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To approximate the percentage change in real income over any period of time,
a. we need to subtract the percentage change in nominal income from the inflation rate
b. we need to subtract the rate of inflation from the percentage change in nominal
income
c. we need to divide the percentage change in nominal income by the inflation rate
d. we need to multiply the change in income by the inflation rate
e. we need to multiply the nominal percentage change in income by the percentage
change in inflation rate
When a market is in equilibrium,
a. quantity demanded equals quantity supplied
b. quantity demanded exceeds quantity supplied
c. the demand curve is identical to the supply curve
d. the economy must be at a point along the production possibilities frontier
e. the law of demand is equivalent to the law of supply
If the cost per unit of output for a particular product is $10 and the product sells for $20,
what is the percentage markup over cost per unit?
a. 200 percent
b. 10 percent
c. 100 percent
d. 20 percent
e. 50 percent.
The difference in unemployment rates between Europe and the U.S. has been narrowing
partly because
a. tax rates in European countries are generally lower.
b. economic conditions in Europe and the U.S have been converging.
c. European and American labor unions have been coordinating their activities.
d. of a change in labor market policies.
e. Europe has been making it easier for workers to gain unemployment benefits
In the short run, a negative demand shock will
a. decrease the price level but leave real GDP unchanged
b. increase the price level but leave real GDP unchanged
c. decrease both the price level and real GDP
d. increase the price level and decrease real GDP
e. decrease the wage rate
Which of the following would shift the entire supply curve for electricity to the left?
a. a decrease in the price per unit of electricity
b. a decrease in the price of coal used to generate electricity
c. new EPA regulations that force the closing of the worst polluting coal-burning power
plants
d. a decrease in the price of alternative forms of energy
e. a technological improvement that reduces the cost of producing electricity
Which of the following mechanisms helps output to return to potential after a supply
shock?
a. A change in the nominal wage
b. Changes in business decision making strategies
c. Changes in the capital stock
d. The rigidity of the price level
e. Changes in inventories.
Positive economic statements are usually easier to refute with data than normative
economic statements are.
Suppose you had the following information regarding the economy:
Which of the following best describes the behavior of the real wage rate?
a. It increased from 2001 to 2002 and increased further from 2002 to 2003.
b. It dropped from 2001 to 2002 and then increased from 2002 to 2003.
c. It dropped from 2001 to 2002 and then remained the same from 2002 to 2003.
d. It increased from 2001 to 2002 and then dropped from 2002 to 2003.
e. It remained the same from 2001 to 2002 and then increased from 2002 to 2003.
The group of economists who believed that the macro economy worked very well on its
own were
a. Micro economists
b. macroeconomists
c. classical economists
d. Keynesian economists
e. Marxist economists
