When analyzing the housing market, the supply curve
a. will be upward sloping because the higher the price of a house the more that will
exist
b. will be horizontal to illustrate that the supply of housing is a stock variable
c. will be downward sloping; that is what went wrong with the housing market
d. will be vertical to illustrate that the supply of housing is a stock variable
e. could be horizontal, vertical or upward sloping depending upon the housing market in
question
The Bureau of Labor Statistics releases its employment report
a. on the first Friday of every month.
b. on the first Friday of every quarter.
c. once every four months.
d. on the first Friday every two months.
e. once every six months.
Money is
a. an asset that is widely accepted as a means of payment in the economy
b. any asset that is convertible into cash
c. an asset that is backed by a precious metal such as gold or silver
d. any financial asset created and issued by government
e. anything used to pay for goods and services, including currency, checks, and credit
cards
Increases in the interest rate reduce the multiplier effect of an increase in government
purchases.
A laissez faire policy is one in which
a. the government plays a major role in guiding economic activity
b. the government prefers to control taxes rather than spending
c. the government leaves things alone
d. individuals rely on the government for guidance but not for active intervention in the
economy
e. businesses rely on the government for guidance but not for active intervention in the
economy
If nominal GDP increased, which of the following could also have occurred?
a. Both prices and real GDP decreased.
b. Prices remained the same and real GDP decreased.
c. Prices decreased and real GDP remained the same.
d. Prices increased and real GDP decreased.
e. Both prices and real GDP remained the same.
Kate takes a part-time job and the sacrifice of study time causes her grade point average
to fall from 3.5 to 2.9. Assume that the grade point average would have stayed at 3.5 if
study time had not been reduced. The opportunity cost of having taken the job is the
a. cost of tuition
b. 3.5 grade point average
c. 0.6 decrease in the grade point average
d. 2.9 grade point average
e. money earned from the part-time job
Which of the following is not a function of the Fed?
a. To supervise and regulate banks.
b. Dealing with financial crises.
c. To print currency.
d. Check clearing.
e. Acting as a “bank for banks”.
Which of the following best describes what has happened to the U.S. labor supply and
labor demand over the past 50 years?
a. Labor supply increased and labor demand decreased.
b. Both labor supply and labor demand decreased.
c. Labor supply did not change but labor demand increased.
d. Both labor supply and labor demand increased.
e. Labor supply increased but labor demand did not change.
If a firm finances a new project using its own funds,
a. the cost is minimal
b. the opportunity cost of borrowing has been avoided
c. investment funds will be in excess supply
d. the financing charges are the measure of the real interest rate
e. the interest rate represents the firm’s opportunity cost
Use the table below to find the marginal propensity to save.
a. 0
b. 0.25
c. 0.5
d. 0.75
e. 0.80
Which of the following is the definition of wealth?
a. Real disposable income
b. The total value of assets
c. Real income
d. The value of liabilities minus the value of assets
e. The value of assets minus the value of outstanding liabilities.
The Consumer Price Index (CPI)
a. measures the prices of all goods produced in the economy
b. includes prices of raw materials
c. is found by averaging the prices of all goods consumed in the economy
d. includes only the prices of domestically produced consumer goods
e. includes the prices of some used consumer goods
The basic problem addressed in economics is
a. scarce resources and unlimited wants
b. scarce wants and unlimited resources
c. cost minimization
d. how to manage a financial portfolio
e. unlimited time and unlimited potential
Assume net exports are -$220, consumption is $5,000, tax revenues are $1,000,
government purchases are $1,500, and 2003 GDP, calculated by the expenditure
approach, is $8,000. We can conclude that
a. private investment was $1,940
b. public investment was $310
c. private investment was $320
d. private investment was $1,720
e. public investment was $1,730
Both a price floor and a price ceiling will reduce that amount of a good that is traded in
the market.
A price ceiling will increase the amount that is traded in the market while a price floor
will reduce the amount that is traded in the market
If the government wants to manipulate the equilibrium price, it will normally create a
price floor or price ceiling; if the government want to manipulate the equilibrium
quantity, it will normally impose taxes or award subsidies.