For society as a whole, producing more of one good or service has an opportunity cost
because
a. human wants are limited and resources are unlimited
b. both human wants and resources are unlimited
c. resources are limited; human wants are irrelevant
d. human wants are unlimited and resources are limited
e. both human wants and resources are limited
Two reasons why an economy might operate inside of its production possibilities
frontier are
a. productive efficiency and technological change
b. depressions and inflation
c. recessions and productive inefficiency
d. opportunity costs and substitutability of resources used in production
e. productive inefficiency and a decrease in the state of technology
Net exports
a. are equal to total exports minus total imports
b. are always positive because total imports exceed total exports
c. are always negative because total exports exceed total imports
d. always exceed total exports
e. include goods produced and sold abroad
The equilibrium price and quantity of a good, once attained, will
a. change only if either supply or demand changes
b. change only if both supply and demand change
c. change only if supply changes
d. change only if demand changes
e. never change
A rise in aggregate expenditure is always
a. smaller than the rise in income that causes it
b. larger than the rise in income that causes it
c. the same as the rise in income that causes it
d. smaller than the increase in consumer spending that causes it
e. smaller than investment spending
It was the banking panic of _____ that convinced Congress to establish the Federal
Reserve System.
a. 1890.
b. 1929.
c. 1907.
d. 1863.
e. 1921.
The frequency of banking panics was greatly reduced when
a. the Federal Reserve was created
b. the federal government started insuring banking deposits
c. the Federal Reserve increased the required reserve ratio
d. the Federal Reserve started using open market operations
e. the Federal Reserve decided to take a less active role in controlling the money supply
Even a bank in good financial health can fail if there is a run on the bank.
In the classical model, even when a country runs a trade deficit, Say’s law holds.
A reliable indicator of a healthy economy is a stable currency.
The federal government
a. runs a deficit when tax revenues are greater than government purchases.
b. runs a surplus when tax revenues are smaller than government purchases.
c. runs a deficit when tax revenues are smaller than government outlays.
d. runs a surplus when tax revenues are greater than government purchases.
e. runs a surplus when tax revenues are smaller than transfer payments..
In macroeconomics, it is impossible to include many individual markets in a single data
source.