Securities dealers that trade stocks and bonds outside exchanges comprise the
A) foreign exchange market.
B) over-the-counter market.
C) NASDAQ market.
D) outlet market.
Suppose the government launches a successful advertising campaign that convinces
workers with high school degrees to quit their jobs and become full time college
students. This would cause
A) the unemployment rate to decrease.
B) the labor force participation rate to decrease.
C) the number of discouraged workers to increase.
D) no change in the unemployment rate.
Macroeconomic equilibrium occurs when
A) aggregate expenditure = GDP.
B) aggregate expenditure = C+ I + G + net transfers.
C) aggregate income = planned inventories.
D) aggregate expenditure = planned inventories.
________ a nation’s production possibilities frontier represents economic growth.
A) An outward shift of
B) An inward shift of
C) Moving up along
D) Moving down along
Under what circumstances would the GDP deflator be less than 100 after the base year?
A) The GDP deflator will be less than 100 if there has been inflation relative to the base
year.
B) The GDP deflator will be less than 100 if there has been inflation of less than 2% per
year relative to the base year.
C) The GDP deflator will be less than 100 if there has been deflation relative to the base
year.
D) There are no circumstances under which the GDP deflator could be less than 100.
If the United States is a “net lender” abroad, ________. (Assume that the capital
account is zero and net transfers are zero.)
A) the United States must be exporting less than it is importing
B) net capital flows must be positive
C) domestic saving is greater than domestic investment
D) net foreign investment must be negative
Which of the following is considered a negative supply shock?
A) increasing investment in the economy causes the capital stock to rise
B) an unexpected increase in the price of natural gas
C) a decline in wages
D) an improvement in technology
According to the World Bank, GDP per capita ________ in the least corrupt countries
than in the most corrupt countries.
A) is more than 50 percent less
B) is roughly the same
C) is twice as high
D) is more than 10 times higher
The Industrial Revolution
A) marked the beginning of significant economic growth in the world.
B) started in France around the year 1750.
C) produced goods exclusively using human or animal power.
D) had no impact on standards of living in the world.
A decrease in the demand for American-made goods will
A) increase the supply of dollars in the foreign exchange market.
B) decrease the supply of dollars in the foreign exchange market.
C) increase the demand for dollars in the foreign exchange market.
D) decrease the demand for dollars in the foreign exchange market.
Figure 15-5
Refer to Figure 15-5. In the figure above, the movement from point A to point B in the
money market would be caused by
A) an increase in the price level.
B) a decrease in real GDP.
C) an open market sale of Treasury securities by the Federal Reserve.
D) an increase in the required reserve ratio by the Federal Reserve.
Figure 2-9
Figure 2-9 shows the production possibilities frontiers for Greenland and Iceland. Each
country produces two goods, snow cones and popsicles.
Refer to Figure 2-9. If the two countries have the same amount of resources and the
same technological knowledge, which country has an absolute advantage in the
production of popsicles?
A) Greenland
B) They have the same advantage.
C) Iceland
D) cannot be determined
If planned aggregate expenditure is greater than total production,
A) actual inventories will equal planned inventories.
B) firms will experience an unplanned increase in inventories.
C) GDP will increase.
D) the economy is in equilibrium.