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Suppose there are 200 million persons in the population, 120 million persons in the
civilian labor force, and 90 million persons are employed.The number of persons
unemployed is _______ million and the unemployment rate is ___________ percent.
a. 30; 25
b. 30; 33
c. 30; 5
d. 80; 40
Exhibit 15-1
One argument against the use of activist monetary policy claims that it can destabilize
the economy. For example, suppose we are in a recessionary gap. Expansionary
monetary policy is implemented, but there are so many lags that by the time it has its
effect, self-regulation has already closed the gap by itself. The end result is a movement
from point
a. B to point D.
b. B to point C.
c. B to point A.
d. A to point C.
e. C to point B
Exhibit 3-2
Good X
Which of the following would result in a movement from point A on D1 to point B on
D2?
a. There was a decrease in the price of a substitute for good X.
b. There was an increase in the price of a complement to good X.
c. There was a decline in technology in the production of good X.
d. There was an increase in the price of a substitute for good X.
If United States real interest rates rise, international repercussions put ____________
pressure on the price level and _______________ pressure on Real GDP in the United
States.
a. upward; upward
b. upward; downward
c. downward; upward
d. downward; downward
The price of a given good is likely to be less variable with speculators than it would be
without speculators.
a. True
b. False
In recent years, tariff rates have declined in the United States, China, and India.
a. True
b. False
If the price of good X is $90 and the price of good Y is $30, it follows that the relative
price of one unit of good Y is ___________ unit(s) of good X.
a. 0.33
b. 1.33
c. 3.00
d. 2.00
e. There is not enough information to answer the question.
Exhibit 9-3
The economy is in short-run equilibrium and has an inflationary gap at point
a. A.
b. B.
c. C.
d. D.
e. E.
Suppose that both the demand for and supply of agricultural products increases.If the
increase in the supply of agricultural products is greater than the increase in demand,
prices of agricultural products
a. increase.
b. decrease.
c. remain the same.
d. may increase, decrease, or remain the same.
The unit of account function of money refers to the
a. fact that money and income are the same thing.
b. common denominator of measurement provided by money.
c. characteristic that all money is intrinsically valuable.
d. all of the above
Exhibit 2-5
The economy is currently operating at point F. The
opportunity cost of moving to point E is approximately
a. 35 televisions.
b. 55 televisions.
c. zero televisions.
d. 40 televisions.
The Federal Open Market Committee (FOMC) is composed of the seven members of
the Board of Governors,
a. the president of the New York Federal Reserve District Bank, and four of the
remaining 11 Federal Reserve District Bank presidents who rotate on an annual basis.
b. and five state governors who rotate on an annual basis.
c. four Federal Reserve District Bank presidents who rotate on an annual basis, and the
head of the Senate Banking Committee.
d. and the Secretary of the Treasury.
Special interest group K receives a 1/100th slice of the economic pie.Its net benefit from
either an economic growth policy or a transfer policy is $200,000.In order for group K
to be indifferent between the two policies, the economic growth policy would have to
make the size of the economic pie (Real GDP) grow by_________________.This type
of analysis is used to show that special interest groups tend to press government for
______________ instead of ________________.
a. $20,000,000; economic growth; transfers
b. $2,000,000; transfers; economic growth
c. $20,000,000; transfers; economic growth
d. $20,000,000; transfers; economic growth
e. none of the above
In the supply-and-demand diagram of the market for peanut butter, the equilibrium
point has moved up and to the right. What could have caused this?
a. a fall in the price of peanuts
b. a rise in the price of peanuts
c. a rise in income, assuming that peanut butter is an inferior good
d. a shift in preferences toward peanut butter
e. none of the above
