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Decreases in the demand for products can be caused by which of the following?
A) decreases in income
B) decreases in population
C) decreases in the prices of substitute goods
D) all of the above
Figure 19.2
Referring to Figure 19.2, the effect of a decrease in Japanese prices is represented by a
movement from point
A) d to a.
B) c to .
C) c to d.
D) d to c.
Which of the following lists assets from the most to the least liquid?
A) currency, fine art, checking accounts
B) fine art, checking accounts, currency
C) currency, checking accounts, fine art
D) fine art, currency, checking accounts
Why is the market supply curve positively sloped?
A) At a higher price, more firms enter the market willing to sell the product or service.
B) At a higher price, fewer firms enter the market willing to sell the product or service.
C) At a higher price, the firms already in the market and are willing to sell a larger
quantity of the product or service.
D) Both A and C are correct.
Figure 2.1
The production possibilities curve in Figure 2.1 illustrates the notion of
A) increased factory goods production.
B) increased farm produce production.
C) diminishing resources.
D) opportunity cost.
The extent of the decline in output associated with the imposition of an employment tax
depends on the
A) slope of the labor demand curve.
B) slope of the labor supply curve.
C) tax rate.
D) wage rate.
The president of which of the following district banks of the Federal Reserve System is
always on the FOMC?
A) Boston
B) Chicago
C) New York
D) all of the above
The Fed indirectly controls long-term interest rates by:
A) setting the Federal Funds rate in advance.
B) determining the interest rate offered by Treasury Bills.
C) influencing market expectations about future short-term interest rates.
D) reducing outside lags and increasing inside lags.
Economic expansions might lead to inflation because an expansion leads to
A) a decrease in the unemployment rate, which increases wages.
B) an increase in the unemployment rate, which increases wages.
C) a decrease in the unemployment rate, which decreases wages.
D) an increase in the unemployment rate, which decreases wages.
If the velocity of money is high
A) interest rates fall.
B) people hold onto money for a long period of time.
C) people hold onto money for a short period of time.
D) interest rates rise.
Money:
A) is the same as income.
B) is anything that is regularly used in exchange.
C) includes the value of all coins and currency in circulation at any time only.
D) includes the balance of your credit cards.
The discount rate is:
A) the rate banks charge each other when they borrow reserves from each other.
B) the rate banks charge their best customers.
C) the rate banks pay on checking accounts.
D) the rate the Fed charges banks when they borrow reserves from the Fed.
Suppose that the Surgeon General releases a study suggesting that steak consumption
increases the risk of cancer. As a result of this study, we would predict that the
equilibrium quantity of steak will ________ and the equilibrium price of steak will
________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
The money multiplier will be smaller when
A) bank customers prefer to hold a bigger amount of their money as cash (instead of in
their checking account).
B) banks prefer to lend out 9 percent of their excess reserves instead of 90 percent.
C) when the marginal propensity to save declines.
D) when the reserve ratio decreases.
Recall the Application about the incentives to buy hybrid vehicles to answer the
following question(s).
In the Application, which of the following isnot a way to reduce CO2 emissions in a
country?
A) improved building insulation
B) deforestations
C) using energy efficient lighting
D) using hybrid vehicles
