An increase in the reserve requirement
A) increases the money supply, which leads to increased interest rates and a decrease in
GDP.
B) increases the money supply, which leads to decreased interest rates and a decrease in
GDP.
C) decreases the money supply, which leads to increased interest rates and a decrease in
GDP.
D) decreases the money supply, which leads to decreased interest rates and a decrease
in GDP.
Recall the Application about the study done about the perceptions and behavior of
the unemployed in Great Britain to answer the following question.
According to this Application, if you are unemployed and if your peer group is also
unemployed,
A) you have a better chance of finding employment.
B) you may not be as aggressive in searching for work.
C) you will want to find a job quickly to encourage your peer group about employment
prospects.
D) you have little chance of finding a job.
Figure 9.1
Refer to Figure 9.1. An increase in government spending causes:
A) the economy to move from Point A to Point B, but will not shift the aggregate
demand curve.
B) the aggregate demand curve to shift from to .
C) the aggregate demand curve to shift from to .
D) neither a shift of the aggregate demand curve nor a change in real GDP.
Table 3.2
Consider two individuals, Rose and Sharon, who produce fish and coconuts. Rose and
Sharon’s hourly productivity are shown in Table 3.2. Sharon’s opportunity cost of
producing 1 coconut is:
A) 3/4 fish.
B) 1 1/3 fish.
C) 3 fish.
D) 4 fish.
In factor markets:
A) households demand inputs, which firms supply.
B) households supply inputs, which firms demand.
C) households supply goods and services, which businesses demand.
D) firms supply products, which households demand.
The largest category of discretionary federal spending is:
A) funding for the Defense Department.
B) funding for the Environmental Protection Agency.
C) funding for the Interior Department.
D) funding for the State Department.
Recall Application 4, “Trade, Consumption and Inequality,” to answer the following
questions:
According to the application, how large was the change in relative price that helped the
poor that can be attributed to trade with China?
A) 1/3
B) 1/2
C) 1/4
D) 1/10
In March 2012, M2 totaled:
A) $1,028 billion.
B) $2,220 billion.
C) $9,798 billion.
D) $7,424 billion.
If you take a walk in the park during your coffee break, this activity ________ the
measurement of real GDP and ________ social welfare.
A) has no effect on; increases
B) decreases; increases.
C) increases; decreases
D) decreases; has no effect on
Figure 18.3 Refer to Figure 18.3. Livonia has a comparative advantage in the
production of
A) pogo sticks.
B) scooters.
C) both scooters and pogo sticks.
D) neither scooters nor pogo sticks.
Refer to Figure 8A.2. If the economy were originally saving at the rate 1 but changed to
the rate 2,
A) depreciation will not catch up to total saving.
B) capital deepening will continue past K2.
C) saving exceeds depreciation at K1.
D) the economy stops growing at e1.
Figure 19.2
Referring to Figure 19.2, the effect of an increase in U.S. prices is represented by a
movement from point
A) c to .
B) to a.
C) d to a.
D) a to d.
Suppose consumers save 8 percent of their incomes. If the government collects 4 dollar
in taxes from each taxpayer and invested it in infrastructure, total social investment will
________ per taxpayer.
A) increase by $ 4.32
B) increase by $3.68
C) increase by 32 cents
D) decrease by 64 cents
Suppose the actual budget deficit increases when the economy falls into a recession.
This is an indication that
A) monetary policy was not used during the recession.
B) fiscal policy was not used during the recession.
C) monetary policy was used during the recession.
D) fiscal policy was used during the recession.
A variable measures
A) something that always has the same value.
B) something that can take on different values.
C) factors that occur with high degrees of uncertainty.
D) the degree to which something varies over time.
Some argue that deficits can cause a smaller government because:
A) deficits make it harder for politician to increase spending.
B) deficits make it easier for politicians to increase spending.
C) deficits make it easier for politicians to print money.
D) deficits make it harder for politicians to print money.