The price/earnings (PE) ratio of a stock is found by
Instead of throwing away a worn-out pair of jeans, a cowboy trades them in for $12.
The jeans are resold for $45 to someone who likes to project a rugged image. These
transactions are Pareto improvements.
The total loss associated with the 2005 Hurricanes Katrina and Rita are estimated to be
between
a. $40 and $60 billion
b. $69 and $130 billion
c. $69 and $80 billion
d. $70 and $80 billion
e. $140 and $200 billion
In the short run, movements in exchange rates are caused largely by economic
fluctuations.
As the wage rate increases for computer programmers, the
The aggregate supply curve is
a. the sum of all individual firms’ supply curves.
b. vertical in the short run.
c. downward sloping in the short run.
d. upward sloping in the short run.
e. upward sloping both in the short run and the long run.
Everything else equal, technological change will typically
a. move the economy along a fixed production function, increasing both productivity
and output
b. move the economy along a fixed production function, increasing output but lowering
productivity
c. cause the production function to shift upward, increasing both output and
productivity
d. cause the production function to shift upward, increasing output but lowering
productivity
e. cause the production function to shift upward, increasing output but leaving
productivity unchanged
The AD-AS model implies that, in the long run,
a. the economy adjusts very quickly to demand shocks
b. changes in government spending have no effect on GDP
c. the price level never changes
d. a mixture of fiscal and monetary policy is necessary to achieve full employment
e. the Fed controls output
M1 and M2 are
a. usually equal
b. aggregates that, when added together, encompass all methods of payment
c. nonofficial measures of the U.S. money supply
d. both measures of the U.S. money supply
e. the best way to measure the U.S. money supply
Which of the following would lead to a rightward shift of the money demand curve?
a. A decrease in the price level
b. A decrease in output
c. An open market sale of bonds by the Fed
d. An increase in the price level
e. An open market purchase of bonds by the Fed
In the short-run macro model, an open-market purchase of bonds by the Fed will
a. raise the interest rate, reduce spending, and increase output
b. raise the interest rate, reduce spending, and decrease output
c. lower the interest rate, reduce spending, and decrease output
d. lower the interest rate, increase spending, and decrease output
e. lower the interest rate, increase spending, and increase output
For which of the following categories of goods is demand likely to be the most price
elastic?
Suppose that the inflation rate was 4 percent in 2002 and 3 percent in 2003. This would
mean that
a. the price level fell from 2002 to 2003
b. the price level fell at a faster rate in 2003 than in 2002
c. the price level rose at a faster rate in 2003 than in 2002
d. the price level rose at a slower rate in 2003 than in 2002
e. all prices in the economy rose at a rate of 3 percent in 2003
Refer to Figure 15-6. Short-run macroeconomic equilibrium occurs at a price level of
a. 120 and real GDP of $5.5 trillion
b. 140 and real GDP of $5.5 trillion
c. 120 and real GDP of $6.5 trillion
d. 120 and real GDP of $7.5 trillion
e. 140 and real GDP of $7.5 trillion
The table below shows the total present value of additional revenue from DVD players
at Video Wizard, a business that rents audiovisual equipment. If the price of a DVD
player is $450, what will be Video Wizard’s total investment expenditure on cash
registers?
Which of the following would be strictly a microeconomic topic?