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Most economists consider the case for jawboning to control inflation is strongest when
this policy is used:
a. for a long period of time.
b. to combat inflation that is out of control.
c. to combat cost-push inflation.
d. All of these are true.
The aggregate supply curve is defined as:
a. net national product.
b. the sum of wages, rent, interest, and profits.
c. the real GDP produced at different price levels.
d. the total dollar value of household expenditures.
Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss
As shown in Exhibit 3A-2, if the market price
falls from P1 to P2, then:
a. total surplus increases.
b. deadweight loss increases.
c. overproduction increases.
d. underproduction decreases.
To illustrate the classical argument that 'supply creates its own demand," the aggregate
supply curve should be drawn:
a. downward-sloping.
b. upward-sloping.
c. horizontal.
d. vertical.
The hypothesis that people believe the best indicator of the future is the recent past is
known as:
a. rational expectations.
b. adaptive expectations.
c. lagged expectations.
d. trend expectations.
When the Fed decreases the required reserve ratio, then the:
a. ability of banks to make loans is restricted.
b. ability of banks to make loans is enhanced.
c. ability of banks to make loans is unaffected.
d. interest rate that banks pay to the Fed to borrow money is reduced.
e. interest rate that banks pay other banks to borrow money is decreased.
Unintended costs that are imposed in third parties as a result of an economic activity are
called:
a. marginal costs.
b. direct costs.
c. negative externalities.
d. positive externalities.
e. positive costs.
Which of the following is true?
a. A budget deficit will have no impact on the national debt.
b. A budget deficit will increase the national debt.
c. A balanced budget will increase the national debt.
d. A budget surplus will increase the national debt.
Which one of the following persons would be considered unemployed?
a. A person not working who has given up searching for a job.
b. A part-time worker looking for a full-time job.
c. A construction worker who was laid off due to cold weather.
d. A full-time college student who is not a member of the labor force.
Which of the following policies could the Fed use to lower the interest rate?
a. A tax cut.
b. Selling government securities.
c. Raising the discount rate.
d. Reducing the required reserve ratio.
If tofu is a normal good, an increase in income will:
a. cause tofu to sell at a lower price.
b. increase the production of tofu.
c. shift the demand curve for tofu to the left.
d. shift the demand curve for tofu to the right.
e. rotate the supply curve in a clockwise manner.
Volt Corp. reported the following information for the year ended December 31, 2015:
How much was paid out in dividends by Volt in 2015?
a. $ 20,000
b. $ 25,000
c. $ 30,000
d. $ 50,000
The creative ability of persons to combine and direct resources to produce new products
is known as:
a. economizing.
b. entrepreneurship.
c. value judgment.
d. product sensitivity.
The Monetary Control Act of 1980:
a. created less competition among various financial institutions.
b. allowed fewer institutions to offer checking account services.
c. restricted savings and loan associations to long-term loans.
d. all of the above.
e. none of the above.
The nation of Exland is considered a less-developed country and has the following
characteristics. Which one is not typical of a less-developed country?
a. High illiteracy.
b. High unemployment.
c. Rapid growth of technology.
d. Low growth in technology.
e. Rapid population growth.
The equation of exchange states:
a. MV = PQ.
b. MP = VQ.
c. MP = V/Q.
d. V = M/PQ.
The U.S. supply curve of dollars is upward-sloping because a:
a. higher number of yen per dollar means Japanese goods are cheaper in Japan.
b. higher number of yen per dollar means Japanese goods are cheaper in the U.S.
c. lower number of yen per dollar means Japanese goods are cheaper in the U.S.
d. none of these.
Which of the following would decrease the supply of airline travel?
a. Reduced number of airline travelers.
b. New airline companies beginning operations.
c. Higher fuel costs.
d. Lower prices for airline tickets.
The primary objective of external auditors is to provide assurance to stockholders and
other users that the statements are fairly presented.
a. True
b. False
If the federal government has a budget surplus, then the national debt is:
a. reduced.
b. fully repaid.
c. negative.
d. interest-free.
