Which of the following would not be included in the consumption component of GDP?
a. Movie ticket sales
b. Purchase of a new home
c. Medical bills
d. Clothing purchases
e. Home electricity bills
Which of the following statements about modern macroeconomic theory is most
accurate?
a. Keynes’ ideas help us understand movements in output around its long-run trend,
while the Classical model is more useful in explaining the long-run trend itself.
b. The classical model helps us understand movements in output around its long-run
trend, while the short-run macro model is more useful in explaining the long-run trend
itself.
c. Both classical and short-run macro models help us understand movements in output
around its long-run trend, but neither model is effective at explaining the long-run trend
itself.
d. Neither the classical nor the short-run macro model helps us understand movements
in output around its long-run trend, but both are useful in explaining the long-run trend
itself.
e. Only the short-run macro model is useful in understanding movements in output
around its long-run trend, and in explaining the long-run trend itself.
Which of the following would encourage the development of new technologies?
a. Rising interest rates
b. Reduced government subsidies for research and development
c. Falling wages
d. Increased tax rates on corporate profits
e. Increased patent protection for inventions
Economists generally conclude that because GDP rose as a result of the response to the
2005 Hurricanes, they were really a good thing.
Of the four major market structures, oligopoly is the worst at achieving economic
efficiency.
The classical assumption that labor markets clear makes it difficult for that model to
explain recessions.
Which of the following would be classified as consumption spending?
a. A family’s purchase of a new home
b. A family’s purchase of a used car
c. A family’s payment for a child’s hospitalization
d. A family’s purchase of Microsoft stock
e. A family’s purchase of a swing set for their home day-care business
Which of the following is the proper order of assets ranked from most to least liquid?
a. Demand deposits, cash in the hands of the public, large time deposits
b. Travelers’ checks, small time deposits, savings-type accounts
c. Small time deposits, large time deposits, demand deposits
d. Cash in the hands of the public, savings-type accounts, demand deposits
e. Cash in the hands of the public, money market mutual funds, small time deposits
The official definition of a recession is when real GDP declines for two consecutive
quarters.
Which of the following is a leakages from the circular flow?
a. Household saving and government spending
b. Business investment and household saving
c. Net taxes and household saving
d. Government spending and business investment
e. Net taxes and government spending
Which of the following would be included in the expenditures approach to calculating
U.S. GDP?
a. Wage and salary payments to U.S. workers
b. Interest paid on borrowed funds
c. Government payments of social security benefits
d. Purchases of new trucks by Federal Express
e. Wage payments to U.S. citizens working outside the U.S.
Which of the following determines the maximum price a firm may charge for a
particular quantity of output?
When was the first U.S. paper currency, the greenback, created?
a. During the Revolutionary War
b. During World War I
c. During World War II
d. During the Civil War
e. During the war of 1812.
Suppose that minimum efficient scale is approximately 20 percent of maximum
potential market demand. In that case,
The vertical distance between a firm’s total cost curve and its total variable cost curve
Given the balance sheet below and assuming a required reserve ratio of 20 percent, how
much (in dollar terms) is this bank actually holding in reserves?
a. $3.5 million
b. $8 million
c. $15 million
d. $20 million
e. $35 million
The national debt
a. can be paid off without major economic effects
b. need never be paid off
c. is no more serious a problem than is a corporation’s debt
d. should not exist during a period of economic prosperity
e. is the simple sum of post budget deficits
In the market for euros, if the current exchange rate is below the equilibrium rate,
a. the quantity supplied and the quantity demanded for euros are equal.
b. there is an excess supply of euros and the exchange rate will fall.
c. there is an excess demand for euros and the exchange rate will rise.
d. the exchange rate will neither rise nor fall.
e. there is an excess demand for euros and the exchange rate will fall.
It is possible for an economy to produce more than its potential level of output, at least
for a short period of time.
The marginal product of labor is the