_______________________
Suppose:
C = 100 + .75 (y-T)
I = 200
G = 300
T = 300
_______________________
Table 11.5
Refer to Table 11.5. If both G and T decrease by 100, equilibrium output will:
A) stay the same.
B) decrease by 200.
C) decrease by 100.
D) increase by 100.
Which of the following must be true before a recession is considered a depression?
A) The unemployment rate must at least be 10 percent.
B) The recession must last at least 2 years.
C) The recovery from the recession must be at least 5 years.
D) None of the above need to be true before an economy is considered a recession.
If the Ricardian Equivalence were true, the effect of an increase in government
expenditure:
A) is the same regardless on whether it is financed by borrowing or by taxation.
B) is the better it is financed by borrowing instead of taxation.
C) is the better it is financed by taxation instead of borrowing.
D) is effective only if done both by borrowing and by taxation.
Which of the following is not an example of a marginal question?
A) How many more years of education must I take if I want to get a Ph.D. in
economics?
B) How many more dollars will I earn in my lifetime if I get my Master’s degree?
C) How many students borrow money in order to attend college?
D) How many more points will I expect to have if I study an hour longer?
Figur
e 15.3 Refer to Figure 15.3 If this economy is initially in a recession, the price level will
start to change to bring the economy back to full employment, which is reflected by the
movement from
A) 1 to 0.
B) a to .
C) d to c.
D) f to e.
In an economy with no government or foreign sector, it is always true that:
A) saving equals investment.
B) saving is positive.
C) investment is positive.
D) all of the above.
Positive economics:
A) is the focus of most modern economic reasoning.
B) concerns the forces that affect economic activity.
C) predicts the consequences of alternative actions.
D) All of the above are correct.
Figure 4.5 Figure 4.5 illustrates the supply of guitars. An increase in the number of
guitar manufacturers would most likely cause a movement from:
A) point B to point C.
B) point B to point A.
C) S1 to S0.
D) S1 to S2.
Which of the following is a macroeconomic statement?
A) Motorcycle manufacturer productivity decreased by three percent in 2012.
B) The price of cell phones decreased by 18 percent last year.
C) Real domestic output of seafood increased 12 percent from 2011 to 2012.
D) The U.S. inflation rate was two percent in 2012.
Investment spending:
A) is inversely related to the money supply.
B) is independent of either the interest rate or money supply.
C) increases as the interest rate increases.
D) decreases as the interest rate increases.
When we draw the aggregate demand curve, ________ should be on the x-axis and
________ should be on the y-axis.
A) real GDP; the price level
B) quantity; price
C) price; quantity
D) real GDP; inflation