Archives: Quiz

The horizontal investment curve used to derive the TE curve implies that investment is a. directly related to Real GDP. b. indirectly related to Real GDP. c. independent of Real GDP. d. sometimes directly and sometimes indirectly related to Real […]

Exhibit 12-1 The required reserve ratio is a. 0.10. b. 0.15. c. 0.20. d. 0.25. e. 0.30. Points that lie inside (or below) the PPF are a. unattainable. b. attainable and productive efficient. c. attainable but productive inefficient. d. attainable […]

Exhibit 8-3 A shift in aggregate demand from AD1 to AD2could have been the result of a. a decrease in the price level. b. an increase in the price level. c. a decrease in interest rates (which was not prompted […]

If we assume that the income elasticity of demand for food has been around 0.2 and that agricultural producers have become increasingly more productive, we can conclude that a. prices of food have increased. b. supply increases have been less […]

Economists perceive a college applicant’s grade point average and standardized test scores (such as SAT and ACT scores) to be rationing devices. a. True b. False A divisive society is one in which members of society work together for the […]

Exhibit 17-5Applying the concept of a production function to your learning, assume that the amount of learning you acquire can be summarized by the following equation (and that your motivation to learn and the quality of instruction are both rated […]

The price of good B has a pattern such that P = $20 on Monday through Thursday of every week, and P = $25 on Fridays.If speculators begin participating in the market for good B, their actions will likely lead […]

If the Fed raises the discount rate at the same time it conducts an open market sale, it follows that the money supply will a. fall. b. rise. c. remain unchanged. d. There is not enough information to answer the […]

Increased productivity in the agricultural sector has __________ the output and __________ the prices of agricultural goods. a. increased; reduced b. increased; increased c. decreased; reduced d. decreased; increased e. had no impact on; had no impact on Which set […]

When the United States moves upward along the J-curve, it is because a depreciation of the dollar is having the _____________ effect of _____________ the number of dollars spent on imports. a. long-run; increasing b. long-run; reducing c. short-run; increasing […]

A stock with a price-earnings ratio of 11.2 means that the stock is selling for a closing share price that is 11.2 times its latest available net earnings per share. a. True b. False If labor is immobile between two […]

Exhibit 34-9 For country Y, the opportunity cost of producing one unit of good B is __________ unit(s) of good A. a. 1.5 b. 2 c. 2/3 d. 1/3 e. 3 The AD curve shifts to the right with a […]

According to the textbook, The Wonderful Wizard of Oz is alleged to be a story about a. the California gold strikes of 1849. b. the end of the gold standard in 1934. c. the presidential election of 1896. d. the […]

The sum of the unemployment rate and the employment rate always equals 100 percent. a. True b. False Exhibit 1-1 If the student whose study habits are illustrated here is currently studying for the 2nd hour she should a. cut […]

Suppose that inventory investment is $20 billion and (total) investment is $680 billion.What does purchases of newly produced capital goods equal? a. $715 billion b. $785 billion c. $750 billion d. $35 billion e. There is not enough information to […]

The coordinates of point A are 400 units of X and 40 units of Y. The coordinates of point B are 480 units of X and 60 units of Y. With X on the horizontal axis and Y on the […]

In year 1 the CPI is 180, and in year 2 the CPI is 192. From year 1 to year 2, Javier’s salary rises from $40,000 to $42,000, and Tom’s salary rises from $55,000 to $57,000. Who is “more than […]

According to classical economists, if interest rates are flexible, a. saving will equal investment. b. saving may be greater than investment. c. saving may be less than investment. d. any of the above If the money market is in the […]

Suppose U.S. peanut butter producers are facing increased foreign competition. Which argument is least likely to be used by the U.S. firms’ lobbyists to urge legislation to restrict imports of peanut butter? a. Peanut butter is important in military rations, […]

If the current Real GDP is less than Natural Real GDP, then the economy is a. in long-run equilibrium. b. in a recessionary gap. c. in an inflationary gap. d. possibly in short-run equilibrium. e. b and d When consumers […]

The real balance effect is the change in a. purchasing power that results from a change in income. b. the amount of money one has that results from a change in income. c. purchasing power that results from a change […]

According to public choice theorists, people in the market sector and people in the public sector have __________, and (but) sometimes act differently because of different __________ arrangements in the two sectors. a. different motives; institutional b. the same motives; […]

A person buys a newly issued bond that matures in 10 years with a face value of $10,000 and a coupon rate of 4%. How much money will the bondholder receive in the tenth year? a. $10,040. b. $10,400. c. […]

Special interest group Q receives a 1/10,000th slice of the economic pie.Its net benefit from either an economic growth policy or a transfer policy is $50,000.In order for group Q to be indifferent between the two policies, the economic growth […]

Exhibit 7-2 GDP in 1990 is a. $49. b. $51. c. $86. d. $92. e. impossible to calculate without the CPI. Use the information provided in Exhibit 11-4 What is the marginal tax rate on the 23,000th of dollar of […]

