional units of
labor.
A) nominal
B) real
C) minimum
D) normal
Which of the following assets is the most liquid?
A) currency
B) checking accounts
C) stocks
D) real estate
The marginal propensity to save (MPS) is the
A) fraction of income that is saved.
B) the ratio of additional savings to additional income.
C) the ratio of savings to consumption.
D) savings that is not based on the level of income.
Figure 9.4 Refer to Figure 9.4. A decrease in aggregate supply is represented by:
A) a movement from Point B to Point A along .
B) a movement from Point B to Point A along .
C) a shift from to .
D) a shift from to .
The velocity of money can be expressed as:
A) nominal GDP/money supply.
B) real GDP/money supply.
C) real GDP/money demand.
D) money supply/real GDP.
If Say’s Law holds true, then if households save more of their incomes:
A) firms will increase spending by the same amount.
B) the government will increase taxes on savings to discourage it.
C) government spending will increase.
D) the economy will experience a recession.
Hyperinflation causes inefficiency in the economy because:
A) people spend all their time hunting for bargains.
B) people spend none of their time hunting for bargains.
C) people spend all their time hunting for jobs.
D) people spend all their time working.
________ is commonly defined as six consecutive months of declining real GDP.
A) A recession
B) A trough
C) An expansion
D) A peak
The short-run aggregate supply curve is relatively flat because
A) in the short run, prices are flexible but output is equal to potential output.
B) in the long run, prices are flexible but output is equal to potential output.
C) in the short run, prices do not change very much but output may be above, below, or
equal to potential output.
D) in the long run, prices are fixed and output is equal to potential output.
Quantity of Frozen Latte-On-A-Stick Supplied
Table 4.1
Refer to Table 4.1, which shows Flo’s and Rita’s individual supply schedules for frozen
latte-on-a-stick. Assuming Flo and Rita are the only suppliers in the market, what is the
market quantity supplied at a price of $5?
A) 3
B) 12
C) 15
D) 27
Those who believed in Say’s Law believe that saving will:
A) find its way to investors and ultimately will also be spent.
B) cause the economy to have more production than spending.
C) cause the economy to have more spending than production.
D) never be spent.