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Suppose that the population of a country increases. Assuming that people in that
country enjoy eating steak, we would predict that the equilibrium quantity of steak will
________ and the equilibrium price of steak will ________ in that country.
A) rise; rise
B) rise; fall
C) fall; rise
D) fall; fall
If C = 500 + 0.5Y and I = 400, then the equilibrium level of income is:
A) 900.
B) 1,800.
C) 2,500.
D) 4,000.
Table 13.3
Refer to Table 13.3. Total loans of People's Bank equal $ ________.
A) 640,000
B) 560,000
C) 680,000
D) 440,000
Which of the following is an example of seasonal unemployment?
A) lost tax preparation jobs after April 15
B) lost textiles jobs due to a recession
C) lost management jobs after the company Yahoo was bought out by Microsoft
D) lost shoe-making jobs after Nike moved operations to China last winter
Which of the following will cause investments to decrease?
A) an increase in the price level
B) a decrease in the level of income
C) a decrease in the price level
D) a decrease in both income and the price level
Contractionary policies are policies designed to
A) increase the level of real GDP.
B) reduce the level of real GDP.
C) increase government spending.
D) increase the federal deficit.
An increase in government spending will:
A) shift the aggregate expenditure line upwards and decrease equilibrium output.
B) shift the aggregate expenditure line downwards and decrease equilibrium output.
C) shift the aggregate expenditure line upwards and increase equilibrium output.
D) shift the aggregate expenditure line downwards. and increase equilibrium output.
All other things equal, a depreciation of the U.S. real exchange rate causes consumers
to buy ________ domestic goods and ________ foreign goods.
A) more; fewer
B) fewer; fewer
C) more; more
D) fewer; more
The U.S. debt to GDP ratio in 2011 was
A) less than 20 percent.
B) 42.4 percent.
C) 67.7 percent.
D) greater than 85 percent.
If the inflation rate is smaller than the nominal interest rate, the real interest rate is:
A) positive.
B) negative.
C) zero.
D) either positive or zero.
Figure 14.1
Refer to Figure 14.1. A movement from Point A to Point D can be caused by:
A) a decrease in the interest rate.
B) an increase in income.
C) a decrease in the price level.
D) an increase in the interest rate.
