The civilian non-institutional population consists of everyone in the population who is
a. at least 16 years of age, in the armed forces, or institutionalized.
b. at least 16 years of age.
c. not in the armed forces.
d. not institutionalized.
e. b, c, and d
John Maynard Keynes drew many economists ______________ the classical view.The
classical view held that a market economy __________ regulate itself to avoid long
periods of excessive unemployment.
a. toward; can
b. toward; cannot
c. away from; can
d. away from; cannot
Under the target price system,
a. supply is restricted.
b. consumers must pay the target price.
c. payments are made to the government when the price paid by consumers rises above
the target price.
d. farmers are paid a deficiency payment if the market price for their goods is below the
target price.
e. a and c
In the market for good X there are three buyers, Adam, Bill, and Carolyn. Adam buys 3
units of good X at $4, Bill buys 7 units of good X at $4, and Carolyn buys 8 units of
good X at $4. One point on the market demand curve for good X consists of a price of
_____________ and a quantity demanded of __________________ units.
a. $4; 10
b. $4; 18
c. $4; 15
d. $5; 8
e. none of the above
Open market purchases of government securities
a. are designed to increase trading on the stock exchange.
b. generally decrease the money supply.
c. always decrease the money supply.
d. cause bank reserves to increase.
e. all of the above
The Banking Act of 1935 changed the name of the _______________ to the Board of
Governors of the Federal Reserve System.
a. Federal Open Market Committee
b. Board of Monetary Affairs
c. Central Bank Board
d. Federal Reserve Board
The effect of a decrease in interest rates upon economic growth is an example of
positive economics.
a. True
b. False
Exhibit 10-4
Let Yd1 denote the present level of disposable income. An increase in disposable
income is most likely to, ceteris paribus, cause a movement to point
a. A.
b. B.
c. F.
d. D.
e. E.
Exhibit 16-5
If the economy continually moves between points 1, 2, and 3, it follows that
a. this economy has not experienced stagflation.
b. a tradeoff exists between inflation and unemployment.
c. when inflation is higher, unemployment is lower.
d. a and b
e. a, b, and c
Exhibit 2-8
For Maya, the opportunity cost of producing one unit of good Y is ___________ unit(s)
of good X.
a. 2.00
b. 1.00
c. 10.00
d. 0.50
Exhibit 34-10
Who has the comparative advantage when it comes to mowing lawns?
a. Danielle
b. Jason
c. neither Jason nor Danielle
d. both Danielle and Jason
The Keynesian link between the money market and the goods and services market is
__________. Changes in the money market must affect the __________ market before
the goods and services market is affected.
a. direct; credit
b. indirect; labor
c. indirect; investment goods
d. direct; stock
e. none of the above
Which sequence of events correctly and sequentially best describes financial sector
problems spilling over to the real sector of the economy?
a. Bank assets increase, capital increases, consumers purchase less, firms lay-off
workers.
b. Bank liabilities increase, capital decreases, consumers purchase more of the “wrong”
products, firms lay-off some workers and hire other workers.
c. Bank assets decline in value, banks approach insolvency, banks cut back on lending,
consumers purchase less, some firms produce less and other firms go out of business.
d. Banks engage in regulatory capital arbitrage, leverage ratios are rising, asset values
are rising, consumers purchase less, producers produce less, firms lay-off some
workers.
e. none of the above
The purchasing power parity theory predicts that changes in the relative price levels of
two countries will affect the exchange rate in such a way that
a. one unit of a nation’s currency will buy more foreign goods than it did before the
change in the relative price levels.
b. one unit of a nation’s currency will buy fewer foreign goods than it did before the
change in the relative price levels.
c. one unit of a nation’s currency will continue to buy the same amount of foreign goods
as it did before the change in the relative price levels.
d. the percentage of depreciation in one currency equals the percentage of appreciation
in the other currency.
There are some economists who argue that low mortgage interest rates in the time
period preceeding the financial crisis of 2007-2009 were a result of a ___________ in
global savings.They argue that emerging countries began to save ___________ which
helped to _____________ the supply of loanable funds in the United States.
a. glut; less; decrease
b. glut; more; increase
c. decline; more; increase
d. decline; less; decrease
Exhibit 39-7
Let E1 represent the initial equilibrium in the market for X. A combination of
population growth and an increase in agricultural productivity will likely result in a new
equilibrium at
a. E2.
b. E3.
c. E4.
d. E5.
e. E4 or E5, depending on the extent of income elasticity of demand.
Exhibit 8-1
Assume the economy is originally in equilibrium at point A.If unusually bad weather
leads to decreased production of wheat, corn, and other crops, at which point is the
economy most likely to end up in the short run?
a. A
b. B
c. C
d. D
If the demand for computer software rises as incomes rise, then computer software is a
(an)
a. inferior good
b. substitute (good) for computers
c. normal good
d. complement (good) for computers
e. c and d