If the Consumer Price Index was 102.2 in 2007 and 104.9 in 2008, we can conclude that
a. the prices of all consumer goods were higher in 2008 than in 2007
b. the prices of all consumer goods were lower in 2008 than in 2007
c. the price level fell from 2007 to 2008
d. the price level rose from 2007 to 2008
e. the base year was 2001
The group of economists who believed that the macroeconomy worked very well on its
own were
a. microeconomists
b. macroeconomists
c. classical economists
d. Keynesian economists
e. Marxist economists
A natural monopoly
In a circular flow diagram of the economy, households and businesses interact
Figure 12-5 shows the number of baseballs a manufacturer can produce per day with
different quantities of labor. Each baseball sells for $5 in a competitive market. The
total revenue per day for the firm if it employs five workers is
In macroeconomics,
a. we study one market at a time
b. we try to understand how the entire economy behaves
c. we focus on large, important products and ignore the rest
d. we study one nation’s economy only
e. we aggregate all national economies into a world economy
A new business computer will generate net income of $1,000 this year, $800 next year,
$400 the year after that, and nothing thereafter. Assume that each year’s income is
received at the end of the year. What is the maximum amount a firm would be willing to
pay for the computer?
Which of the following always decreases as output increases?
Refer to Figure 15-3. Which of the following most likely caused the shifts from AE1to
AE2, and from AD1to AD2?
a. A decrease in the money supply
b. An increase in government purchases
c. An increase in investment spending
d. A decrease in autonomous consumption
e. A decrease in taxes
Double-digit inflation
a. has occurred in the United States in only three of the past fifty years
b. has occurred throughout most of United States history
c. is also called creeping inflation
d. was the norm in the United States until the end of the Vietnam War
e. has not occurred in the United States since the Great Depression
The airline and long-distance telephone service industries are examples of