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If the capital stock remains fixed while the supply of labor increases, it is likely that:
A) the new labor will be more productive than the old labor.
B) the new labor will be less productive than the old labor.
C) the productivity of labor will not change.
D) output per capita will rise.
Figure 4.4
Figure 4.4 illustrates the demand for guitars. An increase in price of guitars would bring
about a movement from:
A) point B to point C.
B) point B to point A.
C) D1 to D0.
D) D1 to D2.
Holding everything else constant, the U.S. real exchange with Australia will increase if
inflation is higher in the United States than in Australia.
Figure 16.1 Refer to Figure 16.1 to answer this question. Suppose the economy is
initially at Point A. If labor leaders successfully negotiate a wage increase, then the
economy will move to point:
A) A.
B) B.
C) C.
D) D.
Which of the following is a financial intermediary?
A) the stock market
B) the Federal Reserve
C) a commercial bank
D) the US Treasury
Cyclical unemployment is the:
A) portion of unemployment that is due to mismatches between skills and jobs that
result in a significant loss of jobs in certain industries.
B) unemployment that occurs during recessions and depressions.
C) portion of unemployment that is due to the normal working of the labor market.
D) unemployment that results when people become discouraged about their chances of
finding a job so they stop looking for work.
The chairman of the Federal Reserve Board of Governors
A) sits on the Federal Open Market Committee.
B) is appointed by the President and confirmed by the Treasury.
C) serves a fourteen year term as chairman.
D) is always the president of the Federal Reserve Bank of New York.
The aggregate demand curve shifts to the left if:
A) the government increases spending.
B) household consumption falls.
C) the government decreases taxes.
D) the supply of money rises.
Table 2.3 Refer to Table 2.3. The
marginal product of the 3rd worker is:
A) 100 units of output.
B) 80 units of output.
C) 60 units of output.
D) 40 units of output.
Figure 18.1 Refer to Figure 18.2. The opportunity cost of producing cheese in
Pizzaland is:
A) 0.4 tomato.
B) 0.6 tomatoes.
C) 1.67 tomatoes.
D) 2.5 tomatoes.
Figure 18.2
Refer to Figure 18.2. The opportunity cost of producing fishing poles in Macadamia is
A) 3/4 of a spear.
B) 5/6 of a spear.
C) 6/5 spears.
D) 4/3 spears.
If the U.S. government enters the foreign exchange market and purchases dollars to
maintain a specific exchange rate with the yen, the dollar will ________ and the yen
will ________.
A) depreciate; depreciate
B) depreciate; appreciate
C) appreciate; depreciate
D) appreciate; appreciate
A man is fired from his job because he was late for work too many times. While taking
a break from searching for another job he would be classified as:
A) not in the labor force.
B) frictionally unemployed.
C) structurally unemployed.
D) cyclically unemployed.
The principle of voluntary exchange is based on the idea of
A) making assumptions.
B) isolating variables.
C) thinking at the margin.
D) rational self-interest.
Suppose that the natural rate of unemployment is 4% and the current inflation rate is
2% per year. To bring the inflation rate down to zero, the actual unemployment rate in
the economy would have to be:
A) 6%.
B) 4%.
C) 8%.
D) 2%.
If the demand for labor ________, real wages rise and the amount of labor employed
________.
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
The interest rate that the banks pay to borrow money from the Fed is the:
A) federal funds rate.
B) discount rate.
C) prime lending rate.
D) reserve rate.
If an economy is fully utilizing its resources, it can produce more of one product only if
it:
A) doubles manufacturing of the product.
B) produces less of another product.
C) adds more people to the labor force.
D) reduces the prices of the most expensive products.
Patents:
A) specifies the term of exchange facilitating exchange between strangers.
B) increases the profitability of inventions encouraging firms to develop new products.
C) provides the public with reliable information about the performance of a firm.
D) increases the risk faced by entrepreneurs.
Gross investment is
A) what is left over from total new private investment after depreciation.
B) the total amount of private investment purchases, whether new or previously
existing.
C) the total amount of new private investment purchases.
D) the wear and tear on private investment.
