The federal revenue source that generates a little revenue but generates a lot of
controversy is the:
A) estate and gift tax.
B) medicare tax.
C) social security tax.
D) corporate tax.
Table 2.3 Refer to Table 2.3. The
marginal product of the 2nd worker is:
A) 100 units of output.
B) 80 units of output.
C) 60 units of output.
D) 40 units of output.
The ‘short run” in macroeconomics is a period in which prices:
A) change by a lot.
B) are determined by changes in the supply.
C) reflect the equilibrium price.
D) do not change or change very little.
Typically, a demand curve will represent what relationship?
A) the current desire for purchases of fad products as opposed to other products
B) how much the products costs and the quantity of it produced
C) how many people are willing to buy and the quantities each will purchase
D) the price and the quantity demanded by the buyers
If the government imposes a price floor that is above the equilibrium price, then the
market will experience:
A) an equilibrium.
B) a shortage.
C) an excess supply.
D) an increase in demand.
As the marginal propensity to consume increases, the value of the multiplier:
A) increases.
B) decreases.
C) stays the same.
D) can increase or decrease.
Figure 15.5
Refer to Figure 15.5. If GDP exceeds potential output, the effect on the money market
is represented by movement from point ________ to point ________.
A) ; d
B) c; a
C) a; d
D) ; c
The government borrows money to cover budget deficits by
A) purchasing bonds.
B) petitioning the International Monetary Fund.
C) filling out a loan application at Citibank.
D) selling bonds.
The ________ the interest rate, the ________ the opportunity cost of holding money,
and the ________ money people will want to hold.
A) lower; higher; less
B) lower; lower; less
C) higher; higher; more
D) higher, higher, less
Let S =y – (100 + 0.5y). Assume no government or foreign sectors. At the equilibrium
level of income, y* = 800, the level of saving is
A) 0.
B) 50.
C) 100.
D) 300.
Refer to Figure 18.4. With an import ban, how many gloves are produced domestically
in Duckland?
A) 100
B) 80
C) 60
D) 0
Figure 2.2
Figure 2.2 presents a production possibilities curve for a country that can either produce
highways or provide people with medical care in a given year. The opportunity cost of
the fourth new highway built in a year is:
A) 50,000 people provided with medical care.
B) 70,000 people provided with medical care.
C) 30,000 people provided with medical care.
D) 90,000 people provided with medical care.
To think at the margin means to consider:
A) how nothing remains constant over time.
B) how a small change in one variable affects another variable.
C) how people behave in their own self-interest.
D) how people will decide what to purchase.
For a country like Mexico, where a relatively large fraction of the population works
abroad and sends home part of their salaries, we would expect that:
A) GDP will exceed GNP.
B) GNP will exceed GDP.
C) GDP will equal GNP.
D) the difference between GDP and GNP will be small.
Suppose that your tuition to attend college is $24,000 per year and you spend $8,000
per year on room and board. If you were working full time, you could earn $30,000 per
year. What is your opportunity cost of attending college for one year?
A) $32,000
B) $38,000
C) $54,000
D) $62,000
Monopoly profits lead to technological process by
A) carefully investing deadweight loss.
B) encouraging the development of innovations by firms attempting to break a
monopoly.
C) firms lobbying Congress for protection of their monopolies.
D) increasing the amount of human capital in the economy.
The mathematical representation of the technological relationship between inputs and
national output is known as the:
A) aggregate supply function.
B) production possibilities frontier.
C) production function.
D) input-output table.
Assuming a long-run aggregate supply curve, a decrease in consumer confidence results
in ________ in output and ________ in price level.
A) a decrease; no change
B) no change; a decrease
C) a decrease; a decrease
D) an increase; no change