Federal subsidies to higher education have the effect of
Suppose there are no firms, only the government and households. What would the total
demand for funds curve look like in such a world?
a. Downward sloping
b. Perfectly horizontal
c. Upward sloping
d. There would be no such curve
e. Perfectly vertical
Unions attempt to raise wage rates for their members by
Which of the following could explain the shift in the production possibilities frontier
from AB to AC in Figure 2-7?
Figure 2-7
Economic efficiency is achieved
The cross-price elasticity of demand between Texaco gasoline and Mobil gasoline sold
at the same intersection would be
When implementing monetary policy, the variable the Federal Reserve watches most
closely is the
a. required reserve ratio
b. federal funds rate
c. long term bond rate
d. national debt
e. short term corporate bond rate
Using average cost pricing, regulators of a natural monopoly
You are thinking of buying a newly issued, 5-year bond that has a face value of $10,000
and offers no annual coupon payments. What is the most you should pay for this bond,
if the interest rate is 5 percent (0.05) per year?
If Panama has a high opportunity cost of producing salmon steaks, then it should export
salmon steaks.
Which of the following would be included in the GDP Price Index but not in the
Consumer Price Index?
a. The price of a Chrysler automobile
b. The price of a fighter aircraft
c. The price of a used computer
d. The price of a tube of toothpaste
e. The price of a bottle of shampoo
In the 1960s, the U.S. experienced ongoing inflation. What was the main cause of this
inflation?
a. The economy’s self-correcting mechanism was allowed to operate.
b. The Federal Reserve maintained an output target.
c. The Federal Reserve increased the money supply in response to positive demand
shocks.
d. The Federal Reserve pursued an active monetary policy.
e. The Federal Reserve increased the money supply in response to negative demand
shocks.
Which of the following is the opportunity cost of money?
a. The use of money as a means of payment
b. The trouble of having to get money out of the bank
c. The interest forgone by holding money
d. The ability to purchase things at a moment’s notice
e. Commissions paid to brokers
In the U.S. over the past century, increases in labor
a. supply have outpaced increases in labor demand, causing the average wage rate to
fall
b. supply have outpaced increases in labor demand, causing the average wage rate to
rise
c. demand have outpaced increases in labor supply, causing the average wage rate to fall
d. demand have outpaced increases in labor supply, causing the average wage rate to
rise
e. demand have occurred at the same pace as increases in labor supply, so the average
wage rate has remained unchanged
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
The Consumer Price Index (CPI) is an index of the cost of a market basket of goods
purchased by a typical household.
Macroeconomics focuses on the economy as a whole.
Amos is a baker in Tucson. Which of the following statements is correct?
In less-developed countries with rapid population growth,
a. the standard of living will always rise because population is the key to rising living
standards
b. the standard of living will always fall
c. the standard of living will always remain constant
d. the standard of living will fall if population grows faster than output
e. will be independent of population growth due to foreign aid payments by rich
countries
Refer to Figure 15-16 above. Short run macro equilibrium occurs at a real GDP of
a. $8.4 trillion and a price level of 110.
b. $8.4 trillion and a price level of 130.
c. $8.7 trillion and a price level of 150.
d. $8.1 trillion and a price level of 110.
e. $8.1 trillion and a price level of 150.