Todays demand curve for gasoline could shift in response to a change in
a. todays price of gasoline.
b. the expected future price of gasoline.
c. the number of sellers of gasoline.
d. All of the above are correct.
When a country experiences capital flight its interest rate
a. and net capital outflow rise.
b. rises and net capital outflow falls.
c. falls and net capital outflow rises.
d. interest rate and net capital outflow fall.
Table 28-2
Labor Data for Aridia
RefetoTable28-2.The labor-force participation rate of Aridia
a. increased both from 2010 to 2011 and from 2011 to 2012.
b. increased from 2010 to 2011 but decreased from 2011 to 2012.
c. decreased from 2010 to 2011 but increased from 2011 to 2012.
d. decreased both from 2010 to 2011 and from 2011 to 2012.
A nations domestic investment is greater than its savings. Which of the following is
correct?
a. This nation has a negative net capital outflow.
b. This nation has a trade surplus.
c. Purchases of foreign assets by domestic residents exceed purchases of domestic
assets by foreigners.
d. All of the above are correct.
When a country has a comparative advantage in producing a certain good,
a. the country should import that good.
b. the country should produce just enough of that good for its own consumption.
c. the countrys opportunity cost of that good is high relative to other countries
opportunity costs of that same good.
d. None of the above is correct.
Missy recently rearranged her portfolio so that it has a higher average return. As a result
of this rearranging, Missy
a. raised both firm-specific risk and market risk.
b. raised firm-specific risk, but not market risk.
c. raised market risk, but not firm-specific risk.
d. None of the above is correct.
Table 3-20
Assume that Brad and Theresa can switch between producing wheat and producing beef
at a constant rate.
RefertoTable3-20.Brad should specialize in the production of
a. wheat and Theresa should specialize in the production of beef.
b. beef and Theresa should specialize in the production of wheat.
c. both goods and Theresa should specialize in the production of neither good.
d. neither good and Theresa should specialize in the production of both goods.
The available evidence indicates that
a. about one-half of all managers of active mutual funds consistently outperform index
funds.
b. outperforming the market on a consistent basis is extremely difficult to do.
c. there is little truth to the notion that there is a trade-off between risk and return.
d. there is little truth to the efficient markets hypothesis.
Macroeconomists study
a. the decisions of individual households and firms.
b. the interaction between households and firms.
c. economy-wide phenomena.
d. regulations imposed on firms and unions.
Table 24-2
The table below pertains to Pieway, an economy in which the typical consumers basket
consists of 15 bushels of peaches and 10 bushels of pecans.
RefertoTable24-2. If 2012 is the base year, then the CPI for 2013 was
a. 95.7.
b. 100.0.
c. 104.4.
d. 110.0.
If after a country experiences capital flight, people become more confident about the
safety of its assets, then in that country
a. the real exchange rate and the real interest rate will rise.
b. the real exchange rate will rise and the real interest rate will fall.
c. the real exchange rate will fall and the real interest rate will rise.
d. the real exchange rate and the real interest rate will fall.
An economys natural rate of unemployment refers to the amount of unemployment that
the economy normally experiences.
a. True
b. False
What is the present value of a payment of $100 to be made one year from today?
a. $100*(1 + r)
b. $100/(1 + r)
c. $100 – $100 ×r
d. $100 – (1 + r)/$100
Gasoline is considered a final good if it is sold by a
a. gasoline station to a bus company that operates a bus route between San Francisco
and Los Angeles.
b. pipeline operator to a gasoline station in San Francisco.
c. gasoline station to a motorist in Los Angeles.
d. All of the above are correct.
Suppose the Congress and president decreased the maximum annual contributions
limits to retirement accounts and at the same time reduced the budget deficit. What
would happen to the interest rate?
a. It would decrease.
b. It would increase.
c. It would stay the same.
d. It might do any of the above.
Inventors often obtain patents on new products and processes, thereby turning new
ideas into
a. private goods and increasing the incentive to engage in research.
b. private goods but decreasing the incentive to engage in research.
c. public goods and increasing the incentive to engage in research.
d. public goods but decreasing the incentive to engage in research.
Table29-5.
