An increase in public saving has what impact on the market for loanable funds?
A) The supply of loanable funds increases.
B) The demand for loanable funds increases.
C) The supply of loanable funds decreases.
D) The demand for loanable funds decreases.
Apple’s decision in 2002 to focus on developing a smartphone rather than a tablet
computer exemplifies the
A) refusal of firms to invest in more than one project where unlimited resources are
involved.
B) refusal of firms to invest in more than one project where limited resources are
involved.
C) trade-off that firms face due to unlimited resources.
D) trade-off that firms face due to limited resources.
Using the Taylor rule, if the current inflation rate exceeds the target inflation rate and
real GDP exceeds potential GDP, then the federal funds target rate ________ the sum of
the current inflation rate plus the real equilibrium federal funds rate.
A) will be greater than
B) will be less than
C) will be the same as
D) may be greater than or less than
If workers and firms have rational expectations, they form their expectations using
A) all the information available to them.
B) only information from the past.
C) only information provided to them by the government.
D) only information gathered from random sources.
When goods and services are produced at the lowest possible cost, ________ occurs.
A) allocative efficiency
B) productive efficiency
C) equity
D) efficient central planning
Today, ________ of Goodyear’s tire sales are in the North America.
A) only 11 percent
B) less than 40 percent
C) 65 percent
D) more than 80 percent
China began pegging its currency, the yuan, to the dollar in 1994. Because the yuan was
________ at the pegged exchange rate, the Chinese government increased its reserves
of ________ as the government purchased more ________ to maintain the pegged
exchange rate.
A) undervalued; dollars; dollars
B) undervalued; yuan; yuan
C) overvalued; yuan; yuan
D) overvalued; dollars; dollars
An increase in the interest rate causes
A) a movement up along the money demand curve.
B) a movement down along the money demand curve.
C) the money demand curve to shift to the left.
D) the money demand curve to shift to the right.
Fiat money has
A) little to no intrinsic value but is backed by the quantity of gold held by the central
bank.
B) little to no intrinsic value and is authorized by the central bank or governmental
body.
C) value, because it can be redeemed for gold by the central bank.
D) a great intrinsic value that is independent of its use as money.
Table 4-2
Refer to Table 4-2. The table above lists the highest prices five consumers are willing to
pay for a concert ticket. If the price of one ticket rises from $20 to $38
A) only three tickets will be sold.
B) consumer surplus decreases from $62 to $12.
C) consumer surplus increases from $88 to $142.
D) no one will buy a ticket.
In the United States in 2012, the percentage of people without some form of private
health insurance was about
A) 17%.
B) 29%.
C) 36%.
D) 83%.
A financial intermediary’s main function is to match ________ with excess funds to
________ with a shortage of funds.
A) savers; borrower
B) borrower; savers
C) governments; households
D) firms; insurance companies
Figure 17-9
Refer to Figure 17-9. A supply shock, such as rising oil prices, would be depicted as a
movement from
A) A to D to C.
B) C to B to A.
C) C to D to A.
D) C to E to B.
E) A to B to C.
If policy makers are concerned that the economy is in danger of rising inflation because
aggregate demand is increasing faster than aggregate supply, the appropriate fiscal
policy response is to
A) increase taxes.
B) increase government spending.
C) use expansionary fiscal policy.
D) increase interest rates.
An open economy is an economy that has
A) interactions in trade or finance with other economies.
B) its own stock market.
C) governmental regulations regarding public information that is included in corporate
finance reports.
D) governmental regulations regarding the number of hours retail establishments must
remain open on a daily basis.
Table 15-5
Refer to Table 15-5. Suppose the table above illustrates the values of real and potential
GDP and the price level, if the Fed does not vote to change their current policy to be
more contractionary or expansionary. Suppose that the Fed uses an appropriate policy
and is successful in keeping real GDP at potential in 2015. State whether each of the
following will be higher or lower than if the Fed had taken no action:
1. Real GDP
2. Potential real GDP
3. The price level
4. The unemployment rate
Table 4-3
Refer to Table 4-3. The table above lists the marginal cost of polo shirts by Marko’s, a
firm that specializes in producing men’s clothing. If the market price of Marko’s polo
shirts is $18
A) Marko’s will produce four shirts.
B) producer surplus from the first shirt is $18.
C) producer surplus will equal $22.
D) there will be a surplus; as a result, the price will fall to $7.
Disposable personal income equals personal income
A) minus personal tax payments.
B) plus government transfer payments.
C) minus personal tax payments plus government transfer payments.
D) minus government transfer payments plus personal tax payments.
An increase in capital outflows from the United States will
A) decrease the balance on the financial account.
B) increase the balance on the financial account.
C) decrease the balance on the capital account.
D) increase the balance on the current account.