Due to society’s overall scarcity of resources,
a. only households are constrained by income
b. only government agencies are constrained by limited budgets
c. only business firms are constrained by the cost of buying their inputs
d. households, business firms and government agencies all face constraints
e. households and business firms face constraints, but government agencies do not
With other things constant, the supply schedule for a particular good indicates the
quantities
a. actually sold with different productive capacities
b. supplied with different productive capacities
c. actually sold at various prices of the good
d. supplied at various prices of the good
e. supplied at various prices of the good and with various productive capacities
Most changes in the money supply are the consequence of a change in the required
reserve ratio.
GDP measures the output produced within a nation’s borders.
Which of the following is assumed constant along a given supply curve for pistachio ice
cream?
a. the price of pistachios and the price of pistachio ice cream
b. the price of pistachio ice cream and the price of alternate flavors of ice cream
c. the prices of alternate goods, but not the prices of inputs
d. all variables affecting supply other than the productive capacity of the industry
e. all variables affecting supply other than the price of pistachio ice cream
Structural unemployment
a. arises from a mismatch between available jobs and workers’ skills or geographic
location
b. is short-term joblessness experienced by those re-entering the labor force after a long
absence
c. occurs because of changes in seasons, tourist patterns, and similar factors
d. does not occur when the economy is at full employment
e. is joblessness resulting from business cycle movements
Refer to Figure 15-12. The vertical line most likely represents the
a. money demand curve
b. short-run aggregate demand curve
c. long-run aggregate demand curve
d. short-run aggregate supply curve
e. long-run aggregate supply curve.
An economic system includes
a. money, stocks and bonds
b. a mechanism for allocating resources and a mode of resource ownership
c. a mechanism for dividing up resources and a way to ensure that technology advances
d. a mechanism for allocating stocks, bonds and money and a mode of technology
e. government ownership, labor time, and machines
Which of the following is correct with regard to the supply of money?
a. The money supply is inversely related to the interest rate.
b. The money supply is independent of the interest rate.
c. The money supply is positively related to the interest rate with a relatively flat slope.
d. The money supply curve is horizontal.
e. The money supply is positively related to the interest rate with a relatively steep
slope.
Refer to Figure 9-7. Everything else equal, which efficient production point will result
in the least economic growth?
a. A
b. B
c. C
d. D
e. all points would promote growth equally
The part of consumption that is determined by income is referred to as autonomous
consumption.
After a positive demand shock, what are the expected long-run adjustments?
a. Wages fall, price level falls, and output falls back to potential.
b. Wages rise, price level rises, and output falls back to potential.
c. Wages fall, price level rises, and output rises back to potential.
d. Wages rise, price level falls, and output falls back to potential.
e. Wages rise, price level rises, and output rises.
If the Fed wants to lower the interest rate, it will
a. buy bonds and decrease the money supply.
b. buy bonds and increase the money supply.
c. sell bonds and decrease the money supply.
d. sell bonds and increase the money supply.
e. sell bonds and decrease money demand.
A country currently is using all its land to produce wheat and grapes. However, the land
most suited to growing grapes is being used to produce wheat, and the land most suited
to growing wheat is being used to produce grapes. This is an example of
a. increasing opportunity costs
b. involuntary unemployment
c. productive inefficiency
d. central planning
e. communal ownership
Assume that the publishing industry produces novels and textbooks, as shown in the
production possibilities frontier in Figure 2-9. Between points F and G, the opportunity
cost of ten more novels equals __________. Between points G and H, the opportunity
cost of ten more novels equals __________.
Figure 2-9
a. 0.4 textbooks; 0.5
textbooks
b. 4 textbooks; 5 textbooks
c. 4 million textbooks; 5 million textbooks
d. 2.5 textbooks; 2 textbooks
e. 10 million textbooks; 5 million textbooks
The assumption that labor markets clear makes it very easy for the classical model to
explain expansions.
An increase in the corporate profits tax would shift the demand for loanable funds curve
to the left.
Restructuring social security benefits might stimulate economic growth; however, we
must consider the cost of this action, which is
a. adequate benefits for everyone except those who originally needed social security
b. an increased burden on other social programs such as food stamps
c. a reduction in saving
d. a reduction in other governmental programs
e. a movement of the production function to the left
What is the relationship between the government’s budget deficit and its tax revenue?
a. Budget deficit = government spending + tax revenue
b. Budget deficit = government spending – tax revenue
c. Government spending = budget deficit / tax revenue
d. Tax revenue = government spending + budget deficit
e. Budget deficit = tax revenue – government spending
The classical model explains away unemployment as a long-run problem by assuming
that
a. coordination in labor markets will occur within an acceptable period of time
b. the economy consists of multiple, coordinated sectors
c. it causes firms to cut back on their long-run production plans
d. what is a problem during one period will seem more like an opportunity for
economic growth during another period
e. higher saving will stimulate increased investment