You’re traveling in Japan and are thinking about buying a new kimono. You’ve decided
you’d be willing to pay $175 for a new kimono, but kimonos in Japan are all priced in
yen. If the kimono you’re looking at costs 14,000 yen, under which of the following
exchange rates would you be willing to purchase the kimono? (Assume no taxes or
duties are associated with the purchase.)
A) 24.5 yen per dollar
B) 65 yen per dollar
C) 80 yen per dollar
D) You would purchase the new kimono at any of the above exchange rates.
How can a proprietorship or partnership raise funds for expansion?
A) borrow from someone or an institution willing to lend the funds
B) reinvest profit back into the business
C) take on a partner or more partners
D) Any of these would generate funds for expansion.
In the United States from 1981 to 2011, deaths from which of the following increased?
A) cancer
B) kidney disease
C) heart attacks
D) strokes
The Great Depression of the 1930s with a large number of workers and factories
unemployed would be represented in a production possibilities frontier graph by
A) a point inside the frontier.
B) a point outside the frontier.
C) a point on the frontier.
D) an intercept on either the vertical or the horizontal axis.
Assuming no change in the nominal exchange rate, how will a lower rate of inflation in
the United States relative to Canada affect the real exchange rate between the two
countries? (Assume the United States is the “domestic” country.)
A) The real exchange rate will rise.
B) The real exchange rate will fall.
C) The real exchange rate will be unaffected.
D) The impact on the real exchange rate cannot be predicted.
If the price of orchids falls, the substitution effect due to the price change will cause
A) an increase in the demand for orchids.
B) an increase in the demand for roses, a substitute for orchids.
C) an increase in the quantity demanded of orchids.
D) an increase in the quantity supplied of orchids.
A monopoly is characterized by all of the following except
A) there are only a few sellers each selling a unique product.
B) entry barriers are high.
C) there are no close substitutes to the firm’s product.
D) the firm has market power.
Which of the following is one reason for the decline in aggregate demand that led to the
recession of 2007-2009?
A) falling oil prices
B) increases in housing prices
C) the financial crisis
D) a decline in government spending
The labor force participation rate equals the
A) (number of employed divided by the labor force) 100.
B) (labor force divided by the number of people not in the labor force) 100.
C) (labor force divided by working-age population) 100.
D) (labor force divided by the total population) 100.
A stock market crash which causes stock prices to fall should cause
A) a decrease in consumption spending.
B) an increase in consumption spending.
C) an increase in wealth.
D) no change in consumption spending.