A man is fired from his job because he was late for work too many times. While he is
searching for another job he would be classified as:
A) not in the labor force because his employer had a legitimate reason for firing him.
B) structurally unemployed.
C) cyclically unemployed.
D) frictionally unemployed.
Using the formula for an infinite sum, if “” designates the reserve ratio, the 1 / reserve
ratio would equal
A) (1 – ).
B) 1 / (1 – ).
C) 1 / [1 – (1 – )].
D) / (1 – ).
The production function describes the relationship between the quantities of which two
variables?
A) inputs and cost
B) output and profit
C) inputs and output
D) output and revenue
Recall Application 1, “The Impact of Tariffs on the Poor,” to answer the following
questions:
Because U.S. tariffs are higher on textiles, footwear and apparel items, U.S. tariffs fall
relatively most heavily on:
A) the middle class.
B) the rich.
C) the poor.
D) the government.
Import bans, import quotas, voluntary export restraints, and tariffs on goods all
A) increase equilibrium quantity and prices.
B) decrease equilibrium quantity and prices.
C) increase equilibrium quantities, but decrease prices.
D) decrease equilibrium quantities, but increase prices.
Which of the following sequence of events occurs in response to an expansionary fiscal
policy?
A) Real GDP increases, causing money demand to decrease, causing the interest rate to
decrease and investment to increase.
B) Real GDP increases, causing money demand to increase, causing interest rates to
decrease and investment to increase.
C) Real GDP increases, causing money demand to increase, causing interest rates to
increase and investment to decrease.
D) Real GDP decreases, causing the demand for money to increase, causing interest
rates to increase and investment to increase.
The extra benefit resulting from a small increase in an activity is called the:
A) opportunity cost.
B) marginal benefit.
C) marginal cost.
D) diminishing returns of the activity.
Recall Application 1, “The Impact of Tariffs on the Poor,” to answer the following
questions:
What proof does the application use to illustrate that tariffs hurt the poor more than the
rich?
A) The proportion of tariffs paid relative to expenditures is higher on the poor than the
rich.
B) The proportion of tariffs paid relative to expenditures is lower on the poor than the
rich.
C) The total amount of dollars paid by the poor in the form of import tariffs is larger
than the rich.
D) The amount of dollars paid by the poor in the form of income taxes is higher with
poor individuals than rich individuals.
Most economists believe that convergence of GDP per capita ________ between
developed nations and ________ between developing and developed nations.
A) has occurred; has occurred
B) has not occurred; has occurred
C) has occurred; has not occurred
D) has not occurred; has not occurred
Figure 15.5
Refer to Figure 15.5. A decrease in the price level, ceteris paribus, is represented by
movement from point ________ to point ________.
A) d; a
B) d; c
C) d;
D) a; c