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Figure 19.3 Refer to Figure 19.3. The market equilibrium for yen is currently at Point
A. A decrease in the price level in Japan causes a movement to Point ________.
A) B
B) D
C) E
D) C
The time it takes for a policy to actually work is known as
A) fiscal policy.
B) crowding out.
C) inside lags.
D) outside lags.
When is an import ban the same as an import quota?
A) when the quota is zero
B) never
C) when all the goods under the quota is taxed
D) when the good under the import ban is taxed
Scarcity can best be defined as a situation in which:
A) there are no buyers willing to purchase what sellers have produced.
B) there are not enough goods to satisfy all of the buyers demands.
C) resources are limited in quantity and can be used in different ways.
D) there is more than enough money to satisfy consumers wants.
Using a production possibility curve, economic growth is represented as:
A) a shifting of the curve outward.
B) a flatter curve.
C) a steeper curve.
D) a shifting of the curve inward.
If the population increases, the market demand for most products will
A) not change.
B) decrease.
C) increase.
D) depend on supply.
In the long run
A) price and output levels are mutually dependent.
B) the level of output depends on the price level.
C) the level of output is independent of the price level.
D) the price level depends on the level of output.
Suppose initially the federal budget is balanced. The economy then enters a period of
expansion. What is likely to happen to the federal budget?
A) It will show a surplus.
B) It will show a deficit.
C) It will remain balanced.
D) It will automatically stabilize.
Because the long-run aggregate supply curve is drawn as a vertical line, then we
effectively assume that the level of production in the economy is determined solely by:
A) the amount of inputs and the level of technology.
B) the demand for the goods and services.
C) the price level.
D) the wage rate in the economy.
Economic growth is best measured by the increase in:
A) nominal GDP.
B) investment.
C) household consumption.
D) real output per person.
The Republic Bank has $2 million in deposits and $250,000 in reserves. If the required
reserve ratio is 10%, excess reserves are equal to:
A) $200,000.
B) $50,000.
C) zero.
D) $450,000
Table 6.12 Refer to
Table 6.12. If 1998 is the base year, the inflation rate between 1999 and 2000 is:
A) 1.40%.
B) 1.01%.
C) 0.5%.
D) none of the above
A flat tax which does allow deductions for investment spending is a type of
A) luxury tax.
B) consumption tax.
C) investment tax.
D) excise tax.
In the long run, a decrease in the growth rate of the money supply will cause:
A) nominal interest rates to decrease and will not affect the real interest rate.
B) nominal interest rates to increase and will not affect the real interest rate.
C) nominal interest rates to decrease and decrease the real interest rate.
D) nominal interest rates to increase and will increase the real interest rate.
What kind of active fiscal policy was implemented in early 2008 in response to a
slowing economy?
A) tax rebates and investment incentives
B) increased government spending on infrastructure
C) decreased government spending on infrastructure
D) increased tax rates to the rich aimed at closing the budget deficit
