1) proponents of economic growth claim that growth leads to greater equality of income
in an economy.
2) Successful new products enable consumers to increase the total utility they obtain
from a specific amount of their total spending.
3) An increase in the cyclical deficits will automatically increase the standardized
budget deficit.
4) The banking system can lend by a multiple of its excess reserves because lending
does not result in a loss of reserves to the banking system as a whole.
5) The greater the elasticity of demand and supply, the greater is the efficiency loss of a
tax.
6) If C + Ig exceeds GDP in a private closed economy, GDP will decline.
7) Fiber-optic telephone lines are rapidly replacing copper telephone cable. This is an
example of:
A.capital-labor substitutability.
B.economies of scale.
C.market (or monopoly) power.
D.technological advance.
8) Since 2000, U.S. official reserves have:
A.maintained a constant value of about $30 billion.
B.been steadily accumulated.
C.been seriously depleted.
D.rising and falling, with deposits and withdrawals roughly balancing over time.
9)
the above diagram shows two product demand curves. on the basis of this diagram we
can say that:
a.over range p1p2price elasticity of demand is greater for d1than for d2.
b.over range p1p2price elasticity of demand is greater for d2than for d1.
c.over range p1p2price elasticity is the same for the two demand curves.
d.not enough information is given to compare price elasticities.
10)
Refer to the above table representing Darcy’s bank account. Assuming that $1000 was
deposited into her account at the beginning of year 1, and no further deposits or
withdrawals were made, how much interest would Darcy receive in Year 2 only?
A.$60
B.$63.6
C.$120
D.$123.6
11) a product market is in equilibrium:
a.when there is no surplus of the product.
b.when there is no shortage of the product.
c.when consumers want to buy more of the product than producers offer for sale.
d.where the demand and supply curves intersect.
12) the social security program (excluding medicare) in the united states is expected to
exhaust the monies in the social security trust fund in:
a.2008
b.2010
c.2017
d.2041
13) Antitrust authorities are least likely to take action against:
A.conglomerate mergers.
B.horizontal mergers.
C.interlocking directorates.
D.price fixing.
14) according to estimates, what percentage of construction workers in the united states
are illegal immigrants?
a.12
b.14
c.17
d.24
15) suppose that a 10 percent increase in the price of normal good y causes a 20 percent
increase in the quantity demanded of normal good x. the coefficient of cross elasticity
of demand is:
a.negative and therefore these goods are substitutes.
b.negative and therefore these goods are complements.
c.positive and therefore these goods are substitutes.
d.positive and therefore these goods are complements.
16) Which of the following is least likely to be found in a collective bargaining
agreement (work agreement)?
A.a union status clause
B.a clause specifying where new plants, if any, will be located
C.seniority rules that affect promotions and layoffs
D.grievance procedures
17) Suppose that friends Jennifer, Stephanie, and Megan cannot agree on how much to
spend for a bouquet of flowers to send to a person that allowed them to use their beach
house for the weekend. Jennifer want to buy a moderately priced bouquet, Stephanie
wants to buy an expensive bouquet, and Megan wants to buy a very expensive bouquet.
Assuming no paradox of voting, majority voting will result in decision to buy:
A.an inexpensive bouquet.
B.a very expensive bouquet.
C.a moderately priced bouquet.
D.an expensive bouquet.
18)
which of the above diagrams illustrate(s) the effect of a decline in the price of personal
computers on the market for software?
a.a only.
b.a and d
c.b only.
d.d only.
19) (Last Word) In 2001, a U.S. court of appeals tossed out an earlier U.S. district court
order that Microsoft:
A.license Windows for sale by competitors.
B.be split into two competing firms.
C.divest itself of its Word and PowerPoint software programs.
D.end its proposed acquisition of Sun Microsystems.
20) If the exchange rate between the U.S. dollar and the Japanese yen is $1 = 200 yen,
then the dollar price of yen is:
A.$.005.
B.$.05.
C.$.50.
D.$5.
21) Which of the following explains why the aggregate demand schedule is downward
sloping?
A.the real-balances effect
B.the interest-rate effect
C.the foreign purchases effect
D.all of these
22) a quasi-public good is:
a.a public good that is produced profitably by private firms, without government
subsidy.
b.one characterized by nonrivalry and nonexcludability.
c.one characterized by rivalry but not excludability.
d.a good for which exclusion could take place but that has such large spillover benefits
that government provides it to prevent an underallocation of resources.
23) indifference curve analysis:
a.presumes, as does utility analysis, that satisfaction is numerically measurable.
b.presumes, unlike utility analysis, that satisfaction is numerically measurable.
c.presumes only that the consumer can say one combination of two goods yields more
or less utility than some other combination.
d.is in conflict with the idea of a downsloping demand curve.
24) The following table contains hypothetical data for the 2010 U.S. balance of
payments. Answer the next question(s) on the basis of this information. All figures are
in billions of dollars.
Refer to the above data. The United States’ balance of capital and financial account is a:
A.surplus of $5.
B.deficit of $10.
C.surplus of $25.
D.deficit of $5.
25)
Refer to the above diagram, where Sd and Dd are the domestic supply and demand for a
product and Pc is the world price of that product. Sd + Q is the product supply curve
after an import quota is imposed. The size of the import quota:
A.is vz
B.is vy
C.is wy
D.cannot be determined.
26) What is the long-run equilibrium in the extended aggregate demand and aggregate
supply model?
27) What are net benefits and how do they relate to natural resource economics?
28) Give a brief definition of fiscal policy? What are its economic goals?
29) State two reasons why dire predictions of falling standards of living and a decline in
resource availability proved to be wrong.
30) What are the many different sources of funding to finance firms R&D expenditures?
If an entrepreneur uses personal funds is there a cost for financing?
31) Identify at least four important policy questions about the powers and limits of
government economic policy that macroeconomics models are able to answer.
32) Give an equation that shows the relationship between excess reserves, maximum
checkable-deposit expansion, and the monetary multiplier.