Economists monitor economic growth by keeping track of
a. the stock market
b. population growth
c. the total quantity of goods and services produced in the United States each year
d. the inflation rate
e. the distribution of income among U.S. states
Which of the following would prevent a market from being classified as perfectly
competitive?
The vertical aggregate supply curve is consistent with
a. the classical model
b. the short run macro model
c. a typical firm’s supply curve
d. a positive demand shock
e. a negative demand shock
If the quantity of money demanded is less than the quantity supplied at a given interest
rate, what will happen to restore the market to equilibrium?
a. The public will try to buy bonds, the price of bonds will increase, and the interest rate
will fall until the equilibrium is attained where the money demand and supply curves
intersect.
b. The public will try to sell bonds, the price of bonds will decrease, and the interest rate
will rise until equilibrium is attained where the money demand and supply curves
intersect.
c. The public will try to sell bonds, the price of bonds will increase, and the interest rate
will fall until equilibrium is attained where the money demand and supply curves
intersect.
d. The public will try to buy bonds, the price of bonds will increase, and the interest rate
will rise until equilibrium is attained where the money demand and supply curves
intersect.
e. The public will try to buy bonds, the price of bonds will decrease, and the interest
rate will fall until equilibrium is attained where the money demand and supply curves
intersect.
Bill’s Office Furniture sells office chairs and desks. Bill’s has changed the price per
chair by $10 in each of four successive weeks. Figure 5-12 shows the four prices along
with the corresponding sales of desks. What is the cross-price elasticity of demand of
desks with respect to chairs when the price of a chair changes in the $45 to $55 range?
Contracts reduce the level of specialization in an economy.
Under a market system of resource allocation, the most important limitations on
individual freedom of action are imposed by
A decrease in oil prices is considered a demand shock because it would lead to a shift of
the aggregate demand curve.
If the full-employment rate of unemployment is 5 percent, and the economy is
experiencing a 7 percent unemployment rate, what is the rate of cyclical
unemployment?
a. 7 percent
b. 12 percent
c. -2 percent
d. 5 percent
e. 2 percent
There is uncertainty about the precise level of the natural rate of unemployment.