Supply curves slope upward because:
a. the quality is assumed to vary with price.
b. technology improves over time, increasing the ability of firms to produce more at
each possible price.
c. increases in the price of a good lead to rightward shifts of the supply curve.
d. rising prides provide producers with the incentives needed to increase the quantity
supplied.
Suppose workers become pessimistic about their future employment, which causes
them to save more and spend less. If the economy is on the intermediate range of the
aggregate supply curve, then:
a. both real GDP and the price level will fall.
b. real GDP will fall and the price level will rise.
c. real GDP will rise and the price level will fall.
d. real GDP and the price level will rise.
A weak U.S. dollar is one that has:
a. c and e.
b. d and e.
c. depreciated.
d. appreciated.
e. helped U.S. exporters.
A person who has given up searching for work is called:
a. frictionally unemployed.
b. structurally unemployed.
c. a discouraged worker.
d. unemployed.
The Phillips curve traces a set of combinations of rates of:
a. interest and unemployment.
b. real GDP and inflation.
c. real GDP and interest.
d. inflation and interest.
e. unemployment and inflation.
The marginal propensity to consume is:
a. the change in disposable income divided by the change in consumption.
b. consumption spending divided by disposable income.
c. disposable income divided by consumption spending.
d. the change in consumption divided by the change in disposable income.
e. the change in consumption divided by disposable income.
The central question in economics is how to:
a. deal with the problem of scarcity.
b. change government economic policy.
c. change people’s wants to match their needs.
d. manage money and become wealthy.
The primary functions of money are:
a. velocity, liquidity, and transactions.
b. speculative demand, measure of value, and precautionary demand.
c. a medium of exchange, a unit of account, and a store of value.
d. a store of value, heterogeneity, and a medium of exchange.
e. currency value, fiat value, and accepted value.
Suppose a bank has checkable deposits of $100,000 and the required reserve ratio is 20
percent. If the bank currently has $100,000 in reserves, it could expand the money
supply by as much as:
a. $100,000.
b. $400,000.
c. $0.
d. $20,000.
e. $80,000.
Generally, most economists feel that a sales tax is:
a. regressive.
b. proportional.
c. progressive.
d. fair.