Macroeconomics

The government owns and distributes goods and services. Based on this information, which economic system is in place? Select the best answer.

Command economy

Which statement is correct? Select the best answer.

Component manufacturers benefit from price floors, but final manufacturers, which use these goods in their own production, suffer.

Which statement is correct? Select the best answer.

Investment expenditure as a component of GDP refers to purchases of physical plants and equipment, primarily by businesses

Does the following event affect demand or quantity demanded for strollers? Select the best answer. Multiple births are more common than they've ever been before.

It affects demand

Which statement is true about adjustable-rate mortgages? Select the best answer.

It is a form of indexing applied to loans.

Consider the following scenario: Rey is currently unemployed and saves money by purchasing canned meat instead of buying meat from his local butcher. Based on this information, is canned meat a normal or inferior good? Select the best answer.

Inferior good

Which statement about U.S. unemployment is correct? Select the best answer.

Low skilled workers have higher unemployment rates than those with a college degree

Which statement is correct? Select the best answer.

Education seems to be key in minimizing the amount of structural unemployment

Does the following statement describe productive or allocative efficiency? Select the best answer. In order for Toyota to produce more Corollas, it has to produce fewer Priuses.

Productive efficiency

Which statement is correct? Select the best answer.

Most of the migration in the world involves people who are moving from countries with relatively low GDP per capita to countries with relatively high GDP per capita.

Which type of diagram best represents the tradeoff decision in the following scenario? Select the best answer. A country in West Africa must decide between using newly acquired land to produce corn or cassava.

Social production possibilites frontier

Does the following statement discuss a macroeconomics issue? Select the best answer. A stock is partial ownership in a firm.

Yes, this is a macroeconomic issue.

Fill in the blank with the correct term. Select the best answer. An especially lengthy and deep recession is called a(an) [blank].

depression

Are cars and gasoline substitutes or complements? Select the best answer.

complements

Which statement about trade balances in a two-person economy is correct? Select the best answer.

A comparative advantage means producing one good more efficiently or quickly than others

Which statement is true about global trade and trade balances? Select the best answer.

A few decades ago, goods were the primary measure for the balance of trade

Which of the following statements describes opportunity cost? Select the best answer.

Bill didn't get coffee with his friend because he made tea for himself

Analysis shows that the overall result of changes in the market for cotton t-shirts is a decrease in the equilibrium quantity. What combination of factors could have caused this result? Select the best answer.

An increase in the price for materials and a decrease in customers' earnings

Which statement is correct? Select the best answer.

Attracting foreign financial capital is one way to describe trade deficits.

Which statement is correct? Select the best answer.

During a recession, the quantity of workers demanded at a sticky wage declines from the original equilibrium

Which statement is correct? Select the best answer.

Flow of international trade are actually the same as flows of international financial capital

Consider the following statements: Guatemala can produce 60 bunches of bananas for $1. Brazil can produce 60 bunches of bananas for $3. Ecuador can produce 60 bunches of bananas for $7. Based on this information, which country has a comparative advantage in producing bananas? Select the best answer.

Guatemala

Which statement is correct? Select the best answer.

In the U.S., crime rates, traffic congestion levels, and income inequality are higher now than in the 1960s

Which statement is correct? Select the best answer.

In the case of a trade deficit, foreign money is considered part of the supply of financial capital

Which statement is correct? Select the best answer.

In the diagram that represents flow of trade and payments, both investment from abroad and payments for exports correspond to financial inflows

Which statement is true about inflation and unintended redistribution of purchasing power? Select the best answer.

Inflation can cause unintended redistribution of purchasing power for wage earners

Does the following example describe either a domestic market for goods/services or a domestic market for labor? Select the best answer. A market where people buy preferred stocks

No, this describes neither a market for goods/services nor a market for labor.

Does the following situation describe a microeconomic issue? Select the best answer.The inflation rate decreases.

No, this is not a microeconomic issue

Suppose you are told that the producer price index has risen by 3.5%. Consequently, which statement is true? Select the best answer.

On average, prices of supplies and inputs for producers rose by 3.5%

Does the following statement describe a budget constraint or a production possibilities frontier? Select the best answer. This graph represents the set of choices society faces for the combinations of goods and services it can produce given the resources available.

Production possibilities frontier

Which of the following statements correctly explains why specialization increases economic productivity? Select the best answer.

