Figure 2.3 In Figure 2.3, point A:
A) implies unemployment of some resources.
B) is the optimum.
C) cannot be produced.
D) all of the above.
As the real interest rate ________, the real investment spending ________.
A) increases; increases
B) decreases; decreases
C) increases; decreases
D) changes; does not change
Replacing the personal income tax with a consumption tax would:
A) be more favorable to corporations than to households.
B) be the same as imposing a “flat tax.”
C) require higher tax rates in order to keep government revenues unchanged.
D) allow for lower tax rates for everyone.
Figure 9.2 Refer to Figure 9.2. Suppose the economy is at Point A, an increase in the
price level causes a movement to Point:
A) E.
B) D.
C) C.
D) B.
________ is a situation in which resources are limited in quantity and can be used in
different ways.
A) Choice
B) Scarcity
C) Economics
D) Supply and demand
Suppose the stock of capital remains constant. By adding more labor, perhaps a second
work shift, output
A) decreases.
B) increases.
C) remains the same.
D) becomes more costly.
If the number of unemployed equals 20,000, the number of employed equals 60,000,
and the total population 16 years of age and older is 90,000, the labor-force
participation rate:
A) is 33.33%.
B) is 66.2%.
C) is 88.9%.
D) cannot be determined from this information.
An improvement in technology will cause:
A) a rightward shift in the aggregate demand curve.
B) a leftward shift in the aggregate demand curve.
C) a rightward shift in the aggregate supply curve.
D) a leftward shift in the aggregate supply curve.
For country A, an import is a good produced in:
A) country B and purchased by residents of country B.
B) country B and purchased by residents of country A.
C) country A and purchased by residents of country B.
D) country A and purchased by residents of country A.
Velocity of money =
A) (nominal GDP) x (money supply).
B) (nominal GDP) / (money supply).
C) (nominal GDP) / (money demand).
D) (nominal GDP) + (money demand).
An export is a product
A) produced in and purchased by residents of the home country.
B) produced in and sold to the residents of a foreign country.
C) produced in the home country and sold in another country.
D) produced in a foreign country and purchased by the residents of the home country.
If sellers have an expectation of lower future prices:
A) the current supply of that good will decrease.
B) the current demand for that good will increase.
C) the current supply of that good will increase.
D) the current demand for that good will decrease.
When a country experiences a balance of payments deficit in a fixed exchange rate
system, it usually ________ the currency to encourage exports.
A) allows the devaluation of
B) increases the printing of
C) allows the revaluation of
D) abandons
Exchange rates that are determined by the unregulated forces of supply and demand are:
A) fixed exchange rates.
B) pegged exchange rates.
C) managed exchange rates.
D) flexible exchange rates.
Suppose consumers save 5 percent of their incomes. If the government collects 100
dollars in taxes from each taxpayer, private saving will ________ per taxpayer.
A) increase by $105
B) decrease by $95
C) decrease by $5
D) decrease by 95 cents
Daily Output of Japan and U.S.
Table 18.2 Refer to Table 18.2. The opportunity cost of
tractors in the U.S. is:
A) 2 stereos.
B) 1/4 stereo.
C) 1/2 stereo.
D) 4 stereos.
Figure 18.1
Refer to Figure 18.1. The opportunity cost of hang gliders in Canada is
A) 1/4 of a bicycle.
B) 1/2 of a bicycle.
C) 2 bicycles.
D) 4 bicycles.
Patinkin and Modigliani argue that Keynes’ argument that demand could fall below
production would hold only if:
A) prices and wages are not fully flexible.
B) prices and wages are fully flexible.
C) prices are fully flexible while wages are not.
D) inputs are fully flexible.
Today, bank runs are:
A) uncommon because of the presence of deposit insurance.
B) common because deposit insurance is useless.
C) common because individuals have little faith in the banking system.
D) uncommon because people have less funds in their savings accounts.