A rise in the interest rate tends to
a. reduce many kinds of spending
b. stimulate investment in high-profit industries
c. cause bond prices to increase
d. encourage confidence in the Fed’s control over the economy
e. suggest a downturn in the economy is coming within 6 months
Suppose there is a large number of jobs available for computer workers in California,
but many such workers live in Texas, New York, and Illinois. This kind of mismatch is
an example of
a. regional unemployment
b. structural unemployment
c. seasonal unemployment
d. frictional unemployment
e. cyclical unemployment
The most powerful person at the Fed is
a. a director of a Federal Reserve bank
b. a member of the Board of Governors
c. a district bank president
d. the president of the U.S.
e. the chairman of the Board of Governors
In less-developed countries with rapid population growth,
a. the standard of living will always rise because population is the key to rising living
standards
b. the standard of living will always fall
c. the standard of living will always remain constant
d. the standard of living will fall if population grows faster than output
e. will be independent of population growth due to foreign aid payments by rich
countries.
The GDP Price Index and the Consumer Price Index measure prices of the same set of
goods.
The group within the Federal Reserve System that determines the general course for the
nation’s money supply is the
a. Federal Monetary Oversight Committee
b. Federal Advisory Council
c. Board of Governors
d. Department of Commerce
e. Federal Open Market Committee
Suppose that today the market for lima beans is in equilibrium. Tomorrow both the
supply and demand curves for lima beans will shift to the left. As a result, the
equilibrium price __________ and the equilibrium quantity will __________.
a. will fall; fall
b. will fall; rise
c. will rise; fall
d. cannot be determined; fall
e. cannot be determined; rise
A simplifying assumption
a. affects the important conclusions of an economic model
b. increases the level of detail in an economic model
c. makes an economic model a more concrete representation of reality
d. eliminates unnecessary details from an economic model
e. limits the validity of an economic model’s conclusions
If government spending increases, which of the following would be most likely in the
short and in the long run? (Both comparisons are with regard to the original price
level/output combination.)
a. Short-run increases in the price level, no change in output; long-run increases in
output and in the price level
b. Short-run increases in output and in the price level; long-run increase in output,
decrease in the price level
c. Short-run decreases in output and in the price level; long-run increase in the price
level, no change in output
d. Short-run increases in output and in the price level; long-run increase in the price
level, no change in output
e. Short-run decreases in output and in the price level; long-run decreases in output and
in the price level.
Economics is
a. the narrow study of how to make money in financial markets
b. the broad study of how to allocate unlimited resources to satisfy limited uses
c. the broad study of how to allocate limited resources to satisfy unlimited wants
d. the narrow study of using stocks and bonds to their maximum potential
e. the narrow study of how to be conservative in financial affairs