As the dollar price of the Mexican peso falls, the __________ Mexican goods will be
for Americans to purchase and the __________ Mexican goods Americans will buy;
thus __________ pesos will be demanded.
a. less expensive; more, more
b. more expensive; fewer, fewer
c. more expensive; more, fewer
d. less expensive; more, fewer
e. none of the above
Which of the following can issue bonds?
a. the government
b. corporations
c. government agencies
d. all of the above
Logrolling is the exchange of votes to gain support for legislation.
a. True
b. False
Major U.S. exports include automobiles and aircraft.
a. True
b. False
Exhibit 15-4
Assume that people have only two choices when it comes to holding their wealth: in
money or in bonds.
In the row of this table containing blank (A), people are holding ______________ of
their wealth in bonds and ________________ of their wealth in money.
a. too much; too little
b. too little; too much
c. just the right amount; too little
d. just the right amount; too much
e. just the right amount; just the right amount
A falling interest rate affects the demand for consumer __________ and shifts the AD
curve to the __________.
a. nondurables; right
b. nondurables; left
c. durables; right
d. durables; left
Exhibit 17-3
Assume that the starting point on the production function is point A.After an increase in
the technology coefficient, there would be a ______________________ which would
shift the LRAS curve from LRAS1 to _______________ resulting in
_______________..
a. movement along the production function to point C; LRAS2; economic growth
b. shift upward of the production function to point B; LRAS2; economic growth
c. movement along the production function to point C; LRAS3; a shrinking economy
d. shift upward of the production function to point B; LRAS3; a shrinking economy
In year 1 the price of good X is $10 and 100 units are bought and sold. In year 2 the
price of good X is $13 and 230 units are bought and sold. What can explain this?
a. The supply of good X was higher in year 2 than in year 1 and the demand for good X
was the same in year 2 as in year 1.
b. The demand for good X was higher in year 2 than in year 1 and the supply of good X
was the same in year 2 as in year 1.
c. Both the demand for, and supply of, good X were higher in year 2 than in year 1.
d. b or c
e. a, b, or c
Exhibit 11-4
If a person’s taxable income is $30,000, how much does he pay in taxes?
a. $4,345
b. $1,400
c. $3,900
d. $4,850
One can determine the consumers€ surplus if the _______________ are known
a. tax paid
b. maximum buying price
c. price paid
d. maximum buying price and price paid
e. maximum buying price and tax paid
As Jamal’s income rises, his demand for pizza does not change. It follows that, for
Jamal, pizza is a(n)
a. normal good.
b. inferior good.
c. neutral good.
d. substitute good.
e. complementary good.
An example of income received but not earned is
a. government transfer payments.
b. undistributed profits.
c. compensation of employees.
d. rental income.
e. a and c
If the Japanese yen trades at $1 = 98 yen, a Honda that sells for $29,000 in the U.S.
would be worth approximately how many yen?
a. 296 yen
b. 28,000 yen
c. 371,000 yen
d. 2,842,000 yen
A business cycle refers to the
a. continued expansion in Real GDP.
b. recurrent swings (up and down) in Real GDP.
c. continued decline in Real GDP.
d. period when Real GDP grows at unusually high rates.
e. none of the above
An economy growing at a steady rate of 2.3 percent per year doubles in size
approximately every __________ years.
a. 50
b. 35
c. 30
d. 43
Suppose the current exchange rate between the U.S. dollar and the Mexican peso is
$0.10 = 1 peso. Furthermore, suppose the price level in the United States rises 15
percent at a time when the Mexican price level is stable. According to the purchasing
power parity theory, what will be the new equilibrium exchange rate?
a. $0.085 = 1 peso
b. $0.13 = 1 peso
c. $0.15 = 1 peso
d. $0.115 = 1 peso
e. none of the above
If Real GDP is less than Natural Real GDP, the economy is in
a. an inflationary gap.
b. a recessionary gap.
c. an unemployment gap.
d. a real gap.