Table 2-9
Table 2-9 shows the number of labor hours required to produce a wristwatch and a
pound of rice in Japan and Thailand.
Refer to Table 2-9. Thailand has a comparative advantage in the production of
A) rice.
B) wristwatches.
C) both products.
D) neither product.
Forecasts by the Congressional Budget Office show spending on Social Security,
Medicare, and Medicaid rising from 9.9 percent of GDP in 2013 to ________ percent of
GDP in 2087, and by 2087 the federal government will be spending, as a fraction of
GDP, ________ on these three programs as it currently spends on all its programs.
A) 12.3 percent; more
B) 12.3 percent; half as much
C) 23.4 percent; more
D) 23.4 percent; half as much
The currencies of Poland and Iceland (the zloty and the krona, respectively) declined in
value relative to the euro following the financial crisis of 2008. This means that the
A) zloty and krona appreciated in value against the euro.
B) euro depreciated in value against the zloty and the krona.
C) zloty and krona depreciated in value against the euro.
D) zloty depreciated in value against the krona.
E) Both A and B are correct.
Figure 16-6
Refer to Figure 16-6. In the dynamic model of AD–AS in the figure above, if the
economy is at point A in year 1 and is expected to go to point B in year 2, and no fiscal
or monetary policy is pursued, then at point B
A) the unemployment rate is very low.
B) firms are operating at below capacity.
C) the economy is below full employment.
D) income and profits are falling.
E) there is pressure on wages and prices to fall.
Table 16-3
Refer to Table 16-3. Consider the hypothetical information in the table above for
potential real GDP, real GDP and the price level in 2013 and in 2014 if the Congress
and the president do not use fiscal policy. If the Congress and the president use fiscal
policy successfully to keep real GDP at its potential level in 2014, which of the
following will be higher than if the Congress and the president had taken no action?
1. A) real GDP and the unemployment rate
2. B) real GDP and the inflation rate
3. C) real GDP and potential GDP
4. D) potential GDP and the inflation rate
Financial securities that represent promises to repay a fixed amount of funds are known
as
A) bonds.
B) stocks.
C) pension funds.
D) insurance premiums.
Which of the following is not an explanation for the revival in the growth of
productivity starting in the mid-1990s?
A) Information and communication innovations are increasingly geared toward
improving business processes and not consumer products.
B) Faster computers have sped up data processing.
C) Internet use has increased the efficiency of how firms buy and sell to each other and
to consumers.
D) Cell phones and wireless Internet access have increased worker flexibility.
A member of a corporate board of directors that is also a manager of the business is
known as
A) a shareholder.
B) an inside director.
C) a partner.
D) a corporate governor.
Electric car enthusiasts want to buy more electric cars at a lower price. All of the
following events would have this effect except
A) technological advancement in the production of electric car batteries.
B) an increase in the number of manufacturers of electric cars.
C) a decrease in the price of lithium, which is used in the electric car batteries.
D) an increase in the price of gasoline.
The market for smartphones has become very competitive. The increase in competition
in this market is an example of how the market responds to
A) decreases in the price of desktop computers (a substitute for the product).
B) increases in income.
C) changes in population.
D) changes in consumer tastes.
Scenario 8-1
CANOES-R-US makes canoes. It buys the shell of the canoe from another firm for
$300 and uses its labor and intermediate goods to make the canoe. It sells the finished
canoe to a retail canoe store for $800. The retail canoe store then sells the canoe to a
consumer for $1,200.
Refer to Scenario 8-1. The value added of CANOES-R-US for each canoe equals
A) $1,200.
B) $800.
C) $500.
D) $400.
Table 2-1
Production Choices for Dina’s Diner
Refer to Table 2-1. Assume Dina’s Diner only produces sliders and hot wings. A
combination of 60 sliders and 50 hot wings would appear
A) along Dina’s production possibilities frontier.
B) inside Dina’s production possibilities frontier.
C) outside Dina’s production possibilities frontier.
D) at the vertical intercept of Dina’s production possibilities frontier.
In 1980, one Zimbabwean dollar was worth 1.47 U.S. dollars. By the end of 2008, the
exchange rate was one U.S. dollar to 2 billion Zimbabwean dollars. When an economy
experiences rapid increases in the price level such as what occurred in Zimbabwe, the
economy is said to experience
A) stagflation.
B) deflation.
C) inflation.
D) hyperinflation.
Which of the following is not a reason why China is unlikely to maintain high enough
rates of productivity growth to catch up with the standard of living in the United States?
A) The United States invests more in research and development. than does China.
B) Much of China’s growth is likely due to the transition from a centrally-planned
economy to a market economy.
C) Because of the low birth rate in China, the labor force will soon decline.
D) The Chinese migration of rural workers to more productive urban jobs.