Which of the following has a direct relationship rather than an inverse relationship with
the supply curve?
a. The number of sellers.
b. Resource prices.
c. Consumer income.
d. Prices of other goods that firms could produce.
United Airlines is an example of a
a. producer
b. supplier
c. retailer
d. service provider
When the discount rate rises, the cost:
a. of loans to bankers, best customers goes up.
b. of loans between banks rises.
c. of international loans rises.
d. to savings and loans of borrowing money from the public falls.
e. to banks of borrowing from the Fed falls.
If a bank has actual reserves of $40,000 and a 20 percent reserve requirement, then the
maximum amount of checkable deposits the bank can have if excess reserves are zero
is:
a. $100,000.
b. $80,000.
c. $300,000.
d. $20,000.
e. $200,000.
The aggregate demand curve:
a. shows the level of real GDP purchased in the economy at different possible price
levels during a period of time.
b. shows the level of real GDP produced in the economy at different possible price
levels during a period of time.
c. shifts to the left whenever there is an increase in aggregate expenditures.
d. slopes upward.
Exhibit 3-4 Supply curves
In Exhibit 3-4, a shift in the supply curve
from S1 to S2 represents a(n):
a. decrease in supply.
b. decrease in the quantity supplied.
c. increase in supply.
d. increase in the quantity supplied.
e. increase in demand.
Exhibit 5-8 GDP data (billions of dollars) Personal consumption expenditures $850
Interest 90
Corporate profits 150
Government spending 400
Depreciation 100
Rental income 70
Gross private domestic investment 120
Compensation of employees 830
Exports 120
Imports 70
Indirect business taxes 80
Proprietors’ income 120
Personal income taxes 110
Social Security taxes 50
Transfer payments 160 In Exhibit 5-8, and using the expenditures approach, gross
domestic product (GDP) equals:
a. $1,540 billion.
b. $2,460 billion.
c. $2,430 billion.
d. $1,450 billion.
e. $1,420 billion.
Which of the following would not appear on the asset side of a commercial bank
balance sheet?
a. Reserves.
b. Checkable deposits.
c. Loans.
d. Securities.
If net exports are a negative number, then:
a. we are not buying enough exports.
b. we are buying too many exports.
c. GDP will underestimated when measured using the expenditure approach.
d. we are exporting more than we are importing.
e. we are exporting less than we are importing.
Assuming that Pepsi-Cola and Coca-Cola are substitutes, a rise in the price of
Pepsi-Cola, other things being equal, results in a(n):
a. upward movement along the demand curve for Coca-Cola.
b. downward movement along the demand curve for Coca-Cola.
c. leftward shift in the demand curve for Coca-Cola.
d. rightward shift in the demand curve for Coca-Cola.
Assume Congress enacts a $10 billion decrease in spending and a $10 billion decrease
in tax revenue. The result of this balanced-budget approach is a:
a. $10 billion decrease in aggregate demand.
b. $20 billion decrease in aggregate demand.
c. $100 billion decrease in aggregate demand.
d. $10 billion increase in aggregate demand.
Exhibit 1A-1 Straight line
As shown in Exhibit 1A-1, the slope of
straight line AB:
a. decreases with increases in X.
b. increases with increases in X.
c. increases with decreases in X. d. remains constant with changes in X.
An increase in the money supply:
a. raises the interest rate, causing an increase in investment and an increase in GDP.
b. lowers the interest rate, causing an increase in investment and an increase in GDP.
c. raises the interest rate, causing a decrease in investment and an increase in GDP.
d. lowers the interest rate, causing a decrease in investment and an increase in GDP.
e. lowers the interest rate, causing a decrease in investment and a decrease in GDP.
M1 money includes all but which one of the following?
a. Checkable deposits.
b. Savings accounts.
c. Paper money.
d. Coins.
If the dollar appreciates (becomes stronger) this causes:
a. the relative price of U.S. goods to increase for foreigners.
b. the relative price of foreign goods to decrease for Americans.
c. U.S. exports to fall and U.S. imports to rise.
d. a balance of trade deficit for the U.S.
e. all of these.
Along the classical or vertical range of the aggregate supply curve, an increase in the
aggregate demand curve will increase:
a. both the price level and real GDP.
b. only real GDP.
c. only the price level.
d. real GDP and reduce the price level.
If a single banks faces a required reserve ratio of 20 percent, has total reserves of
$500,000, and checkable deposit liabilities of $400,000, what is the maximum amount
of money this bank could create (add to the money supply)?
a. $420,000.
b. $100,000.
c. $80,000.
d. $2,100,000.
In Exhibit 8-14, the MPS when Y increases from $5,000 to $6,000 is:
a. 0.20.
b. 0.80.
c. 0.25.
d. 0.75.
A point outside the production possibilities curve represents a combination of goods
that is:
a. inefficient.
b. efficient.
c. unattainable.
d. attainable.
If an economy’s population grows at 3 percent and GDP grows at 4 percent, then:
a. per capita real GDP is declining.
b. the economy’s standard of living is decreasing.
c. per capita real GDP is negative.
d. per capita real GDP is growing.
e. the economy is experiencing unemployment.