Specialization results in efficiency and higher quality

Which item is included in GDP? Select the best answer.

Spending on recreation and travel

Which statement is true about additional price indices? Select the best answer.

The GDP deflator is not a good measure for the cost of living

Which statement is true about international trade statistics? Select the best answer.

The U.S. government can disclose information about spending on aid to the BEA for statistical purposes

Which statement about indexing government programs is true? Select the best answer.

The U.S. taxation system takes inflation into account

How does the following scenario affect the demand or supply curve for neon-colored clothing? Select the best answer. A fashion expert says wearing neon-colored clothing is a "fashion crime."

The demand curve for neon colored clothing shifts left.

Consider the following scenario: Grocery shoppers notice that pork is cheaper than beef. How does this event affect the supply or demand curve for the pork industry? Select the best answer.

The demand curve for pork shifts right

Which statement is true about the CPI and the core inflation index? Select the best answer.

The federal reserve does not need to respond to all inflationary shocks

Which of the following statements best describes the law of diminishing marginal utility? Select the best answer.

The first time surfing brings the consumer more utility at the margin than the fifth time

Which statement is true about tracking inflation? Select the best answer.

The inflation rate cannot be calculated by a simple subtraction of index numbers

What can a circular flow diagram (CFD) represent?

The money that firms receive for service

Which statement is true about historical inflation in the U.S. economy? Select the best answer.

There was no hyperinflation in the U.S. in the twentieth century

Priya has $40 in spending money each week, which she can allocate between campus parking permits and bus fares. The price of campus parking permits is $5 per day, and the price of bus fares is $4 per day. Based on this information, which statement correctly describes the opportunity cost? Select the best answer.

The opportunity cost of a daily campus parking permit equals 1.25 bus fares, and the opportunity cost of a bus fare equals 0.8 parking permits

Does the following statement describe a point above, below, or on the production possibilities frontier (PPF) curve for wheat and barley? Select the best answer. Farmers in Alberta, Canada, produce the optimal amount of wheat and barley to meet domestic and foreign demands.

The point is on the PPF curve

Consider the following example: The government establishes a minimum price of twelve dollars for movie tickets that normally cost eight dollars. What is the effect of this price floor on the market? Select the best answer.

The social surplus will be reduced

Is the following statement true or false? Select the best answer. "The government should focus on building more schools and hospitals" is an example of a positive statement.

The statement is false

Which statement is true about biases in CPI calculations? Select the best answer.

The substitution bias assumes that consumers are locked into buying exactly the same goods, regardless of price changes

How would the following event affect the supply and demand curves for paint? Select the best answer. A large hailstorm damaged several factories that make paint, forcing them to close down for several months.

The supply curve shifts to the left

This policy can help manage money supply.

This is an example of monetary policy

Is the following statement an example of supply, quantity supplied, the law of supply, or none of these? Select the best answer. When the price of dog food goes down, the supply goes down

This is an example of quantity supplied

Which statement is correct? Select the best answer.

Three factors that strongly influence a nation's level of trade are the size of its economy, its geographic location, and its history of trade

Which item can be used to measure the standard of living but is not used to measure GDP? Select the best answer.

Utility of research programs for society

Which statement is true? Select the best answer.

When there's a trade deficit, there should be an inflow of financial capital from abroad.

Is the following a normative statement? Select the best answer. Unhealthy foods should be heavily taxed to reduce the occurrence of diabetes and obesity.

Yes, this is a normative statement

Is the following a positive statement? Select the best answer. Fiscal policy allows the government to increase or decrease taxes.

Yes, this is a positive statement

Is the following scenario an example of globalization? Select the best answer. A local zoo has an exotic birds exhibit.

Yes, this is an example of globalization

Does the following statement explain why theories/models are important? Select the best answer. They are important because analysts are able to understand economic issues and any associated problems.

Yes, this statement explains why economic theories/models are important

Which of the following scenarios requires an opportunity cost decision? Select the best answer.

You have 25 dollars to spend on sneakers or sandals

Which statement is correct? Select the best answer.

employers typically review wages only once or twice a year

For the following sentence, fill in the blank with the correct theory. The [blank] says that there is no clear way in a decentralized economy to decrease worker's wages in bad economic times, even if workers are hypothetically willing to see a decline in their own wages as long as everyone else also experiences a decline.

relative wage coordination argument