1)
Refer to the above diagram. The move of the economy from c to e on short-run Phillips
Curve PC2 would be explained by an:
A.increase in aggregate demand in the economy.
B.increase in aggregate supply in the economy.
C.actual rate of inflation that is less than the expected rate.
D.actual rate of inflation that exceeds the expected rate.
2) in a recent policy change, debeers has decided to:
a.sell off its entire inventory of diamonds.
b.abandon its policy of profit maximization.
c.purchase the entire output of other mines and withhold diamonds from the market to
bolster diamond prices.
d.abandon its 66-year policy of trying to monopolize the sale of rough-cut diamonds.
3) In the balance of payments of the United States, inflows of foreign currencies to the
United States are recorded as:
A.a positive entry.
B.a current account entry.
C.a negative entry.
D.net investment income.
4) the slope of the typical production possibilities curve:
a.is positive.
b.increases as one moves southeast along the curve.
c.is constant as one moves down the curve.
d.decreases as one moves southeast along the curve.
5) which of the following statements is correct?
a.between 1953 and 2007, all growth in u.s. real gdp can be attributed to increases in
labor productivity.
b.between 1953 and 2007, increases in labor productivity account for more of the
growth in u.s. real gdp than do increases in the quantity of labor.
c.between 1953 and 2007, increases in the quantity of labor account for more of the
growth in u.s. real gdp than do increases in labor productivity.
d.between 1953 and 2007, all growth in u.s. real gdp can be attributed to increases in
the quantity of labor.
6) which of the following is not a main function of the entrepreneur?
a.make routine pricing decisions.
b.innovate.
c.assume the risk of economic losses.
d.makes strategic business decisions.
7) If actual reserves in the banking system are $50,000, excess reserves are $5,000, and
checkable deposits are $225,000, then the monetary multiplier is:
A.10.
B.4.
C.5.
D.2.
8) The table below gives data on interest rates and investment demand in a hypothetical
economy. Figures are in billions.
(a)Use the Id1 schedule. Assume that the government needs to finance a budget deficit
and this public borrowing increases the interest rate from 5 percent to 6 percent. How
much crowding-out of private investment will occur?
(b)Now assume that the deficit is used to improve the performance of the economy, and
that as a consequence the investment-demand schedule changes from Id1 to Id2. At the
same time, the interest rate rises from 5 percent to 6 percent as the government borrows
money to finance the deficit. How much crowding-out of private investment will occur
in this case?
(c)Graph the two investment-demand schedules on the graph below and show the
difference between the two events. Put the interest rate on the vertical axis and the
quantity of investment demanded on the horizontal axis.
9)
If the price of each input is $5, the per-unit cost of production in the above economy is:
A.$5.
B.$2.75.
C.$2.50.
D.$.40.
10)
Refer to the above table. The outcomes of the three possible sets of paired-choice
majority votes illustrate the:
A.paradox of voting.
B.inefficiency of logrolling.
C.principal-agent problem.
D.the benefits of majority rule.
11) If D equals the maximum amount of new demand-deposit money that can be
created by the banking system on the basis of any given amount of excess reserves; E
equals the amount of excess reserves; and m is the monetary multiplier, then:
A.m = E/D.
B.D = E m.
C.D = E-1/m.
D.D = m/E.