Archives: Quiz

REFERENCES: Asset Valuation LEARNING OBJECTIVES: ECON.MANK.013 – Apply the basic tools of finance. TOPICS: Financial economics KEYWORDS: BLOOM’S: Knowledge CUSTOM ID: 039.27.3 – MC – MANK08 40. An asset market is said to experience a speculative bubble when a. the […]

1. When a person engages in detailed analysis of a company to determine its value, he or she is engaging in a. standard deviation analysis. b. informational analysis. c. fundamental analysis. d. efficiency analysis. ANSWER: c DIFFICULTY: Easy REFERENCES: Asset […]

92. A risk-averse person has a. a utility function whose slope gets flatter as wealth rises. This means they have increasing marginal utility of wealth. b. a utility function whose slope gets flatter as wealth rises. This means they have […]

a. For a fee, an insurance company provides you with regular income until you die. b. A surcharge is added to life-insurance premiums paid by persons in dangerous occupations. c. Annuity is another name for stock funds managed by mutual […]

1. Risk aversion helps to explain various things we observe in the economy, including a. adherence to the old adage, “Don’t put all your eggs in one basket.” b. insurance. c. the risk-return trade-off. d. All of the above are […]

d. $1814.06 ANSWER: d DIFFICULTY: Easy REFERENCES: Present Value: Measuring the Time Value of Money LEARNING OBJECTIVES: ECON.MANK.017 – Calculate the present value of a sum of money received in n years. TOPICS: Financial economics KEYWORDS: BLOOM’S: Application CUSTOM ID: […]

KEYWORDS: BLOOM’S: Application CUSTOM ID: 124.27.1 – MC – MANK08 125. A judge requires Harry to make a payment to Sally. The judge says that Harry can pay her either $10,000 today or $11,000 two years from today. Of the […]

KEYWORDS: BLOOM’S: Application CUSTOM ID: 063.27.1 – MC – MANK08 64. Your accountant tells you that if you can continue to earn the current interest rate on your balance of $500 for ten years, you will have about $983.58. If […]

1. Suppose you put $500 into a bank account today. Interest is paid annually and the annual interest rate is 3 percent. The future value of the $500 after 1 year is a. $485.44. b. $496.50. c. $509.28. d. $515.00. […]

1. Most financial decisions involve two related elements: a. advice and consent. b. investment and taxes. c. time and risk. d. saving and consumption. ANSWER: c POINTS: 1 DIFFICULTY: Easy REFERENCES: The Basic Tools of Finance LEARNING OBJECTIVES: ECON.MANK.013 – […]

1. If the interest rate is 8 percent, then the present value of $1,000 to be received in 4 years is $735.03. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.017 – Calculate the present value […]

Subjective Short Answer 1. What is the main function of the financial system? ANSWER: Matching savers with investors. POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.067 – Determine the effect of an event on the loanable funds market. TOPICS: Financial economics […]

166. Concerns about the bankruptcy of an appliance manufacturer diminish after a new CEO is appointed and some of the company’s less productive factories are sold. What type of risk for bondholders falls? What happens to the interest rate on […]

d. national saving increases, the interest rate falls, and the economy’s long-run growth rate is likely to increase. ANSWER: d DIFFICULTY: Moderate REFERENCES: The Market for Loanable Funds LEARNING OBJECTIVES: ECON.MANK.067 – Determine the effect of an event on the […]

TOPICS: Interest rates Budget surpluses KEYWORDS: BLOOM’S: Knowledge CUSTOM ID: 066.26.3 – MC – MANK08 67. A larger budget deficit a. raises the interest rate and investment. b. reduces the interest rate and investment. c. raises the interest rate and […]

1. The source of the supply of loanable funds a. is saving and the source of demand for loanable funds is investment. b. is investment and the source of demand for loanable funds is saving. c. and the demand for […]

determine if the government is experiencing a budget deficit or a budget surplus. TOPICS: Budget deficits Fiscal policy KEYWORDS: BLOOM’S: Application CUSTOM ID: 052.26.2 – MC – MANK08 53. You have some estimates of national accounts numbers for a closed […]

