When money is used to compare the costs of different goods and services, it is
functioning as
a. a unit of account
b. a means of payment
c. fiat money
d. a store of wealth
e. legal tender
Which of the following would be counted in U.S. GDP?
a. A new U.S.-produced radio bought by a Japanese citizen living in Kyoto
b. A used U.S.-produced computer bought by a French citizen living in Kansas
c. A new Japanese radio bought by a U.S. citizen in Rhode Island
d. A U.S. pianist’s concert sales in Britain
e. Stock in Microsoft Corporation bought by a Russian citizen
Everything else being equal, a job in which workers face a relatively small chance of
being laid off would generally have
In the following index: 2003 = 123.3; 2004 = 143; 2005 = 111.4; 2006 = 100; 2007 =
94.3, what is the rate of change from 2006 to 2007?
a. 5.7%
b. 5%
c. 4.3%
d. 2.5%
e. unable to determine
The table below shows the present value of beds for a city hospital, at different interest
rates. The price of each bed is $800. If the interest rate decreases from 15 percent (0.15)
to 5 percent (0.05) per year, how will the hospital’s capital expenditure change?
One baker can bake 15 pies in a day. Two bakers can bake 35 pies in a day. If the
marginal revenue product of hiring the second baker is $200, then in a perfectly
competitive product market
Assume that the telephone company built a new plant this year. The value of the new
plant is
a. counted in GDP as public investment
b. not counted in GDP
c. not included in private investment spending
d. an intermediate good, but it is not counted in GDP
e. included in GDP
In 2008, the Ace Card Company produced $10 million worth of playing cards. Because
of strong consumer demand for their product in 2008, Ace sold $12 million worth of
cards, reducing their inventories by $2 million. How much value did Ace add to GDP in
2008?
a. $2 million
b. $8 million
c. $10 million
d. $12 million
e. $14 million
The September 11 attacks no doubt worsened the slowdown that had already begun
earlier in mid-2000..
The labor supply curve is typically upward sloping because as the wage rate rises,
Macro National Bank, a commercial bank, holds $1 million in vault cash, $15 million in
government and corporate bonds, $40 million in demand deposits, $10 million on
deposit with a Federal Reserve bank, and $8 million worth of property. What are Macro
National Bank’s total liabilities?
a. $40 million
b. $48 million
c. $50 million
d. $51 million
e. $65 million
A tax imposed on the part of income that households spend is known as a
a. luxury tax
b. flat tax
c. consumption tax
d. income tax
e. value tax
For any value of the required reserve ratio (RRR), the demand deposit multiplier is
a. 1/RRR
b. 1 – (1/RRR)
c. RRR multiplied by the change in reserves
d. 1 – RRR
e. (1/RRR) -1
Differences in climate among nations
a. could lead to economic efficiency
b. reduce opportunities for gains from international trade
c. lower the terms of trade in favor of warm-climate nations
d. may create opportunities for international trade
e. raise the terms of trade in favor of warm-climate nations
The table below shows the total number of tickets a movie theater can sell per year with
different numbers of screens. The market for movie tickets is perfectly competitive,
with a market price of $8 per ticket. What is the marginal revenue product of the second
screen?