Classical economists believed that
a. the government should play an active role in controlling the economy
b. the government can best help the economy by leaving it alone
c. the economy is controlled by the government
d. laissez faire will hurt the economy
e. economists should offer guidance to governmental leaders
Economies organize according to the principle of specialization and exchange because
doing so
Government outlays and government expenditures mean the same thing..
A decrease in government spending would
a. lower the interest rate, which is unlikely to influence private investment spending
b. raise the interest rate and decrease private investment spending
c. lower the interest rate and decrease private investment spending
d. raise the interest rate and increase private investment spending
e. lower the interest rate and increase private investment spending
The total consumer surplus enjoyed by all consumers in a market
Refer to Figure 5-1 above. If the economy moves from point B to C on the graph, it is
going through a(n)
a. peak
b. trough
c. expansion
d. slump
e. recession
The private sector of the economy produces mainly goods that are nonexcludable.
Which of the following goods is likely to have the least elastic demand over the
relevant range of prices?
If the government wants to encourage spending on research and development, it should
a. reduce patent protection so many individuals can use new products in their own
research
b. shorten the number of years during which a developer has exclusive patent rights to
market an invention
c. increase the number of years during which an inventor has exclusive patent rights to
market an invention
d. raise tax rates on corporate profits to raise money for the research
e. encourage firms and households to spend money instead of saving it
Given the environment illustrated in Figure 11-3, the best outcome the firm can achieve
in the short run is
Structural unemployment
a. arises from a mismatch between available jobs and workers’ skills or geographic
location
b. is short-term joblessness experienced by those re-entering the labor force after a long
absence
c. occurs because of changes in seasons, tourist patterns, and similar factors
d. does not occur when the economy is at full employment
e. is joblessness resulting from business cycle movements
What is the role of the Federal Deposit Insurance Corporation?
a. To insure bank deposits
b. To act as a lender of last resort
c. To establish regulations for commercial banks
d. To monitor the actions of commercial banks
e. To insure the assets of commercial banks
If Canada began to export maple syrup to Australia, which of the following will
happen?
a. The price of maple syrup in Australia will increase and Australian consumers will be
made worse off.
b. The price of maple syrup in Australia will decrease and the Australian consumers will
be made better off.
c. The price of maple syrup in Canada will decrease and the Canadian consumers will
be made better off.
d. The price of maple syrup in Canada will increase and the Canadian consumer will be
made worse off.
e. The price of maple syrup in Canada will decrease and the Canadian consumer will be
made worse off.