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A surplus is defined as
A) the excess of total expenditures over total revenues.
B) the excess of total revenues over total expenditures.
C) government spending plus transfer payments.
D) the sum of all past borrowing by the government.
The knowledge and skills acquired by a worker through education and experience is a
description of which factor of production?
A) physical capital
B) human capital
C) labor
D) entrepreneurship
An income tax system can be converted to a consumption tax by:
A) not taxing earnings from saving.
B) not taxing income from a second job.
C) by not taxing corporate income.
D) by not taxing food expenditures.
The discount rate is:
A) the interest rate commercial banks charge each other for lending funds.
B) the interest rate commercial banks charge their new customer.
C) the interest rate that the Fed charges commercial banks for funds borrowed from the
Fed.
D) none of the above.
What is the nominal value of money?
A) what can be purchased with the money
B) discounts taken by multiple purchases
C) savings by shopping on specific days of the week
D) its actual face value
Recall Application 1, "Shifts in the Natural Rate of Unemployment," to answer the
following questions:
According to the application, the Beveridge Curve depicts:
A) the negative relationship between the unemployment rate and the number of job
vacancies.
B) the positive relationship between the unemployment rate and the number of job
vacancies.
C) the negative relationship between the unemployment rate and the GDP.
D) the positive relationship between the unemployment rate and the inflation rate.
Capital deepening causes ________ in the demand for labor.
A) an increase
B) a decrease
C) no change
D) either an increase or decrease
Suppose the nation of Alphonia was charged with dumping electric lawnmowers in the
nation of Omegalon. The charge of dumping electric lawnmowers in the Omegalon
market means that Alphonia was accused of
A) selling faulty electric lawnmowers in Omegalon.
B) selling electric lawnmowers below cost or below domestic prices.
C) selling counterfeit-branded electric lawnmowers in Omegalon.
D) discarding electric lawnmowers which would not sell in their home country.
If the marginal propensity to save is 0.15, the marginal propensity to consume:
A) is 1.15.
B) is 0.85.
C) is 0.15.
D) cannot be determined by the given information
Recall the Application about the possibilities of transformative economic growth in
authoritarian and participatory political institutions to answer the following
question(s).According to this Application, transformative economic growth, such as that
which occurred with the Industrial Revolution, typically requires
A) more participatory political institutions.
B) more authoritarian political institutions.
C) both participatory and authoritarian political institutions.
D) neither participatory nor authoritarian political institutions.
To make things simpler and focus attention on what really matters, economists would
A) use assumptions.
B) ignore all variables.
C) think at the margin.
D) respond to incentives.
The Tiny Tots Toy Company manufactures only sleds. In 2010, Tiny Tots manufactured
11,000 sleds, but sold only 8,000 sleds. In 2010, Tiny Tots' change in inventory was:
A) -3,000 sleds.
B) 1,000 sleds.
C) 8,000 sleds.
D) 3,000 sleds.
Exports ________ GDP and imports ________ GDP.
A) increase; decrease
B) decrease; increase
C) increase; increase
D) decrease; decrease
Suppose that the equilibrium rent for apartments in San Francisco is $1200 per month.
If the City of San Francisco legislates that apartment owners cannot charge rent higher
than $1000, then the apartment market in San Francisco will experience:
A) an equilibrium.
B) a shortage.
C) an excess supply.
D) an increase in supply.
The sum of all budget deficits and surpluses is known as the
A) fiscal year.
B) budget balance.
C) government expenditure.
D) government debt.
Diminishing returns occurs because
A) not enough people have jobs.
B) one of the inputs to the production process is fixed.
C) consumers don't buy enough of the products produced.
D) two people have not satisfied their self-interests.
Suppose the public expects a 7 percent inflation rate, and both the money supply and
money demand grow at 7 percent a year. Suddenly the Federal Reserve unexpectedly
allows the money growth rate to be 5 percent. In the short run, we expect that
A) real interest rates will remain constant.
B) real interest rates may increase or decrease.
C) real interest rates will decrease.
D) real interest rates will increase.
When constructing a production function between labor and output, which of the
following is not held constant?
A) the stock of labor
B) the stock of capital
C) the level of technology
D) B and C are both correct.
