The difference between microeconomics and macroeconomics is that
a. microeconomics deals with only small numbers while macroeconomics is always
dealing with numbers in the billions and trillions
b. microeconomics deals with the economy as a whole while macroeconomics deals
with individual firms
c. microeconomics is concerned with the behavior of individual decision-makers while
macroeconomics is concerned with behavior of entire economies
d. microeconomics is only useful for small countries while macroeconomics is useful
for large countries
e. microeconomics is only useful for large economies like the United States while
macroeconomics is only useful for small economies
What can be said regarding absolute advantage in production for the two countries
shown in Figure 16-1?
Figure 16-1
Number of workers needed to produce one unit of each of the following goods:
a. Colombia has an absolute advantage in producing both calculators and radios.
b. Korea has an absolute advantage only in producing calculators.
c. Korea has an absolute advantage in producing both radios and calculators.
d. Neither country has an absolute advantage in producing radios.
e. Colombia has an absolute advantage only in producing calculators.
Refer to Figure 8-4. Based on these graphs, what are the equilibrium interest rate and
quantity of loanable funds exchanged?
a. 5 percent and $1.4 trillion
b. 5 percent and $2.2 trillion
c. 8 percent and $1.8 trillion
d. 8 percent and $2.8 trillion
e. It cannot be determined with the information given.
Which of the following is true along the demand curve for labor?
Which economic phenomenon is the short-run macro model most useful in explaining?
a. The sources of employment in the long run
b. The trend of output in the long run
c. The sources of cyclical unemployment
d. The reasons why some workers become discouraged
e. The sources of long-run economic growth
In the dollar-pound market, the equilibrium price of the pound will change
a. only when there is a shift of the demand curve for pounds
b. only when there is a shift of the supply curve for pounds
c. only when there are shifts of both the supply for pounds and demand for pounds
curves
d. whenever there is a shift of either the supply or demand curves for pounds
e. whenever there is movement along either the supply or the demand for pounds curves
If aggregate expenditure is less than GDP, inventories will
a. grow and prices will fall
b. grow and GDP will rise
c. grow and GDP will fall
d. shrink and GDP will rise
e. shrink and GDP will fall
If you use a check to purchase a textbook, the check is
a. the unit of value
b. the means of payment
c. the means of payment and the unit of value
d. outside the monetary system
e. worth less than an equivalent amount of currency
In the classical model, the government needs to worry about employment.
Open market purchases of bonds by the Federal Reserve eventually
a. reduce the pressures on bond markets
b. increase real GDP
c. lead to open market sales of bonds
d. increase the interest rate
e. encourage tax increases
If the Federal Reserve sets a required reserve ratio of 0.2 and a bank has $100 million in
loans and $80 million in deposits, what is the level of required reserves for the bank?
a. $100 million
b. $16 million
c. $80 million
d. $20 million
e. $36 million
Individuals who would like a full-time job but are working only part-time are known as
a. partially unemployed.
b. involuntary part-time workers.
c. freelancers.
d. flexible workers.
e. temporary labor force.
If the interest rate decreases, there will be
a. a movement leftward from one point on the money demand curve to another point on
the same curve
b. no change in the quantity of money demanded
c. a leftward shift of the entire money demand curve caused by a demand shock
d. a rightward shift of the entire money demand curve
e. a movement rightward from one point on the money demand curve to another point
on the same curve
Gerhardt is a bicycle mechanic, and he can repair 6 bikes a day at a market price of
$25.00. If he can’t find any bike shop to hire him,
In the classical model, we include unintended inventory changes.
If the required reserve ratio (RRR) is 10 percent and the Fed sells a $5,000 bond to an
individual who pays for it with a check, the money supply will
a. not change
b. decrease by $4,500
c. increase by $4,500
d. decrease by $5,000
e. increase by $5,000