Which of the following is not a tool for controlling the money supply?
a. Buying government bonds
b. Selling government bonds
c. Changing tax rates
d. Changing the required reserve ratio
e. Changing the discount rate.
Which of the following is the least liquid asset?
a. checkable deposits.
b. savings-type deposits.
c. traveler’s checks.
d. demand deposits.
e. cash.
If the capital stock increases faster than employment, then we would expect
a. both output and labor productivity to rise
b. output to rise but labor productivity to fall
c. both output and labor productivity to fall
d. output to fall but labor productivity to rise
e. output to rise but labor productivity to remain unchanged
The Great Depression provided significant evidence that
a. the economy always worked well on its own
b. the economy always reached full employment on its own
c. the economy may not always do well on its own
d. the notion of laissez faire was correct
e. the supporters of the classical model were correct
The aggregate production function shows us that increasing the number of workers
employed will increase output at a constant rate.
Who owns a commercial bank?
a. Its depositors
b. Its stockholders
c. Lenders
d. Savers
e. The Federal Reserve
One kind of gain from specialization is that
a. most individuals gain at the expense of someone else
b. people develop expertise
c. people get to do only what they like
d. people cannot be bossed around
e. people gain political power
During recessions, GDP falls and unemployment increases. Why might the actual
output produced not fall as much as officially measured GDP during recessions?
a. There is an increase in involuntary part-time employment during recessions, the
output from which is not accounted for in GDP
b. Workers who became unemployed during the recession may produce goods in the
underground economy
c. Unemployment benefits to laid off workers are included in GDP
d. Laid off workers may start their own businesses, but profit income from
self-employment is not accounted for in GDP
e. Unemployed workers have more leisure time to enjoy.
Which of the following could lead to an increase in worker productivity?
a. A decrease in the physical capital stock
b. An increase in the number of workers
c. A war that destroys an enormous amount of plant and equipment
d. An increase in the physical capital stock
e. A decrease in the human capital stock
A movement down and to the left along the aggregate supply curve will occur when
a. firms’ average markup is stable and a decrease in real GDP causes unit costs to fall
b. world oil prices fall, thus decreasing the price level
c. a change in fiscal policy causes aggregate expenditure to increase
d. firms decide to produce less than before at each price level
e. an increase in real GDP causes the price level to fall
Mike recently lost his job as a construction worker. During this unemployment spell,
Mike actively searched for work but recently took a job that paid cash €under the table€
while he continued to search and collect unemployment payments. Mike would be
considered __________ by the Bureau of Labor Statistics but his inclusion would cause
the officially reported unemployment rate to __________ the true unemployment rate.
a. an involuntary part-time worker; overestimate
b. a discouraged worker; underestimate
c. unemployed; underestimate
d. unemployed; overestimate
e. employed; equal
If a newspaper reporter wanted to learn about changes in the U.S. price levels, she
would probably get that information by looking at the
a. real gross domestic product
b. consumer price index
c. latest press release from the Council of Economic Indicators
d. nominal gross domestic product
e. gross national product
In 1996, an advisory committee of economists that studied the CPI found
a. no bias in the CPI
b. that in a typical year the CPI overstates the inflation rate by at least 1.1 percent per
year
c. that the CPI consistently overestimates the inflation rate by less than 1 percent per
year
d. that the CPI typically underestimates the inflation rate
e. that the CPI is somewhat erratic; it occasionally underestimates and occasionally
overestimates the inflation rate