Which of the following is a characteristic of perfect competition?
The formula for labor productivity is given by
a. employment / output.
b. output / population.
c. output / employment.
d. population / output.
e. output / number of firms.
In the mid-1980s the natural rate of unemployment in the U.S. was about __________
while at present it is about __________.
a. 10%; 2.5%
b. 6.5%; 4.5%
c. 4.5%; 6.5%
d. 6.5%; 6.2%
e. 6.5%; 10.0%
In the 1980s, several ________________ countries experienced inflation rates of
thousands of percent per year.
a. Asian
b. Southern European
c. Eastern European
d. Latin American
e. African
If net taxes are cut, consumer
a. spending is not affected
b. spending increases by the amount of the tax cut
c. spending increases by an amount less than the full amount of the tax cut
d. saving increases by the full amount of the tax cut
e. spending increases by two-thirds of the amount of the tax cut and consumer saving
increases by one-third of the amount of the tax cut
In deciding where to operate along its production possibilities frontier, a society is
answering the question of
Nancy buys a $150,000 home using $30,000 of her own money and gets a mortgage for
the remaining $120,000. If the price of the house increases 5%, what will Nancy’s
capital gain be?
You have a bond that you can redeem for $10,000 one year from now. The interest rate
is 3 percent (0.03) per year. How much is the bond worth today?
When we study macroeconomics,
a. we model tens of thousands of individual supply and demand curves
b. we determine thousands of prices and quantities
c. we employ aggregation to reduce the number of markets we need to understand
d. we add up all the demand and supply curves that are obtained in microeconomics
e. we add up the prices of all goods and services produced in the economy
A banking panic occurs when
a. many banks fail simultaneously
b. banks do not earn enough profit
c. a bank exhausts all of its vault cash
d. individuals cannot withdraw money from a bank
e. bank officials fear they have made too many bad loans
Refer to Figure 11-8. If YFErepresents the full-employment level of output, what can
we say about the state of the economy at Y1?
a. It is in equilibrium, but below full employment.
b. It is in equilibrium, and therefore at full employment.
c. It is in equilibrium, but above full employment.
d. It is not in equilibrium, and output will increase.
e. It is not in equilibrium, and output will fall.
A Pareto improvement is any action that makes at least one individual better off, and
harms no one.
The Bureau of :Labor Statistics has been compiling an experimental CPI for the elderly,
called CPI-E.
A shipping company can buy either a new truck or a used truck. Each truck will
generate $4,000 in net revenue per year. But the new truck has a useful life of three
years, whereas the used truck has a useful life of only two years. If the interest rate is 5
percent (0.05) per year, what is the difference in value between the two trucks? (Assume
that each year’s revenue is received at the end of the year.)
The classical model predicts the real GDP will always be
a. rising.
b. falling.
c. equal to its full-employment level.
d. constant.
e. equal to its full-taxation level.
If there is an increase in the interest rate,
a. there will be a rightward movement along a stationary money demand curve
b. there will be a leftward movement along a stationary money demand curve
c. the demand curve for money will shift rightward
d. the demand curve for money will shift leftward
e. there will be no movement of the demand curve for money and no movement along it