Archives: Quiz

The primary purpose of measuring the overall level of prices in the economy is to a. allow for the measurement of GDP. b. allow consumers to know what kinds of prices to expect in the future. c. allow for the […]

The value of net exports equals the value of a. national saving. b. public saving. c. national saving – net capital outflow. d. national saving – domestic investment. The adult population must equal the sum of the employed and the […]

When a Japanese auto maker opens a factory in the U.S., U.S. net capital outflow a. increases because the foreign company makes a portfolio investment in the U.S. b. declines because the foreign company makes a portfolio investment in the […]

In the open-economy macroeconomic model, if foreign interest rates rise and the U.S interest rate stays the same then, U.S. a. net capital outflow rises, so the supply of dollars in the market for foreign exchange shifts right. b. net […]

The Carters’ oldest son attends Big State University. He and his parents pay all his fees and tuition. These payments count in GDP as a. investment. b. government spending. c. consumption of services. d. consumption of durable goods. Based on […]

Figure26-4.On the horizontal axis of the graph, Lrepresents the quantity of loanable funds in billions of dollars. RefertoFigure26-4. Regard the position of the Supply curve as fixed, as on the graph. If the real interest rate is 8 percent, the […]

A utilities company in the Netherlands buys wind generators made by a U.S. company. It pays from them with previously obtained dollars. By itself, this exchange a. increases both U.S. net exports and U.S. net capital outflow. b. decreases both […]

If the French government increases its expenditures and reduces taxes, then France’s interest rate a. and its exchange rate rise. b. rises and its exchange rate falls. c. falls and its exchange rate rises. d. and its exchange rate fall. […]

A demand curve shows the relationship between price and a. income. b. quantity demanded. c. production. d. income and quantity demanded. Figure 34-7 RefertoFigure34-7. Which of the following is correct? a. Unemployment rises as the economy moves from point a […]

Suppose Emilio offers you $500 today or $Xin 10 years. If the interest rate is 6 percent, then at what value of X would you be indifferent between the two options? a. X= 809.33 b. X = 855.56 c. X= […]

If total spending rises from one year to the next, then which of the following could notbe true? a. the economy is producing a smaller output of goods and services, and goods and services are selling at higher prices. b. […]

You have been promised a payment of $400 in the future. In which of the following cases is the present value of this payment the lowest? a. You receive the payment 4 years from now and the interest rate is […]

The slope of the supply of loanable funds is based on the logic that an increase in interest rates a. makes saving more attractive. b. makes saving less attractive. c. makes investment more attractive. d. makes investment less attractive. M2 […]

Which of the following is the correct formula for calculating the unemployment rate? a. b. c. d. An increase in quantity supplied a. results in a movement downward and to the left along a fixed supply curve. b. results in […]

International data on the history of real GDP growth rates shows that over the last 120 years or so, rich countries got richer and poor countries got poorer. a. True b. False Which of the following might cause the demand […]

According to the Friedman-Phelps analysis, in the long run actual inflation equals expected inflation and unemployment is at its natural rate. a. True b. False Which of the following is correct? a. Managed funds typically have a higher return than […]

Table 23-5 The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2015. Prices and Quantities RefertoTable23-5.This country’s output grew a. 31.3% from […]

Wilson is offered a job in Kansas City that pays $50,000 and a job in Dallas that pays $60,000. Which pair of CPIs would ensure that the two salaries have the same purchasing power? a. 80 in Kansas City and […]

We would expect the interest rate on Bond A to be higher than the interest rate on Bond B if the two bonds have identical characteristics except that a. the credit risk associated with Bond A is lower than the […]

In conducting their research, economists face an obstacle that not all scientists face; specifically, in economics, it is often impractical to a. make use of theory and observation. b. rely upon the scientific method. c. conduct laboratory experiments. d. find […]

Economists regard events from the past as a. irrelevant, since history is unlikely to repeat itself. b. of limited interest, since those events seldom provide any useful economic data. c. interesting but not particularly valuable, since those events cannot be […]

Late in the 2000″2009 decade, real estate prices in the U.S. fell by a greater percentage than they had fallen since the a. 1890s. b. 1930s. c. 1950s. d. 1970s. Adam Smith a. and David Ricardo both opposed free trade. […]

The average income in a rich country, such as the United States or Japan, is more than a. 3 times, but less than 5 times, the average income in a poor country, such as Indonesia or Nigeria. b. 5 times, […]

Figure 4-25 The graph below pertains to the supply of paper to colleges and universities. RefertoFigure4-25.All else equal, sellers expecting the price of paper to decrease next month when many college students leave campuses for the summer would cause a […]

The rule of 70 can be stated as follows: A variable with a growth rate of Xpercent per year a. doubles every 70/Xyears. b. doubles every 70(1 – 1/X) years. c. doubles every 70/X2 years. d. doubles every 70/(1 – […]

In recent decades Americans have increased their purchase of stocks of foreign-based companies. The Americans who have bought these stocks were engaged in a. foreign portfolio investment. b. indirect domestic investment. c. foreign direct investment. d. foreign indirect investment. Suppose […]

