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Table 11.6 Refer to Table 11.6. If government spending increases by
$100, equilibrium output increases by:
A) $100.
B) $200.
C) $400.
D) $800.
Figure 10.2
Refer to Figure 10.2 to answer the question below. Points A, B, and C correspond to a
GDP level in Year 2. Suppose that in Year 1 the economy was projected to be at Pt. A by
Year 2. Which of the following policies could bring the economy to Point B instead?
A) a correctly timed tax cut
B) an ill-timed tax cut
C) a correctly timed tax increase
D) an ill-timed tax increase
Inflation is:
A) sustained increases in the average prices of all goods and services.
B) sustained decreases in the average prices of all goods and services.
C) sustained increases in the total prices of all goods and services.
D) sustained decreases in the total prices of all goods and services.
If the money multiplier is 4, the required reserve ratio is:
A) 2%.
B) 20%.
C) 25%.
D) 50%.
Refer to Figure 11.2. Suppose that Ca = 40, MPC = 0.8, I = 10. The slope of the
consumption function is
A) 0.1.
B) 0.2.
C) 0.8.
D) 0.9.
Table 2.1
Kaitlyn and Larissa have formed a dog bathing and grooming business. The number of
dogs they can bathe or groom in any given day is depicted in Table 2.1. As they groom
more dogs, the opportunity cost of grooming additional dogs
A) falls.
B) rises.
C) remains constant.
D) depends on the prices being charged.
The trade-offs made by the U.S. government to fund the war in Iraq
A) prove that the government is spending too much on the war.
B) show that the government is justified in its war spending.
C) exceed the benefits derived from the war.
D) represent what was potentially sacrificed to engage in the war.
Recall the Application about the U.S. "Locomotive Effect": how U.S. growth affects
foreign economies and the demand for foreign products, to answer the following
question(s). From the early 1990s until quite recently, the U.S. economy grew faster
than the rest of the world, with its share of the world economy increasing from
approximately 26 percent in 1992 to over 32 percent in 2001. Because the U.S.
economy is such an important part of the world economy, its growth promoted growth
in foreign countries.According to this Application, as the U.S. economy grew from the
early 1990s, U.S. exports also increased as our demand for foreign products promoted
growth in foreign countries. This increase in exports would tend to
A) increase U.S. GDP and reduce unemployment in the short run.
B) increase U.S. GDP and increase unemployment in the short run.
C) decrease U.S. GDP and reduce unemployment in the short run.
D) decrease U.S. GDP and increase unemployment in the short run.
The fact that the Nigerian oil industry is managed by large foreign corporations tends to
make Nigeria's:
A) GDP exceed its GNP.
B) GNP exceed its GDP.
C) GDP equal its GNP.
D) GDP equal its NDP.
In the simple Keynesian cross model with no government or foreign sectors, at the
equilibrium level of output
A) saving is equal to zero.
B) saving is less than investment.
C) saving is equal to investment.
D) saving is greater than investment.
Which of the following is not a microeconomic question?
A) How does a particular health care reform program affect physicians' incomes?
B) What would happen to gasoline consumption if the gasoline tax were increased?
C) How should Judy decide how many hours to study for her economics exam?
D) All of the above are microeconomic questions.
Table 6.11 Refer to
Table 6.11. If 1999 is the base year, the price index in 1999 is:
A) 100.
B) 121.7.
C) 138.7.
D) 1998.
A decrease in the money supply will cause output:
A) to decrease in the short run; not change in the long run.
B) to decrease in the short run; decrease in the long run.
C) to increase in the short run; increase in the long run.
D) to increase in the short run, decrease in the long run.
Other things equal, relatively poor countries tend to grow ________ than relatively rich
countries and this is known as ________.
A) more slowly; convergence
B) more slowly; divergence
C) more quickly; divergence
D) more quickly; convergence
In the long run:
A) real GDP is completely demand-determined.
B) prices are sticky.
C) increases in the supply of money lead to increases in real GDP.
D) real GDP is determined by the aggregate supply.
Daily Output of Scotland and Poland
Table 18.1 Refer to Table 18.1. After trade begins,
________ will specialize in the production of accordions and ________ will specialize
in the production of bagpipes.
A) Scotland; Poland
B) Poland; Scotland
C) Poland; Poland
D) Scotland; Scotland
