The y-coordinate is the
a. first number of an ordered pair and represents the point’s horizontal location.
b. second number of an ordered pair and represents the point’s horizontal location.
c. first number of an ordered pair and represents the point’s vertical location.
d. second number of an ordered pair and represents the point’s vertical location.
If the price level increased from 120 to 144, then what was the inflation rate?
a. 24 percent.
b. 25 percent.
c. 20 percent.
d. 17 percent.
Proprietary technology is technology
a. that the government prohibits firms from using.
b. conserves natural resources.
c. that is useful while other types of technology are outdated.
d. that is known or controlled only by the company that discovered it.
If the purchasing power of the dollar is always the same at home and abroad, then the
nominal exchange rate defined as units of foreign currency per dollar decreases if the
U.S. price level rises more than the price level in foreign countries.
a. True
b. False
In 2009 President Obama and Congress increased government spending. Some
economists thought this increase would have little effect on output. Which of the
following would make the effect of an increase in government expenditures on
aggregate demand smaller?
a. the MPC is small and changes in the interest rate have a small effect on investment
b. the MPC is small and changes in the interest rate have a large effect on investment
c. the MPC is large and changes in the interest rate have a small effect on investment
d. the MPC is large and changes in the interest rate have a large effect on investment
If U.S. consumers increase their demand for apples from New Zealand, then other
things the same New Zealand’s
a. imports and net exports rise.
b. imports rise and net exports fall.
c. exports and net exports rise.
d. exports rise and net exports fall.
Octavia does not currently have a job, but she has applied for several jobs in the
previous week. Eve is an unpaid stay-at-home mom who has not searched for work in
recent years. Who does the Bureau of Labor Statistics count as “out of the labor force”?
a. Octavia but not Eve
b. Eve but not Octavia
c. both Octavia and Eve
d. neither Octavia nor Eve
Figure 4-20
RefertoFigure4-20. If the price is $25, then there would be an excess
a. supply of 100 units, and price would fall.
b. supply of 300 units, and price would fall.
c. demand of 100 units, and price would fall.
d. demand of 300 units, and price would fall.
A higher rate of return on saving has
a. an income effect that discourages saving and a substitution effect that encourages
saving.
b. an income effect that encourages saving and a substitution effect that discourages
saving.
c. income and substitution effects that both decrease saving.
d. income and substitution effects that both increase saving.
Jamarcus works part-time as a pizza delivery person in a college town. The Bureau of
Labor Statistics counts Jamarcus as
a. unemployed and in the labor force.
b. unemployed and not in the labor force.
c. employed and in the labor force.
d. employed and not in the labor force.
Over the last ten years productivity grew more slowly in Iberia than in Aire while the
population and total hours worked remained the same in both countries. It follows that
a. real GDP per person must be lower in Iberia than in Aire.
b. real GDP per person grew more slowly in Iberia than in Aire.
c. the standard of living must be higher in Iberia than in Aire.
d. All of the above are correct.
A decrease in input costs to firms in a market will result in a(n)
a. decrease in equilibrium price and an increase in equilibrium quantity.
b. decrease in equilibrium price and a decrease in equilibrium quantity.
c. increase in equilibrium price and a decrease in equilibrium quantity.
d. increase in equilibrium price and an increase in equilibrium quantity.
In the U.S., each additional year of schooling has historically raised a person’s wage on
average by about
a. 2 percent.
b. 5 percent.
c. 10 percent.
d. 15 percent.
A low sacrifice ratio would make a central bank less willing to reduce the inflation rate.
a. True
b. False
Consider two labor markets in which jobs are equally attractive in all respects other
than the wage rate. All workers are equally able to do either job. Initially, both labor
markets are perfectly competitive. If a union organizes workers in one of the markets,
then the wage rates will tend to
a. rise in both markets.
b. fall in both markets
c. rise for the union jobs, but remain unchanged for the nonunion jobs.
d. rise for the union jobs and fall for the nonunion jobs.
