Which of the following helps explain low growth rates of many less developed
countries?
a. Good law enforcement
b. Political stability
c. Low population growth rates
d. Excellent legal systems
e. Near-subsistence levels of per capita output
The feature of preferences that “more is better”
In the long run,
a. a larger budget deficit means a larger money supply
b. lower investment spending means slower growth of the standard of living
c. a larger budget deficit means lower consumption spending
d. a larger budget surplus means a smaller capital stock
e. government spending has no effect on the budget deficit or surplus
A tax cut designed to encourage investment and stimulate economic growth
a. must be matched by a cut in government spending in order to be effective
b. must be matched with tax increases in other areas, or with a cut in government
spending, if crowding out is to be avoided
c. will only work if it decreases the size of the budget deficit
d. can only be effective if the tax burden is redistributed or government spending is cut
e. will only work if it is a cut in the capital gains tax
Refer to Figure 9-13. An increased labor supply on the graph would
a. decrease total output
b. increase total output at a constant rate
c. increase total output at an increasing rate
d. increase total output at a decreasing rate
e. not change total output
Aggregation is important because it allows macroeconomists to divide a whole into its
individual components.
When represented graphically, the government’s demand for funds curve is
a. downward sloping
b. upward sloping
c. vertical
d. initially downward sloping, then upward sloping
e. initially rightward sloping, then downward sloping
For which of the following goods is the income elasticity of demand likely to be
largest?
Refer to Figure 14-2. If the interest rate is 4 percent,
a. there is an excess demand for money equal to $100 billion
b. there is an excess demand for money
c. there is an excess demand for money equal to $400 billion
d. the Fed will decrease the money supply
e. the interest rate will tend to rise
Figure 5-1 shows the prices of two services offered by Earl’s Barber Shop and the
resulting quantities demanded by customers. In this example, the price elasticity of
demand for manicures (using the midpoint formula) is
Suppose that a nation has an absolute advantage in the production of all goods. In this
instance, it
a. has no incentive to engage in international trade
b. is producing at a point on its production possibilities frontier
c. has no unemployment
d. also has a comparative advantage in the production of those goods
e. should specialize in producing the goods for which it has a lower opportunity cost
than other countries
Discrimination occurs when a group of people have different opportunities because of
characteristics that have nothing to do with their individual abilities.