Which of the following is not an example of inflation causing a redistribution of income
because the inflation was unanticipated?
A) A firm signs a 3-year contract with a union based on a 2 percent anticipated rate of
inflation per year, and the actual rate of inflation ends up being 7 percent per year.
B) A worker receives a raise in salary that is less than the rate of inflation, because
management under-predicted inflation.
C) Firms have to hire an extra worker to change prices in its store because of inflation.
D) A bank collects a lower amount of interest from a loan because inflation was
under-predicted.
If inventories decline by more than analysts predict they will decline, this implies that
A) actual investment spending was greater than planned investment spending.
B) actual investment spending was less than planned investment spending.
C) actual investment spending was equal to than planned investment spending.
D) there is no relationship between actual investment spending and planned investment
spending.
One would speak of a movement along a supply curve for a good, rather than a change
in supply, if
A) the cost of producing the good changes.
B) supplier expectations about future prices change.
C) the price of the good changes.
D) prices of substitutes in production change.
Table 4-4
Table 4-4 shows the demand and supply schedules for the low-skilled labor market in
the city of Westover.
Refer to Table 4-4. If a minimum wage of $10.00 an hour is mandated, what is the
quantity of labor supplied?
A) 390,000
B) 370,000
C) 350,000
D) 40,000
If in the market for bananas the supply curve has shifted to the right, then
A) the supply of bananas increased.
B) the quantity of bananas supplied has increased.
C) the supply of bananas has decreases.
D) the quantity of bananas supplied has decreased.
Izzy Amador is a highly talented tattoo artist. She has chosen to specialize in tattoo art
because of all of the followingexcept
A) her tattoos are highly esteemed by tattoo lovers who are willing to pay very high
prices.
B) for her, this is the most lucrative way to purchase the products that she wants to
consume.
C) her opportunity cost of pursuing another career is very low.
D) she obviously has a comparative advantage in tattoo art.
Which of the following is not an assumption made by the dynamic model of aggregate
demand and aggregate supply?
A) Potential real GDP increases continuously.
B) The aggregate demand curve shifts to the right during most periods.
C) The short-run aggregate supply curve shifts to the right except during periods when
workers and firms expect higher wages.
D) Aggregate demand and potential real GDP decrease continuously.
If real GDP increases we know for sure that
A) output has risen.
B) prices have risen.
C) prices have risen but output has remained constant.
D) prices have remained constant.
In a closed economy, which of the following components of GDP is not included?
A) investment
B) government spending
C) net exports
D) consumption
Trade restrictions are often motivated by a desire to save domestic jobs threatened by
competition from imports. Which of the following counter-arguments is made by
economists who oppose trade restrictions?
A) Statistics show that trade restrictions actually do not save jobs.
B) Consumers pay a high cost for jobs saved through trade restrictions.
C) Trade restrictions have a limited impact because most Americans prefer domestic
goods over imports.
D) Trade restrictions benefit consumers in the short run but not in the long run.
Which of the following is an example of a worker experiencing cyclical
unemployment?
A) a worker who changes jobs to move closer her family
B) an assembly line worker who loses his job because of automation
C) a freightliner employee that got laid off because of the recession of 2007-2009
D) a lifeguard who was hired during the summer season is laid off after summer is over
E) a worker who quits his job because he does not get along with his boss
A falling price level is called ________ and a fall in the rate of inflation is called
________.
A) disinflation; a contraction
B) a contraction; disinflation
C) disinflation; deflation
D) deflation; disinflation
The ________ in the United States is best described as a managed float exchange rate
system.
A) earliest used exchange rate system
B) current exchange rate system
C) exchange rate system used prior to the great depression
D) exchange rate system set up at the end of World War II
Gross domestic product understates the total production of final goods and services
because of the omission of
A) the underground economy.
B) intermediate goods.
C) inflation.
D) exports.