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If a country's real GDP is growing at 5 percent and the population is also growing at 5
percent, its:
a. per capita real GDP grows at an increasing rate.
b. per capita real GDP grows at a constant rate.
c. population growth will eventually exceed real GDP.
d. per capita real GDP decreases at a constant rate.
e. per capita real GDP does not change.
Which type of demand for money causes the demand for money curve to slope
downward?
a. Speculative demand.
b. Precautionary demand.
c. Transactions demand.
d. Foreign-exchange demand.
An increase in the supply of the product implies:
a. producers will now charge a higher price for a given quantity of output.
b. the supply curve will shift to the left.
c. some producers are dropping out of this market.
d. producers will now charge a lower price for a given quantity of output.
e. the price of this product has increased.
Which one of the following statements is true?
a. Resources flow from the government to households.
b. Resources flow from firms to households.
c. Taxes flow from firms to the government.
d. Resource payments flow from firms to households
e. Imports flow from firms to foreign economies.
People in poor countries may have difficulties achieving economic growth because:
a. their production possibilities curves slope upward instead of downward.
b. they must cut back on current consumption to increase capital goods.
c. they have a solid consumption base already in place.
d. their resource bases are fully developed.
e. the law of increasing costs makes it hard to produce more goods.
Keynes called the money people hold in order to pay unforeseen or unexpected
expenses the:
a. transactions demand for holding money.
b. precautionary demand for holding money.
c. speculative demand for holding money.
d. store of value demand for holding money.
Which of the following is true of the production possibilities curve?
a. It assumes a fixed level of technology.
b. It assumes resources are fixed.
c. It assumes resources are fully employed.
d. All of these are correct.
Because market values are subjective, many assets are carried on the balance sheet at
their acquisition cost.
a. True
b. False
When sketched as a function of disposable income, the investment demand curve is:
a. always horizontal.
b. always vertical.
c. upward sloping.
d. parabolic.
Exhibit 1A-3 Straight line
As shown in Exhibit 1A-3, the slope of
straight line AB:
a. decreases with increases in X.
b. increases with increases in X.
c. increases with decreases in X.
d. remains constant with changes in X.
