Due to slowing growth in China and other developing countries, Caterpillar ________
the number of persons it employed in 2013 and this ________ the total number of
persons unemployed in the economy.
A) decreased; increased
B) decreased; decreased
C) increased; decreased
D) increased; increased
If the consumption function is defined as C = 5,500 + 0.9Y, what is the multiplier?
A) 0.l
B) 0.9
C) 6.1
D) 10
Nominal GDP is another term for
A) inflation-adjusted GDP.
B) real GDP.
C) constant-dollar GDP.
D) current-dollar GDP.
During the recession of 2007-2009 in the United States, ________ relative to potential
GDP.
A) business fixed investment spending rose and net export spending declined
B) consumption spending rose and residential construction spending declined
C) federal government purchases rose and changes in business inventories declined
D) net export spending rose and consumption spending declined
Figure 18-1
Refer to Figure 18-1. Currency speculators believe that the value of the euro will
increase relative to the dollar. Assuming all else remains constant, how would this be
represented?
A) Supply would decrease, demand would decrease and the economy moves from B to
C to D.
B) Supply would increase, demand would decrease and the economy moves from C to
B to A.
C) Supply would decrease, demand would increase and the economy moves from A to
D to C.
D) Supply would increase, demand would increase and the economy moves from D to
A to B.
A firm in a market economy must do all of the following to succeed except
A) produce the goods and services that consumers want at a lower cost than consumers
themselves can produce.
B) organize the factors of production into a functioning, efficient unit.
C) have access to sufficient funds.
D) be organized as a corporation.
Figure 16-6
Refer to Figure 16-6. In the dynamic model of AD–AS in the figure above, if the
economy is at point A in year 1 and is expected to go to point B in year 2, Congress and
the president would most likely pursue
A) expansionary fiscal policy.
B) contractionary fiscal policy.
C) expansionary monetary policy.
D) contractionary monetary policy.
E) expansionary automatic stabilizers.
Monetary policy could be procyclical if the Federal Reserve
A) is late recognizing that a recession has begun and conducts expansionary monetary
policy.
B) is quick to recognize that a recession has begun and conducts expansionary
monetary policy.
C) is late recognizing that a recession has begun and does not conduct expansionary
monetary policy.
D) is quick to recognize that a recession has begun and does not conduct expansionary
monetary policy.
Most payments in the United States for goods and services are made using
A) currency.
B) checking account deposits.
C) traveler’s checks.
D) gold.
What are liabilities?
A) anything of value owned by a person or a business
B) anything a person or a business owes to entities outside the business
C) the total cost of labor for a firm
D) only those unpaid expenses for which a business or person is making interest
payments
Which of the following describes the accuracy of the Consumer Price Index?
A) Changes in the CPI accurately reflect the true rate of inflation.
B) Changes in the CPI understate the true rate of inflation.
C) Changes in the CPI overstate the true rate of inflation.
D) Changes in the CPI are unrelated to the true rate of inflation.
Which of the following contributed to the downfall of the Soviet Union in 1991?
A) government dissatisfaction with high living standards and political freedom
B) an inability to produce low-cost consumer goods that households wanted
C) an overabundance of high-quality goods and services
D) the lack of a strong dictator who can coordinate economic activities