When the price level in the United States falls relative to the price level of other
countries, ________ will fall, ________ will rise, and ________ will rise.
A) imports; exports; net exports
B) exports; imports; net exports
C) net exports; exports; imports
D) net exports; imports; exports
What impact would including members of the military in employment, labor force, and
working-age population statistics have on the unemployment rate and the labor force
participation rate?
A) Including members of the military would increase the unemployment rate and
reduce the labor force participation rate.
B) Including members of the military would reduce the unemployment rate and
increase the labor force participation rate.
C) Including the military would increase both the unemployment rate and the labor
force participation rate.
D) Including the military would reduce both the unemployment rate and the labor force
participation rate.
The first example of comparative advantage appeared in a book that was published in
1817. This example showed that mutually beneficial trade between two countries
(England and Portugal) was possible. The example assumed that two goods (wine and
cloth) could be produced by both countries. Which of the following describes the
conclusion of this example?
A) Portugal had a comparative advantage in wine and England had a comparative
advantage in cloth.
B) Portugal had a comparative advantage in both wine and cloth, but its advantage in
cloth was greater.
C) England had a comparative advantage in both wine and cloth, but its advantage in
cloth was greater.
D) England had an absolute advantage in both wine and cloth, but a comparative
advantage in wine.
In the United States from 1981 to 2011, deaths from ________ increased largely due to
the effects of increasing obesity.
A) strokes
B) cancer
C) heart attacks
D) diabetes
Figure 4-1
Figure 4-1 shows Kendra’s demand curve for ice-cream cones.
Refer to Figure 4-1. If the market price is $3.00, what is the consumer surplus on the
second ice cream cone?
A) $0
B) $0.50
C) $3.00
D) $5.50
Which of the following models focuses on how productivity shocks explain fluctuations
in real GDP?
A) the monetarist model
B) the new classical model
C) the real business cycle model
D) the new Keynesian model
Open market operations refer to the purchase or sale of ________ to control the money
supply.
A) corporate bonds and stocks by the Federal Reserve
B) U.S. Treasury securities by the Federal Reserve
C) corporate bonds and stocks by the U.S. Treasury
D) U.S. Treasury securities by the U.S. Treasury
Table 8-17
A very simple economy produces three goods: movies, burgers, and bikes. The
quantities produced and their corresponding prices for 2006 and 2013 are shown in the
table above.
Refer to Table 8-17. What is real GDP in 2013, using 2006 as the base year?
A) $3,320
B) $3,690
C) $6,360
D) $7,035
An increase in taxes will ________ consumption spending, and a decrease in transfer
payments will ________ consumption spending.
A) increase; increase
B) decrease; increase
C) increase; decrease
D) decrease; decrease
Suppose that Congress allocates $1 billion to clean up after the hurricanes of 2005. It
also raises taxes by $1 billion to keep the deficit from growing. If the marginal
propensity to consume is 0.9, what is the effect on equilibrium GDP?
A) GDP does not change.
B) GDP increases by $10 billion.
C) GDP increases by $900,000.
D) GDP increases by $1 billion.
How can a proprietorship or partnership raise funds for expansion?
A) borrow from someone or an institution willing to lend the funds
B) reinvest profit back into the business
C) take on a partner or more partners
D) Any of these would generate funds for expansion.
Last week, six Swedish kronor could purchase one U.S. dollar. This week, it takes eight
Swedish kronor to purchase one U.S. dollar. This change in the value of the dollar will
________ exports from the United States to Sweden and ________ U.S. aggregate
demand.
A) increase; increase
B) decrease; decrease
C) increase; decrease
D) decrease; increase
According to the National Bureau of Economic Research, the recession that began in
December 2007
A) lasted 12 months.
B) lasted 18 months.
C) lasted 27 months.
D) had not ended by December 2011.
Suppose that the Federal Reserve Open Market Committee adheres to the ideas
expressed by ________. If the economy moves into a recession, the Fed would
recommend that the federal funds target rate decrease as long as the inflation rate did
not rise above the publicly announced goal for inflation.
A) the gold standard
B) the monetarist school of thought
C) inflation targeting
D) the Taylor Rule
Table 7-3
Mateo and Celeste produce custom saddles and spurs. Table 7-3 lists the number of
saddles and pairs of spurs Mateo and Celeste can each produce in one month.
Refer to Table 7-3. Select the statement that accurately interprets the data in the table.
A) Celeste has a comparative advantage in making saddles.
B) Mateo has an absolute advantage in making spurs.
C) Mateo has a comparative advantage in making saddles.
D) Mateo has a comparative advantage in making saddles and making spurs.