Table 11.2 Refer to Table 11.2. If aggregate output equals ________, there will be a
$100 unplanned decrease in inventories.
A) $200
B) $400
C) $600
D) $800
If real GDP was 100 in 2011 and 104.4 in 2012, the growth rate of real GDP between
2011 and 2012 was
A) 2.2 percent.
B) 4.4 percent.
C) 100 percent.
D) 102.2 percent.
If France can produce grapes at a higher opportunity cost than any other nation, France
is said to have a(n) ________ in the production of grapes.
A) autarky
B) absolute advantage
C) comparative disadvantage
D) comparative advantage
The horizontal axis of the production function typically measures:
A) inputs.
B) costs.
C) output.
D) marginal product.
The wage rate that is adjusted for changes in the price level over time is called the:
A) expected future wage rate.
B) nominal wage rate.
C) real wage rate.
D) money wage rate.
In its basic form, an IRA simply does what to taxes?
A) eliminates them
B) passes the taxes on to the rich
C) defers their payment to a later time
D) reduces the tax payments when you save
If Cassie’s Coffee House purchases 33 cents worth of ingredients and spends 36 cents
on wages per cup of coffee to produce an 89 cent cup of coffee, then Cassie’s Coffee
House’s contribution to GDP is ________ per cup of coffee.
A) 20 cents
B) 33 cents
C) 36 cents
D) 56 cents
When 7 of the 8 largest Japanese mortgage lenders in 1995 had gone bankrupt, which of
the following events prevented the collapse of these institutions?
A) The government’s decision to bail out all the 7 bankrupt mortgage lenders.
B) The government’s decision to let the surviving institution buy out the 7 bankrupt
institutions.
C) The decision of U.S. banks to make loans to the 7 bankrupt institutions.
D) The sudden rise in the home values in Japan.
At an interest rate of 6 percent, what would be the present value of receiving $22,000
twelve years from now?
A) $10,934
B) $18,645
C) $19,643
D) $20,755
Recall the Application about how the collapse of the housing boom and the worldwide
recession of 2007 led to problems for some countries in the Euro-zone to answer the
following question(s). When the euro was launched in 1999, the vision of its founders
was to use the monetary union to further unify Europe economically and politically.
They envisioned a large economic market, comparable to the United States with
integrated goods and financial markets. They believed that by moving to a single
currency with agreements on a number of fiscal rules that they could achieve economic
stability and growth.
Recall the Application. Unlike the Euro-zone, the United States does not just have a
single currency, but also has a ________ that provides transfers to areas in economic
distress.
A) single central bank
B) national trade agreement
C) unified fiscal system
D) federally funded emergency account
Capital gains are heavily concentrated on:
A) the middle class.
B) the very wealthy.
C) the poor.
D) the homeless.
Table 6.2Refer to Table 6.2. The total number of people unemployed is:
A) 7.58 million.
B) 10.5 million.
C) 6.83 million.
D) 73.5 million.
Which of the following would cause the long-run aggregate supply curve to shift to the
right?
A) higher energy prices
B) an increase in taxes
C) increases in government regulation
D) an increase in the labor supply
Assume that the consumption function is C = 200 + 0.8Y. The marginal propensity to
save is:
A) 0.8.
B) 0.75.
C) 0.25.
D) 0.2.
From World War II until 2011, the U.S. has experienced:
A) one depression.
B) no depressions.
C) four depressions.
D) 10 depressions.
If nominal GDP is $700 billion and the money supply is $100 billion, the velocity of
money is:
A) 0.7.
B) 7.0.
C) 3.5.
D) 3.0.
If a bond was to pay off one year from now for $440 and the interest rate is 10 percent,
what is the price of the bond?
A) $44
B) $400
C) $440
D) $484
The Laffer curve illustrates that
A) high tax rates could lead to lower tax revenues if economic activity is severely
discouraged.
B) lowering tax rates will always increase tax revenues.
C) high tax rates would increase tax revenue and increase the labor supply as people
work harder to maintain their standard of living.
D) lowering tax rates will always decrease tax revenues.