A simultaneous leftward shift in SRAS and rightward shift in AD may come from the
dollar _______________ in the aftermath of a ____________________ in United
States real interest rates.
a. depreciating; rise
b. depreciating; fall
c. appreciating; rise
d. appreciating; fall
An increase in the quantity of resources available
a. shifts the PPF leftward.
b. shifts the PPF rightward.
c. moves the economy to a new point up along a given PPF.
d. moves the economy to a new point down along a given PPF.
In the prisoner’s dilemma setting for producing and stealing, a tax imposed on
participants could end up changing the payoff matrix so that
a. one participant is better off, and one participant is worse off.
b. both participants are worse off.
c. both participants are better off.
d. all of the above are possible
Suppose Andrea is taking just two courses and is at a point inside her PPF of grades for
those two courses.If Andrea changes her work habits then it is impossible for
a. either one of her grades to rise.
b. both of her grades to rise.
c. both of her grades to fall.
d. either one of her grades to rise while the other grade remains constant.
e. none of the above is impossible in this situation
Unlike the New York Stock Exchange, NASDAQ is an electronic stock market with
trades executed through a sophisticated computer and telecommunications network.
a. True
b. False
Exhibit 39-1
Given the target price PT, what is the quantity supplied?
a. Q1
b. Q2
c. Q3
d. Q3 – Q1
Events of the 1970s and early 1980s showed that
a. the Phillips curve presents policymakers with a stable menu of choices.
b. cycles of unemployment and inflation rates appear to have gravitated around a 6
percent unemployment rate.
c. lower inflation rates are consistently accompanied by higher unemployment rates.
d. a tradeoff between inflation and unemployment may not always exist.
e. a and c
Which statement uses the term ceteris paribus correctly?
a. If you exercise regularly, you will be healthier, ceteris paribus.
b. Blue is to green, ceteris paribus, as red is to purple.
c. Most people consider Sunday to be the first day of the week, ceteris paribus.
d. Interest rates usually rise in October, ceteris paribus.
e. a and d
Exhibit 6-2
The unemployment rate in year 2 is
a. 75 percent.
b. 33 1/3 percent.
c. 50 percent.
d. 66 2/3 percent.
e. 25 percent.
In order for an increase in aggregate demand to raise Real GDP and the price level, the
aggregate supply curve must be ____________________.If an increase in aggregate
demand raises the price level but leaves Real GDP unchanged, the aggregate supply
curve must be _____________________.
a. upward-sloping; vertical
b. upward-sloping; horizontal
c. downward sloping; vertical
d. vertical; upward-sloping
e. vertical; downward-sloping
The combination of low income elasticity of demand for food and high agricultural
productivity leads to the demand for food increasing and the supply of food increasing
even more, which has lead to rising prices of food.
a. True
b. False
According to Keynesians, __________ monetary policy will not remove the economy
from a(an) __________ gap if __________.
a. contractionary; recessionary; investment is interest-insensitive
b. expansionary; recessionary; the economy is in the liquidity trap
c. expansionary; inflationary; investment is interest-insensitive
d. contractionary; inflationary; the economy has been in the inflationary gap for more
than one year
e. none of the above
A decrease in consumption caused by a factor other than a change in the price level
a. shifts the AD curve to the right.
b. shifts the AD curve to the left.
c. causes an upward movement along the existing AD curve.
d. causes a downward movement along the existing AD curve.
e. none of the above.
The face value of a bond is
a. the dollar amount that a person would receive if he or she were to sell the bond.
b. the dollar amount that a person would receive if he or she were to buy the bond.
c. the total value of payments that will be made over the course of the bond’s life.
d. the dollar amount of the bond’s final payment at maturity.
Exhibit 5-5
If the airline charges a price that is between P1 and P2 for both aisle seats and middle
seats, the result will be
a. a surplus of middle seats and a shortage of aisle seats.
b. a surplus of aisle seats and a shortage of middle seats.
c. a shortage of middle seats and the equilibrium quantity of aisle seats.
d. a shortage of aisle seats and the equilibrium quantity of middle seats.
Jessica paid $7,000 for a bond with a face value of $6,000. She will be paid $400
annually as long as she holds on to the bond, until the bond’s maturity date. The yield
on the bond is
a. 6.67 percent.
b. 5.71 percent.
c. 15.0 percent.
d. 80.0 percent.
If there is always a three-for-one tradeoff between goods X and Y, then the PPF
between X and Y is
a. a downward-sloping curve that is bowed outward.
b. a downward-sloping curve that is bowed inward.
c. a downward-sloping straight line.
d. an upward-sloping straight line.
In contrast to a tariff, a quota does not
a. reduce consumers’ surplus.
b. increase producers’ surplus.
c. generate revenues for government.
d. raise price.
e. c and d
Which of the following illustrates double counting?
a. The total market value of the steel used to produce a car and the total market value of
the car itself are summed.
b. The total market value of tennis rackets and the total market value of tennis balls are
summed.
c. The total market value of picture frames and the total market value of camera film are
summed.
d. The total market value of eyeglasses and the total market value of carpet are
summed.
e. b and c