1) The Financial Services Modernization Act of 1999:
A.set limits on the fees that banks can charge for automatic teller machine (ATM)
withdrawals.
B.established a new dollar coin that will replace the dollar bill in 2008.
C.permitted banks, thrifts, pension companies, and securities firms to merge and to sell
each other’s products.
D.outlawed “payday loans” that are advanced against forthcoming payroll checks.
2) A positive externality or spillover benefit occurs when:
A.product differentiation increases the variety of products available to consumers.
B.the benefits associated with a product exceed those accruing to people who consume
it.
C.a firm produces at the P = MC output.
D.economic profits are zero in the long run.
3)
refer to the above matrix. a public good is characterized by combination:
a.a.
b.b.
c.c.
d.d.
4) critics of the north american free trade agreement (nafta) feared that it would:
a.increase the flow of illegal mexican immigrants to the united states.
b.cause the european union and japan to raise trade barriers against u.s. goods.
c.cause a massive loss of u.s. jobs to mexico.
d.increase foreign ownership of assets in the united states.
5) The following information is for a closed economy:
Refer to the above information. The addition of a $100 billion lump-sum tax:
A.reduces the MPC and increases the multiplier.
B.increases the MPC and decreases the multiplier.
C.increases both the MPC and the multiplier.
D.has no effect on either the MPC or the multiplier.
6) Within the past decade, Congress has:
A.permitted banks and thrifts to ‘self-insure” rather than participate in the FDIC system.
B.allowed holders of government bonds to add these bonds to their insured checking
accounts.
C.ended restrictions on banks’ merging with insurance companies, securities firms, and
other firms offering financial services.
D.ended restrictions on banks’ buying of non-bank firms such as manufacturers,
corporate farms, and real estate companies.
7)
over the $10-$8 price range, the elasticity coefficient of supply is:
a.1
b.zero.
c.less than 1
d.greater than 1
8) approximately what percentage of state spending goes to finance education?
a.36
b.44
c.47
d.53
9) Kara and Kyle are competing Sockeye Salmon fishers. Both have been allocated
ITQs that limit their catch to 2,000 tons of Sockeye Salmon each. Kara’s cost per ton is
$8; Kyle’s cost per ton is $12.
Refer to the information above and assume that the market price of Sockeye Salmon is
$15 per ton. If Kara pays Kyle $5 per ton for his ITQs, and if she then catches her new
limit of 4,000, their combined profit would be:
A.$28,000.
B.$22,000.
C.$20,000.
D.$4,000.
10) Assume that by devoting all of its resources to the production of X, nation Alpha
can produce 40 units of X. By devoting all of its resources to Y, Alpha can produce 60Y.
Comparable figures for nation Beta are 60X and 40Y. We can conclude that:
A.the terms of trade will be 3X equals 1Y
B.Alpha should specialize in Y and Beta in X
C.Alpha should specialize in X and Beta in Y
D.there is no basis for mutually beneficial specialization and trade.
11)
Refer to the above diagram in which S is the market supply curve and S1 is a supply
curve comprising all costs of production, including external costs. Assume that the
number of people affected by these external costs is large. If the government wishes to
establish an optimal allocation of resources in this market, it should:
A.not intervene because the market outcome is optimal.
B.subsidize consumers so that the market demand curve shifts leftward.
C.subsidize producers so that the market supply curve shifts leftward (upward).
D.tax producers so that the market supply curve shifts leftward (upward).
12) as a percentage of gdp (total output), u.s. exports are:
a.about 20 percent.
b.lower than in some other industrial countries, including germany and canada.
c.less today than they were in the 1970s.
d.the highest in the world.
13) Below is the information for Manfred’s Shoe Shine Parlor. Assume Manfred hires
labor, its only variable input, under purely competitive conditions. Shoe shines are also
sold competitively.
Refer to the above data. If the wage rate is $11, how many workers will Manfred hire to
maximize profits?
A.1
B.2
C.3
D.5
14) Which of these sets of countries have the greatest degree of internal corruption,
according to Transparency International?
A.Somalia, Myanmar, and Russia
B.Finland, Denmark, and New Zealand
C.United States, Greece, and Italy
D.Mexico, China, and India
15) Assuming no other changes, if checkable deposits increase by $40 billion and
currency in circulation decreases by $40 billion, the:
A.M1 money supply will decline.
B.M1 money supply will not change.
C.M2 money supply will decline.
D.M2 money supply will increase.