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Exhibit 34-1
Considering the data, which of the following terms of trade would both countries agree
to?
a. 1 unit of Y for 1 unit of X
b. 1 unit of Y for 0.75 units of X
c. 1 unit of Y for 0.25 units of X
d. 1 unit of Y for 1.50 units of X
e. all of the above
Keynes believed that
a. the internal structure of the economy is extremely competitive and that wage-price
flexibility exists.
b. monopolistic elements in the economy prevent immediate and sharp price declines in
response to falling demand.
c. even though there are monopolistic elements in the economy, wage-price flexibility
exists.
d. in spite of the competitiveness of the economy, wage-price flexibility does not exist.
Exhibit 7-1
What is the value ofpersonal income?
a. $4,252
b. $4,388
c. $5,072
d. $3,996
e. $4,207
The demand for reserves curve in the federal funds market is
a. horizontal.
b. vertical.
c. upward sloping.
d. downward sloping.
Advocates of a fixed exchange rate system argue that fixed exchange rates promote
international trade.
a. True
b. False
Exhibit 3-8
A price of $1 will result in a ___________________ in this market which will cause the
price of the product to gravitate ________________.
a. shortage; downward
b. shortage; upward
c. surplus; downward
d. surplus; upward
Exhibit 10-2
If autonomous investment decreases, the TE curve will shift ____________ and the
new level of equilibrium Real GDP will be ___________ than $4,500.
a. downward; greater
b. downward; less
c. upward; less
d. upward; greater
The lag between an increase in government spending and the impact of this increased
spending on the economy is called the __________ lag.
a. effectiveness
b. transmission
c. legislative
d. data
Exhibit 3-2
Good X
Which of the following would result in a movement from point B on D2 to point A on
D1?
a. There was an increase in income (assuming that good X is an inferior good) and
technology remained constant.
b. There was an increase in income (assuming that good X is a normal good) and
technology remained constant
c. There was an increase in income (assuming that good X is an inferior good) and
technology improved.
d. There was an increase in income (assuming that good X is a normal good) and
technology declined.
Which of the following statements is false?
a. Changes in technology can lead to changes in the ways in which people are
employed.
b. Cultural differences may help to explain why some men have difficulty finding jobs
in some sectors of the modern economy.
c. In recent years, the demand for workers in the manufacturing sector has grown
dramatically compared to the demand for workers in the service sector.
d. Some people may be at a loss as to what skills are required of them in the current
labor market.
The structural unemployment rate is 3.1 percent, the frictional unemployment rate is 2.1
percent, and the current unemployment rate is 6.0 percent. The economy is in
a. a recessionary gap producing less than Natural Real GDP.
b. an inflationary gap producing more than Natural Real GDP.
c. long-run equilibrium.
d. an inflationary gap producing Natural Real GDP.
e. a recessionary gap producing more than Natural Real GDP.
In economics, the term foreign exchange trading means
a. buying and selling foreign goods.
b. buying and selling foreign services.
c. buying and selling foreign assets (such as, real estate).
d. buying and selling foreign currencies.
Exhibit 9-5
Point A on graph (2) would correspond to the intersection of an AD curve and a SRAS
curve at which point(s) on graph (1)?
a. I or J
b. K
c. L or M
d. I or L
e. J or M
Suppose you go to a high school and identify groups of students sitting at different
lunch tables. To you it appears that everyone on the football team sits at one table,
everyone who gets really high grades sits at another table, everyone who is in the drama
club sits at another table, and so on.This outcome could be
a. the result of everyone preferring to sit at a table with dissimilar students, but not want
to be at a table if he or she is in a 30 percent minority or less.
b. because people naturally discriminate against (and make feel unwelcome) those
people who are not like them.
c. because the school authorities have instituted a one-week experimental plan to keep
students segregated (at lunch) according to certain key interests.
d. b and c
e. all of the above
If checkable deposits in Bank A total $300 million and the required reserve ratio is 10
percent, then required reserves at Bank A equal
a. $3.0 million.
b. $30.0 million.
c. $3.3 million.
d. $300,000
The headline in the newspaper reads "County Supervisors Debate Building New
Schools." The headline relates closest to which economic concept?
a. goods and bads
b. utility
c. choice
d. efficiency
