The value of net exports equals the value of
a. national saving.
b. public saving.
c. national saving – net capital outflow.
d. national saving – domestic investment.
The adult population must equal the sum of the employed and the unemployed.
a. True
b. False
Who was reappointed Chair of the Board of Governors in 2009 by President Barrack
Obama?
a. Ben Bernanke
b. Christina Romer
c. Timothy Geithner
d. Bernie Madoff
The ratio of debt to GDP in the United States
a. tends to rise during wars.
b. rose during the decade that began in 2001.
c. fell during the late 1990s.
d. All of the above are correct.
Economists at the Congressional Budget Office estimated that for 2012, the U.S. natural
rate of unemployment was
a. 1.5%.
b. 3.0%.
c. 5.5%.
d. 8.5%.
A rational decisionmaker
a. ignores marginal changes and focuses instead on “the big picture.”
b. ignores the likely effects of government policies when he or she makes choices.
c. takes an action only if the marginal benefit of that action exceeds the marginal cost of
that action.
d. takes an action only if the combined benefits of that action and previous actions
exceed the combined costs of that action and previous actions.
For any given year, the CPI is the price of the basket of goods and services in the
a. given year divided by the price of the basket in the base year, then multiplied by 100.
b. given year divided by the price of the basket in the previous year, then multiplied by
100.
c. base year divided by the price of the basket in the given year, then multiplied by 100.
d. previous year divided by the price of the basket in the given year, then multiplied by
100.
If the supply of loanable funds shifts right, then the equilibrium
a. interest rate falls, so domestic residents will want to purchase more foreign assets.
b. interest rate falls, so domestic residents will want to purchase fewer foreign assets.
c. interest rate rises, so domestic residents will want to purchase more foreign assets.
d. interest rate rises, so domestic residents will want to purchase fewer foreign assets.
The unemployment that results from the quantity of labor supplied exceeding the
quantity demanded is called structural unemployment.
a. True
b. False
A surplus is the same as an excess demand.
a. True
b. False
If the MPCis 0.8 and there are no crowding-out or accelerator effects, then an initial
increase in aggregate demand of $120 billion will eventually shift the aggregate
demand curve to the right by
a. $216 billion.
b. $150 billion.
c. $600 billion.
d. $480 billion.
Table 28-8
Below is data about the labor market in the state of Northwoods.
RefetoTable28-8.If the state government imposed a minimum wage of $9, how many
people would be unemployed?
a. 0
b. 10,000
c. 20,000
d. 40,000
Figure 2-2
RefertoFigure2-2. Boxes C and D of this circular-flow diagram represent
a. households and government.
b. firms and government.
c. the markets for goods and services and the markets for financial assets.
d. the markets for goods and services and the markets for factors of production.
Figure 33-8.
RefertoFigure33-8. Suppose the economy starts at Z. If changes occur that move the
economy to a new short run equilibrium of P1and Y1, then it must be the case that
a. short run aggregate supply has decreased.
b. short run aggregate supply has increased.
c. aggregate demand has increased.
d. aggregate demand has decreased.
Right-to-work laws give workers in a unionized firm the right to choose whether to join
the union.
a. True
b. False
When computing the opportunity cost of attending a basketball game you should
include
a. the price you pay for the ticket and the value of your time.
b. the price you pay for the ticket, but not the value of your time.
c. the value of your time, but not the price you pay for the ticket.
d. neither the price of the ticket nor the value of your time.
A decrease in the number of sellers in the market causes
a. the supply curve to shift to the left.
b. the supply curve to shift to the right.
c. a movement up and to the right along a stationary supply curve.
d. a movement downward and to the left along a stationary supply curve.
Suppose a bank is operating with a leverage rate of 10. A 6 percent increase in the value
of assets
a. will reduce liabilities by 6 percent.
b. will result in a 60 percent increase in owner’s equity.
c. will result in a 60percent decrease in owner’s equity.
d. will reduce liabilities by 10 percent.
Arlo is offered a job in Des Moines, where the CPI is 80, and a job in New York, where
the CPI is 125. Arlo’s job offer in Des Moines is for $42,000. How much does the New
York job have to pay in order for the two salaries to represent the same purchasing
power?
a. $42,000
b. $65,625
c. $68,880
d. $189,000
When quantity supplied exceeds quantity demanded at the current market price, the
market has a surplus, and market price will likely rise in the future to eliminate the
surplus.
a. True
b. False
Table 28-7
Below is data about the labor market in the city of Productionville.
RefetoTable28-7.If the local government imposed a minimum wage of $6 in
Productionville, how many people would be unemployed?
a. 0
b. 2,000
c. 3,000
d. 5,000
In which case is velocity the highest?
a. the price level equals 4, the money supply equals 5,000, and output equals 20,000.
b. the price level equals 4, the money supply equals 20,000 and output equals 5,000.
c. the price level equals 2, the money supply equals 5,000, and output equals 20,000.
d. the price level equals 2, the money supply equals 20,000 and output equals 5,000.
Mandy purchases 68.2 shares of a mutual fund for $1,500. Cassie’s purchase of these
shares contributes $1,500 to which magnitude in the identity Y= C+ I+ G?
a. C
b. I
c. G
d. None of the above are correct.
The effects of foreign competition on the U.S. textile industry would be studied by a
microeconomist rather than a macroeconomist.
a. True
b. False
The value of money falls. This might be because the Federal Reserve
a. bought bonds, which increased the money supply.
b. bought bonds, which decreased the money supply.
c. sold bonds, which increased the money supply.
d. sold bonds, which decreased the money supply.
Over the last century, U.S. real GDP per person grew at a rate of about
a. 2 percent per year, so that it is now 2 times as high as it was a century ago.
b. 2 percent per year, so that it is now 8 times as high as it was a century ago.
c. 4 percent per year, so that it is now 2 times as high as it was a century ago.
d. 4 percent per year, so that it is now 8 times as high as it was a century ago.
Which of the following statements best represents economists’ beliefs about the bias in
the CPI as a measure of the cost of living?
a. Economists agree that the bias in the CPI is a very serious problem.
b. Economists agree that the bias in the CPI is not a serious problem.
c. Economists agree on the severity of the CPI bias, but there is still debate on what to
do about it.
d. There is still debate among economists on the severity of the CPI bias and what to do
about it.
Some persons are counted as out of the labor force because they have made no serious
or recent effort to look for work. However, some of these individuals may want to work
even though they are too discouraged to make a serious effort to look for work. If these
individuals were counted as unemployed instead of out of the labor force, then
a. both the unemployment rate and labor-force participation rate would be higher.
b. the unemployment rate would be higher ,and the labor-force participation rate would
be lower.
c. the unemployment rate would be lower, and the labor-force participation rate would
be higher.
d. both the unemployment rate and labor-force participation rate would be lower.
Assuming constant returns to scale, if two countries are otherwise the same, the one that
is poorer grows faster.
a. True
b. False
Which of the following does purchasing-power parity conclude should equal 1?
a. both the nominal and the real exchange rate.
b. the nominal exchange rate but not the real exchange rate
c. the real exchange rate but not the nominal exchange rate
d. neither the nominal exchange rate nor the real exchange rate
The set of items that serve as media of exchange clearly includes
a. balances that lie behind debit cards.
b. demand deposits.
c. other checkable deposits.
d. All of the above are correct.
Last year real GDP in the imaginary nation of Populia was 907.5 billion and the
population was 3.3 million. The year before real GDP was 750 billion and the
population was 3 million. What was the growth rate of real GDP per person during the
year?
a. 10 percent
b. 14 percent
c. 17 percent
d. 21 percent