A(n) ________ in U.S. prices will cause an increase in the demand for U.S. dollars and
a(n) ________ in the (per dollar) exchange rate.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
An increase in government spending and a decrease in taxes will cause the:
A) budget deficit to decrease.
B) budget deficit to remain unchanged.
C) budget deficit to increase.
D) budget deficit to increase slightly.
An increase in the marginal propensity to save will:
A) shift the consumption function upwards.
B) shift the consumption function downwards.
C) cause the consumption function to be flatter.
D) cause the consumption function to be steeper.
Compared to the natural rate of unemployment, the actual unemployment rate is
A) always higher.
B) always lower.
C) always the same.
D) higher in periods when GDP fails to grow at its normal rate.
Daily Output of Scotland and Poland
Table 18.1 Refer to Table 18.1. The nation with a
comparative advantage in accordions is:
A) both Scotland and Poland.
B) neither Scotland nor Poland.
C) Poland.
D) Scotland.
Table 6.7
Answer parts (a) through (d) using the information in Table 6.7.
(a) Calculate the number of unemployed workers.
(b) Calculate the number of workers in the labor force.
(c) Calculate the unemployment rate.
(d) Calculate the labor-force participation rate.
(e) Calculate the unemployment rate if 50,000 unemployed workers become
“discouraged” and decide to stop looking for work?
Suppose Panama produces only two goods, bananas and hats. If Panama has a
comparative advantage in bananas, a move toward free trade will
A) harm hat workers, benefit banana workers, but benefit the nation as a whole.
B) harm hat workers, harm banana workers, but benefit the nation as a whole.
C) benefit hat workers, harm banana workers, but harm the nation as a whole.
D) benefit hat workers, harm banana workers, but benefit the nation as a whole.
When the interest rate increases, the:
A) demand for money increases.
B) the quantity demanded of money increases.
C) the demand for money decreases.
D) the quantity demanded of money decreases.
If the economy grew at 7 percent from 2011 to 2012 and real GDP was 400 in 2011,
what was real GDP in 2012?
A) 393
B) 400
C) 407
D) 428
Which of the following explains why the Fed raised the fed funds rate in May 2000,
only to reverse it in January 2001?
A) outside lag in monetary policy
B) inside lag in monetary policy
C) the Fed’s indecisiveness
D) changes in directives from the President of the United States
In 2011, federal spending was about ________ percent of GDP.
A) 25
B) 14.7
C) 33
D) 71
In a production function that is graphed with output on the y-axis and labor on the
x-axis, a decrease in the labor stock is illustrated as:
A) an upward shift in the production function.
B) an upward movement along the production function.
C) a downward shift in the production function.
D) a downward movement along the production function.
Figur
e 15.3 Refer to Figure 15.3 If this economy is initially in a recession, the change in
price level which would bring the economy back to full employment would also change
the money demand. The change in money demand will change interest rates, which is
reflected by the movement from
A) yF to y0.
B) 0 to 1.
C) AS1 to AS0.
D) I1 to I0.
Suppose that growth in labor is 5% while output (real GDP) grew at a rate of 4%, it
must be the case that:
A) real GDP per capita increased.
B) real GDP per capita stayed constant.
C) real GDP per capita decreased.
D) real GDP per capita increased by 20%.
If government increases spending and wants to maintain a balanced budget, it should
A) decrease taxes by an equal amount.
B) increase taxes by an equal amount.
C) decrease taxes by an amount equal to the increase in spending multiplied by the tax
multiplier.
D) increase taxes by an amount equal to the increase in spending multiplied by the tax
multiplier.
Table 5.3
Refer to Table 5.3. Suppose this economy produces only the two goods X and Y. If year
1 is the base year, Real GDP in year 2 is:
A) $180.
B) $222.
C) $290.
D) $356.
When people form expectations about future inflation based on last period’s inflation
rate, it is said that expectations are formed:
A) using a rule of thumb.
B) rationally.
C) using the rule of Law.
D) analytically.