The world’s total output will be greater the more self-sufficient each of the world’s
economies becomes.
If the Fed wanted to prevent a change in money demand from affecting real GDP, which
of the following responses would it choose?
a. A neutralization response
b. A constant interest rate response
c. A constant money supply response
d. A constant tax rate response
e. A constant government spending response
The equilibrium price of automobiles is a primarily macroeconomic issue.
The slope of the consumption function is also known as
a. the consumption ratio
b. the average propensity to consume
c. autonomous consumption spending
d. the marginal propensity to consume
e. multiplying propensity to consume
The phase of the business cycle characterized by rising output is called a(n)
a. peak
b. recession
c. depression
d. trough
e. expansion
The Federal Reserve System
a. is influenced by the executive and legislative branches through the appointment
process
b. is under the jurisdiction of the executive branch
c. is under the control of the private banks that own it
d. is directed in its actions by the U.S. Congress
e. answers only to the judicial branch
If the price of orange juice rises, the demand for grapefruit juice will
If a firm finances a new project using its own funds,
a. the cost is minimal
b. the opportunity cost of borrowing has been avoided
c. investment funds will be in excess supply
d. the financing charges are the measure of the real interest rate
e. the interest rate represents the firm’s opportunity cost
If demand for a good is represented by curve D in Figure 5-10, then an increase in
supply of the good will cause
Consider the total product curve depicted in Figure 7-5. The firm experiences the
greatest marginal returns to labor
Say’s law promises that each and every firm in the economy will be able to sell all of
the particular output it produces.
A price ceiling in a perfectly competitive market
The market for a particular good is more likely to be local
Which of the following would cause the production function to shift upward?
a. A decrease in the capital stock
b. A decrease in human capital
c. An increase in population
d. An increase in human capital
e. Diminishing returns to labor