The tax multiplier equals the change in ________ divided by the change in ________.
A) taxes; equilibrium real GDP
B) equilibrium real GDP; taxes
C) taxes; consumption spending
D) consumption spending; taxes
Figure 2-5
If the economy is currently producing at point Y, what is the opportunity cost of moving
to point W?
A) 2 million tons of steel
B) zero
C) 9 million tons of paper
D) 16 million tons of paper
Which type of business has the least government rules and regulations affecting it?
A) sole proprietorship
B) partnership
C) corporation
D) They all have the same set of rules and regulations affecting them.
In 2011, the dividend yield on Microsoft (MSFT) stock rose from 1.97% to 3.10%.
Which of the following would have generated that result?
A) The closing price of Microsoft stock rose.
B) Microsoft announced an increase in the dividend it would pay per share.
C) The price-earnings ratio rose.
D) Microsoft issued bonds with a coupon rate equal to 3.10%.
How are corporate profits taxed in the United States?
A) Earnings are taxed first by state sales taxes and then as corporate profits at the
Federal level.
B) Earnings are taxed first as personal income then as corporate profits at the Federal
level.
C) Earnings are taxed first as corporate profits then as personal income after dividends
are paid.
D) Corporate profits are not taxed at all.
Which of the following did not help Thailand maintain its peg against the dollar in the
1990s?
A) borrowing dollars from the International Monetary Fund in exchange for baht
B) buying baht on the foreign exchange market to support higher demand for the baht
C) increasing domestic interest rates to attract more foreign investors
D) foreigners selling off new investments in Thailand
When Roxanne, a U.S. citizen, purchases a designer dress from Barneys of New York
that was made in Milan, the purchase is
A) both a U.S. and an Italian import.
B) a U.S. import and an Italian export.
C) a U.S. export and an Italian import.
D) neither an export nor an import for either country.
Figure 15-2
Figure 15-2 above shows the demand and cost curves facing a monopolist. If the firm’s
average total cost curve is ATC2, the firm will
A) suffer a loss.
B) break even.
C) make a profit.
D) face competition.
European governments removed many restrictions on flows of capital into and out of
Europe in the ________. This policy increased both U.S. investment in European stocks
and bonds and European investment in U.S. stocks and bonds.
A) 1950s and 1960s
B) 1960s and 1970s
C) 1970s and 1980s
D) 1980s and 1990s
An increase in cyclical unemployment will result in
A) an increase in the natural rate of unemployment.
B) an increase in the unemployment rate.
C) an increase in structural unemployment.
D) a decrease in frictional unemployment.
The difference between the ________ for a good and the ________ is called consumer
surplus.
A) highest price a consumer is willing to pay; lowest price a consumer is willing to pay
B) lowest price a consumer is willing to pay; price the consumer actually pays
C) highest price a consumer is willing to pay; price the consumer actually pays
D) price the consumer actually pays; actual cost to the producer
Because the monopolistically competitive firm faces a ________ demand curve for its
product, it ________ the price of its output.
A) downward-sloping; cannot influence
B) horizontal; can influence
C) horizontal; cannot influence
D) downward-sloping; can influence
Scenario 1-1 Suppose a cigar manufacturer currently sells 1,500 cigars per week and
makes a profit of $3,000 per week. The plant foreman observes, “Although the last 500
cell cigars we produced and sold increased our revenue by $7,500 and our costs by
$7,000, we are only making an overall profit of $3,000 per week so I think we need to
cut back on production. Using marginal analysis terminology, what is another economic
term for the incremental cost of producing the last 500 cigars?
A) marginal cost
B) operating cost
C) explicit cost
D) Any of the above terms are correct.
Table 8-19
Given the information above, calculate the GDP deflator in 2013.
A) 114
B) 105
C) 95
D) 87
If inflation in the United States is higher than inflation in other countries, what will be
the effect on net exports for the United States?
A) Net exports will rise as U.S. exports increase.
B) Net exports will rise as U.S. imports decrease.
C) Net exports will decrease as U.S. exports decrease.
D) Net exports will decrease as U.S. imports decrease.
A decrease in input costs in the production of LCD televisions caused the price of LCD
televisions to decrease. Holding everything else constant, how would this affect the
market for video game consoles (a complement to LCD televisions)?
A) The supply of video game consoles would increase and the equilibrium price of
video game consoles would decrease.
B) The demand for video game consoles would decrease and the equilibrium price of
video game consoles would decrease.
C) The demand for video game consoles would decrease because consumers could
afford to buy fewer LCD televisions and video game consoles.
D) The demand for video game consoles would increase and the equilibrium price of
video game consoles would increase.
The money market model is concerned with ________ and the loanable funds market
model is concerned with ________.
A) short-term real interest rates; long-term nominal interest rates
B) short-term nominal interest rates; long-term nominal interest rates
C) short-term real interest rates; long-term real interest rates
D) short-term nominal interest rates; long-term real interest rates
It is XOAicult for a private market to provide the economically efficient quantity of a
public good because
A) by law, governments cannot use cost-benefit analysis to determine this quantity.
B) public goods produce positive and negative externalities.
C) individual preferences are not revealed in the market for the good.
D) it is too expensive to produce the necessary amount of the good.