Archives: Quiz

1. Which of the following is always correct in an open economy? a. S = I b. S = NX + NCO c. S = NCO d. S = I + NCO ANSWER: d DIFFICULTY: Easy REFERENCES: Equilibrium in the […]

1. Over the past three decades, the United States has a. generally had, or been very near to a trade balance. b. had trade deficits in about as many years as it has trade surpluses. c. persistently had a trade […]

True / False 1. Over the past two decades, the U.S. has persistently exported more goods and services than it has imported. a. True b. False ANSWER: False DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.011 – Apply basic principles about the international […]

Subjective Short Answer 1. Last month a country sold more goods and services to residents of foreign countries than it purchased from them. What does this imply about this country’s trade balance? ANSWER: This country had a trade surplus. DIFFICULTY: […]

d. neither the tall latte nor the Big Mac ANSWER: b DIFFICULTY: Moderate REFERENCES: A First Theory of Exchange-Rate Determination: Purchasing-Power Parity LEARNING OBJECTIVES: ECON.MANK.261 – Given data on prices in various countries, compute the exchange rate that is consistent […]

1. The law of one price states that a. a good must sell at the price fixed by law. b. a good must sell at the same price at all locations. c. a good cannot sell for a price greater […]

REFERENCES: The Prices for International Transactions: Real and Nominal Exchange Rates LEARNING OBJECTIVES: ECON.MANK.038 – Contrast a country’s nominal exchange rate with its real exchange rate. TOPICS: Exchange rates International trade KEYWORDS: BLOOM’S: Application CUSTOM ID: 042.31.2 – MC – […]

1. The nominal exchange rate is the a. nominal interest rate in one country divided by the nominal interest rate in the other country. b. the ratio of a foreign country’s interest rate to the domestic interest rate. c. rate […]

CUSTOM ID: 183.31.1 – MC – MANK08 184. If Israel’s domestic investment exceeds its national saving, then Israel has a. positive net capital outflows and negative net exports. b. positive net capital outflows and positive net exports. c. negative net […]

DIFFICULTY: Easy REFERENCES: The International Flows of Goods and Capital LEARNING OBJECTIVES: ECON.MANK.079 – Determine the outcome of different trade balances on the variables found in national income identities. TOPICS: National income accounting Open economy KEYWORDS: BLOOM’S: Knowledge CUSTOM ID: […]

d. purchases of foreign assets and sales of domestic assets abroad. ANSWER: d DIFFICULTY: Easy REFERENCES: The International Flows of Goods and Capital LEARNING OBJECTIVES: ECON.MANK.011 – Apply basic principles about the international flow of goods and capital. TOPICS: Balance […]

1. Foreign-produced goods and services that are purchased domestically are called a. imports. b. exports. c. net imports. d. net exports. ANSWER: a DIFFICULTY: Easy REFERENCES: The International Flows of Goods and Capital LEARNING OBJECTIVES: ECON.MANK.011 – Apply basic principles […]

1. Which type(s) of economies interact with other economies? a. only closed economies b. only open economies c. closed economies and open economies d. neither closed nor open economies ANSWER: b DIFFICULTY: Easy REFERENCES: Open Economy Macroeconomics Basic Concepts LEARNING […]

1. A country with negative net exports has a trade surplus. a. True b. False ANSWER: False DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.011 – Apply basic principles about the international flow of goods and capital. TOPICS: Balance of trade International trade […]

Subjective Short Answer 1. The increase in the overall level of prices is known as _____. ANSWER: inflation DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.247 – Given CPI data, calculate the annual inflation rate for a specified year. TOPICS: Price levels Inflation […]

1. In order to maintain stable prices, a central bank must a. maintain low interest rates. b. keep unemployment low. c. tightly control the money supply. d. sell indexed bonds. ANSWER: c DIFFICULTY: Easy REFERENCES: Conclusion TOPICS: Price levels Inflation […]

b. 5.4 percent c. 7.2 percent d. 4.2 percent. ANSWER: d DIFFICULTY: Challenging REFERENCES: The Costs of Inflation LEARNING OBJECTIVES: ECON.MANK.032 – Compare the results of a low-inflation scenario against a high– inflation scenario with regards to tax distortions. TOPICS: […]

