The aggregate demand curve indicates the relationship between:
a. the real wage rate and the quality of resources demanded by producers of goods and
services.
b. the interest rate and the amount of loanable funds demanded by borrowers.
c. the natural rate of unemployment and the demand for goods and services when the
economy is in long-run equilibrium.
d. the general price level and the aggregate quantity of goods and services demanded.
Which of the following U.S. taxes is the most consistent with the ability-to-pay
principle?
a. The excise tax on gasoline.
b. The federal income tax.
c. State sales taxes.
d. The Social Security payroll tax.
Robinson Crusoe’s decision to produce more capital goods and fewer consumer goods
in a given period causes:
a. a decrease in the resources available in its economy.
b. an increase in economic growth in future periods.
c. a decrease in economic growth in future periods.
d. no change in the availability of resources in its economy.
e. a decrease in the ability to produce goods in the next period.
The national debt is unlikely to cause national bankruptcy because the federal
government can:
a. raise taxes.
b. print money.
c. refinance its debt.
d. all of these.
The M1 definition of the money supply includes currency,
a. checkable deposits, and savings accounts.
b. checkable deposits, and credit cards.
c. checkable deposits, and debit cards.
d. and checkable deposits.
An increase in consumers’ incomes will have what effect on the equilibrium in the
restaurant meals market?
a. Price will increase, and quantity will increase.
b. Price will decrease, and quantity will increase.
c. Price will increase, and quantity will decrease.
d. Price will decrease, and quantity will decrease.
e. Price will increase, and quantity will stay the same.
The change in consumption divided by a change in income is called the:
a. consumption function.
b. marginal propensity to consume.
c. marginal propensity to spend.
d. spending function.
e. changing propensity to consume.
Which of the following would not lead to a shift in an economy’s production
possibilities curve?
a. Change in technology.
b. Change in the number of resources.
c. An earthquake.
d. Improvement in the education level.
e. Change in the composition of current output.
Assume the economy is experiencing an inflationary gap, classical economists believe
that:
a. flexible wages will restore full employment.
b. the federal government should decrease spending to shift the aggregate demand curve
leftward.
c. the Federal Reserve should lower the interest rate.
d. the federal government should increase spending to shift the aggregate demand curve
rightward.
Market failure can result from market outcomes that:
a. result in too few resources devoted to a good.
b. result in too many resources devoted to a good.
c. may justify government intervention.
d. all of these.
Exhibit 1A-4 Straight line
In Exhibit 1A-4, as X increases along the
horizontal axis, corresponding to points A-D on the line, the Y value remains
unchanged at 40 units. The relationship between the X and Y variables is:
a. direct.
b. inverse.
c. independent.
d. undefined.
The Fed’s responsibilities include controlling the money supply, clearing checks, and
supervising and regulating banks.
Develop an ethical dilemma scenario that an accountant may face and give examples of
key elements (listed below) that should be considered when analyzing the decision: 1>
Those who may benefit or be harmed
2> What potential benefits or harm could result from the situation
3> The rights or claims violated
4> The specific interests in conflict
5> The responsibilities and obligations
The natural rate of unemployment exists when cyclical unemployment equals zero.
Real disposable income is held constant when constructing a consumption function.
Most less-developed countries have sufficient infrastructure in place to become a
developed country.