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Which of the following is not counted in the GNP of the United States?
A) the wage of a U.S. citizen who works in a foreign country for a foreign firm
B) the interest earned by a U.S. bank on loans to a business firm located in Brazil
C) the profit earned by a restaurant located in the United States but owned by a
Mexican company
D) the value of services that are produced by state and local governments in the United
States
An increase in the government expenditures will:
A) shift the aggregate expenditures line upwards and shift the aggregate demand curve
to the right.
B) shift the aggregate expenditures line downwards and shift the aggregate demand
curve to the right.
C) shift the aggregate expenditures line upwards and shift the aggregate demand curve
to the left.
D) shift the aggregate expenditures line downwards and shift the aggregate demand
curve to the left.
Proponents of new growth theory believe that countries at the edge of the technological
frontier should invest more on:
A) basic education.
B) advanced higher education.
C) A and B.
D) neither A nor B.
Which of the following is an example of an expectation of inflation?
A) Producers expect their prices on average to be higher next year.
B) Producers expect the prices they pay for raw materials to be higher next year.
C) Workers expect that the prices they pay for goods and services will be higher next
year.
D) all of the above
The time it takes to formulate a policy is known as
A) fiscal policy.
B) crowding out.
C) inside lags.
D) outside lags.
The unemployment rate is defined as the ratio of the:
A) labor force to the total population 16 years old or older.
B) number of people unemployed to total population.
C) number of people unemployed to the total population 16 years old or older.
D) none of the above
If wages are sticky downward, then a decrease in the demand for labor:
A) will cause more unemployment in the short run.
B) will cause an increase in production in the short run.
C) will cause wages to drop in the short run.
D) will bring the economy back to full employment.
Recall the Application about the study done about the perceptions and behavior of
the unemployed in Great Britain to answer the following question.
According to this Application, becoming unemployed caused ________ in perceived
well-being for men if those in their peer group were also unemployed.
A) a larger decrease
B) a smaller decrease
C) no change
D) an large increase
Expected Real Rates of Interest for Five Countries
Source: Trading Economics, September, 2010Refer to Table 12.1. The nominal interest
rate for the United States is
A) -0.25%.
B) 0.25%.
C) 2.15%.
D) cannot be determined from the information provided.
One method employed by the World Bank to assist developing countries is:
A) increased foreign aid.
B) the promotion of universal education.
C) infusion of new machinery.
D) All of the above are correct.
Suppose that consumers expect that the price of a product will increase in the future.
The result is that:
A) the current demand for the product increases.
B) the current demand for the product decreases.
C) the current supply of the product increases.
D) the current supply of the product decreases.
Table 2.1 A group of people has formed a house cleaning and yard
maintenance business. The number of houses or yards that they can clean or maintain in
any given day is depicted in Table 2.1. The opportunity cost of cleaning the third house
in a day is:
A) 1 yard maintained.
B) 2 yards maintained.
C) 3 yards maintained.
D) 15 yards maintained.
If the Federal Reserve purchases newly issued government debt
A) the effect is the same as borrowing from the public.
B) the effect is as if the Treasury had printed money to cover the deficit.
C) existing money is destroyed.
D) the money supply decreases.
