Ink jet printers are a normal good only if, as income falls by a certain percentage, the
quantity demanded rises by an even greater percentage.
In real-world markets
The national debt must be paid back in the future.
Refer to Figure 15-5. Assuming that the economy starts at point X, a decrease in world
oil prices would
a. move the economy to point A
b. move the economy to point B
c. shift the aggregate supply curve upward to curve E
d. shift the aggregate supply curve downward to curve F
e. have no impact since the model only shows the relationship between the overall price
level and real GDP
Suppose that over time, consumers used discount stores at an increasing rate, the CPI
would tend to be
a. accurate
b. underestimated because consumers would buy goods and services at lower prices
than those collected by the BLS
c. underestimated because consumers would buy goods and services at higher prices
than those collected by the BLS
d. overestimated because consumers would buy goods and services at lower prices than
those collected by the BLS
e. overestimated because consumers would buy goods and services at higher prices than
those collected by the BLS
When regulating a natural monopoly, government officials
Single-price monopoly is inefficient because
What is the value of any index in the base period?
a. 200
b. 150
c. 110
d. 100
e. 105
If the marginal propensity to consumer is 0.9, what is the value of the expenditure
multiplier?
a. 1.0
b. 1.9
c. 10
d. 0.1
e. 0.9
If demand is price elastic, a decrease in price results in a(n)
If the marginal propensity to consume is 0.5, what is the value of the expenditure
multiplier?
a. 1.0
b. 1.5
c. 2.0
d. 0.5
e. 10.0
If a piece of currency must be accepted for payment because the government says so,
the currency is called
a. commodity money
b. money backed by gold
c. high-powered money
d. greenbacks
e. fiat money
Suppose a $30 billion increase in government purchases increased GDP by $120
billion, what is the value of the MPC?
a. 4.00
b. 0.75
c. 0.25
d. 0.50
e. 0.33
The natural rate is natural in the sense that macroeconomic policy
a. sees it all the time
b. can ignore it
c. can’t do much about it
d. is a natural reaction to unemployment
e. has always recognized that some workers will be voluntarily unemployed
Refer to Figure 9-12. Assume that a nation can slow its population growth rate so that it
now requires only N’ worth of investment in capital to maintain current capital per
worker. If the nation adopts such a policy but maintains investment in capital at N, what
would be the likely effect?
a. Economic growth will slow because the nation would not be producing the optimal
amount of capital; it would be over-investing.
b. The nation would produce inside the production possibilities frontier; that is, there
will be inefficiencies in production.
c. The production possibilities frontier would shift inward because of the decrease in
population.
d. The production possibilities frontier would shift outward at the same rate as it would
have in the absence of the policy, but the mix of capital and consumer goods produced
would change.
e. The production possibilities frontier would shift outward more than it would have in
the absence of the policy.
Figure 4-1 shows the supply and demand for socks. If a price floor of $10 per pair is
imposed by the government
Susie grows corn in her backyard garden to feed her family. The corn she grows is not
counted in GDP because
a. it was not produced for the marketplace
b. it is an intermediate good that Susie will process further before feeding her family
c. goods produced using land are not included in GDP
d. the corn has low value
e. it reduces the amount of corn she will buy at the store
The supply curve for a particular bond is vertical.
An oligopoly is a market