As its capital stock increases, a nation will
a. move rightward along a fixed production function
b. move leftward along a fixed production function
c. find its production function shifting upward
d. find its production function shifting downward
e. experience no change in the marginal product of labor
If you use a check to purchase a textbook, the check is
a. the unit of value
b. the means of payment
c. the means of payment and the unit of value
d. outside the monetary system
e. worth less than an equivalent amount of currency
If the required reserve ratio is 0.2, the demand deposit multiplier is
a. 0.2
b. 0.8
c. 1.25
d. 5.0
e. 8.0
If the dollar-peso exchange rate is 0.01 dollars per peso, what is the rate of pesos per
dollar?
a. 1 peso/dollar
b. 10 pesos/dollar
c. 0.1 peso/dollar
d. 1,000 pesos/dollar
e. 100 pesos/dollar
The 1990 U.S. recession was
a. triggered by a negative supply shock
b. characterized by falling wage rates as the economy began to correct itself
c. relatively painless
d. triggered by a negative demand shock
e. characterized by disinflation
If two goods are substitutes, then
a. an increase in the demand for one of them will lead to an increase in demand for the
other
b. an increase in the demand for one of them will lead to a decrease in demand for the
other
c. an increase in the supply of one of them will lead to an increase in supply of the other
d. an increase in the supply of one of them will lead to a decrease in supply for the other
e. they cannot be produced at the same time
Use the table below to find the real wage in 2007 (in 2006 dollars).
a. $8.06
b. $8.13
c. $8.39
d. $13.00
e. $7.81
Refer to Figure 15-6. Short-run macroeconomic equilibrium occurs at a price level of
a. 120 and real GDP of $5.5 trillion
b. 140 and real GDP of $5.5 trillion
c. 120 and real GDP of $6.5 trillion
d. 120 and real GDP of $7.5 trillion
e. 140 and real GDP of $7.5 trillion.
Which of the following are included in GDP?
a. Traffic congestion
b. Crime
c. Pollution
d. Underground economic activity
e. None of the above
Reducing the government’s budget deficit will certainly increase economic growth.
The formula for determining changes in demand deposits is the reciprocal of the
required reserve ratio (i.e., 1/RRR) multiplied by the change in reserves.
If the Swiss price level fell relative to the British price level, there would be
a. a rightward movement along the supply of British pounds curve in the franc-pound
market
b. a leftward movement along the supply of British pounds curve in the franc-pound
market
c. a rightward shift of the supply of British pounds curve in the franc-pound market
d. a leftward shift of the supply of British pounds curve in the franc-pound market
e. no change of the supply of British pounds curve in the franc-pound market
A decrease in oil prices is considered a demand shock because it would lead to a shift of
the aggregate demand curve.
If a war interrupted oil production, which of the following would most likely happen in
the short run?
a. Unit costs would decrease and there would be an upward movement along the
aggregate supply curve.
b. Unit costs would increase and the aggregate supply curve would shift upward.
c. Unit costs would increase and the aggregate supply curve would shift downward.
d. Unit costs would decrease and the aggregate supply curve would shift upward.
e. Unit costs would increase and there would be movement along the aggregate supply
curve.
How would budget deficit reduction through reduced government spending affect
economic growth?
a. It would not affect economic growth because the budget deficit and economic growth
are unrelated.
b. It would stimulate economic growth.
c. It would hinder economic growth.
d. It would not affect economic growth because the positive and negative effects of
deficit reduction would cancel each other out.
e. It depends on which government programs are cut to achieve deficit reduction.