According to the textbook, L. Frank Baum, the author of The Wonderful Wizard of Oz,
blamed ____________________ for the economic depression of 1893 and the related
hardships faced by farmers and workers.
a. the gold standard
b. the silver standard
c. a massive tornado
d. high taxes
Real business cycle theory would emphasize the ability of a beneficial supply shock to
shift the __________ curve rightward and __________ Real GDP.
a. AD; lower
b. AD; raise
c. LRAS; lower
d. LRAS; raise
With a progressive income tax, as taxable income rises (up to a certain point), one’s tax
rate rises.
a. True
b. False
Suppose that prices in France increase by 8 percent while prices in the United States
remain relatively stable. We would expect that (on the foreign exchange market) the
demand for U.S. dollars will __________ and the supply of U.S. dollars will
__________.
a. increase; decrease
b. increase; increase
c. decrease; decrease
d. decrease; increase
Monetarists can be described as a group of macroeconomists who
a. emphasize the importance of the federal government’s involvement in the economy to
dampen the harmful effects of the business cycle.
b. emphasize the importance of the money supply as a determinant of macroeconomic
activity.
c. tend to view government spending and taxation policy as the chief means of
stabilizing the economy.
d. feel that money should not be created in the private banking system, but only by
government.
The change in the price of a foodstuff will be greater,
a. the smaller the change in the supply of the foodstuff.
b. the greater the change in the supply of the foodstuff and the more inelastic the
demand curve for the foodstuff.
c. the lesser the change in the supply of the foodstuff and the more inelastic the demand
curve for the foodstuff.
d. the greater the change in the supply of the foodstuff and the more elastic the demand
curve for the foodstuff.
e. the lesser the change in the supply of the foodstuff and the more elastic the demand
curve for the foodstuff.
Someone says, “Even though the equilibrium wage rate is $8 an hour in the unskilled
labor market, if we impose a minimum wage of $10 an hour, no one currently working
will lose his or her job.” This person must believe that the
a. demand curve for unskilled labor is vertical.
b. demand curve for unskilled labor is downward-sloping.
c. supply curve for unskilled labor is downward-sloping.
d. supply curve for unskilled labor is horizontal.
e. none of the above.
Absolute real economic growth is an increase in __________ from one period to the
next.
a. GDP
b. Real GDP
c. per-capita Real GDP
d. per-capita GDP
e. none of the above
The Federal Reserve Bank of Minneapolis once chartered a small airplane to deliver
money to a commercial bank that was experiencing a “mad run” on the bank.
a. True
b. False
A market is said to be in disequilibrium if
a. it exhibits either a surplus or a shortage.
b. the number of units that individuals are willing to buy exceeds the number of units
they can afford.
c. it is a market for an inferior good.
d. none of the above
Barter is
a. the exchange of money for goods and then the exchange of those goods for money.
b. the exchange of money for money, or the exchange of money for stocks and bonds.
c. the exchange of goods and services for goods and services without the use of money.
d. any exchange, with or without the use of money, in which the participants negotiate
(or barter) the price of the goods to be exchanged.
The efficiency wage model contains the assumption that labor productivity __________
the wage rate, so that a firm maximizing its profits __________ pay workers an
above-market wage rate.
a. is independent of; may
b. is independent of; will never
c. depends on; may
d. depends on; will never
An advance in technology commonly refers to the ability to produce
a. the same output with a smaller quantity of resources.
b. more output with a fixed quantity of resources.
c. more output with a greater quantity of resources.
d. both a and b
e. both b and c
What does it mean if a person makes a “decision at the margin”?
a. The person compares additional benefits and additional costs when deciding what to
do.
b. The person weighs the good against the bad and then decides what to do.
c. The person is more likely to say yes than to say no.
d. The person compares marginal benefits and total costs and then decides what to do.
e. The person makes a decision based on a condition.
As the price of good Z falls, the quantity demanded of good Z rises, but the quantity
supplied of good Z does not change.Based upon this information we can conclude that
the demand curve for good Z is ________________ and the supply curve for good Z is
________________.
a. downward sloping; upward sloping
b. upward sloping; downward sloping
c. upward sloping; vertical
d. downward sloping; vertical
e. vertical; downward sloping