Other things being equal, the higher the interest rate, the larger investment spending.
National policy always overrides free trade in matters of environmental concern.
The substantial increase in clear property rights has severely impeded growth in many
developing countries.
Reductions in the real interest rate cause increases in investment.
When applying the marginal principle, you should pick the level at which the activity’s
marginal benefit equals its marginal cost.
When you have a job and your employer compensates you for your time with money,
resulting in both of you being better off, it is an example of a voluntary exchange.
Recall Application 4, “Securitization: the Good, the Bad, and the Ugly,” to answer the
following questions:
According to the Application, the reason why the problem caused by securitization was
exposed was because the housing boom ended.
The key difference between the real exchange rate and the market exchange rate is that
the market exchange rate controls for the level of prices.
Money demand increases as the price level decreases in the economy.
Voluntary export restraints are illegal under WTO rules.
A change in the price of a product will change the supply of that product.
Studies that focus on why oil prices go up and down fall under the realm of
macroeconomics.
The purchase by the central bank of newly created government debt is called
“monetizing the deficit.”
In the 20 years from 1980-2000, evidence suggests that there existed a high rate of
convergence across countries.
Table 11.1
Refer to Table 11.1. What is the value of the marginal propensity to import?
A) 0.15
B) 0.25
C) 0.6
D) 0.9
Figure 4.6
David’s Supply Schedule Celeste’s Supply Schedule Refer to Figure 4.6, which
shows David’s and Celeste’s individual supply curves for flower arrangements per
week. Assuming David and Celeste are the only producers in the market, if the market
quantity supplied is 350, the price must be
A) $10.
B) $20.
C) $30.
D) $40.
Figure 9.2 Refer to Figure 9.2. A movement from point to point d could be caused by
a(n)
A) decrease in government spending.
B) increase in the price of oil.
C) decrease in taxes.
D) increase in short-run aggregate supply.
In fiscal policy, the inside lags:
A) are longer than the outside lags.
B) take about the same length of time as the outside lags.
C) are shorter than the outside lags.
D) are too long that they cannot be measured.
Deciding if a company will produce automobiles by robotics or manual labor answers
the economic question of
A) who consumes the products produced.
B) what products will be produced.
C) where will the products be consumed.
D) how will the products be produced.
How many governors are included in the Board of Governors of the Federal Reserve?
A) 12
B) 10
C) 8
D) 7
Figure 18.4
For the good in Figure 18.5, with free trade, the people in the country will buy:
A) Q2.
B) Q3.
C) Q4.
D) Q5.
Figure 11.1
Refer to Figure 11.1. If the expenditures in the economy correspond to C + I, which of
the following points correspond to an equilibrium?
A) a
B)
C) c
D) a and d
An example of a public good is:
A) a levee.
B) national defense.
C) space exploration.
D) All of the above are examples of public goods.
An open market purchase by the Fed causes the value of the dollar to
A) rise, increasing net exports.
B) rise, reducing net exports.
C) fall, increasing net exports.
D) fall, reducing net exports.
If the retirement of baby boomers alone was the reason for the declining labor force
participation rate in the U.S. since 1999, then an improving economy will:
A) not stop the decline labor force participation rate as long as a large number of baby
boomers are still in the labor force.
B) encourage baby boomers to go back to the work and lower the labor force
participation rate.
C) encourage baby boomers to go back to the work and raise the labor force
participation rate.
D) cause the unemployment rate to increase.
Suppose Ariana deposits $75,000 in her bank. If the reserve ratio is 20 percent, this will
lead to a maximum increase of ________ in checking account balances throughout all
banks.
A) $15,000
B) $375,000
C) $750,000
D) $1,500,000
Recall the Application about the relationship between economic growth and inequality
to answer the following question(s).
According to this Application, recent research indicates that
A) higher growth can only occur if there is increased inequality.
B) economic growth and inequality are directly related.
C) there is no apparent relationship between economic growth and equality.
D) equality may be beneficial to growth.
Which of the following individuals can be classified as a marginally attached worker?
A) Bob, stops looking for a job as a 5th grade teacher after looking for a job the last 6
months.
B) Joe, works at McDonald’s after losing his management job at IBM.
C) Jane is currently looking for a job, and has not found one.
D) Bill, retired from 32 years of government service rather than get a 10 percent pay
cut.
Consider the following weekly production possibilities of bagpipes and accordions in
Poland and Scotland:
What is each country’s opportunity cost of producing
bagpipes and accordions? If the countries could, should they trade?
Explain the difference between a change in quantity supplied and a change in supply.
Explain why the Fed does not often choose to use the reserve requirement to control the
money supply.
In the balance of payments accounts, what does the statistical discrepancy measure?
What causes a statistical discrepancy to emerge?
Explain how the existence of lags limits the effectiveness of fiscal policy as a tool of
economic stabilization.