The equilibrium short-run interest rate is determined at the intersection of the demand
and supply curves in the market for
a. labor
b. money
c. capital goods
d. mortgage funds
e. corporate bonds
If steel manufacturers expected that the price of steel was going to rise in the next six
months, this would
a. have no change in the competitive market for steel
b. lead to a decreased demand for steel
c. lead to a decreased supply of steel
d. increase the future demand for automobiles
e. lead to a decrease in the quantity of steel supplied to the market
An increase in government spending will lead to which of the following?
a. an increase in equilibrium GDP, a decrease in money demand, a decrease in the
interest rate, and an increase in investment spending
b. a decrease in equilibrium GDP, a decrease in money demand, an increase in the
interest rate, and a decrease in investment spending
c. an increase in equilibrium GDP, an increase in money demand, an increase in the
interest rate, and an increase in investment spending
d. a decrease in equilibrium GDP, a decrease in money demand, a decrease in the
interest rate, and an increase in investment spending
e. an increase in equilibrium GDP, an increase in money demand, an increase in the
interest rate, and a decrease in investment spending
In the loanable funds market, an increase in the desire to save is translated into a(n)
a. increase in investment spending and slower growth in the capital stock
b. decrease in investment spending and slower growth in the capital stock
c. decrease in investment spending and faster growth in the capital stock
d. increase in investment spending and faster growth in the capital stock
e. increase in investment spending but with no growth in the capital stock
The aggregate demand curve slopes downward for the same reason that a
microeconomic demand curve slopes downward.
The classical model is based on the assumption that
a. all markets clear
b. all demand curves are horizontal
c. all supply curves are vertical
d. the government’s budget is always balanced
e. the quantity of loanable funds demanded is independent of the interest rate
To have a rising standard of living, a nation’s stock of capital must
a. equal the amount of consumption in the country
b. grow faster than the population
c. be associated with a low rate of investment and high rate of consumption
d. grow slower than the population
e. decline to enable the production of essential consumption goods
Ricardian equivalence implies a tax multiplier of zero.
When the economy is operating at an unemployment rate below the full employment
rate,
a. actual output is above potential output
b. actual output equals potential output
c. actual output is below potential output
d. frictional unemployment has been eliminated
e. structural unemployment has been eliminated
A consultant who earns $100 per hour takes four hours off work to go to the movies.
The
out-of-pocket cost for the cab and the movie ticket are $12. The total cost of the movie
to the consultant is
a. $12
b. $412
c. $400
d. $388
e. $112
Which of the following four elements contribute to GDP in the expenditure approach?
a. Consumption spending, private investment, government purchases, net exports
b. Consumption spending, business investment, government purchases, imports
c. Consumption of services, private investment, government consumption, exports
d. Consumption of goods, private investment, government investment, government
consumption
e. Consumption of durable goods, private investment, government purchases, net
exports
Because financial markets clear, we know that leakages in the economy will equal
injections and, therefore, there will be enough spending in the economy to purchase
whatever amount of output level produced.