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Exhibit 34-3
The world price is PW. At this price, Americans purchase Q1 from U.S. producers and
import the quantity __________ from foreign producers.
a. Q4 - Q1
b. Q2 - Q1
c. Q2 - Q4
d. Q2 - Q3
There is no difference between building a theory and evaluating a theory.
a. True
b. False
Economist Jones favors a constant-money-growth-rate rule. She says that if the annual
money supply growth rate each year is equal to the average annual growth rate in Real
GDP, price stability will exist over time. What would economist Smith, who favors
activist monetary policy, say to economist Jones?
a. Your analysis assumes that Real GDP is constant over time, and it is not.
b. Your analysis assumes that velocity is constant, and it is not.
c. Your analysis assumes that you can correctly define the money supply.
d. b and c
e. a, b and c
Bond prices and bond yields have a(n) ______________ relationship.
a. direct
b. inverse
c. independent
d. positive
Exhibit 2-2
If PPF2 is the relevant production possibilities frontier, a significant loss of
resources will
a. move this society from point D to point G on PPF .
b. move this society to PPF .
c. move this society to PPF .
d. not affect this society.
Of all the categories of unemployment, most unemployed persons fall into the category
of
a. reentrant.
b. new entrant.
c. job leaver.
d. job loser.
e. none of the above
Public choice is concerned with
a. relative prices.
b. government decision making.
c. marketing techniques.
d. consumer surveying.
Which of the following statements is false?
a. One of the intended effects of the health-care reform bills passed in March 2010 was
for some people who had health insurance before the reform to choose to become
uninsured after health-care reform.
b. One of the provisions of the health-care reform bills passed in March 2010 is that
individuals will be fined for not buying insurance.
c. Among the provisions in the health-care reform bills passed in March 2010 is that
insurance companies are prohibited from turning down a person with a preexisting
disease.
d. One of the objectives of the health-care reform bills passed in March 2010 was to
bring more people into the pool of insured persons so that insurance policies would
become cheaper.
Suppose that the government implements expansionary fiscal policy that raises
aggregate demand, but the policy is unanticipated.According to new classical theory, in
the short run the price level would ____________ and Real GDP would
______________.In the long run, new classical theory would predict that the price level
would ______________ compared to its original long-run equilibrium level and that
Real GDP would ____________.
a. rise; decline; rise; remain unchanged
b. rise; rise; rise; remain unchanged
c. rise; decline; remain unchanged; rise
d. fall; rise; remain unchanged; rise
Compare a property rights system in which people are allowed to keep one-third of the
monetary rewards of their labor with a system in which they keep two-thirds. We should
expect harder work under the __________ system and less risk taking under the
__________ system.
a. former; former
b. former; latter
c. latter; former
d. latter; latter
Suppose that in year 1 every adult in the country works 40 hours a week and GDP is
$6.7 trillion. In year 2 every adult in the country works 45 hours a week and GDP is
$7.5 trillion. Which of the following statements is true?
a. Per-capita GDP is necessarily higher in year 2 than year 1.
b. People are "better off" in year 2 than in year 1 because there are more goods and
services in year 2 than year 1.
c. Government transfer payments were higher in year 2 than in year 1.
d. a and b
e. none of the above