RefetoTable29-5. If the bank faces a reserve requirement of 8 percent, then the bank
a. is in a position to make a new loan of $14,000.
b. has fewer reserves than are required.
c. has excess reserves of $16,400.
d. None of the above is correct.
Table 23-6
The table below contains data for the country of Batterland, which produces only
waffles and pancakes. The base year is 2013.
RefertoTable23-6.In 2010, this countrys GDP deflator was
a. 41.9.
b. 100.
c. 165.0.
d. This cannot be calculated from the information given.
Risk-averse persons will take no risks.
a. True
b. False
In the open-economy macroeconomic model, net capital outflow rises if
a. either the exchange rate rises or the real interest rate falls.
b. either the exchange rate falls or the real interest rate rises.
c. the real interest rate rises. Net capital outflow does not depend on the exchange rate.
d. the real interest rate falls. Net capital outflow does not depend on the exchange rate.
Which of the following is nota valid point in debating the merits of increasing
government expenditures or cutting taxes during a recession?
a. A cut in the marginal tax rate increases the incentives to find a job and work longer
hours.
b. Consumers will save a portion of a tax cut.
c. The government may use the increase in expenditures on projects with little value,
particularly if it wishes to respond quickly.
d. There is no evidence that tax cuts have been followed by increases in economic
growth.
If the Fed followed a rule for monetary policy, the time inconsistency problem would be
eliminated.
a. True
b. False
If new government regulations designed to protect wetlands remove very productive
farmland from production, then the production possibilities frontier will shift inward.
a. True
b. False
The discount rate is
a. the interest rate the Fed charges banks.
b. one divided by the difference between one and the reserve ratio.
c. the interest rate banks receive on reserve deposits with the Fed.
d. the interest rate that banks charge on overnight loans to other banks.
If the reserve requirement is 12 percent and banks desire to hold no excess reserves,
when a bank receives a new deposit of $1,000,
a. it must increase its required reserves by more than $150.
b. its total reserves initially increase by $120.
c. it will be able to make new loans up to a maximum of $880.
d. None of the above is correct.
The opportunity cost of an item is
a. the number of hours that one must work in order to buy one unit of the item.
b. what you give up to get that item.
c. always less than the dollar value of the item.
d. always greater than the cost of producing the item.
The labor-force participation rate equals the percentage of the labor force that is
employed.
a. True
b. False
Table 3-6
Assume that Zimbabwe and Portugal can switch between producing toothbrushes and
producing hairbrushes at a constant rate.
Refer to Table3-6. Which of the following represents Zimbabwes and Portugals
production possibilities frontiers when each country has 60 minutes of machine time
available?
a. Zimbabwe Portugal
b. ZimbabwePortugal
c. ZimbabwePortugal
d. ZimbabwePortugal
Transfer payments
a. are payments that flow from government to households.
b. are not made in exchange for currently produced goods or services.
c. alter household income, but they do not reflect the economys production.
d. All of the above are correct.
To say people respond to incentives means that people may alter their decisions when
the costs and benefits of an action change.
a. True
b. False
Consider two individuals Howard and Mai each of whom would like to wear sweaters
and eat tasty food. The gains from trade between Howard and Mai are least obvious in
which of the following cases?
a. Howard is very good at knitting sweaters and at cooking tasty food, but Mais skills in
both of these activities are very poor.
b. Howard is very good at knitting sweaters and at cooking tasty food; Mai is very good
at knitting sweaters, but she knows nothing about cooking tasty food.
c. Howards skills in knitting sweaters are fairly good, but his skills in cooking tasty
food are fairly bad; Mais skills in knitting sweaters are fairly bad, but her skills in
cooking tasty food are fairly good.
d. Howards skills are such that he can produce only sweaters, and Mais skills are such
that she can produce only tasty food.
Other things the same,when the price level falls, interest rates
a. rise, which means consumers will want to spend more on homebuilding.
b. rise, which means consumers will want to spend less on homebuilding.
c. fall, which means consumers will want to spend more on homebuilding.
d. fall, which means consumers will want to spend less on homebuilding.
Owners of bonds that were issued by the federal government are not required to pay
federal income tax on the interest income.
a. True
b. False