What impact does expansionary monetary policy have on the short-run Phillips curve if
consumers and firms expect the expansionary monetary policy to increase inflation?
A) The short-run Phillips curve shifts down.
B) The short-run Phillips curve shifts up.
C) The short-run Phillips curve becomes the long-run Phillips curve.
D) The short-run Phillips curve is not affected by expansionary monetary policy.
Investment, as defined by economists, would not include which of the following? Ford
A) buys a new robotic machine (from a plant in Ohio) to assemble cars.
B) adds 1,000 new cars to inventories.
C) builds another assembly plant in the United States.
D) buys U.S. government bonds.
The purchase of $1 million of Treasury securities by the Federal Reserve, if there is no
change in the quantity of currency, will cause reserves at banks to
A) increase by $1 million.
B) increase by less than $1 million.
C) decrease by $1 million.
D) decrease by less than $1 million.
A persistent shortage or surplus of a currency under the Bretton Woods system was
evidence of
A) failure to support the existing fixed exchange rate by central banks.
B) fundamental disequilibrium in the country’s exchange rate.
C) speculation against the currency by speculators in world exchange markets.
D) all of the above
A goal of ________ is to give patients an incentive to pay more attention to the prices
of medical services. This would tend to increase economic efficiency by decreasing the
costs of medical services
A) the Patient Protection and Affordable Care Act (ACA)
B) market-based reforms of the health care system
C) government-provided health care
D) socialized medicine
A regressive tax is a tax for which people with lower incomes
A) pay a lower percentage of their incomes in tax than do people with higher incomes.
B) pay a higher percentage of their incomes in tax than do people with higher incomes.
C) pay the same percentage of their incomes in tax as do people with higher incomes.
D) do not have to pay unless their incomes exceeds a certain amount.
The horizontal-equity principle of taxation is not easy to use in practice because
A) some people engage in rent seeking to reduce their taxes below the level other
people pay.
B) people can use tax loopholes to reduce their incomes below the incomes of other
taxpayers.
C) different people receive different levels of government benefits even if their incomes
are the same.
D) it is difficult to determine whether people are in the same economic situation.
Some factors currently exist that inhibit the growth rate of the Chinese economy. One
reason that General Motors has been unwilling to bring its latest technology for
building electric and hybrid cars to China is
A) the introduction of free-market reforms.
B) the introduction of the relatively new resource of entrepreneurship.
C) the lack of laws that predictably enforce property rights.
D) the total lack of governmental intervention in the market place.
Figure 16-5
Suppose the firm represented in the diagram decides to practice perfect price
discrimination. What is the profit-maximizing quantity?
A) 320 units
B) 480 units
C) 560 units
D) 640 units
What is an inside director?
A) a movie director who also appears in the movie
B) a member of a corporate board of directors that is also a manager of the business
C) the CEO that is selected by the corporation’s board of directors
D) a board of director chair who has been in the job for at least three years
Table 4-4
Table 4-4 shows the demand and supply schedules for labor market in the city of Pixley.
If a minimum wage of $11.50 an hour is mandated, what is the quantity of labor
supplied?
A) 40,000
B) 570,000
C) 610,000
D) 1,180,000
Suppose a transaction changes the balance sheet of Wells Fargo bank as indicated in the
following T-account.
At this point, what percentage of the new deposits does Wells Fargo hold in reserves?
A) 100 percent
B) 10 percent
C) 5 percent
D) 1 percent
Which of the following statements about the prisoner’s dilemma is false?
A) The prisoner’s dilemma in a one-shot game leads to a noncooperative, equilibrium
outcome.
B) The prisoner’s dilemma in repeated games could lead to cooperation especially if
there is some enforcement mechanism that punishes a player who does not cooperate.
C) Players caught in a prisoner’s dilemma act in selfish ways that lead to an equilibrium
that is sub-optimal.
D) The prisoner’s dilemma game can never reach a Nash equilibrium as long as players
do not cooperate.
Figure 6-8
Identify the two goods which are substitutes.
A) Good X and Good Y
B) Good Y and Good Z
C) Good X and Good Z
D) It is not possible to distinguish any relationship among the goods.
Economies where goods and services are traded directly for other goods and services
are called ________ economies.
A) trade
B) barter
C) direct
D) seigniorage
________ refers to reductions in a firm’s costs that result from an increase in the size of
an industry.
A) Internal economies
B) External economies
C) Autarkial dominance
D) Streamlining