Writing in TheWallStreetJournalin 2009, economist Jeremy Siegel pointed out that the efficient markets hypothesis a. was responsible for the financial crisis of 2008-2009. b. was responsible for the Great Depression of the 1930s. c. claims that prices observed in financial […]

Over the last fifty years both real GDP and prices have trended upward in most countries. Continuing real GDP growth and inflation can be explained by a. continuing technological progress alone. b. continuing increases in the money supply alone. c. […]

In the basket of goods that is used to compute the consumer price index, which of the following categories of consumer spending is the smallest? a. education & communication b. apparel c. medical care d. recreation Suppose the number of […]

If the price of Italian shoes imported into the United States increases, then a. both the GDP deflator and the consumer price index will increase. b. neither the GDP deflator nor the consumer price index will increase. c. the GDP […]

In 2009, the imaginary nation of Mainland had a population of 7,000 and real GDP of 210,000. In 2010 the population was 7,300 and real GDP of 223,380. Over the year in question, real GDP per person in Mainland grew […]

Suppose that medical technicians and nurses’ aides are not unionized. If the nurses’ aides unionize, then the wages of a. both medical technicians and nurses’ aides will rise. b. both medical technicians and nurses’ aides will fall. c. medical technicians […]

Figure 4-12 RefertoFigure4-12.If these are the only two sellers in the market, then the market quantity supplied at a price of $6 is a. 2 units. b. 10 units. c. 12 units. d. 22 units. Short-term bonds are generally a. […]

Table 26-2 RefertoTable26-2.Which company had the highest dollar dividend per share? a. Boeing Co. b. Eli Lilly and Co. c. Kraft Foods Group d. Kellogg Co. When the money market is drawn with the value of money on the vertical […]

A decrease in the money supply causes the interest rate to rise so that investment falls. a. True b. False According to classical macroeconomic theory, changes in the money supply affect a. unemployment and the price level. b. unemployment but […]

Figure 3-12 Refer to Figure3-12. If Argentina and Peru each divides its time equally between producing corn and fish, then total production is a. 13 tons of corn and 15 tons of fish. b. 13 tons of corn and 10 […]

Two years ago Darryl put $3,000 into an account paying 3 percent interest. How much does he have in the account today? a. $3,180.00 b. $3,182.70 c. $3,183.62 d. None of the above are correct to the nearest cent. If […]

If consumer confidence rises, then aggregate demand shifts a. right, making inflation higher than otherwise. b. right, making inflation lower than otherwise. c. left, making inflation higher than otherwise. d. left, making inflation lower than otherwise. Suppose John and Wayne […]

The y-coordinate is the a. first number of an ordered pair and represents the point’s horizontal location. b. second number of an ordered pair and represents the point’s horizontal location. c. first number of an ordered pair and represents the […]

Net capital outflow equals a. the value of domestic assets purchased by foreigners. b. the value of foreign assets purchased by domestic residents. c. the value of domestic assets purchased by foreigners – the value of foreign assets purchased by […]

Figure 28-2 RefetoFigure28-2. What do the two lines in the figure measure? a. The top line is the labor force participation rate, and the bottom line is the unemployment rate. b. The top line is the labor force participation rates […]

Which of the following does the Federal Reserve not do? a. It controls the supply of money. b. It acts as a lender of last resort to banks. c. It makes loans to any qualified business that requests one. d. […]

At any meeting of the Federal Open Market Committee, that committee’s voting members consist of a. 5 Federal Reserve Regional Bank Presidents and all the members of the Board of Governors. b. 5 Federal Reserve Regional Bank Presidents and 5 […]

Money a. is a perfect store of value. b. is the most liquid asset. c. has intrinsic value, regardless of which form it takes. d. All of the above are correct. Bert put $75 into an account and one year […]

A movement downward and to the right along a demand curve is called a(n) a. increase in demand. b. decrease in demand. c. decrease in quantity demanded. d. increase in quantity demanded. Table29-3.An economy starts with $50,000 in currency. All […]

A “lean against the wind” policy says the government should not use stabilization policy and simply let the economy “weather the storm.” a. True b. False Exceptionally favorable growing conditions in the vineyards of Napa Valley would cause a(n) a. […]

Figure 2-7 RefertoFigure2-7. Unemployment could cause this economy to produce at which point(s)? a. L, M b. N, O, P, Q c. N, O, P d. Q The CPI is always 1 in the base year. a. True b. False […]

Table 2-1 The following table contains some production possibilities for an economy for a given month. Refer to Table2-1. If the production possibilities frontier is bowed outward, then “?” could be a. 400. b. 450. c. 600. d. 750. Which […]

Equilibrium quantity must increase when demand a. increases and supply does not change, when demand does not change and supply increases, and when both demand and supply increase. b. increases and supply does not change, when demand does not change […]

Government expenditures on capital goods such as roads could increase aggregate supply. Such effects on aggregate supply are likely to matter more in the short run than in the long run. a. True b. False Figure 3-17 RefertoFigure3-17.Daisy has an […]