Currency traders expect the value of the dollar to rise. What effect will this have on the
demand for dollars and the supply of dollars in the foreign exchange market?
A) Demand for dollars will increase, and supply of dollars will decrease.
B) Demand for dollars will increase, and supply of dollars will increase.
C) Demand for dollars will decrease, and supply of dollars will increase.
D) Demand for dollars will decrease, and supply of dollars will decrease.
Under the Bretton Woods exchange rate system, set up in 1944, which of the following
was true?
A) Americans could sell their dollars to the American government in exchange for gold.
B) Americans could sell their dollars to the American government in exchange for
silver.
C) Americans could sell their dollars to foreign central banks in exchange for gold.
D) Foreign central banks could sell their dollars to the American government in
exchange for gold.
Which of the following is an examples of spending on factors of production in the
circular flow model?
A) Tuan purchases a cappuccino at the student union.
B) Laurence rents a car to drive to a wedding in San Diego.
C) Yvette pays $50 to join a softball league.
D) The “Lucky Ducky” casino buys a new craps table for the casino floor.
Table 4-4
Table 4-4 shows the demand and supply schedules for labor market in the city of Pixley.
If a minimum wage of $11.50 an hour is mandated, what is the quantity of labor
demanded?
A) 40,000
B) 570,000
C) 610,000
D) 1,180,000
Figure 11-13
The lines shown in the diagram are isocost lines. Which of the following shows a
decrease in the price of capital while the price of labor remains unchanged?
A) the movement from AF to BF
B) the movement from BF to AF
C) the movement from BF to BD
D) the movement from BF to CE
An “omitted variable” is
A) a variable which is purposely omitted from an economic analysis.
B) a variable which is inadvertently omitted from an economic analysis.
C) a variable that has no impact on other variables in an economic analysis.
D) a variable that affects other variables and its omission from economic analysis can
lead to false conclusions about cause and effect.
Shondra’s real wage in 2014 is $18.50. If the price level is 106, what is Shondra’s
nominal wage?
A) $19.61
B) $18.61
C) $18.50
D) $17.44
A ________ demand curve for shampoo would be caused by a change in the price of
shampoo.
A) rightward shift of the
B) leftward shift of the
C) movement along the
D) positively sloped
A positive externality causes
A) the marginal social benefit to be equal to the marginal private cost of the last unit
produced.
B) the marginal social benefit to be less than the marginal private cost of the last unit
produced.
C) the marginal social benefit to exceed the marginal private cost of the last unit
produced.
D) the marginal private benefit to exceed the marginal social cost of the last unit
produced.
Fiscal policy refers to changes in
A) state and local taxes and purchases that are intended to achieve macroeconomic
policy objectives.
B) federal taxes and purchases that are intended to achieve macroeconomic policy
objectives.
C) federal taxes and purchases that are intended to fund the war on terrorism.
D) the money supply and interest rates that are intended to achieve macroeconomic
policy objectives.
Which of the following would cause the short-run aggregate supply curve to shift to the
left?
A) an increase in the price level
B) an increase in inflation expectations
C) a technological advance
D) a decrease in interest rates
Suppose you withdraw $500 from your checking account deposit and bury it in a jar in
your back yard. If the required reserve ratio is 10 percent, checking account deposits in
the banking system as a whole could drop up to a maximum of
A) $0.
B) $50.
C) $500.
D) $5,000.
Figure 15-15
Figure 15-15 shows the cost and demand curves for the Erickson Power Company.
Erickson Power is a natural monopoly because
A) it is a power company and all power companies are natural monopolies.
B) average total cost is still declining when it intersects demand.
C) of its continually declining marginal revenue curve as output rises.
D) its marginal cost lies entirely below its long-run average cost.
Figure 11-3
Fancy Footwear manufactures shoes. Figure 11-3 shows Fancy Footwear’s marginal
product of labor and average product of labor curves in the short run.
For what quantity of labor does production display diminishing returns?
A) for more than 1 units of labor
B) for more than 4 unit of labor
C) for more than 5 units of labor
D) for more than 8 units of labor