Econ Final Part 3

Hyperinflation is A) An inflation rate in excess of 200 percent, lasting at least one year. B) An inflation rate in excess of 20 percent, lasting at least one year. C) The movement of taxpayers to higher tax brackets because of rising prices. D) A common problem in the United States.

A

If the nominal interest rate is 13 percent and the anticipated rate of inflation is 8 percent, the real interest rate is A) 5 percent. B) 21 percent. C) -5 percent. D) 13 percent.

A

In Figure 8.2, an improvement in technology is best represented as a movement from point A) A to point B. B) C to point B. C) C to point A. D) B to point A.

A

On the basis of your calculations in Table 1.1, what is the opportunity cost of producing at point V rather than point U? A) 3 Stealth bombers. B) 4 Stealth bombers. C) 3 B-1's D) 1 B-1

A

A decrease in the average level of prices of goods and services is A) Recession. B) Deflation. C) Depression. D) Inflation.

B

A mixed economy A) Relies on the use of central planning by private firms rather than the government. B) Utilizes both market and nonmarket signals to allocate goods and services. C) Is justified by the superiority of laissez faire over government intervention. D) Is one that allows trade with other countries.

B

At which point might society be able to produce if new resources were discovered but cannot produce with current resources? (See Figure 1.1.) A) D. B) A. C) B. D) C.

B

GDP per capita A) Is real GDP corrected for price level changes. B) Is equal to a nation's GDP divided by its population. C) Indicates the most efficient use of resources. D) Does not permit comparisons of the economic welfare of different nations

B

The fastest-growing areas for state expenditures are A) Sewage and trash service. B) Prisons and welfare. C) Transportation and public safety. D) Education and welfare.

B

The study of aggregate economic activity for the economy as a whole is A) Microeconomics. B) Macroeconomics. C) Scarcity. D) Opportunity cost.

B

When calculating GDP, consumption makes up approximately A) One-half of total output. B) Two-thirds of total output. C) One-fifth of total output. D) One-third of total output.

B

Which of the following is an example of a progressive tax? A) A local sales tax. B) The federal income tax. C) Social Security payroll tax. D) An excise tax.

B

A decline in total real output for two or more consecutive quarters is referred to as A) A growth recession. B) Laissez faire. C) A recession. D) Say's Law.

C

A tax is regressive if it takes a A) Larger number of dollars as income falls. B) Smaller fraction of dollars as income falls. C) Smaller fraction of dollars as income rises. D) Larger number of dollars as income rises.

C

At the equilibrium price, there are A) Shortages. B) Surpluses. C) No shortages or surpluses. D) Excess inventories.

C

Inflation is A) An increase in relative prices of all goods and services. B) A situation in which purchasing power increases. C) An increase in the average level of prices of goods and services. D) A rise in the price of every good but not any service.

C

The current chairman of the Federal Reserve is A) Barack Obama. B) Alan Greenspan. C) Janet Yellen. D) Hillary Clinton.

C

Underemployment refers to A) The same thing as unemployment. B) A discouraged worker. C) A person who is not able to use her full capabilities in her job. D) A person who is lazy and not working hard at her job.

C

When there is a mismatch between the skills required for a job and the skills of job seekers, the unemployment that results is an example of A) Frictional unemployment. B) Seasonal unemployment. C) Structural unemployment. D) Cyclical unemployment.

C

A country has a comparative advantage in a good if A) It can specialize only in two goods. B) It always has an absolute advantage in the production of the good. C) It can produce more of the good than another country. D) It can produce a good at a lower opportunity cost relative to another country.

D

A furniture factory produces dining room sets. The lumber it purchases from the lumberyard is a/an A) Final service. B) Final good. C) Intermediate service. D) Intermediate good.

D

Figure 3.1 Shifts of Supply and Demand Candy bars: People become more health-conscious and prefer power bars instead of candy bars. A) B. B) A. C) D. D) C.

D

If the aggregate supply curve is upward-sloping, a decrease in aggregate demand will cause A) An increase in the price level and a decrease in unemployment. B) A decrease in the price level and a decrease in unemployment. C) An increase in the price level and an increase in unemployment. D) A decrease in the price level and an increase in unemployment.

D

The direct exchange of one good for another A) Is most efficient for an economy. B) Facilitates market exchanges. C) Facilitates specialization in production. D) Is barter.

D

Unemployment was fairly low during A) The recession of 1981 B) The 1930s. C) The Great Depression. D) World War II.

D