Table 28-4
2010 Labor Data for Adults (ages 16 and older) in Meditor
RefetoTable28-4. What is the adult unemployment rate in Meditor?
a. 4.2%
b. 6.25%
c. 6.7%
d. 10%
The natural rate of unemployment refers to the current unemployment rate.
a. True
b. False
In 1931, President Herbert Hoover was paid a salary of $75,000. Government statistics
show a consumer price index of 15.2 for 1931 and 229.6 for 2012. President Hoover’s
1931 salary was equivalent to a 2012 salary of about
a. $4,965.
b. $1,132,895.
c. $1,057,894.
d. $16,080,001.
Structural unemployment results when the number of jobs is insufficient for the number
of workers.
a. True
b. False
The Bureau of Labor Statistics produces data on unemployment
a. weekly.
b. monthly.
c. quarterly.
d. yearly.
The legal tender requirement means that
a. people are more likely to accept the dollar as a medium of exchange.
b. the government must hold enough gold to redeem all currency.
c. people may not make trades with anything else.
d. All of the above are correct.
Positive statements are
a. prescriptive.
b. claims about how the world should be.
c. claims about how the world is.
d. made by economists speaking as policy advisers.
Figure 3-3
Refer to Figure3-3. If the production possibilities frontier shown for Arturo is for 100
hours of production, then how long does it take Arturo to make one burrito?
a. 1/4 hour
b. 1/3 hour
c. 3 hours
d. 4 hours
In the long run, which of the following depends primarily on the growth rate of the
money supply?
a. the natural rate of unemployment and the inflation rate
b. the natural rate of unemployment but not the inflation rate
c. the inflation rate but not the natural rate of unemployment
d. neither the natural rate of unemployment nor the inflation rate
Carl and Carly are American residents. Carl buys stock of a corporation in Austria.
Carly opens a coffee shop in Austria. Whose purchase, by itself, decreases Austria’s net
capital outflow?
a. Carl’s
b. Carly’s
c. both Carl’s and Carly’s
d. neither Carl’s nor Carly’s
Which of the following would reduce the natural rate of unemployment?
a. both an increase in the rate of money growth and increased unemployment
compensation
b. an increase in the rate of money growth but not increased unemployment
compensation
c. an increase in unemployment compensation but not an increase in the rate of money
growth.
d. neither an increase in unemployment compensation nor an increase in the rate of
money growth.
Which of the following entities actually executes open-market operations?
a. the Board of Governors
b. the New York Federal Reserve Bank
c. the Federal Open Market Committee
d. the Open Market Committees of the regional Federal Reserve Banks
Tax cuts affect only aggregate demand not aggregate supply.
a. True
b. False
Figure 35-4. The left-hand graph shows a short-run aggregate-supply (SRAS) curve
and two aggregate-demand (AD) curves. On the left-hand diagram, the price level is
measured on the vertical axis; on the right-hand diagram, the inflation rate is measured
on the vertical axis.
RefertoFigure35-4.What is measured along the horizontal axis of the right-hand
graph?
a. the interest rate
b. the price level
c. the government’s budget deficit as a percent of GDP
d. the unemployment rate
Rapid population growth
a. was hailed by Thomas Robert Malthus as the key to future economic growth.
b. tends to lead to higher levels of educational attainment.
c. is the main reason that less developed nations are poor.
d. may depress economic prosperity by reducing the amount of capital which each
worker has to work with.
What you give up to obtain an item is called your
a. opportunity cost.
b. explicit cost.
c. monetary cost.
d. direct cost.
Which of the following groups is largely responsible for carrying out the Fed’s tasks of
regulating banks and ensuring the health of the financial system?
a. FOMC
b. the Board of Governors
c. the New York Fed
d. the regional Federal Reserve Banks
Which of the following restrictions implies that private saving and investment are equal
for a closed economy?
a. Consumption and private saving are equal.
b. The economy’s government is running neither a surplus nor a deficit.
c. Private saving and public saving are both zero.
d. No restriction is necessary; private saving and investment are equal for all closed
economies.
Last year the imaginary nation of Freedonia had a population of 2,800 and real GDP of
16,800,000. This year it had a population of 2,700 and real GDP of 15,390,000. About
what was the growth rate of real GDP per person between last year and this year?
a. -5.3 percent
b. -5 percent
c. 5 percent
d. 5.3 percent
Peru has exports of $31.5 million and imports of $30 million. Peru
a. sells more overseas then it buys from overseas; it has a trade deficit.
b. sells more overseas then it buys from overseas; it has a trade surplus.
c. buys more from overseas then it sells overseas; it has a trade deficit.
d. buys more from overseas then it sells overseas; it has a trade surplus.
Someone who loses his job at a truck factory because the demand for trucks has fallen
and the demand for cars has risen, is structurally unemployed.
a. True
b. False
Some poor countries appear to be falling behind rather than catching up with rich
countries. Which of the following could explain the failure of a poor county to catch
up?
a. The poor country has outward-oriented trade policies.
b. The poor country allows foreign direct investment.
c. The poor country has poorly developed property rights.
d. All of the above are correct.
In a closed economy, if Y and T remained the same, but G rose and C fell but by less
than the rise in G, what would happen to private and national saving?
a. private and national saving would rise
b. private and national saving would fall
c. private saving would rise and national saving would fall
d. private saving would fall and national saving would rise
Other things the same, in the open-economy macroeconomic model, if the exchange
rate rises,
a. the demand for dollars shifts left.
b. the demand for dollars shifts right.
c. the quantity of dollars demanded falls.
d. the quantity of dollars demanded rises.
When inflation rises, people tend to go to the bank
a. more often, giving rise to menu costs.
b. more often, giving rise to shoeleather costs.
c. less often, giving rise to redistribution costs.
d. less often, thereby lessening the severity of the inflation tax.
The nominal exchange rate is 4 Saudi Arabian riyals, 8 Moroccan dirham, 60 Indian
rupees, or .8 euros per U.S. dollar. A fast food breakfast costs $5 in the U.S., 30 riyals in
Saudi Arabia, 40 Moroccan dirham in Morocco, 250 Indian rupees in India, and 5 euros
in France. According to these numbers, where is the real exchange rate between
American and foreign goods the lowest?
a. Saudi Arabia
b. Morocco
c. India
d. Britain
If a country’s budget deficit rises, then its exchange rate
a. rises, so its imports rise.
b. rises, so its imports fall.
c. falls, so its imports rise.
d. falls so its imports fall.
The theory of liquidity preference was developed by Irving Fisher.
a. True
b. False
If the reserve ratio is 4 percent, then the money multiplier is
a. 24.
b. 25.
c. 26.
d. 4.
A rightward shift of a supply curve is called a(n)
a. increase in supply.
b. decrease in supply.
c. decrease in quantity supplied.
d. increase in quantity supplied.
Macroeconomic forecasts are
a. precise; this makes policy lags less relevant.
b. precise; this makes policy lags more relevant.
c. imprecise; this makes policy lags less relevant.
d. imprecise; this makes policy lags more relevant.
If a country had a trade surplus of $100 billion and then its exports rose by $40 billion
and its imports rose by $30 billion, its net exports would now be
a. $110 billion
b. $90 billion.
c. $70 billion.
d. $60 billion.
Thousands of people develop lung cancer from second-hand exposure to cigarette
smoke. This is an example of
a. a market failure caused by an externality.
b. a market failure caused by market power.
c. a market failure caused by equality.
d. There is no market failure in this case.