Which of the following statements is false?
a. In recent years, the Chinese government has bought U.S. government bonds, raising
interest rates in the United States.
b. Among the key features of globalization is the growing integration of the national
economies of the world.
c. Globalization is associated with a movement toward more free enterprise.
d. It is becoming increasingly common for Americans to work for foreign companies
that have offices in the United States.
A rise in the price level prompts an increase in the demand for credit. This is relevant to
the __________ effect.
a. international trade
b. real balance
c. aggregate demand
d. interest rate
e. b and c
Insolvency is a condition where a firm€s
a. liabilities are greater than assets.
b. assets are greater than liabilities.
c. assets are equal to liabilities.
d. liabilities are less than or equal to assets.
Exhibit 7-1
What is the value ofnet domestic product?
a. $5,840
b. $5,731
c. $5,650
d. $5,767
e. $6,637
Exhibit 34-4
Country 1 has a comparative advantage in the production of __________, and country 2
has a comparative advantage in the production of __________.
a. good A; good B
b. good B; good A
c. both goods; neither good
d. neither good; both goods
e. neither good; neither good
Two major exports for the United States are
a. clothing and office machines.
b. soybeans and scientific instruments.
c. footwear and fish.
d. coffee and diamonds.
e. none of the above
Exhibit 9-3
If the economy is in equilibrium at point B,
a. the (actual) unemployment rate is less than the natural unemployment rate.
b. the (actual) unemployment rate is equal to the natural unemployment rate.
c. the (actual) unemployment rate is greater than the natural unemployment rate.
d. the relationship between the (actual) unemployment rate and the natural
unemployment rate cannot be determined from the available information.
The economy is in equilibrium, TP = TE, and Real GDP is $500 billion. The MPC is
0.95, the multiplier is operative, and idle resources exist at each expenditure round.
Autonomous investment spending rises by $4 billion. As a result, the TE curve shifts
__________, inventory levels unexpectedly __________, business firms __________
the quantity of goods and services they produce, and Real GDP __________ by
__________.
a. upward; fall; increase; rises; $3.8 billion
b. upward; fall; increase; rises; $8 billion
c. downward; rise; decrease; falls; $80 billion
d. upward; fall; increase; rises; $80 billion
e. downward; fall; decrease; falls; $3.8 billion
When congestion occurs on the freeway (because of a shortage of freeway space), the
economist would most likely explain this by saying that it is because
a. the freeway has too few miles of roadway.
b. there are too many cars.
c. the price of driving on the freeway is below the equilibrium price.
d. a and c
The CPI was 238 in one year and 244 the following year. How much did prices rise
between these two years?
a. 2.46 percent
b. 5.50 percent
c. 2.52 percent
d. 0.03 percent
If reserves increase by $4 million and the required reserve ratio is 8%, what is the
resulting change in checkable deposits (or the money supply), assuming that there are
no cash leakages and that banks hold zero excess reserves?
a. $3.2 million
b. $3.7 million
c. $5 million
d. $50 million
The median voter model predicts that
a. both candidates in a two-person race will definitely move toward the middle of the
political spectrum as the election approaches.
b. the candidate (in a two-person race) closer to the middle of the political spectrum
(closer to the median voter) on election day will win the election.
c. conservatives have a higher probability of winning elections than liberals.
d. liberals have a higher probability of winning elections than conservatives.
e. voters will often be rationally ignorant of important political issues.
Exhibit 3-12
—————————–Quantity Supplied ————————————–
Assume that Aline, Bentley, Calvin, and Daniel are the only sellers in this market. Fill
in blanks (C) and (D) respectively with the market quantity supplied at each given
price.
a. 17.75; 21.00
b. 47; 52
c. 50; 55
d. 71; 84
e. none of the above
Which of the following has never been a monetary policy tool of the Fed?
a. open market operations
b. the required reserve ratio
c. the discount rate
d. the term auction facility (TAF) program
e. income tax rates
The terms rational expectations and adaptive expectations are two differentnames for
the same concept.
a. True
b. False
Carlos can produce the following combinations of X and Y: 10X and 10Y, 5X and 15Y,
and 0X and 20Y. The opportunity cost of one unit of X for Carlos is
a. 1 unit of Y.
b. 2 units of Y.
c. 1/2 unit of Y.
d. 1/4 unit of Y.
e. none of the above
In which setting are the transaction costs of making an exchange likely to be the
highest?
a. buying cereal at the grocery store
b. buying a house
c. buying a computer over the Internet
d. buying stock in a company
e. buying a Big Mac at McDonald’s
Exhibit 13-2
What word (up or down) should go in the place of blank (1) and blank (2), respectively?
a. up; up
b. up; down
c. down; up
d. down; down