The art in scientific thinking is
a. finding the right problem to study.
b. deciding which assumptions to make.
c. the ability to make an abstract subject easy to understand.
d. not something in which economists have to be skilled.
You know an economist has crossed the line from scientist to policy adviser when he or
she
a. claims that the problem at hand is widely misunderstood by non-economists.
b. talks about the evidence.
c. makes normative statements.
d. makes a claim about how the world is.
You have a bond that entitles you to a one-time payment of $10,000 one year from now.
The interest rate is 10 percent per year. How much is the bond worth today?
a. $9,090.91
b. $10,000.00
c. $8,264.46
d. $9,523.81
The residents of country A earn $500 million of income from abroad. Residents of other
countries earn $200 million in country A. These earnings are accounted for in country
A’s
a. GNP which is larger than GDP in country A.
b. GNP which is smaller than GDP in country A.
c. GDP which is larger than GNP in country A.
d. GDP which is smaller than GNP in country A.
The Bureau of Labor Statistics defines the unemployment rate as the percentage of
a. those unemployed relative to those employed.
b. the labor force that is unemployed.
c. the adult population that is unemployed.
d. the adult population that is unemployed or not in the labor force.
Over the last 80 years, the average annual U.S. inflation rate was about
a. 3.6 percent, implying that prices have increased 16-fold.
b. 4 percent, implying that prices have increased 17-fold.
c. 4 percent, implying that prices have increased 16-fold.
d. 3.6 percent, implying that prices increased about 17-fold.
Which of the following is an example of a positive, as opposed to normative,
statement?
a. When the minimum wage is increased, unemployment is a predictable consequence.
b. The income tax rate should be increased to offset the budget deficit.
c. Increasing government spending is the best way to help the economy move out of a
recession.
d. More than one of the above are positive statements.
Figure 4-20
RefertoFigure4-20. If the price is $10, then there would be a
a. shortage of 400 units, and price would rise.
b. surplus of 400 units, and price would rise.
c. shortage of 600 units, and price would rise.
d. surplus of 600 units, and price would rise.
Policymakers who control monetary and fiscal policy and want to offset the effects on
output of an economic contraction caused by a shift in aggregate supply could use
policy to shift
a. aggregate supply to the right.
b. aggregate supply to the left.
c. aggregate demand to the right.
d. aggregate demand to the left.
Historically, stocks have offered higher rates of return than bonds.
a. True
b. False
Which of the following events must cause equilibrium quantity to fall?
a. demand increases and supply decreases
b. demand and supply both decrease
c. demand decreases and supply increases
d. demand and supply both increase
The short-run effects of an increase in the saving rate include
a. a higher level of productivity.
b. a higher growth rate of productivity.
c. a higher growth rate of income.
d. All of the above are correct.
If an economy is producing efficiently, then
a. there is no way to produce more of one good without producing less of another good.
b. it is possible to produce more of both goods without increasing the quantities of
inputs that are being used.
c. it is possible to produce more of one good without producing less of another good.
d. it is not possible to produce more of any good at any cost.
Susan is a plant manager in charge of a factory in a relatively poor country. Even
though market wages are low, she decides to raise the wages of her workers. Her
decision
a. might increase profits if it means that the wage is high enough for her workers to eat
a nutritious diet that makes them more productive.
b. will help eliminate the excess supply of labor.
c. may cause her workers to reduce the effort they expend at their jobs.
d. All of the above are correct.
Which of the following tends to make aggregate demand shift further to the right than
the amount by which government expenditures increase?
a. the crowding-out effect
b. the multiplier effect
c. the exchange-rate effect
d. the interest-rate effect
The average person’s share of the U.S. government debt as a percentage of lifetime
income is
a. less than 1 percent.
b. more than 1 percent but less than 2 percent
c. about 4 percent
d. over 6 percent