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Advances in technology will shift the aggregate:
a. demand curve rightward.
b. supply curve rightward.
c. demand curve leftward.
d. supply curve leftward.
The most broadly based price index is the:
a. real GDP price index.
b. consumer price index.
c. producer price index.
d. GDP chain price index.
Exhibit 9-7 Keynesian aggregate-expenditures model
In Exhibit 9-7, if I = 0, C = Y
at:
a. $300.
b. $500.
c. $800.
d. $100.
e. $200.
Which of the following statements is true?
a. Specialization and trade along the lines of comparative advantage allows nations to
consume more than if they were to produce just for themselves.
b. Free trade theory suggests that when trade takes place any gains made by one nation
comes at the expense of another.
c. According to the theory of comparative advantage, a nation should specialize in the
production of those goods for which it has an absolute advantage.
d. All of these.
A reduction in the rate of inflation is called:
a. deflation.
b. disinflation.
c. hyperinflation.
d. cost-push inflation.
The vicious circle of poverty refers to a condition where:
a. c and d.
b. c and e.
c. people are poor because they cannot invest in capital goods and they cannot invest in
capital goods because they are poor.
d. people cannot invest in capital goods because they are poor and they are poor
because they cannot invest in capital goods.
e. poverty is relative and poor people remain poor because the wealthy grow wealthier.
In recent years, people have benefited from greater amounts of leisure time. This trend:
a. has caused GDP to rise.
b. has caused GDP to fall.
c. made GDP fluctuate randomly.
d. is not accounted for in GDP.
The most fundamental concepts underlying the discipline of economics are:
a. scarcity and choice.
b. supply and demand.
c. money, stocks, and bonds. d. inflation and unemployment.
Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss
As shown in Exhibit 3A-1, if the market is in equilibrium, then ____ represents
producer surplus.
a. ADFB
b. CEFD
c. EGH
d. BEF
From the standpoint of economic efficiency, competitive markets provide:
a. less of a public good than would be efficient.
b. more of a public good than would be efficient.
c. exactly the amount of a public good that is efficient.
d. none of these.
Which of the following best represents the effects of a decrease in the price of coffee,
other things being equal?
a. A leftward shift in the demand curve for coffee.
b. A downward movement along the demand curve for coffee.
c. A rightward shift in the demand curve for coffee.
d. An upward movement along the demand curve for coffee.
A rightward shift of the investment demand curve would be caused by a(n):
a. increase in the expected rate of return on investment caused by an increase in
business confidence.
b. decrease in the expected rate of return on investment caused by a decrease in
business confidence.
c. increase in the rate of interest.
d. decrease in the rate of interest.
A country is said to have an absolute advantage in the production of a good when:
a. its opportunity cost of producing the good is lower than another country.
b. it can produce the good using fewer resources than another country.
c. it specializes in the production of the good.
d. all of these.
There was an extensive black market (illegal market) for many consumer products in
the United States during World War II. A likely explanation of the black market is that:
a. the prices of goods were artificially held down by price controls.
b. black markets were legal during the war.
c. goods were not subject to price controls.
d. gasoline rationing greatly restricted civilians from driving to stores.
There is a direct link between a nation's per capita real GDP and its:
a. c and e.
b. c, d, and e.
c. human capital investment.
d. population.
e. life expectancy.
Among the major industrial economies, which of the following had the lowest national
debt as a percent of GDP?
a. Canada
b. Australia
c. United States
d. Italy
