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Prices that do not always adjust rapidly to maintain equality between quantity supplied
and quantity demanded are known as:
A) sticky prices.
B) fixed prices.
C) regulatory prices.
D) market prices.
Refer to Figure 15.2. A decrease in wages is represented by a movement from point
________ to point ________.
A) d; c
B) c;
C) a;
D) a; e
If the government increased its purchases of goods and services by $12,000, and this
resulted in an eventual increase in GDP and income of $60,000, the MPS would be
equal to
A) 0.2.
B) 0.4.
C) 0.8.
D) 2.
Recall the Application about the factors involved in causing recessions, and the causes
of recessions in the United States from 1893 to 1990 to answer the following
question(s).
Recall the Application. Recessions can occur either when there is a(n) ________ in
aggregate demand or a(n) ________ in aggregate supply.
A) increase; increase
B) increase; decrease
C) decrease; decrease
D) decrease; increase
Which of the following groups of countries are members of NAFTA?
A) Japan, Canada, and Mexico
B) the United States, Japan, and Mexico
C) the United States, France, and Germany
D) the United States, Canada, and Mexico
Recall the Application about declining U.S. labor force participation since 1999 to
answer the following question.
According to this Application, one explanation for the decline in the U.S. labor force
participation rate since 1999 is
A) higher college enrollment.
B) the increase in foreign ownership of U.S.-based companies.
C) sluggish economic growth that resulted in more discouraged workers.
D) the growing number of workers who have postponed retirement.
Refer to Figure 15.2. The unemployment rate is below the natural rate at point
A) a.
B) .
C) c.
D) d.
Recall Application 3, "The Ends of Hyperinflations," to answer the following questions:
According to the Application, which country below did not have hyperinflation after
World War I.
A) Great Britain
B) Austria
C) Germany
D) Hungary
A rightward shift in the aggregate demand curve can be caused by:
A) an increase in government spending.
B) a decrease in taxes.
C) an increase in the money supply.
D) all of the above.
Olives are used to produce olive oil. If the price of olives increases
A) the demand for olive oil increases.
B) the demand for olive oil decreases.
C) the supply of olive oil increases.
D) the supply of olive oil decreases.
An increase in U.S. imports from Mexico ________ the supply of dollars and ________
the demand for pesos.
A) decreases; decreases
B) increases; increases
C) increases; decreases
D) decreases; increases
A tax on labor results in a shift in the labor:
A) demand curve to the left.
B) supply curve to the left.
C) demand curve to the right.
D) supply curve to the right.
Which of the following is NOT an example of technological progress?
A) an increase in the labor supply as the result of population growth
B) the development of laser eye surgery
C) the invention of the microwave oven
D) the development of smart phones
Critics of a balanced-budget amendment believe that a balanced budget would not
allow the government enough flexibility to:
A) get the economy out of recessions.
B) raise wages for civil servants.
C) fight inflation.
D) spend budget surpluses.
When the economy is in a liquidity trap, one way to get the economy out of a recession
is to:
A) expand the money supply.
B) contract the money supply.
C) increase government expenditures.
D) increase taxes.
Suppose consumer tastes and preferences shift from pizza to tacos. In the short run
case, these changing tastes will result in pizza restaurants ________ pizza prices and
taco restaurants ________ taco prices.
A) increasing; decreasing
B) decreasing; increasing
C) decreasing; decreasing
D) increasing; increasing
