When there are implicit costs of production,
If the required reserve ratio is 0.2, the demand deposit multiplier is
a. 0.2
b. 0.8
c. 1.25
d. 5.0
e. 8.0
If U.S. GDP drops and South Korean GDP remains unchanged, which of the following
will happen in the Korean won market?
a. A rightward shift of the supply curve, a depreciation of the won, and a larger number
of won traded
b. A rightward shift of the demand curve, a depreciation of the won, and a smaller
number of won traded
c. A rightward shift of the demand curve, an appreciation of the won, and a larger
number of won traded
d. A leftward shift of the demand curve, a depreciation of the won, and a smaller
number of won traded
e. A leftward shift of the supply curve, an appreciation of the won, and a smaller
number of won traded.
Production possibilities frontiers are typically concave (bowed out) from the origin
because
If free international trade is compromised by the imposition of an import quota or tariff,
a. all of the following are true
b. import-competing producers in the country that imposes the tariff or quota will be
able to sell a larger quantity at higher prices
c. consumers of import goods will obtain a larger quantity at lower prices
d. workers in export industries will find more jobs
e. consumers of export goods will obtain a larger quantity, although only at higher
prices
What are the components of private consumption expenditures?
a. Services, newly-constructed homes, durable goods, and nondurable goods
b. Services, durable goods, and nondurable goods
c. Services and nondurable goods
d. Services, durable goods, and used goods
e. Services and durable goods
Why doesn’t the Fed eliminate inflation from the economy entirely?
a. It is incapable of doing so.
b. It believes that inflation is bad for the economy.
c. It believes that the measured inflation rate understates the true rate of inflation.
d. It recognizes that continuing inflation helps labor markets adjust more easily.
e. If it did so, no one would get a raise in salary.
Which of the following is not among the factors that influence economic growth?
a. Increase in employment
b. Growth in physical capital stock
c. Technological progress
d. Lower government debt
e. An efficient political and legal system
If minimum efficient scale is small relative to the maximum potential market,
Which of the following is not true of the demand deposit multiplier?
a. Its formula is 1/RRR.
b. It represents the change in demand deposits generated by a change in reserves.
c. It represents the change in demand deposits generated by a change in taxes.
d. It is a way to determine the effect on money supply from a given Federal Reserve
action.
e. It ignores changes in the behavior of the public and the banks.
There have been no major banking panics in the U.S. since the creation of the Federal
Reserve System.
The Fed typically increases the money supply by
a. selling government bonds
b. buying government loans
c. selling government loans
d. printing more currency
e. buying government bonds
Newspaper reports about good news in the economy are often followed by declines in
stock and bond prices because
a. the Fed reacts in anticipation of the news to prevent speculation
b. financial markets are often irrational
c. financial markets prefer recessions to spending shocks
d. stock and bond holders fear the Fed’s reaction to possible overheating
e. newspapers may be confused about the performance of financial markets
A physician’s knowledge and skills are referred to by economists as
A change in autonomous consumption causes a movement along the aggregate
expenditure line, while a change in consumption that depends on income causes a shift
of the aggregate expenditure line.
The best outcome the firm illustrated in Figure 11-3 can achieve is a(n)