All of the following are important provisions of the Sarbanes-Oxley Act except:
a. The establishment of a new Public Company Accounting Oversight Board.
b. The requirement to prepare both FASB and IASB financial statements.
c. A requirement that the external auditors report directly to the company’s audit
committee.
d. A clause to prohibit public accounting firms that audit a company from providing any
other services that could impair their ability to act independently in the course of their
audit.
If the Fed wants to raise interest rates, then it can use its open market operations to:
a. increase the money supply.
b. decrease the money supply.
c. increase money demand.
d. decrease money demand.
Cost-push inflation is due to:
a. “too much money chasing too few goods”.
b. the economy operating at full employment.
c. increases in production costs.
d. all of these.
Which of the following statements is true?
a. The doctrine of laissez-faire advocates an economic system with extensive
government intervention and little individual decision-making.
b. In capitalism income is distributed on the basis of need.
c. Adam Smith was the father of socialism.
d. Most real-world economies are mixed economic systems.
e. The “invisible hand” refers to government economic control.
Expansionary fiscal policy consists of:
a. increasing government spending.
b. increasing payroll taxes to finance health care.
c. decreasing government spending.
d. raising the minimum wage.
In international trade, an infant industry is one:
a. that protects firms that produce products for infants.
b. with a large number of very small firms.
c. in which the firms are experiencing very small profits.
d. in the early stages of its development.
The aggregate supply curve:
a. shows the level of real GDP produced in the economy at different possible price
levels during a period of time.
b. is horizontal in the Keynesian range.
c. is vertical in the classical range.
d. all of these.
Unemployment compensation payments:
a. rise during a recession and thus reduce the severity of the recession.
b. rise during a recession and thus increase the severity of the recession.
c. rise during inflationary episodes and thus reduce the severity of the inflation.
d. fall during a recession and thus increase the severity of the recession.
The Japanese demand curve for dollars is downward-sloping because a:
a. higher number of yen per dollar means U.S. goods are cheaper in Japan.
b. lower number of yen per dollar means U.S. goods are cheaper in Japan.
c. lower number of yen per dollar means U.S. goods are more expensive in Japan.
d. lower number of yen per dollar means U.S. goods are less expensive in the U.S.
Assume the economy is experiencing a recessionary gap. Keynesian economists would
support which of the following policies?
a. Nonstabilization
b. Expansionary
c. Nonintervention
d. Fixed wage
Exhibit 16-5 Money, investment and product markets
In Exhibit 16-5, when the money supply increases from MS1 to MS2, the equilibrium
interest rate:
a. remains unchanged.
b. increases from i2 to i1, increasing investment spending from I1 to I2.
c. increases from i2 to i1, decreasing investment spending from I2 to I1.
d. decreases from i1 to i2, increasing investment spending from I1 to I2.
e. decreases from i1 to i2, decreasing investment spending from I2 to I1.
Exhibit 2-8 Production possibilities curve data A BCDEF
Capital goods 15 14 12 9 5 0
Consumer goods 0 2 4 6 8 10 As shown in Exhibit 2-8, the concept of increasing
opportunity costs is reflected in the fact that:
a. the quantity of consumer goods produced can never be zero.
b. the labor force in the economy is homogeneous.
c. greater amounts of capital goods must be sacrificed to produce an additional 2 units
of consumer goods.
d. a graph of the production data is a downward-sloping straight line.
Which of the following is not a way to become officially unemployed?
a. Quit your job to look for a better job in another part of the country.
b. Be fired from your job.
c. Look for a job after being out of the civilian labor force for five years.
d. Retire.
e. Look for a job only for the period in the summer that you are out of school.
Exhibit 18-4 Coffee and tea output (pounds per hour) Country CoffeeTea
Brazil 10 5
China 8 8 If specialization were carried out by each country in Exhibit 18-4 on the basis
of comparative advantage, then:
a. Brazil would produce neither coffee nor tea.
b. China would produce both coffee and tea.
c. Brazil would produce tea and China would produce coffee.
d. Brazil would produce coffee and China would produce tea.
The law of demand is illustrated by a demand curve that is:
a. horizontal.
b. downward-sloping.
c. vertical.
d. upward-sloping.
UnderArmouris an example of a service provider.
a. True
b. False
If M = 200, P = 100, and Q = 10, then V is:
a. 20.
b. 2.
c. 10.
d. 5.
e. 2,000.
An economic system characterized by private ownership of the factors of production
and economic activity coordinated through a system of markets and prices is called:
a. capitalism.
b. socialism.
c. communism.
d. none of these.