Which of the following correctly describes what the Fed used as monetary targets in the
past?
A) The Fed used M1 and M2 as targets after 1993.
B) The Fed focused on M1 as a target after deregulation of the financial markets.
C) The Fed increased its reliance on interest rate targets since the mid-1990s.
D) After 1980 and before the 1990s, the Fed focused on interest rate targets.
Economic costs of production differ from accounting costs in that
A) economic costs include expenditures for hired resources while accounting costs do
not.
B) economic costs add the opportunity costs of a firm using its own resources while
accounting costs do not.
C) accounting costs include expenditures for hired resources while economic costs do
not.
D) accounting costs are always larger than economic cost.
Economic rent is defined as
A) what you pay to rent your apartment or house.
B) the revenue received by a factor of production with an upward sloping supply curve.
C) the price of a factor of production that is fixed in supply.
D) the surplus received by employing a factor of production in its highest valued use.
Purchases of Huggies diapers should
A) remain fairly constant over the business cycle.
B) increase in recessions and decrease in expansions.
C) decrease in recessions and increase in expansions.
D) increase in recessions and remain constant in expansions.
The demand for soft drinks in the United States has been ________ while the global
demand has been ________.
A) increasing; increasing
B) increasing; decreasing
C) decreasing; increasing
D) decreasing; decreasing
Economists John Cogan, Glenn Hubbard, and Daniel Kessler have estimated that
________ the tax preference for employer-provided health insurance would reduce
spending by people enrolled in these programs by 33 percent.
A) enacting
B) doubling
C) cutting in half
D) repealing
Domestically produced goods and services sold to other countries are referred to as
A) exports.
B) imports.
C) transfer payments.
D) capital outflow.
In the long run, if the demand curve of a monopolistically competitive firm is tangent to
its average total cost curve, then
A) the firm would break even.
B) the firm would shut down temporarily.
C) the firm would earn enough revenue to cover its variable costs, but not its fixed
costs.
D) the firm would earn an economic profit.
Figure 9-1 Figure 9-1 shows the U.S. demand
and supply for leather footwear.
Suppose the government allows imports of leather footwear into the United States.
What will be the quantity demanded?
A) 5 units
B) 10units
C) 15 units
D) 20 units
Figure 22-4
The movement from A to B to C illustrates
A) an improvement in technology.
B) a decline in capital per worker.
C) diminishing returns to capital.
D) diminishing returns to labor.
Consumption spending refers to ________ spending on goods and services.
A) household
B) business
C) government
D) foreign
The quantity theory of money seeks to explain the connection between money and
A) interest rates.
B) unemployment.
C) output.
D) prices.
Based on the following information, what is the balance on the financial account?
Exports of goods and services = $5 billion
Imports of goods and services = $3 billion
Net income on investments = -$2 billion
Net transfers = -$2 billion
Increase in foreign holdings of assets in the United States = $4 billion
Increase in U.S. holdings of assets in foreign countries = -$1 billion A) $3 billion
B) $2 billion
C) $1 billion
D) -$1 billion
Ben’s Peanut Shoppe suffers a short-run loss. Ben will not choose to shut down if
A) his Shoppe’s total revenue exceeds his fixed cost.
B) his Shoppe’s total revenue exceeds his variable cost.
C) his Shoppe’s total revenue exceeds his implicit costs.
D) his Shoppe’s total revenue exceeds his capital costs.
Figure 3-2
An increase in the number of firms in the market would be represented by a movement
from
A) A to B.
B) B to A.
C) S1 to S2.
D) S2 to S1.
Figure 18-2
Which of the events below cause the shifts in the supply and demand curves in the
market for dollars against the British pound shown in the graph above?
A) Interest rates rise in England.
B) Interest rates rise in the United States.
C) Real income rises in the United States.
D) Real income falls in England.
An office supply store sells a ream of printer paper at a fixed price of $4.50. Which of
the following is a term used by economists to describe the money received from the sale
of an additional ream of paper?
A) marginal revenue
B) gross earnings
C) pure profit
D) marginal costs
E) net benefit