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The major way that the government supports crop prices is by granting nonrecourse
loans to farmers.
a. True
b. False
Exhibit 39-2
Given a target price of P1, what is the total deficiency payment made by the
government?
a. (P1 - P2) x Q2
b. (P1 - P0) x Q2
c. P1 x Q1
d. P0 x Q0
Person A argues that government is unnecessary and often does more harm than
good.Economist A disagrees.What does economist A --- who believes that there is a
legitimate case that can be made for government --- most likely say to support his
position?
a. Government almost always does more good than harm.
b. Without government, life would be anarchy.
c. There are some things that individuals want done that can€t get done without
government.
d. There are better people going into government work than are going into the private
sector.
e. none of the above
If checkable deposits in Bank A total $620 million and the required reserve ratio is 9
percent, then required reserves at Bank A equal
a. $564.2 million.
b. $468 million.
c. $28.8 million.
d. $55.8 million.
e. $558 million.
Exhibit 3-12
-----------------------------Quantity Supplied --------------------------------------
Assume that Aline, Bentley, Calvin, and Daniel are the only sellers in this market. Fill
in blanks (E) and (F) respectively with the market quantity supplied at given each price.
a. 24.75; 32.75
b. 47; 52
c. 99; 131
d. 48; 65
e. none of the above
Exhibit 8-3
A movement from point B to point A on AD1 would have been the result of
a. a decrease in the price level.
b. an increase in the price level.
c. an increase in foreign real national income.
d. a decrease in foreign real national income.
At a price below the equilibrium price, there is
a. a surplus.
b. a shortage.
c. excess supply.
d. sub-equilibrium.
e. none of the above
In the production function Real GDP = T (L, K), the T stands for tax coefficient.
a. True
b. False
Exhibit 39-6
A major change in weather conditions favorable to the production of X will shift the
supply curve for X from its original position. The consequent change in price and total
revenue would be less sharp if the demand curve for X is __________ because it is
__________ over the relevant region.
a. D1; more elastic than D2
b. D1; more inelastic than D2
c. D2; more elastic than D1
d. D2; more inelastic than D1
According to new classical economists, when monetary and fiscal policies are
__________ anticipated, people form their expectations __________, and wages and
prices are __________, the policy ineffectiveness proposition (PIP) results.
a. correctly; adaptively; inflexible
b. correctly; rationally; flexible
c. incorrectly; adaptively; inflexible
d. incorrectly; rationally; flexible
e. correctly; rationally; inflexible
An increase in the expected price of corn would likely do the following to the current
supply and demand for corn:
a. increase both the demand and the supply.
b. decrease both the demand and the supply.
c. increase the demand, but decrease the supply.
d. increase the supply, but decrease the demand.
