1) Suppose the reserve requirement is 20 percent. If a bank has checkable deposits of $4
million and actual reserves of $1 million, it can safely lend out:
A.$1 million.
B.$1.2 million.
C.$200,000.
D.$800,000.
2) (Advanced analysis) Answer the next question(s) on the basis of the following
information for a private open economy:
Refer to the above information. In equilibrium, saving is:
A.$20.
B.$30.
C.$40.
D.$50.
3)
Refer to the above table. Which of the following might reduce the per capita income
gap between countries A and E?
A.faster population growth in country A than in country E.
B.greater investment relative to GDP in country E than in country A.
C.more rapid improvement in literacy and education in country A than in E.
D.increased capital flight from country A relative to that from country E.
4) (Advanced analysis) Answer the next question(s) on the basis of the following
information for a private open economy:
Refer to the above information. This nation is incurring:
A.a trade surplus.
B.balance in its international trade.
C.a trade deficit.
D.unemployment.
5) Suppose three roommates cannot agree on the size of a pizza to order. Domino
argues for a medium pizza, Godfather contends a large pizza will be needed, and Little
Caesar wants a super-large pizza. Assuming no paradox of voting, majority voting will
result in a decision to order:
A.a medium pizza.
B.a large pizza.
C.a super-large pizza.
D.two medium pizzas.
6) The equation MPL/PL = MPC/PC:
A.designates the MR = MC level of output.
B.assumes imperfect competition in the hiring of labor and capital.
C.is a sufficient condition for the maximization of profits.
D.is a necessary, but not sufficient, condition for the maximization of profits.
7) The mainstream view is that macro instability is caused by:
A.erratic growth of the nation’s money supply.
B.government interference in the economy.
C.significant changes in investment spending.
D.consumption “booms” and “busts.”
8) suppose that the price of product x rises by 20 percent and the quantity supplied of x
increases by 15 percent. the coefficient of price elasticity of supply for good x is:
a.negative and therefore x is an inferior good.
b.positive and therefore x is a normal good.
c.less than 1 and therefore supply is inelastic.
d.more than 1 and therefore supply is elastic.
9) which of the following best illustrates the post hoc, ergo propter hoc fallacy?
a.because it was 90 degrees today, i worked up a sweat playing tennis.
b.i took the day off work to go to the beach and that’s why it rained.
c.because it rained at the football game, my new sweater got wet.
d.because i have studied diligently this semester, my grade average has improved.
10) Foreign aid to the DVCs has been criticized:
A.because it may generate economic dependence on the IACs.
B.because it encourages the centralization of government power over the economy.
C.because government corruption in the DVCs causes aid to be misused.
D.all of these reasons.