Exhibit 1A-4 Straight line
In Exhibit 1A-4, the slope of the straight
line A-D is:
a. 0.
b. 1.
c. 1/2.
d. -1.
The recent growth records of Japan and Hong Kong during the last 50 years indicate
that a nation can grow rapidly without:
a. securely defined property rights.
b. adopting modern technology.
c. significant capital formation.
d. abundant domestic natural resources.
Which of the following explains why a $100 billion reduction in consumption spending
might decrease equilibrium real GDP by more than $100 billion?
a. Say’s law.
b. The quantity theory of money.
c. Flexible resource prices.
d. The multiplier principle.
Exhibit 15-7 Lower Walloon National Bank AssetsLiabilities
Reserves $10,000 Checkable deposits $10,000 In Exhibit 15-7, if Lower Walloon
National bank loans out all of its excess reserves to James Brown so that Mr. Brown can
upgrade his restaurant, and the money is put into Mr. Brown’s account at the Lower
Walloon National bank, then the bank will have reserves of:
a. $10,000, loans of $8,000, and checkable deposits of $18,000.
b. $2,000, loans of $4,000, and checkable deposits of $14,000.
c. $6,000, loans of $4,000, and checkable deposits of $10,000.
d. $10,000, loans of $8,000, and checkable deposits of $10,000.
e. $0, loans of $8,000, and checkable deposits of $18,000.
Assuming that hamburger is an inferior good, an increase in consumer income, other
things being equal, will cause a(n):
a. upward movement along the demand curve for hamburger.
b. rightward shift in the demand curve for hamburger.
c. downward movement along the demand curve for hamburger.
d. leftward shift in the demand curve for hamburger.
Price indexes like the CPI are calculated using a base year. The term base year refers to:
a. the first year that price data are available.
b. any year in which inflation was higher than 5 percent.
c. the most recent year in which the business cycle hit the trough.
d. an arbitrarily chosen reference year.
The statement, “Violent crime has decreased in the last five years,” is:
a. obviously wrong and, therefore, cannot be a positive statement.
b. normative since it can be answered by simply looking at the facts.
c. positive because it is testable.
d. not very interesting because all normative issues are of little importance.
Payments to households not in exchange for goods and services currently produced are:
a. transfer payments.
b. government purchases.
c. consumption expenditures.
d. investment expenditures.
The consumption function will shift for all of the following reasons except:
a. a change in a household’s real assets.
b. a change in interest rates.
c. expectations of price changes.
d. changes in a household’s disposable incomes.
e. changes in taxation policy.
The long-run Phillips curve is a(n) ____ line at the natural rate of unemployment.
a. horizontal
b. vertical
c. upward-sloping
d. downward-sloping
Entrepreneurs can delegate every one of the following tasks to labor except:
a. hiring and training new employees.
b. assuming business risk and uncertainty.
c. supervision of the production process.
d. researching ideas for new products.
e. marketing the goods and services produced.
Which of the following would shift the demand curve for autos to the right?
a. A fall in the price of autos.
b. A fall in the price of auto insurance.
c. A fall in consumers’ incomes.
d. A fall in the price of steel.
The demand for money that households keep for emergency purposes is known as the:
a. precautionary demand.
b. emergency demand.
c. speculative demand.
d. transactions demand.
e. temporary demand.
Keynesian economics focuses on the role of aggregate spending in determining the
level of real GDP.
The expenditure approach measures GDP by adding the spending of households,
businesses, government, and foreigners.
Can the U.S. federal government go broke as a result of a large national debt?
“Ceteris paribus” is a Latin expression that essentially means “holding everything else
constant.”
Stagflation means a simultaneous decrease in the unemployment and inflation rates.