Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Suppose that inventory investment is $20 billion and (total) investment is $680
billion.What does purchases of newly produced capital goods equal?
a. $715 billion
b. $785 billion
c. $750 billion
d. $35 billion
e. There is not enough information to answer this question.
The state of choosing not to acquire information because the costs of acquiring the
information are greater than the benefits is referred to as
a. logrolling.
b. rational ignorance.
c. market failure.
d. government failure.
Exhibit 34-9
In the no specialization-no trade case, suppose country X produces and consumes 100
units of good A and 20 units of good B. Country Y produces and consumes 20 units of
good A and 60 units of good B. If the two countries specialize and trade, and the actual
amounts traded are 125 units of good A for 25 units of good B, how many more units of
good B will country Y consume by specializing and trading?
a. 75
b. 5
c. 15
d. 10
e. 50
Exhibit 9-3
The economy is in long-run equilibrium at point
a. A.
b. B.
c. C.
d. D.
e. E.
The higher the opportunity cost of attending college,
a. the more likely an individual will go to college.
b. the more economics classes an individual will take at college.
c. the fewer economics classes an individual will take at college.
d. the less likely an individual will go to college.
A theory is
a. built on the major factors or variables that the theorist believes explain some event.
b. a simplified abstract representation of the real world.
c. used to understand the real world.
d. a and b
e. a, b, and c
Which of the following is not included in M1?
a. retail money market mutual funds
b. checkable deposits
c. traveler's checks
d. all of the above
Monetary policy is
a. the policy concerning changes in the money supply that is pursued to achieve
particular macroeconomic goals.
b. the expenditures and taxation policy that the government pursues to achieve
particular macroeconomic goals.
c. the investment policy that businesses pursue to achieve particular macroeconomic
goals.
d. the spending and saving policy that consumers pursue to achieve particular
macroeconomic goals.
e. the spending policy that the Treasury pursues to achieve particular macroeconomic
goals.
According to the equation of exchange, if GDP equals $4 trillion and the money supply
equals $1 trillion, the velocity of money
a. must be 0.25.
b. must be 4.
c. must be 0.25 trillion.
d. must be 4 trillion.
e. cannot be determined without knowing what the price level is.
Exhibit 9-3
If the economy is in short-run equilibrium at point C,
a. the (actual) unemployment rate is less than the natural unemployment rate.
b. the (actual) unemployment rate is equal to the natural unemployment rate.
c. the (actual) unemployment rate is greater than the natural unemployment rate.
d. the relationship between the (actual) unemployment rate and the natural
unemployment rate cannot be determined from the available information.
To an economist, an increase in demand means the same thing as an increase in quantity
demanded.
a. True
b. False
Exhibit 9-5
Imagine an AD curve intersecting an SRAS curve at Point J on graph (1).Which
point(s) would this correspond to on graph (2)?
a. A or B
b. C
c. E or F
d. F
e. G
In the classical view of the credit market, a rise in saving produces a rise in investment
via a
a. rising interest rate.
b. falling interest rate.
c. rising price level.
d. falling price level.
The Friedman natural rate theory is built upon
a. rational expectations.
b. adaptive expectations.
c. flexible wages and prices.
d. the assumption of one Phillips curve.
e. b and c
Suppose that a $30 billion increase in government spending increases Real GDP by
$150 billion, and that a $10 billion tax reduction increases Real GDP by $40 billion.In
this situation, the tax multiplier is _______________ the government spending
multiplier.
a. less than
b. greater than
c. equal to
d. none of the above
Exhibit 8-1
Assume the economy is originally in equilibrium at point A.If the price of oil rises, at
which point is the economy most likely to end up in the short run?
a. A
b. B
c. C
d. D
Exhibit 9-1
The economy is currently producing Q1. If an economist believes the economy can
move itself without government intervention to QN, then the economist believes that the
a. LRAS curve will shift leftward until it intersects the SRAS and AD curves at Q1.
b. AD curve will shift rightward and intersect the SRAS curve at point B.
c. SRAS curve will shift rightward and intersect the AD curve at point A.
d. economy will likely stay 'stuck" in short-run equilibrium.
