If nominal GDP rises we can say that
A) production has risen and prices remain constant.
B) prices have risen and production remains constant.
C) production has risen or prices have risen or both have risen.
D) production has fallen and prices have risen.
The public choice model raises questions about the government’s ability to regulate
economic activity efficiently. Which of the following statements represents the views of
most economists with regard to the role of government?
A) Congress should abolish the Food and Drug Administration, the Environmental
Protection Agency and other agencies and commissions because the costs of their
actions exceed the benefits they provide to the public.
B) Government should do more to regulate markets. The public choice model has
shown that rent seeking and rational ignorance affect more markets than are currently
subject to regulation.
C) U.S. citizens can afford more government regulation if the cost of this regulation is
borne mostly by taxpayers with the highest incomes.
D) Agencies such as the Food and Drug Administration and the Environmental
Protection Agency can serve a useful purpose, but we need to take the costs of
regulation into account along with the benefits.
How do a sole proprietorship and a corporation differ?
A) Proprietorships have unlimited liability while corporations have limited liability.
B) Corporations can issue stocks and bonds, while proprietorships cannot.
C) Corporations face more taxes than do proprietorships.
D) All of these are differences between the two types of businesses.
How does an increase in government spending affect the aggregate expenditure line?
A) It shifts the aggregate expenditure line upward.
B) It shifts the aggregate expenditure line downward.
C) It increases the slope of the aggregate expenditure line.
D) It decreases the slope of the aggregate expenditure line.
The current account does not include which of the following?
A) net exports
B) net investment income
C) net transfers
D) U.S. holdings of foreign assets
Table 2-16
Table 2-16 shows the number of labor hours required to produce a cell phone and a
board foot of lumber in Estonia and Finland. If the two countries specialize and trade,
who should export lumber?
A) There is no basis for trade between the two countries.
B) Estonia
C) Finland
D) They should both be exporting lumber.
Under the Patient Protection and Affordable Care Act (ACA), every company with
more than 200 employees must offer health insurance to its employees and must
automatically enroll them in the plan.
In 2013, the U.S. auto industry experienced rising sales. The automobile industry was
experiencing the effects of
A) inflation.
B) the underground economy.
C) the business cycle.
D) depreciation.
An economy that has interactions in trade or finance with other economies is referred to
as
A) an open economy.
B) a closed economy.
C) a trade-balanced economy.
D) a net foreign investment economy.
A tax rebate, like the one issued in 2008, is likely to ________ consumption spending
________ than would a permanent tax cut.
A) increase; more
B) increase; less
C) decrease; more
D) decrease; less
In the United States from 1981 to 2011, deaths from ________ increased largely due to
the effects of increasing obesity.
A) strokes
B) cancer
C) heart attacks
D) diabetes
Given the equations for C, I, G, and NX below, what is the marginal propensity to
consume? C = 1,000 + 0.8Y
I = 1,500
G=1,250
NX = 100 A) 0.2
B) 0.8
C) 1.8
D) 10
The GDP deflator is the
A) difference between real GDP and nominal GDP multiplied by 100.
B) difference between nominal GDP and real GDP divided by 100.
C) ratio of real GDP to nominal GDP multiplied by 100.
D) ratio of nominal GDP to real GDP multiplied by 100.