If the PPF for two goods is a downward-sloping straight line, the resources used to produce those goods are equally well suited to the production of both goods. a. True b. False Exhibit 34-8 Assume that the current price of […]

The civilian non-institutional population consists of everyone in the population who is a. at least 16 years of age, in the armed forces, or institutionalized. b. at least 16 years of age. c. not in the armed forces. d. not […]

The economy is currently on its production possibilities frontier (PPF). A politician says that it is possible to get more of everything—more infrastructure, more schools, more national defense, more spending on social programs, and so on. The politician is a. […]

Implied in new Keynesian theory is that when policy is correctly anticipated, there is a tradeoff between inflation and unemployment in a. neither the short run nor the long run. b. both the short run and the long run. c. […]

A simultaneous leftward shift in SRAS and rightward shift in AD may come from the dollar _______________ in the aftermath of a ____________________ in United States real interest rates. a. depreciating; rise b. depreciating; fall c. appreciating; rise d. appreciating; […]

If the demand for a good falls by less than the supply of the good rises, then the good€s equilibrium price will __________ and its equilibrium quantity will __________. a. rise; fall b. rise; rise c. fall; fall d. fall; […]

When the economy is in an inflationary gap, the labor market is experiencing a _____________.In a self-regulating economy, wage rates will then ___________ and the ______________ curve will shift __________________. a. shortage; rise; SRAS; leftward b. shortage; fall; SRAS; leftward […]

Suppose that for a given good, demand decreases and supply decreases at the same time. If demand decreases by a greater amount than supply decreases, then equilibrium price __________ and equilibrium quantity __________ for that good. a. rises; rises b. […]

As the opportunity cost of holding money decreases, the quantity demanded of money a. increases. b. decreases. c. remains unchanged. d. increases, then decreases. e. decreases, then increases. Exhibit 2-1 The PPF illustrates a. constant opportunity costs between guns and […]

If the economy is self-regulating and in a recessionary gap, a. wages and prices will fall. b. wages will fall, but prices will rise. c. neither wages nor prices will change. d. wages will rise, but prices will fall. e. […]

Productive efficiency implies a. the possibility of gains in one area without losses in another. b. that more output has been produced. c. the impossibility of gains in one area without losses in another. d. that prices are stable. e. […]

The change in the interest rate due to a change in the supply of loanable funds is referred to as the __________ effect. a. income b. expectations c. liquidity d. real In 2000, the top 100 transnational companies produced about […]

Exhibit 8-4 A movement from point A to point B on SRAS1could have been the result of a. a decrease in the price level. b. an increase in the price level. c. an adverse supply shock. d. a beneficial supply […]

The __________ rate is the interest rate one bank pays another bank for a loan. a. discount b. mortgage c. reserve requirement d. federal funds e. bank-borrowing Variables X and Y are independent of each other. If we plot X […]

If, under a fixed exchange rate system, the dollar price of a Mexican peso is above its equilibrium level, then the a. dollar is overvalued. b. peso is overvalued. c. dollar has appreciated. d. peso has depreciated. Which of the […]

Exhibit 39-8 Assume that E1 represents the initial equilibrium in the market for grain X. If all the farmers agree to restrict production and abide by the agreement, a. the price of X increases. b. the equilibrium quantity decreases. c. […]

Evidence seems to indicate that the demand for many agricultural products a. has increased much more than supply over the years. b. is relatively elastic. c. is relatively inelastic. d. is relatively income elastic. e. b and d With respect […]

The point where the PPF intersects the horizontal axis is a. unattainable. b. attainable and productive efficient. c. attainable but productive inefficient. d. attainable and neither productive efficient nor productive inefficient. Which of the following statements is true? a. To […]

One example of one-shot inflation occurs when the SRAS curve shifts leftward. a. True b. False The PPF between goods X and Y will be a downward-sloping a. straight line if increasing opportunity costs exist. b. straight line if decreasing […]

To a bank, checkable deposits are classified as a liability. a. True b. False Why would a candidate for political office speak in general instead of specific terms? a. Because he or she believes voters want to hear generalities, not […]

Exhibit 2-4 The line joining points A and D is called the a. production function frontier. b. utility function. c. production possibilities frontier. d. demand curve. A.W. Phillips collected data on the rate of change in money wages and plotted […]

A floating exchange rate is one that is allowed to move freely between two points that have been determined by an exchange treaty. The 2008 financial crisis peaked in September 2008, when Lehman Brothers declared bankruptcy. Answer: A If the […]

The three methods for computing GDP include a. the expenditure approach, the value-added approach, and the factor payments approach b. the expenditure approach, the value-added approach, and the productivity approach c. the productivity approach, the value-added approach, and the factor […]

In the long run, supply shocks a. are of no concern b. are automatically offset so that the full-employment level of output is restored c. cause the long-run AS curve to shift d. have no effect on the wage rate […]

Which of the following is the most liquid category of assets? a. Large time deposits b. Money market mutual fund balances c. Small time deposits d. Saving-type accounts e. Demand deposits The primary macroeconomic cost of unemployment is a. higher […]