When the United States moves upward along the J-curve, it is because a depreciation of
the dollar is having the _____________ effect of _____________ the number of dollars
spent on imports.
a. long-run; increasing
b. long-run; reducing
c. short-run; increasing
d. short-run; reducing
Making a decision at the margin is __________ an all-or-nothing decision.
a. consistent with
b. inconsistent with
c. the same as making
d. conditioned upon making
Variables A and B are inversely related. If we plot A on the horizontal axis and B on the
vertical axis, the line that connects combinations of A and B in a two-variable diagram
is
a. parallel to the horizontal axis.
b. downward-sloping (left to right).
c. parallel to the vertical axis.
d. upward-sloping (left to right).
e. a or c
The Fed has been called “the lender of last resort” because it
a. is the biggest bank in the country.
b. is the only lender to the federal government.
c. serves as the last place to acquire loans for banks suffering cash management, or
liquidity, problems.
d. a and b
e. all of the above
Decision making “at the margin” means making a choice based on __________ of a
decision.
a. the total benefits
b. the total costs
c. comparing the total benefits and costs
d. comparing the additional benefits and costs
The physical production possibilities frontier illustrates the different combinations of
goods that society can produce given
a. the constraints of finite resources and the current state of technology.
b. a constant price level.
c. its institutional constraints.
d. the natural rate of unemployment.
e. the constraints of finite resources and the current state of technology and institutional
constraints.
Exhibit 2-3
If PPF1 is the relevant production possibilities frontier, society may move to PPF2 as a
result of
a. an increase in resources.
b. a decrease in resources.
c. an increase in technology.
d. both a and c
e. both b and c
According to public choice theorists, people behave differently in the market sector
than in the public sector because
a. the more people there are in the market sector the less influence they are able to
exert, whereas the more people there are in the public sector the more influence they are
able to exert.
b. the fewer people there are in the market sector the less influence they are able to
exert, whereas the fewer people there are in the public sector the more influence they
are able to exert.
c. self-interest is the motivating force in the market sector, whereas altruism is the
motivating force in the public sector.
d. altruism is the motivating force in the market sector, whereas self-interest is the
motivating force in the public sector.
e. institutional arrangements are different in the two sectors.
Exhibit 34-1
Country B is the lower opportunity cost producer of
a. good Y.
b. both goods.
c. neither good.
d. good X.
The larger the marginal propensity to save,
a. the smaller the multiplier.
b. the larger the multiplier.
c. the smaller the change in Real GDP, given a change in autonomous consumption.
d. a and c
e. none of the above