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If the price of bonds rises,
a. the Fed will decrease the money supply
b. the Fed will increase the money supply
c. the interest rate will rise
d. the interest rate will fall
e. inflation must be accelerating
An increase in supply could be caused by a(n)
a. increase in price
b. government-imposed price ceiling
c. decrease in resource prices
d. decrease in consumer incomes
e. unfavorable shift in tastes and preferences
The process of moving from disequilibrium to equilibrium in labor markets creates
special problems because
a. we are all workers threatened by recession
b. we cannot spend money we have not earned
c. the process is very short
d. the process is especially lengthy
e. negative shocks create economic expansions
All of the following would be examples of a spot markets except one. Which would not
be a spot market?
a. The market for milk
b. The market for beauty salon services
c. The market for higher education
d. The market for basketball cards
e. The market for used cars
Rich countries (measured by GDP per capita) tend to have __________ infant mortality
rates, __________ life expectancies at birth, and __________ adult literacy rates than
poor countries.
a. higher; higher; higher
b. lower; higher; higher
c. lower; lower; higher
d. lower; lower; lower
e. lower; higher; lower
If the same dairy can produce either whole milk or skim milk, an increase in the
profitability of whole milk results in a(n)
a. decrease in the quantity supplied of whole milk
b. increase in the supply of whole milk
c. decrease in the supply of skim milk
d. increase in the supply of skim milk
e. decrease in the quantity supplied of skim milk
If equilibrium GDP is below potential, then
a. unemployment is unusually low
b. the Fed will lower the money supply
c. the wage rate will fall as workers compete for scarce jobs
d. the aggregate supply curve will shift leftward
e. the wage rate will remain stable as labor productivity increases
In one hour, George can fix 4 flat tires or type 200 words. His opportunity cost of fixing
a flat tire is
a. 200 words
b. 4 flat tires
c. 1 word
d. 50 words
e. 800 words
If output decreases, which of the following would occur?
a. Prices of non-labor inputs, input requirements per unit of output and unit costs would
all increase and the economy would move upward along the aggregate supply curve.
b. Prices of non-labor inputs, input requirements per unit of output and unit costs would
all decrease and the economy would move upward along the aggregate supply curve.
c. Prices of non-labor inputs, input requirements per unit of output and unit costs would
all increase and the economy would move downward along the aggregate supply curve.
d. Prices of non-labor inputs, input requirements per unit of output and unit costs would
all decrease and the economy would move downward along the aggregate supply curve.
e. Prices of non-labor inputs would decrease, input requirements per unit of output
would increase and the economy would move upward along the aggregate supply curve.
Which of the following is a positive statement?
a. Driving speeds should be lowered so that fewer accidents will occur.
b. When per capita income falls, fewer meals are consumed at restaurants.
c. The minimum wage is too low; college students deserve a raise.
d. Cigarette sales should be made illegal in order to reduce the incidence of cancer.
e. Social Security is a good program for U.S. workers.
If the British price level rose relative to the Swiss price level, there would be
a. a rightward movement along the supply of Swiss francs curve in the pound-franc
market
b. a leftward movement along the supply of Swiss francs curve in the pound-franc
market
c. an increased supply of Swiss francs to the pound-franc market
d. a decreased supply of Swiss francs to the pound-franc market
e. no change of the supply of Swiss francs curve in the pound-franc market
