In the classical model, beginning from an equilibrium in which the government is
running a budget surplus, an increase in government spending will
a. lower the wage rate
b. increase the supply of loanable funds
c. cause total spending to decline
d. cause total spending to increase
e. leave total spending unchanged
As a percentage of GDP, non-military government purchases have remained very low
and stable.
A new public offering that significantly shifts the supply curve for a firm’s shares will
If there is a strong possibility that the dollar price of the Japanese yen will fall in the
next few months, which of the following would we expect to happen right now in the
market for yen?
a. A rightward shift of the demand curve, a leftward shift of the supply curve, and an
appreciation of the yen
b. A leftward shift of the demand curve, a rightward shift of the supply curve, and an
appreciation of the yen
c. A leftward shift of the demand curve, a leftward shift of the supply curve, and a
depreciation of the yen
d. A rightward shift of the demand curve, a rightward shift of the supply curve, and an
appreciation of the yen
e. A leftward shift of the demand curve, a rightward shift of the supply curve, and a
depreciation of the yen.
A merger wave can be set off
A country’s total output, or real GDP, is determined only by its aggregate production
function.
Suppose a woman has an exterminator treat her house every month but she then marries
the exterminator who now performs the service for free. As a result, GDP would
a. increase
b. decrease
c. not change, because services are not counted in the first place
d. not change, as the activity occurred monthly
e. not change, because the activity is an intermediate good or service
Which of the following factors would not be considered by a fundamental analyst when
predicting stock prices?
A tax that is imposed on each unit of an imported good is known as a(n)
a. quota
b. ad valorem quota
c. implicit quota
d. tariff
e. subsidy
The demand for labor is likely to decrease if
Which of the following types of unemployment can the classical model not explain?
a. Structural unemployment
b. Cyclical unemployment
c. Seasonal unemployment
d. Frictional unemployment
e. Temporary unemployment
Saving and taxes are considered leakages from the spending stream.
When a monopoly is created through government franchise,
The marginal propensity to consume (MPC) is typically
a. less than zero or greater than 1.0
b. equal to zero
c. equal to 1.0
d. between -1.0 and 1.0
e. between zero and 1.0