Recall Application 3, “Sources of Growth in China and India,” to answer the following
questions:
According to the application, which country has a low GNP per capita relative to the
U.S.?
A) China
B) India
C) Both A and B are correct.
D) Neither A nor B is correct.
Table 11.6 Refer to Table 11.6. If net taxes (T) increases by $100,
equilibrium output decreases by:
A) $100.
B) $200.
C) $0.
D) $50.
Which one of the following statements is true?
A) The savings and loan crisis of the 1990s was due to the big U.S. budget deficit.
B) Deposit insurance guarantees savings up to $1,000,000.
C) Savings and loan institutions were very profitable during the 1970s when there was
high inflation.
D) Deposit insurance was created to prevent bank runs from occurring.
Refer to Figure 18.4. With a tariff or quota, what is the equilibrium quantity of gloves in
Duckland?
A) 100
B) 80
C) 60
D) 40
If consumption is $5,000 when income is $5,000, and consumption increases to
$10,000 when income increases to $12,000, the marginal propensity to save is:
A) 0.29.
B) 0.71.
C) 0.43.
D) 0.33.
Refer to Figure 11.4. Which diagram illustrates the effect of a decrease in the income
tax rate?
A) A
B) B
C) C
D) D
If 1999 is the base year and the inflation rate between 1999 and 2000 is 7%, the price
index in 2000 must be equal to:
A) 70.
B) 107.
C) 170.
D) cannot be determined from this information because the index in the base year is not
given
Which of the following are the factors that affect the short-run aggregate supply curve?
A) input prices
B) the state of technology
C) taxes and subsidies
D) All of the above can affect the SRAS curve.
GDP understates the value of output produced by an economy because it
A) includes transactions that do not take place in organized markets, such as
home-cooked meals.
B) excludes value added from the underground economy, such as tips taken “under the
table.”
C) includes environmental degradation caused by increased output production.
D) excludes the value of the wages and benefits of government employees.
In the market for labor, the sellers of labor are:
A) the workers.
B) the firms.
C) the government.
D) both B and C are correct.
Daily Output of Japan and U.S.
Table 18.2 Refer to Table 18.2. The opportunity cost of
tractors in Japan is:
A) 2 stereos.
B) 1/4 stereo.
C) 1/2 stereo.
D) 4 stereos.
Jobs lost to outsourcing can be partially offset by jobs gained from
A) higher production costs.
B) higher opportunity costs.
C) greater trade imbalances.
D) increased output from another industry.
If the weekly income from 1974 to 2011 increased from $80 to $290, but the number of
standard baskets of goods that the weekly income decreased from 1.70 to 1.29 in 2011,
then we can conclude that:
A) prices decreased faster than the wage increase between 1974 and 2011.
B) prices increased faster than the wage increase between 1974 and 2011.
C) prices increased slower than the wage increase between 1974 and 2011.
D) prices decreased slower than the wage increase between 1974 and 2011.
If there is an advancement in the technology used to produce a product, what is the
likely effect it may have on the supply?
A) The company would not change its manufacturing.
B) More people would be needed to produce the product.
C) It would decrease the supply.
D) It would increase the supply.