In the classical model with an open economy, an increase in government purchases
always causes complete crowding out.
Even if employers are not prejudiced, employee or customer discrimination will tend to
be reinforced by market forces and may lead to permanent wage differences between
the favored and unfavored groups.
As a firm increases its output in the short run, average fixed cost
When the market estimate of a company’s riskiness decreases the market adjusts by
Which of the following are considered sources of bias in the CPI?
a. Prices changing too rapidly; substitution, new technologies; and quality changes.
b. Prices changing too rapidly; substitution; quality changes; and growth in discounting.
c. Quality changes; new technologies; prices changing too rapidly; and growth in
discounting.
d. Substitution; new technologies; prices changing too rapidly; and growth in
discounting.
e. Quality changes; new technologies; substitution; and growth in discounting.
An understanding of macroeconomics is valuable because it can help
a. in making purchase decisions
b. us to understand the forces that determine how fast the economy grows
c. us to understand why some firms earn more economic profit than others
d. to minimize the amount of tax an individual owes
e. minimize the opportunity cost of making poor decisions
A Pareto improvement is any action that makes everyone better off.
The difference in wage rates needed to make two jobs equally attractive to workers is
known as a(n)
What interest rate does the Fed charge when it makes loans to banks?
a. the prime rate
b. the U.S. Treasury Bond rate
c. the discount rate
d. the federal funds rate
e. the U.S. Treasury Bill rate
The cross-price elasticity of demand measures
Tova is trying to get a bakery to hire her. She said that if she helped out, the shop could
sell an additional 5 cakes per day. If each cake sells for $10 and the owner hires her,
then
A market failure occurs when
The concerns about the 2009 $787 billion stimulus by the Obama Administration were
that
a. it was too small.
b. it was too large.
c. it was not well designed.
d. Some economists opposed any stimulus whatsoever.
e. All of the above.
For a monopoly,
A newly issued bond with a face value of $8,000 and no coupon payments is priced at
$7,000. The bond will mature in one year. What is the yield on this bond?
Aggregate expenditure is the sum of
a. all types of spending by households and firms
b. spending and savings by households
c. spending by households and governments on final goods and services
d. spending by households, government, firms, and foreigners on final goods and
services
e. all spending and saving by households, firms, and governments
Which of the following would lead to an (eventual) increase in the labor force by
shifting the labor demand curve?
a. A trend toward earlier retirement ages
b. An increase in the working-age population
c. A reduction in the number of guaranteed student loans
d. An increase in college work-study programs
e. A decrease in personal income tax rates
A newly issued bond with a face value of $12,000 and no coupon payments is priced at
$9,000. The bond will mature in one year. What is the yield on this bond?