1. Which of the following is not correct? a. Gross domestic product is both total income in an economy and total expenditures on the economy’s output of goods and services. b. In a closed economy net exports are zero. c. […]

DIFFICULTY: Challenging REFERENCES: Financial Institutions in the U.S. Economy LEARNING OBJECTIVES: ECON.MANK.067 – Determine the effect of an event on the loanable funds market. TOPICS: Financial economics KEYWORDS: BLOOM’S: Application CUSTOM ID: 126.26.1 – MC – MANK08 127. Refer to […]

d. neither high credit risk nor a long term ANSWER: a DIFFICULTY: Easy REFERENCES: Financial Institutions in the U.S. Economy LEARNING OBJECTIVES: ECON.MANK.125 – Explain the relationship between risk and return in the markets for financial assets. TOPICS: Financial economics […]

1. At the broadest level, the financial system moves the economy’s scarce resources from a. the rich to the poor. b. financial institutions to business firms and government. c. households to financial institutions. d. savers to borrowers. ANSWER: d DIFFICULTY: […]

1. When opening a print shop you need to buy printers, computers, furniture, and similar items. Economists call these expenditures a. capital investment. b. investment in human capital. c. business consumption expenditures. d. personal saving. ANSWER: a DIFFICULTY: Easy REFERENCES: […]

1. The financial system coordinates investment and saving, which are important determinants of long-run real GDP. a. True b. False ANSWER: True LEARNING OBJECTIVES: ECON.MANK.067 – Determine the effect of an event on the loanable funds market. TOPICS: Investment KEYWORDS: […]

Subjective Short Answer 1. In order to assess the level of prosperity in a nation in a given year, should we examine the level of that nation’s real GDP per person, or should we examine the growth rate of that […]

1. Economists differ in their views of the role of the government in promoting economic growth. At the very least, the government should a. lend support to the invisible hand by maintaining property rights and political stability. b. limit foreign […]

DIFFICULTY: Moderate REFERENCES: Economic Growth and Public Policy LEARNING OBJECTIVES: ECON.MANK.007 – Analyze the factors that affect a country’s growth. TOPICS: International trade Free trade KEYWORDS: BLOOM’S: Application CUSTOM ID: 113.25.3 – MC – MANK08 114. Outward-oriented policies a. allow […]

63. Which of the following is consistent with the catch-up effect? a. The United States had a higher growth rate before 1900 than after. b. After World War II the United States had lower growth rates than war-ravaged European countries. […]

1. Consider three imaginary countries. In Aziria, saving amounts to $3,000 and consumption amounts to $7,000; in Graniva, saving amounts to $2,000 and consumption amounts to $8,000; and in Tanistan, saving amounts to $4,500 and consumption amounts to $10,500. The […]

d. is the same as the quantity of labor. ANSWER: c DIFFICULTY: Moderate REFERENCES: Productivity: Its Role and Determinants LEARNING OBJECTIVES: ECON.MANK.225 – Given a scenario, identify which productivity determinant it represents. TOPICS: Factors of production KEYWORDS: BLOOM’S: Comprehension CUSTOM […]

60. Which of the following is an example of physical capital? a. the strength of workers b. on the job training c. financial assets like cash and bonds d. the equipment in a factory ANSWER: d DIFFICULTY: Easy REFERENCES: Productivity: […]

1. Which of the following is correct? a. Although levels of real GDP per person vary substantially from country to country, the growth rate of real GDP per person is similar across countries. b. Productivity is not closely linked to […]

1. A nation’s standard of living is best measured by its a. real GDP. b. real GDP per person. c. nominal GDP. d. nominal GDP per person. ANSWER: b DIFFICULTY: Easy REFERENCES: Economic Growth around the World LEARNING OBJECTIVES: ECON.MANK.007 […]

1. 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 […]

True / False 1. Real GDP per person in rich countries, such as Germany, is sometimes more than 10 times that of poor countries like India. a. True b. False ANSWER: True DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.264 – Given data […]

Subjective Short Answer 1. List the five steps for calculating the consumer price index and inflation rate. ANSWER: (1) Survey consumers to determine a fixed basket of goods, (2) find the price for each good, (3) calculate the cost of […]

