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Suppose the official unemployment rate is 10 percent. We can conclude without
question that:
a. the same 10 percent of the people in the economy were out of work for the entire ear.
b. one of every 10 people in the civilian labor force is currently unemployed.
c. the same 10 percent of the people in the civilian labor force were out of work for the
entire year.
d. every person in the civilian labor force was out of work for 10 percent of the year.
e. 10 percent of the people in the economy were out of work for 10 percent of the year.
Which of the following is not an interest-earning asset of commercial banks?
a. Required reserves.
b. Securities.
c. Loans.
d. All of these are interest-earning assets of commercial banks.
Which of the following is not a characteristic of capitalism?
a. Private ownership of the factors of production.
b. Businesses make their own product and price decisions.
c. Public ownership of the factors of production.
d. Decentralized decision-making using markets.
The benefits-received principle of taxation is most evident in:
a. progressive tax rates.
b. excise taxes on gasoline.
c. the personal income tax.
d. the corporate income tax.
It is important to distinguish between the privately held portion of the national debt and
the portion held by government agencies and the Federal Reserve System because:
a. the government will not have to repay the privately held debt.
b. only the privately held debt creates a net interest liability for the federal government.
c. the privately held debt does not create a net interest liability for the federal
government.
d. taxes will have to be raised in order to pay the interest on the debt held by the Federal
Reserve system.
A free rider is a person who:
a. is harmed by another's actions.
b. is subject to a negative externality.
c. receives benefits from someone else's action but does not pay for them.
d. pays less than the full value for a product.
e. won the state lottery.
A decrease in the rate of interest, other things being equal, will cause a:
a. rightward shift of the investment demand curve.
b. movement upward along the investment demand curve.
c. movement downward along the investment demand curve.
d. leftward shift of the investment demand curve.
Exhibit 4-9 Data on supply and demand Price Quantity
DemandedQuantity
Supplied
$2.00 100 300
1.50 150 250
1.00 200 200
0.50 250 150In Exhibit 4-9, which of the following would occur at a price of $2.00?
a. Inventories would put upward pressure on price.
b. Quantity demanded exceeds quantity supplied, putting downward pressure on price.
c. Inventories would put downward pressure on price.
d. The surplus would be so small that there would be only slight downward pressure on
price.
Which of the following favors government policies to stimulate the economy by
creating incentives for individuals and businesses to increase their productive efforts?
a. supply-side economics.
b. Keynesian economics.
c. monetarist economics.
d. Marxian economics.
Consider a broom factory that permanently closes because of foreign competition. If the
broom factory's workers cannot find new jobs because their skills are no longer
marketable, then they are classified as:
a. seasonally unemployed.
b. frictionally unemployed.
c. structurally unemployed.
d. cyclically unemployed.
Exhibit 4-5 Supply and demand curves for computers
Which of the following changes could
cause the computer market to change as shown in Exhibit 4-5?
a. Lower costs for computer chips and motherboards.
b. The failure of several computer manufacturers.
c. Higher prices for computer software.
d. More features and greater ease of use.
The phase of the business cycle that follows a recession is known as the:
a. peak.
b. recession.
c. recovery.
d. trough.
A baby boom will have what immediate effect on the disposable diaper market?
a. Supply decreases.
b. Supply increases.
c. Demand decreases.
d. Demand increases.
e. Supply and demand remains the same.
In Exhibit 15-4, the bank could make:
a. $1,000 in new loans.
b. $4,000 in new loans.
c. $16,000 in new loans.
d. $20,000 in new loans.
Exhibit 2-10 Production possibilities curve data A B C D E
Capital goods 0 1 2 3 4
Consumption goods 25 23 19 13 0 Suppose an economy is faced with the production
possibilities table shown in Exhibit 2-10. As additional units of capital goods are
produced, the opportunity cost in terms of sacrificed units of consumption goods ____
because of ____.
a. decreases; greater efficiency in production
b. increases; decreasing opportunity cost
c. increases; the law of increasing costs
d. increases; greater efficiency in production
e. decreases; the law of increasing costs
If your disposable personal income increases from $30,000 to $40,000 and your savings
increases from $2,000 to $4,000, your marginal propensity to save (MPS) is:
a. 0.2.
b. 0.4.
c. 0.5.
d. 0.8.
e. 1.0.
According to the text, Singapore is classified as a less developed country (LDC).
Supply-siders believe that high tax rates are a disincentive to labor supply.
A horizontal line has an infinite slope.
During periods of inflation, all prices of all products are rising.
In the Keynesian model, equilibrium occurs when aggregate output equals aggregate
expenditures.
