Table 5.3
Refer to Table 5.3. Assume that this economy produces only two goods: Good X and
Good Y. If year 1 is the base year, the value for this economy’s GDP Deflator in year 2
is:
A) 113.8.
B) 133.3.
C) 152.0.
D) 184.5.
Table 2.2
Krystal runs a nail salon and needs to decide how many hours to stay open. Table 2.2
illustrates her marginal costs of staying open for each additional hour. Suppose that we
observe Krystal staying open 5 hours and her marginal benefit of staying open per hour
is $18. If she is following the marginal principle, Krystal should
A) stay open 2 more hours.
B) stay open 3 more hours.
C) stay open 2 fewer hours.
D) stay open 3 fewer hours.
Figure 19.1 Refer to Figure 19.1. The yen is currently at Point A. An appreciation of the
U.S. dollar causes a movement to Point ________.
A) B
B) D
C) E
D) C
Social security payments automatically increase when the CPI goes up because of the
A) age of the recipient.
B) years receiving social security.
C) cost-of-living adjustments.
D) individual being married or unmarried.
Suppose that in 2011 the chain-weighted price index for GDP in Estonia is 220 and the
chain-weighted price index in Lithuania is 160. In 2012 the price index in Estonia is
242 and the price index in Lithuania is 180. You could conclude that
A) Estonia is a more expensive place to live than Lithuania.
B) Lithuania is a more expensive place to live than Estonia.
C) Estonia’s rate of inflation is higher than Lithuania’s.
D) Lithuania’s rate of inflation is higher than Estonia’s.
Figure 15.2
Refer to Figure 15.2. If the economy is currently at Point D producing output level :
A) the economy is operating above full employment.
B) input prices are likely to fall eventually.
C) aggregate supply shifts to the left and the economy ends up at Point E.
D) the economy will experience inflation.
Personal income and personal disposable income refer to payments ultimately flowing
to
A) firms.
B) households.
C) governments.
D) foreigners.
From 1970-2011, investment as a share of GDP was lowest in ________ when it was at
________ percent.
A) 2000; 18
B) 2001; 25
C) 1975; 30
D) 2011; 21
Why are transfer payments not included in GDP?
A) The amount is too low to have any effect.
B) Unemployment varies and can’t be tracked.
C) They do not represent payments to those who contributed resources to currently
produced goods or services.
D) Money companies receive from the government isn’t reported.
Economists define the labor force to include
A) only people who are working full time.
B) people who are working.
C) people who are not working but are actively looking for a job, and people who are
working.
D) all individuals of working age, regardless of whether they are working or looking for
a job.
Recall the Application about the policies used by the European Union to support
the agricultural sectors of is member countries to answer the following question(s).
According to this Application, the policies used by the European Union to support the
agricultural sectors of its member countries created excess supply. This would occur if
these policies set a ________ price which was ________ the market equilibrium price.
A) maximum; above
B) maximum; below
C) minimum; above
D) minimum; below
An example of people acting in their own self-interest would include:
A) individuals joining a car pool to work when tolls are imposed on congested
highways.
B) an adult, returning to college to pursue a degree to qualify for a promotion at work.
C) a teenager earns an A grade average in school in order to use his or her parent’s car.
D) All of the above are examples of people acting in their own self-interest.
If the consumption function is C = 25 + 0.9y and income increases by $100, then
savings will increase by
A) $10.
B) $25.
C) $90.
D) $115.