An open market ________ by the Fed increases interest rates and ________ output.
A) sale; increases
B) sale; decreases
C) purchase; increases
D) purchase; decreases
Rising wages and input prices:
A) cause the aggregate demand curve to shift to the right.
B) cause the aggregate supply curve to shift to the left.
C) cause the aggregate demand curve to shift to the left.
D) cause the aggregate supply curve to shift to the right.
Which of the following is a macroeconomic question?
A) Will a constitutional amendment to balance the federal budget lead to good
economic policy?
B) Should a firm decide to enter a particular market?
C) Should the government prevent the merger of two large firms?
D) All of the above are macroeconomic questions.
Suppose that the interest rate available to you on a long-term bond is 4 percent. If you
hold $1,000 of your wealth in currency instead of in the form of a bond, the annual
opportunity cost is
A) $0.04.
B) $4.
C) $40.
D) $400.
If the supply of labor ________, real wages rise and the amount of labor employed
________.
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
Figure 8.1
Refer to Figure 8.1. If the saving rate is s2, the economy reaches the long run
equilibrium at:
A) pt. A.
B) pt. C.
C) pt. D.
D) pt. E.
When the price level is low, resulting in domestic goods being cheaper than imported
foreign goods,
A) consumers hold more money.
B) consumers spend less.
C) the demand for domestic goods will increase.
D) there will be a reduction in import tariffs.
Which of the following is not a market?
A) a group of children trading Pokemon cards
B) a cattle auction
C) your college bookstore
D) All of the above are markets.
An import quota
A) limits the amount of a good that can be imported, thus decreasing prices.
B) limits the amount of a good that can be imported, thus increasing prices.
C) increases the amount of a good imported, thus decreasing prices.
D) increases the amount of a good imported, thus increasing prices.
The smallest source of federal revenue is:
A) corporate income taxes.
B) individual income taxes.
C) social insurance taxes.
D) estate and excise taxes.
A decrease in Swiss interest rates will cause
A) an increase in the demand for U.S. dollars and an increase in the exchange rate of
Swiss francs per dollar.
B) a decrease in the demand for U.S. dollars and a decrease in the exchange rate of
Swiss francs per dollar.
C) an increase in the supply of U.S. dollars and a decrease in the exchange rate of Swiss
francs per dollar.
D) a decrease in the supply of U.S. dollars and an increase in the exchange rate of Swiss
francs per dollar.
Table 3.1
Table 3.1 illustrates Willy and Blythe’s hourly production for apples and carrots. Based
on the table, Willy’s opportunity cost of 1 carrot is:
A) 3 apples.
B) 4 apples.
C) 6 apples.
D) 1.5 apples.
Which of the following is an example of government discretionary spending?
A) Social Security retirement payments
B) Medicare benefits for the elderly
C) defense spending
D) net interest paid on government debt held by the public
M1
A) is the sum of currency plus traveler’s checks.
B) is the narrowest definition of the money supply.
C) includes small time deposits.
D) includes credit cards.
If the cost of hiring workers increases but the marginal benefit remains unchanged,
employers are likely to respond by hiring ________ at any given wage.
A) more workers
B) fewer workers
C) immigrant workers
D) teenaged workers
As consumers prefer smaller and more fuel-efficient cars, the:
A) demand for SUVs will decrease.
B) quantity demanded for SUVs will rise.
C) demand for SUVs will increase.
D) quantity demanded for SUVs will fall.
The quantity demanded of a product increases as
A) consumer income rises.
B) the prices of other products fall.
C) the price of the product rises.
D) the price of the product falls.
At lower interest rates:
A) there is a direct relationship between the interest rate and the quantity of money
demanded.
B) people make a larger sacrifice in interest foregone for each dollar of money they
hold.
C) bonds are more attractive than money.
D) people hold larger money balances.