The money demand curve indicates the total quantity of money demanded in the
economy at each
a. price level
b. level of GDP
c. quantity of money supplied
d. level of income
e. interest rate
“The Consumer Price Index increased by 4.2 percent in the first quarter of this year.”
What type of statement is this?
a. normative
b. negative
c. positive
d. subjective
e. biased
Which of the following is the most liquid asset?
a. A classic art painting
b. A commercial building
c. A savings bond
d. A checking account balance
e. Gold
GDP measures the output produced by all of a country’s resources.
Which of the following is a leakages from the circular flow?
a. Household saving and government spending
b. Business investment and household saving
c. Net taxes and household saving
d. Government spending and business investment
e. Net taxes and government spending
What would a leftward shift of the labor demand curve indicate?
a. Firms want to hire more workers than before at any given wage than before.
b. Firms want to pay a higher wage than before at any given level of employment.
c. Households want to supply fewer hours of work than before at any given wage rate.
d. Firms want to hire fewer workers than before at any given wage rate.
e. Households want to supply more hours of work than before at any given wage rate.
Income is to wealth as
a. hours are to minutes
b. inches are to feet
c. periods are to sentences
d. demand is to quantity demanded
e. learning is to knowledge
In the short-run macro model, a decrease in the money supply will
a. move the economy to the right along the aggregate expenditure line
b. move the economy to the left along the aggregate expenditure line
c. shift the aggregate expenditure line upward
d. shift the aggregate expenditure line downward
e. not affect the aggregate expenditure line
Government budget deficits
a. discourage household saving, which increases interest rates and reduces planned
investment spending
b. encourage household saving, which increases the funds available for planned
investment spending
c. reduce the demand for funds, lower interest rates, and increase planned investment
spending
d. discourage planned investment spending by putting upward pressure on interest rates
e. stimulate economic growth by encouraging capital investment
Use the table below to find the marginal propensity to consume.
a. the marginal propensity to consume cannot be determined from the information given
b. 0.4
c. 0.5
d. 0.6
e. 0.8
If prices (as measured by the CPI) tripled and nominal wages tripled, what would
happen to real wages?
a. They would triple.
b. They would remain unchanged.
c. They would increase by one-third.
d. They would decrease by one-third.
e. They would increase by a factor of nine.
Which combination of government policies would be most likely increase labor
demand?
a. Increasing subsidies to education and increasing subsidies to businesses for hiring
new employees
b. Reducing income tax rates and cutting transfer payments to the needy
c. Raising income tax rates and cutting transfer payments to the needy
d. Reducing subsidies to education and increasing subsidies to businesses for hiring
new employees
e. Increasing subsidies to education and reducing subsidies to businesses for hiring new
employees
Given the balance sheet below, what is the simple leverage ratio?
a. 1.25
b. 0.25
c. 5.00
d. 4.00
e. 1.00
Assume a closed economy. If consumption spending is $6.2 trillion, investment
spending is $2.5trillion, net taxes are $1.5 trillion and total income is $11 trillion, how
much must government purchases be?
a. $2.3 trillion
b. $0.8 trillion
c. $3.3 trillion
d. $7 trillion
e. cannot be determined without more information
Over the past 80 years, real GDP has
a. decreased in more years than it has increased
b. increased dramatically
c. increased slowly
d. increased moderately
e. been stable
As a large number of students graduate from college, which category of unemployment
would increase?
a. Seasonal unemployment
b. Structural unemployment
c. Frictional unemployment
d. Cyclical unemployment
e. They will have no effect on unemployment
If the price of orange juice rises, the demand for grapefruit juice will
a. increase because the two goods are substitutes
b. increase because it is a complement
c. decrease because the two goods are substitutes
d. decrease because the two goods are complements
e. not change unless the price of grapefruit juice also changes
Which statement best describes economic fluctuations?
a. Expansions and contractions typically have about the same lengths.
b. Expansions typically last 7 years, while recessions typically last 3 years.
c. Expansions tend to be shorter than contractions.
d. The percent change in output is larger during recessions than during expansions.
e. Expansions and contractions vary in duration and magnitude, with expansions
tending to last longer than contractions.