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Suppose that a sporting goods store had $800 of golf balls on its shelves at the
beginning of 2012 and $1,300 at the end of 2012. The amount of inventory investment
included in GDP would be
A) $500.
B) $800.
C) $1,300.
D) $2,100.
Insurance:
A) specifies the term of exchange facilitating exchange between strangers.
B) reduces the risk of entrepreneurs.
C) provides the public with reliable information about the performance of a firm.
D) increases the risk faced by entrepreneurs.
A wage-price spiral occurs when
A) rising wages cause higher prices, which in turn cause higher wages.
B) rising wages cause higher prices, which in turn cause lower wages.
C) falling wages cause higher prices, which in turn cause lower wages.
D) falling wages cause falling prices, which in turn cause higher wages.
Recall Application 3, "Jasper Johns and House Painting," to answer the following
questions:
According to the application, if Jasper Johns earns $5,000 per day painting art and
$1,500 per day painting houses, he should:
A) only paint art.
B) only paint houses.
C) paint both houses and art.
D) paint art on the side of his house.
The face value of money or income is called its ________ value.
A) real
B) marginal
C) nominal
D) external
Suppose a politician stimulates the economy before an election to improve the chances
she is reelected. This is known as
A) an election cycle.
B) a political business cycle.
C) lobbying.
D) campaigning.
If the population increases, what will this do for the market demand for most products?
A) no change
B) decrease
C) increase
D) none of the above
When a demand curve is drawn, which of the following is held constant?
A) people's income
B) people's preferences
C) prices of related goods
D) All of the above are held constant when constructing a demand curve.
If a government runs a deficit it can cover the gap by
A) increasing transfer payments.
B) printing money.
C) purchasing bonds.
D) lowering the discount rate.
The GATT was initiated in 1947 by the U.S. and how many other countries?
A) 23
B) 13
C) 40
D) 147