1. In the 1970s, the U.S. inflation rate reached about a. 7 percent per year. b. 10 percent per year. c. 14 percent per year. d. 20 percent per year. ANSWER: b DIFFICULTY: Easy REFERENCES: The Costs of Inflation LEARNING […]

216. The nominal interest rate is 5 percent and the real interest rate is 3 percent. What is the inflation rate? a. 8 percent b. 15 percent c. 2 percent d. 1.7 percent ANSWER: c DIFFICULTY: Easy REFERENCES: The Classical […]

a. P x Y must rise. b. P x Y must fall. c. P x Y must be unchanged. d. the effects on P x Y are uncertain. ANSWER: a DIFFICULTY: Moderate REFERENCES: The Classical Theory of Inflation LEARNING OBJECTIVES: […]

TOPICS: Money Interest rates KEYWORDS: BLOOM’S: Comprehension CUSTOM ID: 117.30.1 – MC – MANK08 118. Interest rates adjusted for the effects of inflation a. and inflation are nominal variables. b. and inflation are real variables. c. are real variables; inflation […]

ANSWER: d DIFFICULTY: Moderate REFERENCES: The Classical Theory of Inflation LEARNING OBJECTIVES: ECON.MANK.173 – Given a graph of the market for money, show the effect of a change in the money supply on the market equilibrium. TOPICS: Money Money supply […]

1. The classical theory of inflation a. is also known as the quantity theory of money. b. was developed by some of the earliest economic thinkers. c. is used by most modern economists to explain the long-run determinants of the […]

1. Over the past 80 years, prices in the U.S. have risen on average about a. 2 percent per year. b. 4 percent per year. c. 3.6 percent per year. d. 6 percent per year. ANSWER: c DIFFICULTY: Easy REFERENCES: […]

True / False 1. The inflation rate is measured as the percentage change in a price index. a. True b. False ANSWER: True DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.247 – Given CPI data, calculate the annual inflation rate for a specified […]

TOPICS: Financial intermediaries Central banks KEYWORDS: BLOOM’S: Application DATE CREATED: 9/19/2016 1:35 PM DATE MODIFIED: 9/21/2016 3:54 PM CUSTOM ID: 039.29 – SAE – MANK08 40. What is the change in the money supply when the Fed purchases $700 worth […]

Subjective Short Answer 1. What does the “double coincidence of wants” refer to? ANSWER: “Double coincidence of wants” refers to an undesirable characteristic of barter economies. In an economy without money, trade can only occur if two people each have […]

REFERENCES: The Fed’s Tools of Monetary Control LEARNING OBJECTIVES: ECON.MANK.249 – Given data on a bank’s balance sheets, evaluate the bank’s reserve situation. TOPICS: Financial intermediaries Reserve requirements Central banks KEYWORDS: BLOOM’S: Application CUSTOM ID: 096.29.4 – MC – MANK08 […]

ANSWER: c DIFFICULTY: Moderate REFERENCES: The Fed’s Tools of Monetary Control LEARNING OBJECTIVES: ECON.MANK.075 – Determine the impact on the money supply of an open market operation by the Federal Reserve. TOPICS: Central banks Financial intermediaries Open market operations Reserve […]

1. Which of the following can the Fed do to change the money supply? a. change reserves or change the reserve ratio b. change reserves but not change the reserve ratio c. change the reserve ratio but not change the […]

1. Which of the following institutions is a central bank? a. the Bank of Japan b. the Bank of England c. the Federal Reserve System d. All of the above are correct. ANSWER: d DIFFICULTY: Easy REFERENCES: The Federal Reserve […]

d. neither demand deposits nor money market mutual funds ANSWER: a DIFFICULTY: Moderate REFERENCES: The Meaning of Money LEARNING OBJECTIVES: ECON.MANK.101 – Examine the role of monetary policy in governing an economy. TOPICS: Money KEYWORDS: BLOOM’S: Comprehension CUSTOM ID: 057.29.1 […]

1. Which of the following lists is included in what economists call “money”? a. cash b. cash and stocks and bonds c. cash and stocks and bonds and real estate d. cash and stocks and bonds and real estate and […]

