How will the exchange rate (foreign currency per dollar) respond to an increase in
preference for imported goods in the United States in the long run?
A) Exchange rates will rise.
B) Exchange rates will fall.
C) Exchange rates will be unaffected by changes in the relative rate of productivity
growth in the United States, both in the short run and in the long run.
D) The exchange rate will be affected in the short run, but not in the long run.
If, during a deposit expansion, not all money gets redeposited into the banking system
and some leaks out as currency, then the real world multiplier is
A) smaller than 1/RR.
B) larger than 1/RR.
C) equal to 1/RR.
D) not related to 1/RR.
The term “derived demand” refers to
A) the demand for financial products called derivatives.
B) the demand for a factor of production that is derived from the demand for the good
the factor produces.
C) a firm’s estimated demand curve derived from sales data.
D) a demand curve that derives from the availability of resources.
Alternative approaches for reducing carbon dioxide emissions are
A) carbon taxes and carbon scrubbing.
B) carbon trading and carbon subsidies.
C) carbon taxes and carbon trading.
D) burning low carbon coal and deforestation.
Suppose a competitive firm is paying a wage of $12 an hour. Assume that labor is the
only input. If hiring another worker would increase output by four units per hour, then
to maximize profits the firm should
A) not change the number of workers it currently hires.
B) hire the extra worker.
C) layoff some workers.
D) There is not enough information to answer the question.
Zach Greinke and other star baseball players earn millions of dollars annually. These
salaries are due to
A) the greed of players and their agents.
B) the demand and supply of labor in the market for baseball players.
C) the elastic demand for jobs in Major League Baseball.
D) the irrational behavior of team owners.
If government saving is negative, then
A) T > TR.
B) G > T.
C) T – TR < G.
D) Y + TR < C – T.
Article Summary. Unlike in many nations, when the financial crisis hit in 2008 the
Polish economy continued to grow, but due to a current slowdown in exports and
domestic demand, Poland is expecting a large outflow of workers. Unemployment
was expected to grow to 14 percent in Poland in 2013, and according to Krystyna
Iglicka, a demographer at Lazarski University in Warsaw, “€¦Poles have always
treated emigration as a way of improving their lot.” Despite earning relatively low
salaries in Western European countries, on average just over ¬2,000 (about $2,660)
a month according to the National Bank of Poland, this is still four times more
than workers would earn on average by staying in Poland. Iglicka predicts that
between 500,000 and 800,000 Poles will emigrate from Poland over the next five
years. Source: Jan Cienski, “Poland braces for fresh exodus of workers,”
Washington Post, January 22, 2013.
If an outflow of workers leaves Poland with a smaller but more productive workforce
and the capital per hour worked does not change, there will be ________ the per-worker
production function in Poland.
A) a movement up
B) a movement down
C) an upward shift of
D) a downward shift of
Japan has developed a comparative advantage in designing and producing automobiles.
The source of its comparative advantage in these products is
A) abundant supplies of natural resources.
B) a favorable climate.
C) a strong central government.
D) technology.
What are the two types of taxes that working individuals pay on their earnings?
A) individual income tax and sales tax
B) payroll tax and sales tax
C) individual income tax and social insurance taxes
D) property tax and payroll tax
For allocative efficiency to hold
A) price must equal marginal revenue of the last unit sold.
B) price must equal the marginal cost of the last unit produced.
C) average variable cost is minimized in production.
D) average total cost is minimized in production.
Which of the following could decrease unemployment and inflation simultaneously?
A) a decrease in oil prices
B) expansionary monetary policy
C) contractionary monetary policy
D) an increase in the real wage
Human capital refers to which of the following?
A) the quantity of goods and services that can be produced by one worker or by one
hour of work
B) the accumulated knowledge and skills workers acquire from education and training
or from their life experiences
C) manufactured goods that are used to produce other goods and services
D) physical equipment that is made by human laborers, not machines
To calculate the price elasticity of supply we divide
A) the percentage change in price by the percentage change in quantity supplied.
B) the percentage change in quantity supplied by the percentage change in price.
C) rise by the run.
D) the average price by the average quantity supplied.
Globalization is positively associated with
A) poverty.
B) declining rates of investment.
C) declining standards of living.
D) economic growth.
Suppose that at the beginning of a loan contract, the real interest rate is 4% and
expected inflation is currently 6%. If actual inflation turns out to be 7% over the loan
contract period, then
A) borrowers gain 1% of the loan value.
B) lenders gain 1% of the loan value.
C) borrowers lose 3% of the loan value.
D) lenders gain 3% of the loan value.