Exhibit 2-6
Which graph depicts the result of an increase in the number of illegal immigrants
entering the country?
a. (1)
b. (2)
c. (3)
d. (4)
e. none of the above
When a production function is graphed with Real GDP on the vertical axis and labor on
the horizontal axis, a rise in labor ________________________, and a rise in capital
__________________.
a. shifts the production function upward; also shifts the production function upward
b. shifts the production function downward; shifts the production function upward
c. moves us up along a given production function; shifts the production function
upward
d. shifts the production function upward; moves us up along a given production
function
The funds the Fed receives from selling government securities
a. are deposited in a commercial bank.
b. disappear into thin air.
c. are turned over to the Office of Management and Budget in Washington, D.C.
d. are deposited in the U.S. Treasury.
New Keynesian theorists argue that
a. price and wage adjustments in response to policy changes often overcompensate and
cause further price disruptions.
b. prices and wages may not be free to adjust in response to policy changes.
c. unions and big business have considerable power and often choose not to change
wages and prices so as to deliberately offset policy changes enacted by the government.
d. the Fed and the Congress rarely do what they say they will do, so one should never
listen to what they say.
e. new classical rational expectations theories about how expectations are formed are
completely wrong.
Milton Friedman argued that there
a. are two Phillips curves, a short-run one and a long-run one.
b. are three Phillips curves, a short-run one, a long-run one, and one in stagflation.
c. is one Phillips curve, and it is vertical.
d. is one Phillips curve, and it is nearly flat or horizontal.
Exhibit 7-3
Consumption is equal to
a. $3,700.
b. $9,000.
c. $10,150.
d. $8,200.
e. $9,700.
Which of the following statements is true?
a. In a world of efficiently used scarce resources, more of one good necessarily means
less of some other good.
b. The law of increasing opportunity costs assumes that all people have the same ability
to produce goods.
c. Efficiency implies that it is impossible to get more of one good without getting less
of another.
d. Even if a country has unemployed resources, it can still be operating on its
production possibilities frontier (PPF).
e. a and c
According to Keynes, the private sector (by itself)
a. can always move the economy out of a recessionary gap in a timely manner.
b. cannot always move the economy out of a recessionary gap in a timely manner.
c. can never move the economy out of a recessionary gap.
d. can only move the economy out of a recessionary gap if the SRAS curve drops.
e. can only move the economy out of a recessionary gap if the SRAS curve rises.
If there are 10 job losers, 12 job leavers, 13 reentrants, and 12 new entrants, then there
are __________ unemployed persons.
a. 35
b. 47
c. 25
d. 37
e. There is not enough information to answer the question.
Explain in detail how the legalization of marijuana would be expected to impact the
supply, demand, equilibrium price and quantity for marijuana.
Candidate A says, “Health care is too expensive in the United States. We need to do
something-and quickly-to develop a better, more responsive, less expensive health care
system.” Candidate B, who is running against candidate A in a two-person race, says,
“Health care is too expensive in the United States. We need to do something about it
and quickly. I suggest that we have the federal government develop a centralized system
for delivering health care in this country.” If you know nothing else about the two
candidates, it follows that
a. candidate A has taken polls and candidate B has not.
b. candidate B has taken polls and candidate A has not.
c. candidate B is smarter than candidate A.
d. candidate B has a higher probability of winning the election than candidate A.
e. candidate A has a higher probability of winning the election than candidate B.
Exhibit 17-1Production Function Real GDP = T (L, K), such that Real GDP = T(L
+ K) Assume that the technology coefficient is equal to 0.40.
If this production function is graphed with Real GDP on the vertical axis and labor
on the horizontal axis, and labor rises from 6 units to 7 units it would cause a
a. shift upward in the production function to a higher level of Real GDP.
b. shift downward in the production function to a lower level of Real GDP.
c. movement down along the same production function to a lower level of Real
GDP.
d. movement up along the same production function to a higher level of Real GDP.
The data lag is the time between
a. the implementation of a policy and when the impact of the policy is felt.
b. the enactment of a policy and the implementation of the policy.
c. realizing a policy is needed and enacting the policy.
d. the occurrence of an event and policymakers realizing the event has occurred.
One reason that helps to explain the law of demand is the law of
a. diminishing marginal utility.
b. diminishing marginal returns.
c. increasing opportunity costs.
d. supply.
Exhibit 35-4
Under a fixed exchange rate system, at the exchange rate of E3, the dollar is
__________ and there is a __________.
a. overvalued; surplus of dollars
b. undervalued; shortage of pesos
c. overvalued; shortage of dollars
d. undervalued; surplus of pesos
The synonym economists commonly use for additional is
a. capital.
b. rational.
c. marginal.
d. economic.
Another term for a stockbroker is an account representative.
a. True
b. False
Exhibit 38-4
If the closing price of Greenco’s stock on the previous day was $48.10, what value goes
in blank (B)?
a. $47.35
b. $48.85
c. $45.85
d. $47.85
e. There is not enough information given to answer this question.