GDP in a country grew from $10 billion to $14 billion over the span of 5 years. The
average annual growth rate of GDP was
A) 4%.
B) 7%.
C) 10%.
D) 40%.
If an economy experiences deflation, the real interest rate
A) will be less than the nominal interest rate.
B) will be negative when the nominal interest rate is positive.
C) will be greater than the nominal interest rate.
D) will be equal to the deflation rate, so long as the nominal interest rate is positive.
When there is a positive externality,
A) the private benefit received by consumers is greater than the external benefit.
B) the social benefit received by consumers is greater than the private benefit.
C) the private benefit received by consumers is greater than the private cost.
D) the private benefit received by consumers is greater than the social benefit.
Which of the following statements is true?
A) If the price of a good is lowered and total revenue decreases, demand is elastic.
B) If the price of a good is raised and total revenue does not change, demand is
perfectly elastic.
C) If the price of a good is raised and total revenue increases, demand is inelastic.
D) If the price of a good is lowered and total revenue increases, demand is inelastic.
When the United States sends money to Indonesia to help tsunami survivors, in what
account is this transaction recorded?
A) the financial account
B) the capital account
C) the current account
D) the foreign exchange account
Figure 9-5 Suppose the U.S. government
imposes a $0.75 per pound tariff on coffee imports. Figure 9-5 shows the impact of this
tariff. The increase in domestic producer surplus as a result of the tariff is equal to
A) $11.25 million.
B) $18 million.
C) $32.5 million.
D) $45 million.
Suppose the U.S. GDP growth rate is slower relative to other countries’ GDP growth
rates. This will
A) move the economy up along a stationary aggregate demand curve.
B) move the economy down along a stationary aggregate demand curve.
C) shift the aggregate demand curve to the left.
D) shift the aggregate demand curve to the right.
Figure 3-1
An increase in the price of a complement would be represented by a movement from
A) A to B.
B) B to A.
C) D1 to D2.
D) D2 to D1.
The demand for loanable funds has a ________ slope because the lower the interest
rate, the ________ number of investment projects are profitable, and the ________ the
quantity of loanable funds demanded.
A) negative; greater; greater
B) negative; greater; lesser
C) negative; lesser; greater
D) positive; lesser; lesser
Allison’s Auto Art is a company that applies pinstripes to vehicles. Allison’s cost for a
basic 1-color pinstriping job is $35, and she charges $95 for this service. For a total
price of $175, Allison will apply a fancier 3-color pinstripe application to an
automobile, a service that adds an additional $40 to the total cost of the package. What
is Allison’s marginal benefit if she sells a basic 1-color job?
A) $35
B) $60
C) $95
D) The marginal benefit cannot be determined.
Potential GDP in the United States
A) does not change over time.
B) grows as the economy grows.
C) changes over a given business cycle.
D) declines over time.
Figure 30-8
The equilibrium exchange rate is at A, $1.25/euro. Suppose the European Central Bank
pegs its currency at $1.00/euro. At the pegged exchange rate,
A) there is a shortage of euro equal to 500 million.
B) there is a surplus of euro equal to 300 million.
C) there is a shortage of euro equal to 200 million.
D) there is a surplus of euro equal to 700 million.
Opportunity cost is defined as
A) the benefit of an activity.
B) the monetary expense associated with an activity.
C) the highest valued alternative that must be given up to engage in an activity.
D) the total value of all alternatives that must be given up to engage in an activity.
If Congress passed a one-time tax cut in order to stimulate the economy in 2014, and
tax rate levels returned to their pre-2014 level in 2015, how should this tax cut affect
the economy?
A) The tax cut would increase consumption spending less than would a permanent tax
cut.
B) The tax cut would increase consumption spending more than would a permanent tax
cut.
C) The tax cut would increase consumption spending by the same amount as would a
permanent tax cut.
D) The tax cut would raise the price level in 2014.
An increase in the equilibrium price for a product will result
A) when the quantity demanded for the product exceeds the quantity supplied.
B) when there is a decrease in supply and an increase in demand for the product.
C) when there is a decrease in supply and a decrease in demand for the product.
D) when there is an increase in demand and an increase in the number of firms
producing the product.