The total quantity of goods and services demanded by households, firms, foreigners,
and government at varying price levels is:
a. gross domestic product.
b. aggregate demand.
c. aggregate expenditure.
d. total demand.
e. total expenditure.
The Monetary Control Act of 1980:
a. required banks to make home loans.
b. eliminated many forms of competition among financial institutions.
c. created sharper distinctions among various financial institutions.
d. none of these.
Presented below are selected data from the accounting records for Micco’s Gift Store
for 2014.
A) Calculate the net income or loss for 2014. B) Explain how the amount from part “A”
will affect the financial position of Micco’s Gift Store. C) Is the company profitable?
Explain your answer.
Ralph wants to buy some milk and a box of cereal. If Ralph buys 2 quarts of milk at $1
per quart, the box of cereal costs 75 cents. If he buys 3 quarts of milk at $1 per quart,
the box of cereal is free. For Ralph, the marginal cost of the third quart of milk is:
a. zero.
b. 25 cents.
c. 75 cents.
d. $1.
The pre-Keynesian or classical economic theory predicted that in the long-run the
economy would experience:
a. long periods of high unemployment.
b. rising rates of inflation.
c. only temporary periods of high unemployment.
d. idle factors of production.
In recent years, net interest on the national debt paid by the federal government as a
percentage of GDP is equal to approximately:
a. 1 to 3 percent.
b. 5 to 9 percent.
c. 10 to 14 percent.
d. 15 to 19 percent.
e. 20-25 percent.
According to classical economists,
a. prices are rigid.
b. both V and Q are variable for an economy in short-run equilibrium.
c. changes in M cause changes in V.
d. the velocity of money is constant.
An entrepreneur is a(n):
a. individual who has much education.
b. organizer who seeks profitable opportunities and is willing to accept risks.
c. business organization that uses inputs to produce output.
d. depot or warehouse for commercial products.
Bobby’s neighbor is growing a tree that is blocking Bobby’s ocean view. Bobby is
considering taking his neighbor to court. This is most likely an example of a:
a. considerate neighbor.
b. public good.
c. free rider.
d. positive externality.
e. negative externality.
The aggregate supply curve indicates the:
a. relationship between prices and the aggregate quantity of goods and services
purchased by consumers, investors, governments, and foreigners (net exports).
b. relationship between prices and the natural rate of unemployment.
c. relationship between the real wage rate and the quantity of labor supplied by
households.
d. quantity of goods and services producers will supply at different price levels.
The total lag for fiscal policy tends to be shorter than the total lag for monetary policy.
If some resources went to waste rather to use in production, the economy would operate
outside its production possibility curve.
An increase in the price level in Japan relative to the price level in the United States
will shift the demand curve for dollars leftward and the dollar depreciates or becomes
weaker.
The opportunity cost of attending a movie is the purchase price of a ticket.
List the four financial statements. Explain the connection between these four
statements.
Structural unemployment is a special type of cyclical unemployment.
The federal budget deficit has been over 30 percent of GDP since the early 1980s.
Nominal GDP is greater than GDP because of the effects of inflation as measured by the
GDP chain price index.
Fiscal policy is the management of aggregate demand through changes in taxes and
government spending.
Although it has considerable political independence, the Fed is legally a branch of the
U.S. Treasury Department.