A nation’s net exports consist of
A) its exports plus its imports.
B) its exports minus its imports.
C) its exports plus all other nation’s imports.
D) its imports plus all other nation’s exports.
The efforts of nations to influence exchange rates are known as
A) open market operations.
B) foreign exchange market intervention.
C) rate discrimination.
D) establishing terms of trade.
Suppose the growth rate of GDP in the United States is 4.2 percent. If 2.9 percent and
1.3 percent of GDP growth are due, respectively, to capital and labor growth, the
amount resulting from technological progress is
A) 0 percent.
B) 1.3 percent.
C) 2.9 percent.
D) 4.2 percent.
Figure 19.1
Referring to Figure 19.1, U.S. goods will become cheaper in Mexico if the exchange
rate goes from ________ to ________ pesos to the dollar.
A) 12; 11
B) 12; 13
C) 11; 13
D) 10; 14
Suppose the US imposes a ban on imported steel from China because the Chinese steel
was made with factories that pollute the environment. If China complains to the WTO
regarding the US ban, the WTO will side with:
A) China, because the pollution in China does not harm the US directly.
B) China, because the WTO is in favor of industries that generate pollution.
C) the US, because a country can determine what goods can and cannot enter its
borders.
D) the US, because US factories have to comply with US environmental standards.
An example of a public good is:
A) national defense.
B) Pay-Per-View broadcasts.
C) an apple.
D) a seat in a bus.
Recall the Application about the impact tariffs have on lower income households to
answer the following question(s). Economists have found that tariffs in the United
States fall most heavily on lower-income consumers. In the United States, tariffs are
very high on textiles, apparel items and footwear, and within these categories the
highest tariffs fall on the cheapest products. In general, to protect U.S. industries, tariffs
are highest on labor-intensive goods.
According to this Application, tariffs in the United States are very high on textiles,
apparel items and footwear, and within these categories tariffs are highest on the
cheapest products. These tariffs disproportionately impact lower-income households
because
A) higher-income consumers tend to refuse to purchase products with tariffs.
B) only lower-income consumers buy cheap, imported products.
C) these cheaper products tend to be purchased by lower-income consumers.
D) higher-income consumers can deduct the tariff from their income taxes.
If government spending is $650 billion while government revenue is $950 billion, the
government is said to have a
A) $300 billion budget deficit.
B) $1,600 billion budget balance.
C) $300 billion budget surplus.
D) $950 billion budget deficit.
Macroeconomics is best described as the study of
A) very large issues.
B) the choices made by individual households, firms, and governments.
C) the nation’s economy as a whole.
D) the relationship between inflation and wage inequality.
The Federal Reserve System:
A) is a private profit-making commercial banking system.
B) is different than the central bank of the United States.
C) implements fiscal policy.
D) includes 12 district federal reserve banks.
Figure 4.3 illustrates the demand for tacos. An increase in the number of consumers in
the market would bring about a movement from
A) point a to point .
B) point c to point a.
C) D2 to D1.
D) D0 to D2.
Deposit insurance guarantees that the federal government will reimburse depositors up
to ________ in each account in each bank should the banks fail.
A) $250,000
B) $100,000
C) $25,000
D) $1,000,000
If a competitive market operates perfectly, it relies on:
A) the number of people buying goods.
B) the laws of supply and demand.
C) how many products can be produced for sale.
D) how much people are willing to pay for the products.
Table 2.3 Refer to Table 2.3. The
marginal product of the 1st worker is:
A) 100 units of output.
B) 80 units of output.
C) 60 units of output.
D) 40 units of output.
The discretionary spending component of federal spending includes all programs that:
A) Congress authorizes on an annual basis.
B) Congress authorizes on a monthly basis.
C) is made mandatory by the president of the US.
D) is authorized by prior law.
From World War II through 2010, the United States experienced ________ recessions.
A) 2
B) 5
C) 11
D) 15
Estate and gift taxes are:
A) taxes levied on the real estate assets of corporations and on their charity
contributions.
B) taxes levied on the estates and previous gifts of individuals when they pass away.
C) taxes levied on the capital of corporations when they are dissolved or acquired by
another corporation.
D) taxes levied on the real estate assets of individuals and on their charity contributions.
Increased government spending will not cause investments to drop as much if:
A) the Fed increases the money supply at the same time the federal government
increases government spending.
B) the Fed decreases the money supply at the same time the federal government
increases government spending.
C) the Fed does not change the money supply when the government increases
government spending.
D) business firms become pessimistic about the future.
When the economy experiences sustained economic growth, the:
A) labor demand decreases and the equilibrium wage drops.
B) labor demand increases and the equilibrium wage rises.
C) the supply increases and the equilibrium wage increases.
D) the supply decreases and the equilibrium wage decreases.
The Bank of New York has $4 million in deposits and $350,000 in reserves. If the
required reserve ratio is 5%, excess reserves are equal to:
A) $150,000.
B) $200,000.
C) $350,000.
D) $50,000.