Increased production, but not increased inflation, will result in higher:
a. nominal GDP.
b. money GDP.
c. real GDP.
d. current dollar GDP.
An increase in the real rate of interest that can be earned on U.S. investments above the
rate that can be earned on investments in India would:
a. increase the price of the dollar in Indian rupees.
b. increase the supply of dollars by those holding U.S. dollars.
c. decrease the equilibrium exchange rate of Indian rupees per dollar.
d. all of these.
Canyon Corporation
The accountant for the Canyon Corporation prepared the following list from the
company’s accounting records for the year ended December 31, 2014:
Read the information for Canyon Corporation. Determine the following amounts for
Canyon Corporation: A) Total revenues for 2014
B) Total expenses for 2014
C) Net income for 2014
Suppose the Organization of Petroleum Exporting Countries (OPEC) sharply increased
the price of oil, which triggered higher inflation rates in the United States. This type of
inflation is best classified as:
a. pseudo-inflation.
b. demand-pull inflation.
c. cost-push inflation.
d. hyperinflation.
Real GDP means GDP:
a. valued at prices in a base year.
b. that does not change from year to year.
c. corrected for changes in quality.
d. valued at prices at which goods are actually sold.
Which of the following statements is true?
a. The inclusion of intermediate goods and services into GDP calculations would
underestimate our nation’s production level.
b. The expenditures approach sums the compensation of employees, rents, profits, net
interest, and nonincome expenses for depreciation and indirect business taxes.
c. Real GDP has been adjusted for changes in the general level of prices due to
inflation.
d. Real GDP equals nominal GDP multiplied by the GDP deflator.
The production possibilities curve for the nation of Economania shifts to the right. This
could have been caused by:
a. a decrease in Economania’s capital stock.
b. a decrease in the Economania’s labor supply.
c. high unemployment in Economania the previous time period.
d. Economania producing all consumer goods in the previous period.
e. technological innovation in the production of Economania goods.
A reduction in production costs will result in a(n):
a. rightward shift of the supply curve.
b. increase in supply.
c. greater willingness and ability of producers to supply a larger quantity at any given
price.
d. greater willingness and ability of producers to supply the same quantity at a lower
price.
e. all of these.
The law of demand is graphically demonstrated by a(n):
a. perfectly vertical demand curve.
b. perfectly horizontal demand curve.
c. downward-sloping demand curve.
d. upward-sloping demand curve.
e. curved demand line.
If a country has a lower opportunity cost of producing oranges, then this is:
a. inefficient resource use.
b. an absolute advantage.
c. a tariff.
d. a comparative advantage.
e. a situation where oranges should be imported.
Which of the following is true about the production possibilities curve when a
technological progress occurs? The curve:
a. shifts inwards to the left.
b. becomes flatter at one end and steeper at the other end.
c. becomes steeper.
d. shifts outward to the right.
e. does not change.
Sawaddee Enterprises began the year with total assets of $450,000 and total liabilities
of $230,000. If Sawaddee’s total assets doubled to $900,000 and its owners’ equity
remained the same during the year, what was the amount of its total liabilities at the end
of the year?
a. $670,000
b. $680,000
c. $440,000
d. $900,000