Real GDP is GDP
a. in current-year prices.
b. in base-year prices.
c. in GDP-prices.
d. in that year’s prices.
A candidate who understands that in a two-person race the person closer to the center of
the voter distribution will win is likely to
a. first take polls to figure out what the voters are thinking and then afterward propose
policies that are consistent with the polls.
b. first put forth his or her views on a whole host of issues and then afterward take polls
to see if the majority of voters agree with him.
c. speak in specific terms about what needs to be done.
d. a and c
e. b and c
Inventory levels unexpectedly fall and as a result firms increase the quantity of goods
and services they produce. Which of the following is consistent with these two
occurrences?
a. TP is greater than TE.
b. TP is less than TE.
c. TE is equal to TP minus the rise in inventories above the optimum inventory level.
d. TP is equal to TE.
e. b and c
Most voters choose not to be informed about political and governmental issues because
they are not smart enough to really understand the issues.
a. True
b. False
House A has an ocean view and House B does not.In all other respects, the two houses
are the same.The market price of house A is $2,800,000; the market price of house B is
$2,600,000.The ocean view is therefore valued at
a. $200,000.
b. $1,950,000.
c. -$700,000.
d. $2,700,000.
An appreciation of the dollar in the foreign exchange market raises United States Real
GDP when the _____________ shift of the SRAS curve exceeds the __________ shift
of the AD curve.
a. rightward; rightward
b. rightward; leftward
c. leftward; rightward
d. leftward; leftward
Suppose the Fed forecasts a reduction in cash leakages. It might offset the effect of this
on the money supply by
a. buying government securities.
b. selling government securities.
c. lowering the required reserve ratio.
d. lowering the discount rate.
The existence and use of the Internet has lowered the transaction costs of making some
exchanges.
a. True
b. False
The opportunity cost of attending college
a. consists of the tuition costs only.
b. consists of the tuition costs plus the costs of room and board and other expenses.
c. is zero, if the student receives a scholarship that covers the costs of tuition, room and
board, and other expenses.
d. varies from person to person.
e. both b and c
Exhibit 2-5
The opportunity cost of moving from point D to
point C is
a. 5,000 televisions.
b. 5,000 fax machines.
c. 10,000 televisions.
d. 10,000 fax machines.
If the relative price of one unit of good Y is 0.25 units of good Z, then it follows that the
absolute price of good Z can be __________ and the absolute price of good Y can be
__________.
a. $4,000; $2,000
b. $1,000; $2,000
c. $2,000; $1,000
d. a and c
e. none of the above
Exhibit 39-4
The price support of $6 per bushel results in private citizens spending __________ on
wheat.
a. $600
b. $3,000
c. $3,600
d. $4,800
e. $6,600
The problems of physical distance can be _____________ by technology which can
serve to ___________ trade.
a. increased; discourage
b. reduced; enhance
c. increased; enhance
d. reduced; discourage