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Currently, the Social Security Trust Fund is running a:
a. deficit, which reduces the apparent size of the budget deficit.
b. surplus, which reduces the apparent size of the budget deficit.
c. surplus, which increases the apparent size of the budget deficit.
d. deficit, which increases the apparent size of the budget deficit.
According to the expenditure approach, the largest component of GDP is:
a. government spending.
b. proprietor's income.
c. net interest.
d. personal consumption expenditures.
e. compensation of employees.
In Exhibit 5-9, national income (NI) equals:
a. $3,628 billion.
b. $3,706 billion.
c. $4,446 billion.
d. $3,550 billion.
e. $5,344 billion.
A decrease in aggregate demand and the subsequent cutbacks in production lead to:
a. frictional unemployment.
b. cyclical unemployment.
c. cost-push unemployment.
d. structural unemployment.
e. transitory unemployment.
Exhibit 8-13 Consumption function
In Exhibit 8-13, which of the following
could cause the shift from C1 to C2?
a. Higher interest rates.
b. An increase in disposable income.
c. A decrease in disposable income.
d. Lower tax rates.
e. Expectations of future economic growth.
The formula to compute the spending multiplier is:
a. 1 / (MPC + MPS).
b. 1 / (1 - MPC).
c. 1 / (1 - MPS).
d. 1 / (C + I).
Assume the marginal propensity to consume is 0.96. Firms become pessimistic and
decrease investment spending by $100 billion. Other things equal, real GDP will:
a. decrease by $100 billion.
b. not change.
c. decrease by $96 billion.
d. decrease by $2,500 billion.
Which of the following does not appear on the asset side of a bank's balance sheet?
a. Required reserves.
b. Checkable deposits.
c. Loans.
d. Excess reserves.
The market demand is the:
a. sum of all individual demand curves in a market.
b. sum of all individual prices in a market.
c. sum of all individual demand curves and supplies in a market.
d. vertical sum of all individual demand curves.
Which of the following would be expected if the tariff on foreign-produced shoes were
decreased?
a. The domestic price of shoes would fall.
b. The supply of foreign shoes to the domestic market would decline, causing shoe
prices to rise.
c. The number of unemployed workers in the domestic shoe industry would decline.
d. The demand for foreign-produced shoes would decrease, causing the price of shoes
to increase in other nations.
Elisa Kilhafer, a housewife in St. Louis, Missouri, who claims on a Bureau of Labor
Statistics (BLS) survey that she is neither gainfully employed nor looking for work, is,
according to the BLS,
a. considered retired.
b. counted as unemployed.
c. considered reemployable.
d. counted as a member of the labor force.
e. not counted as a member of the labor force.
Exhibit 2-18 Production possibilities curves
In Exhibit 2-18, the production
possibilities curves for a country are shown for the years Year X and Year Y. Suppose
this country was located at point A in Year X and point B in Year Y. This country:
a. is producing the same number of capital goods in both years.
b. is producing the same number of consumption goods in both years.
c. has shown no growth between Year X and Year Y.
d. has higher unemployment in Year X than in Year Y.
e. has higher unemployment in Year Y than in Year X.
The consumption function shows the relationship between consumer expenditures and:
a. the interest rate.
b. the tax rate.
c. savings.
d. disposable income.
Target, Inc., started the year with total assets of $400,000 and total liabilities of
$240,000. Net income for the year is $120,000 and dividends declared and paid during
the year are $90,000. A) What is the amount of Target's total stockholders' equity at the
end of the year? B) Could Target have paid additional dividends during the year?
Explain your answer.
