Suppose the Federal Reserve wants to increase the money supply. Which combination
of actions would lead to the appropriate effect?
a. Increase the discount rate, decrease the reserve ratio, sell bonds.
b. Increase the discount rate, decrease the reserve ratio, buy bonds.
c. Decrease the discount rate, decrease the reserve ratio, buy bonds.
d. Decrease the discount rate, increase the reserve ratio, buy bonds.
e. Decrease the discount rate, decrease the reserve ratio, sell bonds.
Inflation
a. hurts society by imposing additional opportunity costs
b. is generally harmful, but has the benefit of reducing opportunity costs
c. makes it easier for us to comparison shop
d. benefits society by causing people to make use of resources that would have
otherwise gone to waste
e. benefits society because by making people better consumers, they start to buy only
those consumer goods they really need
Production is productively efficient when
a. the maximum possible output is being produced from a given collection of inputs
b. people are working their hardest
c. no more capital can be substituted for labor
d. technological innovation is no longer desirable
e. workers perform their duties at the expected level, even if they are physically capable
of doing more
If U.S. goods became less desirable to the British, there would be
a. a rightward movement along the supply of British pounds curve in the dollar-pound
market
b. a leftward movement along the supply of British pounds curve in the dollar-pound
market
c. a rightward shift of the supply of British pounds curve in the dollar-pound market
d. a leftward shift of the supply of British pounds curve in the dollar-pound market
e. no change in the supply of British pounds curve in the dollar-pound market
Since the late 1970s, economic growth has
a. occurred at a rapid pace compared to the period 1950-1973
b. improved living standards across the entire population
c. maintained approximately constant living standards across the entire population
d. improved the living standards of less-skilled workers while highly skilled workers
have become worse off
e. improved the living standards of highly skilled workers while less-skilled workers
have become worse off
Which of the following countries achieved economic growth, in part, by reducing its
population growth rate?
a. The former Soviet Union
b. The United States
c. The United Kingdom
d. China
e. Hong Kong
The opportunity cost of a particular activity is the sum of the benefits that could have
been received from all foregone activities.
In the short-run macro model, which of the following increases when government
spending increases?
a. The interest rate
b. Investment spending
c. Taxes
d. Spending on consumer durables
e. The money supply.
In a market economy, most of what we consume is obtained by
a. a command system
b. greed
c. altruism
d. exchange
e. central planning
Crowding out is important only in the classical model.
What is the main factor that explains why government spending typically exceeds
government purchases?
a. Imports exceed exports
b. Transfer payments
c. The federal debt
d. Government budget deficits
e. Construction of schools
A flow variable
a. measures a process that takes place over a period of time
b. is often used to measure the amount of wealth that a household has
c. is related to the supply and demand of water
d. measures a quantity in existence at a moment in time
e. is a definition unique to economics
Assume that GDP growth in a particular country is 4 percent per year. How many years
it will take for GDP to double?
a. 80.0 years.
b. 17.5 years.
c. 10.0 years.
d. 20.0 years.
e. 20.5 years.