Harvard University admits a larger percentage of applicants than does India€s Indian
Institute of Technology.
a. True
b. False
Exhibit 8-3
A shift in aggregate demand from AD1 to AD2could have been the result of
a. a decrease in the price level.
b. an increase in the price level.
c. an increase in foreign real national income.
d. a decrease in foreign real national income.
Open Market Operations are conducted by
a. the main Fed office in Washington, D.C.
b. the U.S. Treasury on behalf of the Fed.
c. the Federal Reserve Bank of New York.
d. a consortium of private banks contracted by the Fed.
If price is on the vertical axis and quantity demanded is on the horizontal axis, why is a
demand curve downward sloping (left to right)?
a. Because a demand curve is the graphical representation of the law of demand, which
specifies an inverse relationship between price and supply, ceteris paribus.
b. Because a demand curve is the graphical representation of the law of demand, which
specifies a direct relationship between price and quantity supplied, ceteris paribus.
c. Because a demand curve is the graphical representation of the law of demand, which
specifies an inverse relationship between price and demand, ceteris paribus.
d. Because a demand curve is the graphical representation of the law of demand, which
specifies a direct relationship between price and demand, ceteris paribus.
e. Because a demand curve is the graphical representation of the law of demand, which
specifies an inverse relationship between price and quantity demanded, ceteris paribus.
Exhibit 2-6
Which graph depicts society’s choice to produce more of good X and less of good Y?
a. (1)
b. (2)
c. (3)
d. (4)
e. none of the above
If we subtract the number of persons not in the labor force from the civilian
noninstitutional population, we get the number of people in the
a. ranks of the unemployed.
b. civilian labor force.
c. ranks of the employed.
d. ranks of discouraged workers.
e. none of the above
Keynes assumed consumption is
a. inversely related to the rate of interest.
b. directly related to disposable income.
c. directly related to investment.
d. less than disposable income.
e. both b and d
Most states have instituted mandatory seatbelt laws to reduce traffic fatalities. An
economist may point out that an unintended effect of these laws is
a. an increase in the price of automobiles, further reducing fatalities.
b. an increase in driving speed, reducing the number of accidents.
c. a decrease in driving speed, further reducing fatalities.
d. an increase in risky driving behavior, increasing fatalities.
Exhibit 3-14
At a price of $15, there is a ____________ unit____________ of good X.
a. 40; shortage
b. 90; surplus
c. 40; surplus
d. 20; shortage
e. 20; surplus
Here is a consumption function: C = C0 + MPC(Yd). The C0 term is usually defined as
a. autonomous consumption.
b. point-zero consumption.
c. mandatory consumption.
d. propensitory consumption.
e. none of the above
If the producers€ surplus is $50, and the consumers€ surplus is $40, then what is the
minimum selling price of the good?
a. $10
b. $40
c. $50
d. $90
e. There is not enough information to answer the question.
Lower real interest rates in the United States (relative to foreign real interest rates) will
lead to a(n) ________________ of the dollar and a ______________ shift of the U.S.
SRAS curve.
a. appreciation; rightward
b. appreciation; leftward
c. depreciation; rightward
d. depreciation; leftward