Exhibit 14-2
The economy moves from point 1 to 2 to 3 to 4 to 5 to 6 to 7. What explains this?
a. an initial decrease in SRAS, followed by alternating rises in AD and decreases in
SRAS
b. continued increases in AD
c. continued decreases in SRAS
d. an initial rise in the price level, followed by a decrease in SRAS, and then alternating
increases in AD and decreases in SRAS
e. continued increases in SRAS
A budget deficit
a. occurs when government expenditures exceed tax revenues.
b. occurs when tax revenues exceed government expenditures.
c. occurs when transfer payments exceed tax revenues.
d. will always result when Congress and the president cannot agree on expenditures.
e. occurs when monetary policy works in the opposite direction of fiscal policy.
According to the text, the _______________ is currently the primary reserve currency.
a. Chinese renmimbi
b. euro
c. U.S. dollar
d. Japanese yen
e. British pound
Suppose that for a given good demand increases and supply increases at the same time.
If demand increases by a lesser amount than supply increases, then equilibrium price
__________ and equilibrium quantity __________ for that good.
a. rises; falls
b. falls; falls
c. rises; rises
d. falls; rises
Exhibit 1-2
Based on the data provided in this table,what type of relationship exists between
variables X and Y?
a. inverse
b. direct
c. independent
d. There is no relationship between variables X and Y.
Which of the following will not shift a supply curve?
a. a change in the price of relevant resources
b. a change in the good’s own price
c. a change in the number of sellers
d. a change in per-unit costs brought about by a change in taxes
The supply curve of bonds is graphed as a vertical line.
a. True
b. False
Something that provides disutility is called a
a. good.
b. want.
c. need.
d. bad.
e. none of the above
When the Fed conducts open market operations, the impact of the buying or selling of
bonds will include changes in
a. the money supply.
b. interest rates.
c. the expected rate of inflation.
d. a and c
e. a, b and c
Suppose the price level is rising and it is widely forecast to rise even further. This
forecast might cause __________ of some consumption plans, resulting in __________
the AD curve.
a. postponement; a rightward shift of
b. postponement; a leftward shift of
c. acceleration; a rightward shift of
d. acceleration; movement down along
The economist who, in his presidential address to the American Economic Association
in 1967, attacked the idea of a permanent downward-sloping Phillips curve was
a. A. W. Phillips.
b. Paul Samuelson.
c. Milton Friedman.
d. Robert Lucas.
e. Thomas Sargent.
Exhibit 34-8
Assume that the current price of sugar in the United States is $300 per ton (which
includes a $100 per ton tariff on sugar imports). Consumers’ surplus is equal to the area
__________ while producers’ surplus is equal to the area __________.
a. A + B + C + D + E + F;G + H + I + J + K
b. A + C + G;B + D + E + F
c. A + B;C + G
d. A + C;G
e. A + C;B + D + E + F
The simple quantity theory of money assumes that
a. velocity and Real GDP are constant.
b. only velocity is constant.
c. only the money supply is constant.
d. only the price level is constant.
Use the information provided in Exhibit 11-4
If a person’s taxable income is $110,000, how much does he pay in taxes?
a. $21,750
b. $33,000
c. $24,750
d. $21,840