ANSWER: c POINTS: 1 DIFFICULTY: Moderate REFERENCES: Correcting Economic Variables for the Effects of Inflation LEARNING OBJECTIVES: ECON.MANK.269 – Given data on the nominal interest rate and inflation, calculate the real interest rate. NATIONAL STANDARDS: United States – BUSPROG: Analytic […]

56. Refer to Table 24–12. Suppose Will’s 2009 food expenditures in 2011 dollars amount to $5,750. Then x, the consumer price index for 2011, has a value of a. 184.0. b. 185.8. c. 187.5. d. 189.4. ANSWER: a POINTS: 1 […]

1. 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 […]

a. The consumer price index is a measure of the overall level of prices, whereas the GDP deflator is not a measure of the overall level of prices. b. If, in the year 2011, the consumer price index has a […]

CUSTOM ID: 187.24.1 – MC – MANK08 188. For some racquet sports, there have been increases in the size of the racquets; also, the methods and materials used for making racquets have improved. To which problem in the construction of […]

KEYWORDS: BLOOM’S: Knowledge DATE CREATED: 9/19/2016 1:20 PM DATE MODIFIED: 9/21/2016 1:54 PM CUSTOM ID: 139.24.1 – MC – MANK08 140. The relative importance of housing in the breakdown of consumer spending is a. 42 percent. b. 15 percent. c. […]

a. 24.7 percent. b. 54.0 percent. c. 32.8 percent. d. 38.0 percent. ANSWER: c POINTS: 1 DIFFICULTY: Moderate REFERENCES: The Consumer Price Index LEARNING OBJECTIVES: ECON.MANK.247 – Given CPI data, calculate the annual inflation rate for a specified year. NATIONAL […]

DATE MODIFIED: 9/21/2016 1:54 PM CUSTOM ID: 046.24.1 – MC – MANK08 47. Refer to Table 24-1. What belongs in space A? a. 14 b. 150 c. 144 d. 154 ANSWER: d POINTS: 1 DIFFICULTY: Moderate REFERENCES: The Consumer Price […]

1. The CPI is a measure of the overall cost of a. the inputs purchased by a typical producer. b. the goods and services purchased by a typical consumer. c. the goods and services produced in the economy. d. the […]

1. Babe Ruth, the famous baseball player, earned $80,000 in 1931. Today, the best baseball players can earn more than 400 times as much as Babe Ruth earned in 1931. However, prices have also risen since 1931. We can conclude […]

b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: ECON.MANK.280 – Given pricing and consumption data on a fixed basket of goods, calculate the CPI. NATIONAL STANDARDS: United States – BUSPROG: Analytic TOPICS: Price levels Consumer price index KEYWORDS: […]

True / False 1. The consumer price index is used to monitor changes in an economy’s production of goods and services over time. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: ECON.MANK.103 – Examine various cost […]

Subjective Short Answer 1. For the economy as a whole, how does income compare to expenditures? Explain. ANSWER: For the economy as a whole income and expenditures are equal. This is because every dollar of spending by some buyer is […]

1. GDP per person tells us the income and expenditure of the a. richest person in the economy. b. poorest person in the economy. c. average person in the economy. d. entire economy. ANSWER: c POINTS: 1 DIFFICULTY: Easy REFERENCES: […]

GDP Deflator KEYWORDS: BLOOM’S: Application DATE CREATED: 9/19/2016 1:11 PM DATE MODIFIED: 9/21/2016 1:44 PM CUSTOM ID: 066.23.4 – MC – MANK08 QUESTION ID: JFND-GO3A-ERHD-YTBO QUESTION GLOBAL ID: GCID-E7BW-1TBP-GH5S-EQDD-GBUG-KAUD-GITN-4CJT-CRH1-43MF-CO4N- 4P3I-GPUN-43TO-GTTG-RCTW-GJDI-GWN8-EPRW-EMMG-GY5D-O3BT-8BOS- KCTO-GASU-KPJT-8YSS-KQMR-GOSS-CA3S-GCSU-N3TO-CC3G-G3UG-E7JI- YT4D-JFNN-4OTI-GO4W-NQNBEE PREFACE GLOBAL ID: GCID-5d38c799e8e0-9128–2a64–3510–a4ed3b91 Table 23-6 The table […]