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Matchthefollowingbusinessformswiththeircharacteristicsbelow.
a. Sole proprietorship
b. Partnership
c. Corporation
Single owner
During a period of inflation, the Fed is likely to:
a. sell government securities to banks in order to reduce the amount of loanable funds.
b. buy government securities from banks in order to reduce the amount of loanable
funds.
c. raise taxes in order to reduce the money supply.
d. cut the required reserve ratio in order to reduce the amount of excess reserves banks
have to loan out.
e. cut the discount rate in order to increase the affordability of loanable funds.
Assume the demand for money curve is stationary and the Fed increases the money
supply. The result is that people:
a. increase the supply of bonds, thus driving up the interest rate.
b. increase the supply of bonds, thus driving down the interest rate.
c. increase the demand for bonds, thus driving up the interest rate.
d. increase the demand for bonds, thus driving down the interest rate.
If you buy a brand new, American-made laptop computer to use for taking notes in your
economics class, then it will be counted as:
a. none of the following.
b. C.
c. I.
d. G.
e. (X - M).
The curve that reflects the view that when tax rates are too high, lowering them not only
creates greater incentive for suppliers to increase production, but ends up generating
higher tax revenues, is known as the:
a. Phillips curve.
b. Laffer curve.
c. Engel curve.
d. Rational expectations curve.
e. consumption curve.
Exhibit 2-16 Production possibilities curve
In Exhibit 2-16, which of the following
points on the production possibilities curve are efficient production points?
a. A, B, C, U
b. A, B, C, D, U
c. E, U, W
d. B, C, D, U
e. A, B, C, D
If something is a unit of account, then it:
a. serves as a yardstick for measuring the relative value of other goods
b. is a means of holding wealth for the future
c. is fairly stable
d. is durable and portable
e. is accepted as payment for any purchase
Exhibit 11-5 Aggregate demand and supply model
Suppose the economy in
Exhibit 11-5 is in equilibrium at point E1 and the marginal propensity to consume
(MPC) is 0.75. Following Keynesian economics, the federal government can move the
economy to point E2 and reduce inflation by:
a. increasing government tax revenue by $6 billion.
b. decreasing government tax revenue by $6.1 billion.
c. decreasing government tax revenue by $200 billion.
d. increasing government tax revenue by approximately $66 billion.
e. decreasing government tax revenue by approximately $66 billion.
If real GDP is increasing more rapidly than population:
a. population must be declining.
b. the country will have to export more than it imports.
c. the general level of prices must be increasing.
d. per capita real GDP will be increasing.
A production possibilities curve shows the various:
a. prices that can be charged for capital and consumption goods.
b. combinations of prices and outputs that can be produced.
c. combinations of goods the economy has the capacity to produce.
d. combinations of resources and prices that the economy can produce.
Taxes in the United States as a percentage of GDP are among the highest in the world.
Automatic stabilizers are government programs that tend to push the federal budget
toward surplus as the real GDP rises and toward deficit as the real GDP falls.
The vicious circle of poverty refers to the fact that LDCs are poor because other
countries do not want to buy their goods and services.
Gross domestic product is the total dollar value at current prices of all final and
intermediate goods produced by a nation during a given time period.
Describe the functions of the Federal Reserve System.
If a good gives rise to substantial external benefits to society that are associated with its
production and/or consumption, then the good likely has too many resources devoted to
its production.
