In the U.S. over the past century, increases in labor
a. supply have outpaced increases in labor demand, causing the average wage rate to
fall
b. supply have outpaced increases in labor demand, causing the average wage rate to
rise
c. demand have outpaced increases in labor supply, causing the average wage rate to fall
d. demand have outpaced increases in labor supply, causing the average wage rate to
rise
e. demand have occurred at the same pace as increases in labor supply, so the average
wage rate has remained unchanged
The natural rate of unemployment never changes.
If the government decreases taxes, which of the following would occur?
a. An increase in GDP, an increase in the price level, an increase in money demand, and
an increase in the interest rate
b. An increase in GDP, a decrease in the price level, an increase in money demand, and
a decrease in the interest rate
c. A decrease in GDP, a decrease in the price level, a decrease in money demand, and a
decrease in the interest rate
d. A decrease in GDP, a decrease in the price level, an increase in money demand, and
an increase in the interest rate
e. An increase in GDP, an increase in the price level, a decrease in money demand, and
a decrease in the interest rate.
Refer to Figure 9-13. An increased labor supply on the graph would
a. decrease total output
b. increase total output at a constant rate
c. increase total output at an increasing rate
d. increase total output at a decreasing rate
e. not change total output
Which of the following is an open market purchase?
a. When private individuals sell government bonds
b. When the Fed sells government bonds
c. When private individuals purchase government bonds
d. When bond dealers buy government bonds from the fed
e. When the Fed buys government bonds
In which of the following situations would an individual experience an increase in real
wages?
a. Receiving a 5 percent increase in nominal wages while inflation was 6 percent
b. Taking a 3 percent cut in nominal wages while deflation was 4 percent
c. Taking a 1 percent cut in nominal wages while inflation was 1 percent
d. Receiving a 3 percent increase in nominal wages while inflation was 3 percent
e. Receiving no increase in nominal wages while inflation was 0 percent
Consider Figure 14-7 above. Which of the following would cause a movement from
point A to point B on the diagram?
a. An increase in the price level.
b. A decrease in the interest rate.
c. An increase in the interest rate.
d. An increase in real income.
e. A decrease in the price level.
Ongoing inflation has its own momentum because
a. prices rise whenever firms see other prices rising
b. the public learns to expect inflation and adjusts its decisions in response
c. public officials are unwilling to stop prosperity
d. more and more people now have jobs
e. we are always playing catch up, trying to get what we lost when others raise prices
Purchases of stocks and bonds are examples of investment spending.
Figure 4-1 shows the supply and demand for socks. If a price ceiling of $10 per pair is
imposed by the government, the number of pairs actually purchased will be
a. 2 pairs
b. 8 pairs
c. 5 pairs
d. 1 pair
e. 6 pairs
“Supply curves are upward sloping” is a graphical way of saying
a. supply equals demand
b. price and quantity supplied are inversely related
c. price and quantity demanded are directly related
d. price and quantity supplied are directly related
e. price and quantity demanded are inversely related
Which of the following could lead to an inward shift of the production possibilities
frontier?
a. an increase in the cost of one good
b. an increase in the utilization of resources
c. a rise in the level of technology
d. a law is passed whereby a mandatory retirement age of 60 is imposed
e. a decrease in the utilization of resources
A government-imposed price ceiling set below the market’s equilibrium price will
create an excess demand for a product. As a result of the excess demand, either the
demand curve will tend to shift to the left or the supply curve will shift to the right-or
both.