A tariff
a. is usually set by domestic producers of a good
b. can be either a fixed dollar amount or a percentage of a good’s value
c. decreases domestic price for a good, holding all else constant
d. improves economic efficiency in the importing nation
e. improves economic efficiency in the exporting nation
Right or wrong, using the expenditure approach to GDP will show a net increase in
GDP because of the 2005 Hurricanes.
What is the difference between nominal and real GDP?
a. Nominal GDP is adjusted for changes in the price level; real GDP is not.
b. Real GDP is adjusted for taxes and transfer payments; nominal GDP is not.
c. Real GDP is adjusted for changes in the price level; nominal GDP is not.
d. Nominal GDP is adjusted for depreciation; real GDP is not.
e. Real GDP is adjusted for depreciation; nominal GDP is not.
Which of the following would shift the AS curve downward?
a. A decrease in the price level
b. A decrease in world oil prices.
c. An increase in world oil prices.
d. A natural disaster that raises unit costs for all firms.
e. A loss of technological capability.
For the capital stock to grow, production of capital goods must
a. exceed the inflation rate
b. exceed 15 percent of GDP
c. exceed the depreciation of existing capital
d. increase from the previous year
e. exceed the growth of the labor force
Which of the following is the definition of autonomous consumption spending?
a. The effect of a change in wealth on consumption spending
b. The part of consumption spending that is independent of disposable income
c. The impact of disposable income on consumption spending
d. The part of consumption spending that is independent of wealth
e. The horizontal intercept of the consumption function
Assume the economy is at full employment. Which of the following would you expect
if oil prices suddenly decreased?
a. A recession
b. A decrease in employment below its full-employment level
c. An economic contraction
d. A technological breakthrough
e. An increase in employment above its full-employment level
What is the relationship between household saving and taxes?
a. taxes = income – consumption – household saving
b. household saving = income + taxes – consumption
c. taxes = income + consumption + household saving
d. household saving = consumption + income – taxes
e. taxes = household saving – income + consumption
International trade occurs whenever
a. two nations have achieved internal economic efficiency
b. one of the trading nations is self-sufficient
c. one nation can profit from trade at the expense of another
d. two nations can benefit from trading with each other
e. labor is cheaper in one country than in another
An open market purchase of bonds by the Fed
a. drains reserves from the banking system and decreases the money supply
b. injects reserves into the banking system and increases money demand
c. injects reserves into the banking system and increases the money supply
d. drains reserves from the banking system and increases the money supply
e. injects reserves into the banking system and decreases the money supply
If a country begins to import a good,
a. it has a comparative advantage in producing that good
b. it has a comparative advantage in consuming that good
c. domestic consumers are made better off
d. domestic producers are made better off
e. both domestic consumers and domestic producers are harmed