Which of the following would decrease the price of packaged hot dogs?
a. An increase in the price of hot dog buns, a complement to packaged hot dogs.
b. A decrease in the price of hamburger meat, a substitute for packaged hot dogs.
c. A technological advance that lowers the cost of producing packaged hot dogs.
d. All of these.
Which of the following will increase the supply of a good?
a. An increase in the price of another good that producers could produce.
b. A lower price paid for resources used in the production of the good.
c. A decrease in the number of sellers.
d. An increase in taxes paid to the government by producers.
The Fed’s countercyclical policy during expansion and prosperity includes:
a. raising the required reserve ratio, raising the discount rate, and selling government
bonds on the open market.
b. raising the required reserve ratio, raising the discount rate, and buying government
bonds on the open market.
c. raising the required reserve ratio, cutting the discount rate, and selling government
bonds on the open market.
d. raising the required reserve ratio, cutting the discount rate, and buying government
bonds on the open market.
e. lowering the required reserve ratio, cutting discount rates, and buying government
bonds on the open market.
The Federal Reserve System is divided into:
a. 2 districts.
b. 12 districts.
c. 26 districts.
d. 50 districts.
e. 1 district.
If a company prepares a statement of retained earnings, net income plus dividends are
added to beginning retained earnings on this statement.
a. True
b. False
Gross domestic product (GDP) includes:
a. intermediate as well as final goods.
b. foreign goods as well as domestically produced goods.
c. used goods sold in the current time period.
d. only final goods and services.
Economists use the phrase “business cycle” when referring to fluctuations in:
a. real GDP.
b. the chain price index.
c. the consumer price index.
d. the general level of prices.
Exhibit 2-7 Production possibilities curve
In Exhibit 2-17, what can we conclude about point Q?
a. It is efficient.
b. It is inefficient.
c. It is unattainable.
d. It gives maximum future growth.
e. It shows underemployed resources.
Which of the following is an important issue in the Keynesian-Monetarist debate?
a. The relative importance of monetary and fiscal policy.
b. The nature of the transmission mechanism through which a change in the money
supply affects the economy.
c. The shape of the investment-demand curve.
d. All of these.
If two goods are complementary, a(n):
a. decrease in the price of one product will cause a decrease in the demand for the other
product.
b. decrease in the price of one product will cause an increase in the demand for the
other product.
c. increase in the price of one product will cause an increase in the supply of the other
product.
d. increase in the price of one product will cause a decrease in the supply of the other
product.
e. increase in the price of one product will cause an increase in the demand for the other
product.
Assume that Coca-Cola and Pepsi-Cola are substitutes. A rise in the price of Coca-Cola
will have which of the following effects on the market for Pepsi?
a. A movement down along the Pepsi demand curve.
b. A rightward shift in the Pepsi demand curve.
c. A movement up along the Pepsi demand curve.
d. A leftward shift in the Pepsi demand curve.