What would be a way for the Federal Reserve to stimulate a sluggish economy?
A) print more money
B) buy government bonds on the open market
C) sell more government bonds
D) encourage the stock market
When referring to “marginal” changes, the economic focus is on
A) changes which affect only a few people or products.
B) large changes on the low end.
C) graduated changes on the high end.
D) small or incremental changes.
Refer to Figure 15.2. Output is likely to rise and prices are likely to fall if the economy
is at point
A) a.
B) .
C) c.
D) d.
The federal deficit ________ in 2006 and 2007, and ________ in 2008.
A) increased; decreased
B) increased, increased further
C) decreased; increased
D) decreased; decreased further
Suppose that net investment in 2009 was $360 billion and depreciation was $30 billion.
Gross investment in 2009 was:
A) -$30 billion.
B) $300 billion.
C) $330 billion.
D) $390 billion.
Daily Output of Japan and U.S.
Table 18.2 Refer to Table 18.2. The opportunity cost of
stereos in the U.S. is:
A) 2 tractors.
B) 1/4 tractor.
C) 1/2 tractor.
D) 4 tractors.
Figure 2.1
Refer to Figure 2.1. If you are producing 600 tons of agricultural products per year,
what is the maximum amount of manufactured products you can produce per year?
A) 300 tons
B) 500 tons
C) 600 tons
D) 700 tons
Figure 4.2 Figure 4.2 depicts three market situations. Which of the panels depicts a
market in which the price is likely to rise?
A) Panel A
B) Panel B
C) Panel C
D) None of the panels depicts a market in which the price is likely to rise.
Assuming an upward-sloping short-run aggregate supply curve, an increase in the
money supply results in ________ in output and ________ in prices in the short run.
A) an increase; an increase
B) a decrease; a slight decrease
C) a decrease; no change
D) no change; an increase
Suppose the overall MPC is 0.9. If a $2 billion increase in imports to the United States
will lead to a $10 billion decrease in GDP, the value of the marginal propensity to
import must be
A) 0.1.
B) 0.2.
C) 0.5.
D) 0.8.
If the marginal propensity to consume is 0.5, a decrease in consumption by $100 will
shift the aggregate demand curve horizontally to the left by:
A) $400.
B) $100.
C) $200.
D) $100.5.
According to the data presented in the text, the effect of Japan’s voluntary export
restraints on cars was to:
A) increase the price of Japanese cars in the U.S.
B) decrease the price of Japanese cars in the U.S.
C) increase the number of Japanese cars imported in the U.S.
D) caused Japanese car companies to delay building plants in the U.S.
Lettuce and spinach are substitute goods. All else equal, if a spinach beetle destroys half
of the nation’s spinach crop, we predict that the equilibrium price of lettuce will
________ and the equilibrium price of spinach will ________.
A) rise; rise
B) rise; fall
C) fall; rise
D) fall; fall
Does the performance of the economy in 2007 support the theory expressed in the
application?
A) Yes, the president was a Democrat, and the economy is growing fast.
B) Yes, the president was a Republican and the inflation is low.
C) Yes, the president was a Democrat, and the economy is slumping.
D) Yes, the president was a Republican and the economy is growing fast.
During hyperinflations, prices are
A) not changing.
B) decreasing rapidly.
C) changing slowly and predictably.
D) changing fast and unpredictably.
Due to the ________ effect, the final shift in aggregate demand is larger than the initial
shift in aggregate demand.
A) income
B) multiplier
C) substitution
D) crowding-out
Refer to Figure 15.1. If the wage rate can easily adjust to clear the market, then if the
wage rate is currently at $12:
A) the wage rate will decline to eliminate the surplus.
B) the wage rate will increase to eliminate the shortage.
C) the wage rate will decline to eliminate the shortage.
D) the wage rate will increase to eliminate the surplus.
Most economists believe that price indices
A) overstate inflation and understate growth in nominal GDP.
B) overstate inflation and understate growth in real GDP.
C) understate inflation and understate growth in nominal GDP.
D) understate inflation and understate growth in real GDP.
If Germany can produce cars at a lower opportunity cost than any other nation,
Germany is said to have a(n) ________ in the production of cars.
A) comparative advantage
B) autarky
C) absolute advantage
D) comparative disadvantage