In macroeconomics,
a. we study one market at a time
b. we try to understand how the entire economy behaves
c. we focus on large, important products and ignore the rest
d. we study one nation’s economy only
e. we aggregate all national economies into a world economy
Most of the growth in living standards over the last ten years can be attributed to
growth in labor force participation.
Under a socialist system,
a. most resources are owned by the state
b. most resources are shared with the whole community
c. market prices determine how resources are distributed
d. conflicts are usually resolved by consensus
e. most resources are privately owned
Everything else equal, an increase in the demand for labor will
a. increase the real wage rate, employment, and real output
b. reduce the real wage rate, employment, and real output
c. increase the real wage rate but decrease employment and real output
d. reduce the real wage rate but increase employment and real output
e. increase the real wage rate and employment, but leave real output unchanged
In the United States between 1790 and the Civil War, who issued paper currency?
a. The Federal Reserve System
b. The U.S. Treasury Department
c. The U.S. Congress
d. The British government
e. Private banks.
Frictional unemployment is joblessness
a. related to changes in weather and similar factors
b. arising from a mismatch between available jobs and workers’ skills
c. resulting from macroeconomic fluctuations
d. that is short-term and is experienced by people who are between jobs
e. that is caused by structural changes in the economy
Which of the following is not a part of M1?
a. Cash in the hands of the public.
b. Demand deposits.
c. Traveler’s checks.
d. Money market mutual fund (MMMF) balances.
e. Corporate stocks.
A person has an absolute advantage in producing a good if he can
a. produce it using fewer resources than another person
b. produce it while sacrificing less than another person in terms of foregone output
c. corner the market
d. use other peoples’ money to produce it
e. work out some long term payment plan for financing the good
You are reading a newspaper article that refers to expansions and contractions in the
economy. The references are to changes in
a. wage rates
b. inflation rates
c. movements in exchange rates
d. real GDP
e. investment expectations
Increases in inventories are subtracted from GDP because they reflect output that is
produced but not sold.
One problem with using discount rate changes to influence deposit creation or
destruction is that
a. small changes in the rate do not have much impact
b. the discount rate changes are covert
c. banks like to borrow from the Fed, and they will borrow even more after the changes
d. the Fed must change the discount rate each time they meet
e. banks do not have enough control over their demand deposits
Moving up the Phillips curve in the short run will cause the entire curve to shift upward
in the long run.
Which of the following would be considered a component of government purchases?
a. Both d and e
b. All of the following
c. Welfare payments
d. Police salaries
e. Social security payments
Suppose that the inflation rate for a given year was 3%. In that year,
a. all prices rose by 3%
b. prices on average rose by 3%
c. the economy was in an expansion
d. the economy was in a recession
e. the inflation rate was rising
If Holly’s demand for fast food decreases as her income rises, then
a. fast food is a normal good for her
b. the law of demand must apply
c. fast food is a complementary good
d. fast food is an inferior good for her
e. fast food is a substitute good
If money demand changes for some reason other than a spending shock, the Fed can
stabilize
a. GDP without changing the interest rate
b. GDP, but at the expense of interest rate stability
c. GDP by keeping the interest rate stable
d. the price level by keeping the interest rate stable
e. the price level and GDP by stabilizing the interest rate
The demand curve for a product will shift rightward when the price of a substitute
decreases.
If Sally purchases a particular compact disk, it is because the opportunity cost is higher
than it would be for any other compact disk.