Which of the following factors may lead to an underestimation of the significance of
unemployment when evaluating the overall unemployment rate?
a. Involuntary full-time employment
b. An increase in the number of military personnel
c. Discouraged workers
d. An increase in the number of people under the age of 16
e. A decrease in the number of institutionalized people
Refer to Figure 9-9. The production possibilities frontier tells us that there is a trade-off
between investment in capital and
a. investment in human capital
b. research and development expenditures
c. leisure time available to workers
d. higher living standards in the future
e. living standards in the present
If eight workers can manufacture 70 tables per day and nine workers can manufacture
90 tables per day,
Because it lowers the amount of output per person, unemployment results in
a. a shift in the economy’s production possibilities frontier
b. increased workers’ incomes
c. optimism about economic growth
d. a lower standard of living
e. rapid inflation
Highway traffic is a mixed good because
Which of the following is the correct formula for computing GDP?
a. GDP = consumption + private investment + government spending + exports – imports
b. GDP = consumption + public investment + government spending + exports – imports
c. GDP = consumption + private investment + government spending – exports – imports
d. GDP = consumption + private investment + government spending + transfers
e. GDP = consumption + private investment + tax revenue + transfers
Firms produce too little output
According to Say’s Law, supply creates its own demand.
The Fed responds to money demand shocks by
a. changing the velocity of money
b. changing the money supply
c. following the money creation rules responsible for its success in the past two decades
d. increasing the required reserve ratio
e. changing its definition of the natural rate of unemployment
Providing training to unemployed individuals will help to alleviate
a. frictional unemployment
b. seasonal unemployment
c. structural unemployment
d. cyclical unemployment
e. short-term unemployment
Which of the following could explain a movement from point F to point H in Figure
12-2?
Which of the following factors does not help explain incomplete specialization by
countries that trade in accordance with comparative advantage?
a. There may be high transportation costs for perishable products or human services.
b. The economies of trading partners may be of vastly different sizes.
c. Opportunity costs of production may not be constant, but may vary with the volume
of production.
d. Governments may impose all kinds of barriers to free international trade, such as
tariffs and quotas.
e. The cost of making trade deals may have become extremely low because of the
existence of the World Trade Organization.
An increase in the interest rate shifts the money demand curve to the right.
In macroeconomics, it is impossible to include many individual markets in a single data
source.