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Capital stock indicates the owners' contributions to a partnership.
a. True
b. False
Which of the following is true of resources?
a. Resources are inputs used to produce goods and services.
b. Labor is the mental and physical capacity of workers to produce goods and services.
c. Entrepreneurship organizes resources to produce goods and services.
d. All of these are true.
Trade between nations A and B:
a. leaves the production possibilities of nation A unchanged.
b. leaves the production possibilities of nation B unchanged.
c. increases the consumption possibilities of both nations.
d. All of these are true.
Matchthefollowingbusinessformswiththeircharacteristicsbelow.
a. Sole proprietorship
b. Partnership
c. Corporation
Need an agreement about contributions to the business
Exhibit 18-3 Potatoes and wheat output (tons per day) Country PotatoesWheat
United States 4 2
Ireland 3 1 If each nation in Exhibit 18-3 specializes in producing the good for which it
has a comparative advantage, then:
a. Ireland would produce neither potatoes or wheat.
b. the United States would produce both potatoes and wheat.
c. the United States would produce potatoes.
d. Ireland would produce potatoes.
The nice thing about foreign exchange markets is that the goods are money, and they
are paid for with money. This means that if the U.S. dollar ____ the Japanese yen ____.
a. goes down; goes down
b. goes up; goes up
c. buys more yen; buys more dollars
d. buys fewer yen; buys fewer dollars
e. buys more yen; buys fewer dollars
Suppose a German bank purchases a U.S. Treasury bond. This transaction would be
recorded in the:
a. capital account.
b. current account.
c. goods trade balance.
d. unilateral transfers.
Other things being equal, the effects of a decrease in the price of orange juice, is
represented by which of the following?
a. A rightward shift in the demand curve for orange juice.
b. An increase in the quantity demanded for orange juice.
c. A leftward shift in the demand curve for orange juice.
d. A decrease in the quantity demanded orange juice.
Which of the following events would produce an upward shift in the consumption
function, other things being equal?
a. An increase in consumer wealth.
b. A decrease in consumer wealth.
c. A decrease in autonomous consumption.
d. Both b and c.
Exhibit 15-7 Lower Walloon National Bank AssetsLiabilities
Reserves $10,000 Checkable deposits $10,000 In Exhibit 15-7, if the required reserve
ratio is 20 percent for all banks, and every bank in the banking system loans out all of
its excess reserves. Then a $10,000 deposit from Mr. Brown in checkable deposits could
create for the entire banking system:
a. $8,000 worth of new money.
b. $2,000 worth of new money.
c. $10,000 worth of new money.
d. $40,000 worth of new money.
e. no new money.
If good X is an inferior good, a decrease in consumer income, other things being equal,
will shift the:
a. demand curve for good X to the right. c. supply curve for good X to the right.
b. demand curve for good X to the left. d. supply curve for good X to the left.
Brian Vargo, an auto repair mechanic who remains unemployed because he refuses to
work for less than $1,000 an hour, is:
a. counted as part of the labor force.
b. considered frictionally unemployed.
c. an underemployed worker.
d. not counted as part of the labor force.
e. considered as productively active.
The negative slope of the aggregate demand curve is caused by:
a. the real balances effect, the interest rate effect, and the price level effect.
b. the real balances effect, the money supply effect, and the net exports effect.
c. the interest rate effect, the net exports effect, and the real GDP effect.
d. the real balances effect, the interest rate effect, and the net exports effect.
e. the real balances effect, the interest rate effect, and the net export effect.
