The purchase or building by a corporation of a facility in a foreign country is called
A) foreign direct investment.
B) foreign portfolio investment.
C) foreign capital depreciation.
D) globally-directed investment.
By the year 2013, health care spending on Medicare, Medicaid, and other U.S.
government programs as a percentage of GDP had reached a level of
A) 2.2 percent.
B) 6 percent.
C) 17.5 percent.
D) 21.5 percent.
Table 15-3
Refer to Table 15-3. Consider the hypothetical information in the table above for
potential real GDP, real GDP and the price level in 2014 and in 2015 if the Federal
Reserve does not use monetary policy. If the Fed wants to keep real GDP at its potential
level in 2015, it should
1. A) buy Treasury securities.
2. B) sell Treasury securities.
3. C) decrease the required reserve ratio.
4. D) decrease income taxes.
If households in the economy decide to take money out of checking account deposits
and put this money into savings accounts, this will initially
A) decrease M1 and increase M2.
B) decrease M1 and decrease M2.
C) decrease M1 and not change M2.
D) increase M1 and decrease M2.
The Apple iPhone is sold in a box labeled “Made in China,” but a study by economists
at the Asian Development Bank found that the actual percentage of the price of the
iPhone accounted for by the only work done in China, which is assembly, is
A) 4 percent.
B) 12 percent.
C) 25 percent.
D) 65 percent.
Two-dimensional graphs have a horizontal and a vertical axis and are used in
economics to illustrate
A) relationships between two economic variables.
B) one variable.
C) a flow chart.
D) a pie chart.
In which of the following situations might you expect expansionary monetary policy to
reduce the unemployment rate?
A) if expectations are rational
B) if changes in monetary policy are unanticipated
C) if actual inflation is higher than expected
D) if actual inflation is lower than expected
Table 2-7
Table 2-7 shows the output per week of two people, Minnie and Mickey. They can
either devote their time to making hats or making umbrellas.
Refer to Table 2-7. Which of the following statements istrue?
A) Mickey has an absolute advantage in making both products.
B) Minnie has an absolute advantage in making both products.
C) Minnie has an absolute advantage in making hats and Mickey in making umbrellas.
D) Minnie has an absolute advantage in making umbrellas and Mickey in making hats.
Gross domestic product understates the total production of final goods and services
because of the omission of
A) exports.
B) inflation.
C) intermediate goods.
D) household production.
Under the Patient Protection and Affordable Care Act (ACA), individuals who do not
have health insurance will be subject to a fine.
Of the following, the most to the rapid rise in health care costs in the United States can
be attributed to
A) the cost of malpractice insurance
B) the cost to treat uninsured patients
C) slow growth in labor productivity in health care
D) the cost of malpractice lawsuit settlements
A change in tax rates
A) has a less complicated effect on GDP than does a tax cut of a fixed amount.
B) has a larger multiplier effect the smaller the tax rate.
C) will not affect disposable income.
D) will not affect the size of the multiplier.
Hyperinflation can be caused by
A) the government selling bonds to the central bank.
B) the central bank selling bonds to the public.
C) the government selling bonds to the public.
D) the central bank selling bonds to the government.