Exhibit 34-9
For country Y, the opportunity cost of producing one unit of good B is __________
unit(s) of good A.
a. 1.5
b. 2
c. 2/3
d. 1/3
e. 3
The AD curve shifts to the right with a __________ in government purchases (G) or a
__________ in taxes.
a. rise; rise
b. rise; fall
c. fall; rise
d. fall; fall
A financial system is a means of bringing together savers and borrowers.
a. True
b. False
A savings account functions as
a. a unit of account.
b. a store of value.
c. a medium of exchange.
d. none of the above
When everyone correctly anticipates that the Fed will buy government securities, then
they know that prices will increase. Which of the following adjustments is not likely to
occur?
a. Workers will negotiate higher wages.
b. Suppliers of resources will demand higher prices for their resources.
c. Producers will prevent the price level from increasing and hurting their sales.
d. Producers will raise prices.
There are two goods in the economy, apples and bread. The relative price of apples has
increased. This could be due to
a. an increase in the absolute price of apples, ceteris paribus.
b. a decrease in the absolute price of bread, ceteris paribus.
c. a decrease in the absolute price of apples, ceteris paribus.
d. an increase in the absolute price of bread, ceteris paribus.
e. a and b
Which of the following is false?
a. Economists who believe that the AS curve is vertical assert that changes in Real GDP
originate only on the supply side of the economy.
b. Economists who believe that the AS curve is upward-sloping assert that changes in
Real GDP originate only on the supply side of the economy.
c. For economists who believe that the AS curve is upward-sloping, government policy
that aims to impact either side of the economy (supply or demand) will change both
prices and Real GDP.
d. Compared to the economists who believe that the AS curve is upward-sloping, the
economists who believe that the AS curve is upward-sloping assert that the government
has fewer tools with which to change Real GDP.
To macroeconomists, investment is mainly the purchases of goods and services
a. by businesses.
b. to hold as wealth, such as gold coins or art.
c. to hold as wealth, such as stocks and bonds.
d. by the government.
e. €b and c
Exhibit 15-2
If the interest rate is i1 and the relevant money supply curve is S2, then there is a
a. shortage of money between points B and A.
b. surplus of money between points B and A.
c. surplus of money between points C and D.
d. shortage of money between points C and D.
There are economists who believe that some types of government spending are better
for the economy than other types of government spending.
a. True
b. False
If an individual pays an additional $0.30 in taxes as a result of a $1.00 increase in
income, then that individual must have a(n) __________ tax rate of 30 percent.
a. average
b. fixed
c. total
d. marginal
Exhibit 4-8
Suppose that wheat producerslobby the government for a price floor and receive
one.This price floor is set at PF.What has happened to the producers’ surplus as a result
of the imposition of the price floor?
a. Producers’ surplus has risen by (area 2 + 3)
b. Producers’ surplus has fallen by (area 4 + 5)
c. Producers’ surplus has changed by (area 3 – area 5)
d. Producers’ surplus has changed by (area 2 – area 5)