Suppose U.S. peanut butter producers are facing increased foreign competition. Which
argument is least likely to be used by the U.S. firms’ lobbyists to urge legislation to
restrict imports of peanut butter?
a. Peanut butter is important in military rations, so we cannot risk losing our supply of
it.
b. Foreign peanut butter is made by virtual slave labor, working in horrible conditions.
c. Economic profits of the U.S. firms are already at a very low level.
d. Thousands of U.S. peanut farmers face hard times without this protection against
imports.
The coordinates of point A are 30 units of X and 70 units of Y. The coordinates of point
B are 28 units of X and 76 units of Y. With X on the horizontal axis and Y on the
vertical axis, the slope of the line between points A and B is
a. + 3.00
b. + 0.67
c. + 0.33
d. – 3.00
e. – 0.33
The original (1958) Phillips curve differed from the Samuelson-Solow Phillips curve in
that
a. the former was based on American data, while the latter was based on British data.
b. the former measured price inflation rates, while the latter used wage inflation rates.
c. the former was based on British data, while the latter was based on American data.
d. the former measured nominal GDP, while the latter used Real GDP.
e. a and b
Some economists argue that increases in government spending are not a likely source of
continued inflation because
a. increases in government spending cause reductions in other spending components.
b. government spending is not created by the Fed.
c. increases in government spending can be financed by money creation.
d. a and b
e. a and c
Exhibit 7-1
What is the value ofgross domestic product?
a. $6,062
b. $5,731
c. $3,072
d. $6,382
e. $2,637
A rise in the price of foreign inputs leads to a
a. rightward shift of the AD curve.
b. leftward shift of the AD curve.
c. rightward shift of the SRAS curve.
d. leftward shift of the SRAS curve.
Exhibit 10-4
If the present level of disposable income is Yd1,
autonomous consumption is equal to
a. C0.
b. C1.
c. C2.
d. C1 – C0.
e. C2 – C1.
One-shot inflation can originate
a. only on the demand side of the economy.
b. only on the supply side of the economy.
c. on the demand side or the supply side of the economy.
d. on neither the demand side nor the supply side of the economy.
Economist Smith favors an activist monetary policy. He says that if the economy is
going to be stabilized over time, it is necessary to fine-tune the money supply to the
particular economic conditions that exist. What would economist Jones, who favors
rules-based monetary policy, say to economist Smith?
a. Because of long lags, activist monetary policy is likely to be destabilizing rather than
stabilizing.
b. There have been times when activist monetary policy has worked well.
c. There have been times when a constant-money-growth-rate rule has worked poorly.
d. Flexibility is desirable when it comes to monetary policy.
Exhibit 3-5
In the market shown, if equilibrium was originally at point V and is now at point Z, the
new equilibrium price is __________ it was originally and the new equilibrium quantity
is ____________ it was originally.
a. greater than; greater than
b. less than; greater than
c. greater than; less than
d. less than; less than
Suppose the demand curve for corn is inelastic between the current price and price that
exists after the supply of corn falls. It follows that
a. fewer farmers are producing corn at the new price than at the old price.
b. the total revenue for corn is lower at the new price than at the old price.
c. the total revenue for corn is higher at the new price than at the old price.
d. more farmers are producing corn at the new price than at the old price.
e. a and c
Suppose 100 bushels of X are produced at a target price of $7 per bushel, but
consumers will only buy 100 bushels at $3 a bushel. What is the total deficiency
payment to farmers?
a. $400
b. $600
c. $300
d. $100
Which of the following companies was part of the original Dow Jones Industrial
Average?
a. Chicago Gas Company
b. National Lead Company
c. General Motors Corp.
d. AT&T Inc.
e. a and b
If the minimum wage law sets a price floor that is below the equilibrium wage in the
unskilled labor market, the minimum wage will create a shortage of unskilled labor.
a. True
b. False