A monopoly’s
Which of the following is a distinguishing characteristic of oligopolies?
Cyclical unemployment
a. is short-term joblessness experienced by those who are between jobs
b. is joblessness created by a mismatch between available jobs and workers’ skills
c. is joblessness related to regular seasonal events such as holidays or weather changes
d. is joblessness caused entirely by microeconomic forces
e. does not exist when the economy is at full employment
If the expenditure multiplier is 2.5 and investment spending increases by $2,000 billion,
what will be the change in GDP?
a. $2,000 billion
b. $5,000 billion
c. $571.4 billion
d. $3,500 billion
e. $7,000 billion
One consequence of an increase in government spending is that
a. autonomous consumption will increase
b. autonomous consumption and investment spending will decrease
c. the increase in GDP will equal the size of the amount of spending
d. autonomous consumption and investment spending will increase
e. investment spending will increase
Which of the following would be most likely to increase consumption spending?
a. A higher interest rate
b. A drop in stock prices
c. A reduction in consumer credit card debt
d. The expectation of lower future prices
e. An increase in the income tax rate
Prices of finished imported goods are
a. not included in the CPI because the goods were produced outside the country
b. not included in the CPI because different countries choose different base periods
c. not included in the CPI because import prices are not denominated in U.S. dollars
d. not included in the CPI because most imports are raw materials
e. included in the CPI
One explanation for the drop in the standard of living in the Soviet Union during World
War II is that
An increase in government spending will lead to which of the following?
a. an increase in equilibrium GDP, a decrease in money demand, a decrease in the
interest rate, and an increase in investment spending
b. a decrease in equilibrium GDP, a decrease in money demand, an increase in the
interest rate, and a decrease in investment spending
c. an increase in equilibrium GDP, an increase in money demand, an increase in the
interest rate, and an increase in investment spending
d. a decrease in equilibrium GDP, a decrease in money demand, a decrease in the
interest rate, and an increase in investment spending
e. an increase in equilibrium GDP, an increase in money demand, an increase in the
interest rate, and a decrease in investment spending
Which of the following could cause economic growth?
a. Growth in productivity
b. Growth in the employment-population ratio
c. Growth in the average number of hours worked
d. Growth in the population
e. All of these
In the United States between 1790 and the Civil War, who issued paper currency?
a. The Federal Reserve System
b. The U.S. Treasury Department
c. The U.S. Congress
d. The British government
e. Private banks.
Capital is a stock variable.
The main function of the Federal Open Market Committee is
a. to control the printing of currency.
b. to determine the path of tax rates.
c. to use open market operations to control the nation’s money supply.
d. to create and issue bonds on behalf of the Treasury.
e. to oversee economic activity in the various Federal Reserve districts.