1. You use U.S. currency to pay the owner of a restaurant for a delicious meal. The currency a. has no intrinsic value. The exchange is an example of barter. b. has no intrinsic value. The exchange is not an […]

True / False 1. In an economy that relies on barter, trade requires a double-coincidence of wants. a. True b. False ANSWER: True DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.012 – Apply basic, economic principles of individual decision making that determine how […]

Subjective Short Answer 1. An important determinant of a country’s standard of living is the amount of __________ it typically experiences. ANSWER: unemployment DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.009 – Analyze the presence of unemployment in an economy. TOPICS: Labor economics […]

1. The theory of efficiency wages explains why a. setting wages at the equilibrium level may increase unemployment. b. it may be in the best interest of firms to offer wages that are above the equilibrium level. c. the most […]

1. Which of the following is correct? a. Union membership in the United States peaked in the 1940s and 1950s. b. Unions play a larger role in the United States than in European countries such as Belgium, France, and Germany. […]

1. Which of the following is not correct? a. Frictional unemployment results from the process of matching workers and jobs. b. Structural unemployment results when the number of jobs is insufficient for the number of workers. c. Minimum wages are […]

1. Job search a. is one reason economies always experience some unemployment. b. is the process of matching workers with appropriate jobs. c. would not be a problem if all workers and all jobs were the same. d. All of […]

ANSWER: c DIFFICULTY: Moderate REFERENCES: Identifying Unemployment LEARNING OBJECTIVES: ECON.MANK.016 – Calculate the effect of including discouraged workers on the unemployment rate. TOPICS: Labor economics Unemployment KEYWORDS: BLOOM’S: Comprehension CUSTOM ID: 168.28.1 – MC – MANK08 169. Some individuals would […]

b. white females c. black males d. black females ANSWER: c DIFFICULTY: Moderate REFERENCES: Identifying Unemployment LEARNING OBJECTIVES: ECON.MANK.009 – Analyze the presence of unemployment in an economy. TOPICS: Labor economics Unemployment rate KEYWORDS: BLOOM’S: Application CUSTOM ID: 124.28.1 – […]

TOPICS: Labor economics Unemployment KEYWORDS: BLOOM’S: Comprehension CUSTOM ID: 063.28.1 – MC – MANK08 64. Sheamous loses his job and decides to sit on the beach rather than look for work during the next few months. Other things the same, […]

1. The Bureau of Labor Statistics is part of the U.S. Department of a. the Treasury. b. Commerce. c. Labor. d. the Interior. ANSWER: c DIFFICULTY: Easy REFERENCES: Identifying Unemployment LEARNING OBJECTIVES: ECON.MANK.009 – Analyze the presence of unemployment in […]

1. To maintain their standard of living, most people rely on a. government assistance. b. their personal savings. c. their labor earnings. d. rental income. ANSWER: c POINTS: 1 DIFFICULTY: Easy REFERENCES: Unemployment LEARNING OBJECTIVES: ECON.MANK.009 – Analyze the presence […]

unemployment. a. True b. False ANSWER: False DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.295 – Identify if a policy will reduce frictional unemployment. TOPICS: Labor economics Unemployment KEYWORDS: BLOOM’S: Comprehension CUSTOM ID: 159.28 – TF – MANK08 160. Unemployment insurance is designed […]

82. Causes of the decline in the U.S. men’s labor-force participation rate over the past several decades include young men now staying in school longer than their fathers and grandfathers did, older men now retiring earlier and living longer, and […]

True / False 1. Most people rely primarily on income other than their labor earnings to maintain their standard of living. a. True b. False ANSWER: False DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.009 – Analyze the presence of unemployment in an […]

Subjective Short Answer 1. Write the formula for finding the future value in n years of $x today. ANSWER: $x(1+ r)n POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.013 – Apply the basic tools of finance. TOPICS: Financial economics Future value […]

1. Stock market fluctuations a. often go hand in hand with fluctuations in the economy more broadly. b. rarely have anything to do with fluctuations in the economy more broadly. c. have few, if any, macroeconomic implications. d. are attributable […]