1)
Refer to the above table. A decrease in government purchases of $5 would:
A.increase real GDP by $5.
B.increase real GDP by $10.
C.decrease real GDP by $5.
D.decrease real GDP by $15.
2) if the consumer price index falls from 120 to 116 in a particular year, the economy
has experienced:
a.inflation of 4 percent.
b.inflation of 3.33 percent.
c.deflation of 3.33 percent.
d.deflation of 4 percent.
3) Which of the following statements is not correct?
A.State and local governments in the aggregate have realized budget surpluses in some
years.
B.A Federal deficit of $20 billion in 2010 would increase the public debt by $20 billion.
C.The public debt is the accumulation of all the Federal government’s deficits and
surpluses.
D.The public debt refers to the debts of all units of governmentFederal, state, and local.
4) The textbook authors apply the metaphor ‘shooting yourself in the foot” to:
A.trade wars and trade boycotts.
B.fixed exchange rates.
C.import quotas.
D.voluntary export restraints.
5) for comparing changes in potential military strength and political preeminence, the
most meaningful measure of economic growth would be:
a.changes in total nominal output.
b.changes in total real output.
c.changes in per capita output.
d.changes in per family output.
6) which of the following cases best illustrates economic immigration?
a.sophia migrated to germany to rejoin her family.
b.julio migrated to australia to take a job paying three times what he earned at home.
c.nguyen migrated to the united states to escape religious persecution.
d.vladimir migrated to great britain to avoid political imprisonment.
7) the abc corporation decreases all of its inputs by 12 percent and finds that its output
falls by only 8 percent. this means that initially it was producing:
a.in the range of diseconomies of scale.
b.in the range of economies of scale.
c.where ap is less than mp.
d.at the point of minimum efficient scale.
8) Assume the price of capital falls relative to the price of labor and, as a result, the
demand for labor increases. Therefore:
A.capital is very highly substitutable for labor.
B.the output effect is greater than the substitution effect.
C.the income effect is greater than the output effect.
D.the substitution effect is greater than the output effect.
9) suppose that a person’s nominal income rises by 5 percent and the price level rises
from 125 to 130. the person’s real income will:
a.fall by about 1 percent.
b.remain constant.
c.rise by about 4 percent.
d.rise by about 1 percent.
10) the sunshine corporation finds that its costs are $40 when it produces no output. its
total variable costs (tvc) change with output as shown in the accompanying table. use
this information to answer the following question(s).
refer to the above information. the average total cost of 3 units of output is:
a.$65.
b.$21.67.
c.$40.
d.$35.