Providedbelowisalistofimportantusersofaccountinginformation.Belowthelistaredescripti
onsofamajorneedofeachofthevarioususers.Fillintheblankwiththeoneusergroupthatismost
likelytohavetheneeddescribedtotherightoftheblank.Someusergroupsmaybeusedmorethan
onceornotatall.
a. Stockholder
b. Company management
c. Supplier
d. Banker
e. Internal Revenue Service
f. Securities and Exchange Commission
g. Labor union The exact amount of profit on each product of the company.
If people refused to use banks to create checkable deposits, the banking system would:
a. not be affected in the money creating process.
b. not have a way to loan out excess reserves.
c. be able to expand the money supply by more than the money multiplier indicates.
d. not be able to create new money.
e. not be able to find new borrowers.
When people hold money to transact purchases they expect to make, this is known as
the:
a. precautionary demand for money.
b. liquidity demand for money.
c. spending demand for money.
d. speculative demand for money.
e. transactions demand for money.
Technological innovations will cause:
a. the production possibilities curve to stay the same.
b. the production possibilities curve to shift to the left.
c. the production possibilities curve to shift to the right.
d. an economy to operate below its production possibilities curve.
e. the production possibilities curve to increase or decrease.
If the exchange rate between the yen and the dollar changes from 100 yen = $1 to 110
yen = $1, then:
a. the dollar has depreciated in value.
b. U.S.-made goods will become less expensive to Japanese citizens.
c. the dollar has appreciated in value.
d. Japanese-made goods will become more expensive to U.S. citizens.
e. there will be an increase in the demand for dollars in the foreign exchange market.
According to the law of supply:
a. producers are willing to supply larger amounts of a good as its price increases.
b. a direct relationship exists between the price of a good and the amount buyers choose
to buy.
c. an inverse relationship exists between the price of a good and the amount buyers
wish to buy.
d. an inverse relationship exists between the price of a good and the amount producers
supply.
A U.S. citizen’s gift for famine relief in Somalia would be considered a:
a. capital inflow.
b. capital outflow.
c. current account transaction.
d. service trade transaction.
The infant industry argument is based on the idea that:
a. competitive pressure from established foreign firms would encourage the infant
industry’s prospects for future growth.
b. failure to shelter these infant industries tends to lead to political instability.
c. small firms must be protected.
d. none of these.
Which of the following types of financial institutions is required to belong to the
Federal Reserve System?
a. National banks.
b. State-chartered banks.
c. Savings and loan institutions.
d. Credit unions.
Exhibit 10-8 Aggregate demand and supply
In Exhibit 10-8, if aggregate
demand shifts from AD1 to AD3,
a. real GDP will increase from $3.0 to $4.0, and the price level will increase from 100
to 140.
b. real GDP will increase from $3.0 to $7.0, and the price level will increase from 100
to 140.
c. real GDP will increase from $3.0 to $4.0, and the price level does not change.
d. real GDP will increase from $3.0 to $7.0, and the price level will increase from 100
to 120.
e. real GDP will not change and the price level will increase from 100 to 140.
The production possibilities curve shows different combinations of goods that:
a. can be consumed by households.
b. can be consumed by firms.
c. can be produced with the available technology.
d. are produced and consumed by firms.
e. are bought and sold in the market.
Providedbelowisalistofimportantusersofaccountinginformation.Belowthelistaredescripti
onsofamajorneedofeachofthevarioususers.Fillintheblankwiththeoneusergroupthatismost
likelytohavetheneeddescribedtotherightoftheblank.Someusergroupsmaybeusedmorethan
onceornotatall.
a. Stockholder
b. Company management
c. Supplier
d. Banker
e. Internal Revenue Service
f. Securities and Exchange Commission
g. Labor union The profitability of the company based upon the Internal Revenue Code.
If the MPC is 0.80, and if the goal is to increase real GDP by $200 million, then by how
much would government spending have to change to generate this increase in real
GDP?
a. $240 million.
b. $200 million.
c. $180 million.
d. $40 million.
Which one of the following factors will most likely cause an increase in aggregate
demand?
a. An increase in net exports.
b. An increase in the real interest rate.
c. A decrease in net exports due to falling incomes abroad.
d. A technological development that decreases the cost of producing computer chips.
Which type of unemployment is experienced by a person who is laid off at an office
because word processing equipment and software reduce the need for typists?
a. Seasonal.
b. Cyclical.
c. Voluntary.
d. Structural.
e. Frictional.
Price floors are used as a method to:
a. ensure buyers that goods won’t be cheaper tomorrow.
b. see that production levels don’t fall too low.
c. guarantee there will be enough food for everyone.
d. combat excess demand in the market.
e. ensure sellers a minimum price for their goods.
Exhibit 2-9 Production possibilities curve
Which of the following moves from
one point to another in Exhibit 2-9 would represent an increase in economic efficiency?
a. Z to W. c. W to X.
b. W to Y. d. X to Y.
If there are strong expectations of future economic growth, then the:
a. economy will move to the right along the existing consumption function.
b. economy will move to the left along the existing consumption function.
c. consumption function will shift downward.
d. consumption function will shift upward.
e. investment demand curve will shift upward.
In the U.S. economy, the effect on federal tax revenues and spending of an increase in
the unemployment rate is to:
a. cut tax revenues and raise expenditures.
b. cut expenditures and raise tax revenues.
c. raise both tax revenues and expenditures.
d. cut both expenditures and tax revenues.