If a firm is a price taker, then the demand curve it faces is perfectly
Relative to GDP, interest on the national debt
a. has grown at a steady rate during the last 40 years
b. has remained constant in recent decades
c. grew especially rapidly during the 1980s
d. declined slightly during the 1980s
e. fluctuates as retirement portfolios change their allocation of government securities
Which of the following will cause a movement along the aggregate demand curve?
a. A decrease in the price level
b. An increase in government purchases
c. A decrease in taxes
d. An increase in investment spending
e. An increase in the interest rate
Involuntary exchanges, such as robbery,
The formula for the demand deposit multiplier is
a. 1 divided by excess reserves
b. 1 divided by the required reserve ratio
c. 1 minus the required reserve ratio
d. the required reserve ratio minus 1
e. the required reserve ratio times the level of demand deposits
The marginal propensity to consume tells us the intercept of the consumption function.
As of mid-2009, the unemployment rate for blacks is approximately 1.7 times the rate
for
a. Hispanics
b. white teenagers
c. women
d. black teenagers
e. whites
The price elasticity of demand is usually equal to the slope of the demand curve.
If the unit cost of output for a computer is $2,000 and if firms’ average markup is 10
percent, what is the total cost to the consumer?
a. $2,000
b. $2,010
c. $2,020
d. $2,200
e. $20
Each of the following would shift a nation’s production possibilities frontier outward,
but which is least likely to be accompanied by an increase in the standard of living?
a. population growth
b. increased investment in private physical capital
c. increased investment in human capital
d. technological advances
e. increased investment in infrastructure
Use the table below to calculate the CPI in 2007. Assume the base year is 2006 and the
cost of the market basket in the base year is $200.
The CPI in 2007 is
a. 100
b. 126
c. 115
d. 230
e. 200
Changes in the interest rate
a. change business spending, but not consumption spending
b. shift the consumption function
c. cause a movement along the consumption function
d. change consumption spending but not business spending
e. have no impact on autonomous consumption or business spending
Refer to Figure 5-1 above. If the economy goes from point A to point C on the graph, it
is going through a(n)
a. peak
b. trough
c. expansion
d. business cycle
e. recession
Myron worked at a factory where he earned $20,000 per year. One day, he quit his job
and opened a bumper sticker business. After one year, his business earned $60,000 in
sales revenue and he incurred $30,000 in direct business expenses. If he received no
salary from the new business, what is his economic profit?