Exhibit 8-4
A movement from point A to point B on SRAS1could have been the result of
a. a decrease in the price level.
b. an increase in the price level.
c. an adverse supply shock.
d. a beneficial supply shock.
The absolute price of a good is the price of that good in terms of another good.
a. True
b. False
Which of the following statements is false?
a. The Fed serves as the lender of last resort for banks.
b. The Fed serves as a fiscal agent for the U.S. Treasury.
c. A major responsibility of the Fed is to control the nation’s money supply.
d. The federal government is the Fed’s banker.
If the interest rate falls, the opportunity cost of holding money __________ and the
quantity demanded of money __________.
a. rises, rises
b. rises, falls
c. falls, rises
d. falls, falls
At a taxable income of $80,000 Adam’s income tax is $18,400.When his taxable income
rises to $90,000 his income tax is $21,000. Based on this information, Adam’s marginal
tax rate is _____________ percent and his new average tax rate is____________
percent.
a. 3.8; 23.0
b. 23; 26.0
c. 26; 23.3
d. 18; 24.0
e. 21; 23.3
A price ceiling set below the equilibrium price will
a. clear the market for the good.
b. result in a shortage of the good.
c. result in a surplus of the good.
d. induce new firms to enter the industry.
A(n) __________ is a person who was previously employed, hasn’t worked for some
time, and is currently reentering the labor force.
a. discouraged worker
b. entrant
c. reentrant
d. job loser
e. job leaver
If income rises from $1,000 to $1,400 and consumption rises from $800 to $1,168, the
marginal propensity to consume is __________ percent.
a. 8
b. 85
c. 15
d. 92
Economist C says all of the following: Expansionary fiscal policy is needed to raise
aggregate demand and remove the economy from a recessionary gap.The choice of
fiscal policy measures is between ________________ government spending and a
_______________ in taxes.Since I am in favor of bigger government, I choose a(n)
_________________ in_________________.
a. less; decrease; increase; government spending
b. more; decrease; increase; government spending
c. less; rise; decrease; government spending
d. less; reduction; increase; taxes
e. b or d
Which set of prices would you expect to see (posted, quoted) in a barter economy?
a. 1 horse = 10 pieces of gold; 1 kettle = 1 piece of gold
b. 1 horse = 10 kettles; 1 kettle = 1/10 horse
c. 1 horse = $200; 1 kettle = $20
d. 1 horse = 10 kettles; 1 kettle = 10 apples; 1 apple = 1 orange
e. b and d
Income tax revenues rise as income tax rates fall. It follows that the
a. percentage cut in the tax rate is greater than the percentage increase in the tax base.
b. percentage cut in the tax rate is less than the percentage increase in the tax base.
c. percentage cut in the tax rate is equal to the percentage increase in the tax base.
d. marginal tax rate is equal to the average tax rate
e. b and d
Exhibit 6-1
Prices rose by __________ percent from Year 4 to Year 5.
a. 3.90
b. 3.75
c. 4.30
d. 5.90
The typical face value of a corporate bond is $1,000.
a. True
b. False
Exhibit 12-1
If Bank A’s assets rise by 5 percent and its liabilities rise by 3 percent, by what
percentage would its bank capital change compared to its original bank capital (i.e. the
value originally in blank (A))?
a. 2 percent
b. 8 percent
c. 28 percent
d. 40 percent
e. 67 percent