Which of the following categories accounted for the third largest percentage of total
federal government expenditures?
a. Education and health.
b. National defense.
c. Income security.
d. Interest on the national debt.
Producer surplus is the:
a. amount by which the quantity supplied of a good exceeds the quantity demanded of a
good.
b. measure of producers’ willingness to sell a good plus the price of the good.
c. measure of how much producers value a good.
d. amount consumers actually pay for a good minus the amount the sellers are willing to
sell the good.
Which of the following is most likely to be a major source of growth in per capita
GDP?
a. A high investment / GDP ratio
b. A high rate of inflation
c. Rapid population growth
d. Rapid growth in the money supply
At December 31, 2015, the accounting records of Wyndam Corporation contain the
following:
If capital stock is $260,000, what is the December 31, 2015 cash balance? a. $46,000
b. $506,000
c. $94,000
d. $86,000
Using the Keynesian aggregate expenditures model, which of the following is true?
a. Macro equilibrium may occur at levels of real GDP other than full-employment real
GDP.
b. At any macro equilibrium, the actual rate of unemployment must equal the natural
rate of unemployment.
c. If an economy is operating below full employment capacity, the Keynesian model
indicates that lower wage rates will automatically adjust the economy back to full
employment.
d. All of these are correct.
An increase in oil prices will shift the aggregate:
a. demand curve leftward.
b. demand curve rightward.
c. supply curve leftward.
d. supply curve rightward.
Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss
As shown in Exhibit 3A-1, if the market price falls from $3.00 to $2.00, then area ____
disappears.
a. ABEFD
b. ABEC
c. CEFD
d. BEF
Gross domestic product (GDP) is defined as:
a. the market value of all final goods and services produced within the borders of a
nation.
b. incomes received by all of a nation’s households.
c. the quantity of each good and service produced by U.S. residents.
d. none of these.
In the aggregate expenditures model, if aggregate expenditures (AE) are less than GDP,
then:
a. inventory is depleted.
b. inventory is unchanged.
c. employment decreases.
d. employment increases.
During the Great Depression of the 1930s, the aggregate demand curve intersected the
aggregate supply curve in the:
a. horizontal portion of the aggregate supply curve.
b. upward-sloping part of the aggregate supply curve.
c. vertical portion of the aggregate supply curve.
d. early years in the horizontal portion, but in the later years in the vertical portion.
e. early years in the vertical portion, but in the later years in the horizontal portion.
As shown in Exhibit 8-6, this economy is in macro equilibrium at:
a. $8 trillion.
b. $12 trillion.
c. $16 trillion.
d. None of these.
A price ceiling:
a. is the lowest price that the law will allow to be charged in the market.
b. is the highest price that the law will allow to be charged in the market.
c. is the price that must be charged in the market.
d. would be imposed if the government believes the market equilibrium price is too low.
e. would only be applicable in the case of non-essential goods.
Suppose the government imposes rent control (a price ceiling) below the equilibrium
price for rental housing. Which of the following could result?
a. Tenants risk breaking rent control law.
b. The quality of existing rental housing deteriorates.
c. Shortages.
d. All of these.
According to the classification in the text, which of the following is not an industrially
advanced country (IAC)?
a. United Arab Emirates.
b. Israel.
c. Greece.
d. All of the above are IACs.
e. None of the above are IACs.
Which of the following is a lagging indicator?
a. Outstanding commercial loans.
b. Duration of unemployment.
c. Prime rate.
d. All of these.
One of the strengths of a socialist economy, according to those who advocate such a
system, is that government intervention will enable a more equitable distribution of
income.
National income (NI) is the total income earned by resource owners, including wages,
rents, interest, and profits.
What are the different types of trade barriers? What are the arguments for trade
barriers? What are the consequences of trade barriers?
The concept that assumes that assets are recorded at the amount to acquire them is
called the
_________________________.
An analysis of IBM’s pricing decisions would be classified as a macroeconomic study.
Assume a price floor is set above the equilibrium price. The result is a surplus.
Does government borrowing crowd out private sector spending?