Many less developed countries have low rates of economic growth because
a. high population growth rates reduce living standards
b. low population growth rates result in an inadequate labor supply
c. high current output per capita reduces incentives for growth
d. interest rates are too high
e. they invest too much in infrastructure leaving little for private capital investment
Which of the following would lead to an upward shift of the consumption-income line?
a. A decrease in income
b. A decrease in population
c. An increase in income
d. An increase in wealth
e. An increase in the interest rate
We measure GDP in different ways because
a. we can then check for errors and gain different insights into how the economy
performs
b. certain economists do not like the expenditure approach for GDP
c. the expenditure equation ignores certain aspects of the economy
d. it is too difficult to determine accurate values of consumption and investment
e. the particular situations of different countries require different approaches
When the money market is in equilibrium, the bond market is in equilibrium as well.
Which of the following will decrease if the Fed sells bonds?
a. autonomous consumption.
b. business investment.
c. real GDP.
d. none of the above.
To cause the interest rate to fall, the Fed can
a. decrease the money supply
b. stabilize the money supply to increase investor confidence
c. decrease the price of bonds
d. increase the money supply
e. increase the demand for money
Which of the following is an opportunity cost of cyclical unemployment?
a. A higher wage rate
b. A lower interest rate
c. Lower taxes paid by the employed
d. Costs of updating prices
e. Lost earnings of the unemployed.
The demand for loanable funds curve is downward sloping because
a. as the interest rate falls business firms demand fewer loanable funds
b. as the interest rate falls business firms demand more loanable funds
c. as the interest rate rises business firms demand more loanable funds
d. as the interest rate rises, the government demands more loanable funds
e. as the interest rate rises, the government demands fewer loanable funds
Which of the following shocks have caused most of the recessions since 1950?
a. Both c and e
b. Increased government spending
c. Oil price increases
d. The beginning of a war
e. Changes in Federal Reserve Policy
In the long run, if the inflation rate is positive, a currency depreciates to maintain
purchasing power parity.
Typically, countries with high growth rates of per-capita GDP have
a. lower infant mortality rates
b. higher life expectancies
c. higher adult literacy
d. all of the above
e. higher unemployment rates.
Which of the following explains why economists may disagree over positive issues?
a. They have different beliefs and values.
b. They examine the same data to draw their conclusions.
c. They need to disagree in order to publish their research findings.
d. They often employ different models and statistical techniques when examining data.
e. Some work only on microeconomic issues, while others focus exclusively on
macroeconomic issues.
A decrease in the interest rate shifts the money demand curve to the right.