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Suppose u = those adults who are unemployed and seeking work; e = those adults who
are employed; and NLF = those adults not in the labor force. Which expression would
equal the BLS definition of the unemployment rate?
a. u / (e + NLF)
b. u / e
c. u / (u + e)
d. u / (e + NLF)
e. u / (u + e - NLF)
Since 1929, total government taxes as a percentage of GDP:
a. climbed from 10 percent to about 30 percent.
b. remained close to 30 percent.
c. climbed from 30 percent to about 50 percent.
d. climbed from 15 percent to about 50 percent.
Which of the following does not hinder economic development?
a. Low birth rates.
b. Low GDP that limits saving and investment.
c. Lack of knowledge.
d. Lack of technology.
e. Lack of physical capital.
The market where banks borrow from other banks for short periods of time is the:
a. discount market.
b. federal funds market.
c. inter-bank loan market.
d. national bank market.
e. liquidity market.
GDP does count:
a. state and local government purchases.
b. spending for new homes.
c. changes in inventories.
d. none of the above.
Which of the following is a basic question answered by an economic system?
a. for whom goods and services are produced.
b. how goods and services are produced.
c. what goods and services are produced.
d. all of these.
Which fundamental economic question is most closely related to the issues of income
distribution and poverty?
a. The What to Produce question.
b. The Why to Produce question. c. The How to Produce question.
d. The For Whom to Produce question.
If the MPC is 0.70, then the spending multiplier is equal to:
a. 0.70.
b. 0.30.
c. 0.14.
d. 3.33.
e. 5.
Which of the following goods are most likely to be substitutes?
a. potato chips and chip dip
b. bread and peanut butter
c. ketchup and French fries
d. bananas and apples
Exhibit 9-7 Keynesian aggregate-expenditures model
In Exhibit 9-7, the value of the
MPC is:
a. .20.
b. .25.
c. .50.
d. .75.
e. .80.
Exhibit 5-3 Expenditure approach National income accountBillions of
dollars
Personal consumption expenditures (C) $1,000
Exports (X) 120
Federal government spending (G) 200
State and local government spending (G) 400
Imports (M) 20
Gross private domestic investment (I) 75 As shown in Exhibit 5-3, net exports is:
a. $75 billion.
b. $100 billion. c. $20 billion.
d. $120 billion.
Which of the following assets is the most liquid?
a. Money.
b. Gold.
c. Land.
d. Stocks.
Which of the following policies is a supply-side policy?
a. Reduction in taxes.
b. Reduction in regulation.
c. Reduction in resource prices.
d. Subsidies to produce technological advances.
e. All of these.
Exhibit 2-2 Production possibilities curve
In Exhibit 2-2, the opportunity cost of coffee when moving from A to B is:
a. 2 million bushels of corn.
b. 6 million bushels of corn.
c. 8 million bushels of corn.
d. 14 million bushels of corn.
e. it is not possible to determine.
Exhibit 6-3 Unemployment categories CategoryWorkers
Frictional unemployment 250
Structural unemployment 350
Cyclical unemployment 600
Discouraged workers 400
Underemployment 450 According to data in Exhibit 6-3 and assuming the total number
of workers is 8,400, the unemployment rate is:
a. 14 percent.
b. 15 percent.
c. 16 percent.
d. 19 percent.
e. 24 percent.
Exhibit 10-1 Aggregate supply curve
In Exhibit 10-1, higher price levels allow
producers to earn higher profits, stimulating production and employment in:
a. the segment labeled ab.
b. the segment labeled bc.
c. the segment labeled cd.
d. both segment bc and segment cd.
e. the entire curve.
