Appreciation of the Japanese Yen would lead to
a. outward shift in the aggregate supply curve for Japan.
b. upward shift in the aggregate demand curve for Japan.
c. downward shift in the aggregate supply curve for Japan.
d. downward shift in the aggregate demand curve for Japan.
Free markets can:
a. prouduce goods and services with maximum efficiency
b. solve unemployment
c. protect the environment
d. all of these
The U.S. has the biggest national economy in the world solely because of the U.S.
population.
a. True
b. False
The U.S. Secretary of the Treasury met with the Japanese Finance Minister to discuss
possible cuts in the Japanese discount rate. The likely outcome of currency speculation
in response to this news is that
a. the dollar will depreciate.
b. the dollar will appreciate.
c. the yen will appreciate.
d. both the dollar and yen will appreciate.
Figure 10-3
In Figure 10-3, we would expect the aggregate supply curve in graph (b) to eventually
a. shift to the right, eliminating the recessionary gap.
b. shift to the left, eliminating the inflationary gap.
c. become steeper in the upper portion, eliminating the inflationary gap.
d. become flatter in the upper portion, eliminating the recessionary gap.
Recessionary gaps are associated with output below potential and high unemployment
rates.
a. True
b. False
Bank accounts and bonds are examples of money-fixed assets.
a. True
b. False
Table 20-2
In Table 20-2, what is equilibrium GDP?
a. $2,500
b. $3,500
c. $4,500
d. $5,500
The U.S. switched from being a creditor nation to a debtor nation in:
a. the 1970s
b. the 1980s
c. the 1990s
d. 2008-2009
Economists use a model that is a literal description of business’ behavior.
a. True
b. False
Table 22-4
Table 22-4 presents the demand and supply schedules for television sets in Japan and
the United States. If Japan and the United States trade with each other, what will be the
equilibrium price in the world market for television sets?
a. $100
b. $200
c. $300
d. $400
The example of an inflationary gap in 2006-2007 suggested that the economy adjusts
a. rapidly to inflationary gaps by lowering prices.
b. rapidly to inflationary gaps by raising prices.
c. slowly to inflationary gaps by lowering prices.
d. slowly to inflationary gaps by increasing inflation.
Questions of what to produce, how much to produce, and who will get the output must
be faced by
a. market economies.
b. centrally planned economies.
c. the economies of underdeveloped countries.
d. all economies.
The cost of trash removal goes up, in part at least, because labor productivity in auto
manufacturing goes up.
a. True
b. False
Suppose that the Fed decides to decrease the growth rate of the money supply in the
United States. What is most likely to happen to the U.S. trade deficit and to GDP?
a. The trade deficit will fall; GDP will fall.
b. The trade deficit will rise; GDP will rise.
c. The trade deficit will fall; GDP will rise.
d. The trade deficit will rise; GDP will fall.
Figure 15-2
The firm illustrated in Figure 15-2 is producing
a. less than it would if the external costs were internalized.
b. more than it would if external costs were internalized.
c. a beneficial externality.
d. at the socially optimal point.
Taxes on emissions have led to
a. extraction of pollutants by firms from their liquid discharges.
b. recycling of pollutants in lieu of discharge as waste.
c. voluntary reduction in emissions to avoid the taxes.
d. all of the above.
A craze for apples in Riverdale increases the quantity demanded at every price by five
bushels. Between any two prices, the new demand curve will be ____ the old demand
curve.
a. more elastic than
b. less elastic than
c. equal in elasticity to
d. More information is needed to predict the relationship.
Which term refers to the share of an activity’s marginal cost that is paid for by people
other than those who carry out the activity?
a. Beneficial cost
b. Incidental cost
c. Marginal private cost
d. Marginal social cost
In 2009, which of the following countries had the lowest average unemployment rates?
a. Canada
b. France
c. Italy
d. Germany
e. United States
Only economists and other “social” scientists have areas of dispute within their
disciplines.
a. True
b. False
Average cost can be thought of as the cost per unit.
a. True
b. False
Figure 18-2
Figure 18-2 shows the widget market before and after an excise tax is imposed. The
revenue collected by the tax is ____.
a. $8,000
b. $50,000
c. $100,000
d. $150,000
In most businesses there is only one way to produce output.
a. True
b. False
The scarcity of physical resources is far more fundamental to the study of economics
than the scarcity of funds.
a. True
b. False
Recessions are typically associated with increases on interest rates on risky securities
coupled with increases on interest rates on Treasury securities.
a. True
b. False
The United States produces both automobiles and computers more efficiently than
Mexico. Nevertheless, it is possible that both nations would benefit from trade in these
items. The reason for this is
a. the law of comparative advantage.
b. the inflation-unemployment trade-off.
c. externalities.
d. the cost disease of personal services.
e. attempts to repeal the law of supply and demand.
As of December 2010, the largest single component of M1 consists of
a. checkable deposits at banks.
b. money market mutual funds.
c. savings deposits.
d. currency.
Some economists believe that our best years of economic growth are behind us.
a. True
b. False
When MSC > MPC there are detrimental externalities.
a. True
b. False
Define the following terms carefully:
(a) Full employment
(b) Purchasing power of money
(c) Real wage rate
(d) Relative price
The federal income tax is a good example of a
a. regressive tax.
b. proportional tax.
c. digressive tax.
d. progressive tax.