Quiz Q's Macro Econ
Causes of market failure include.. A. externalities and market power. B. market power and incorrect forecasts of consumer demand. C. externalities and foreign competition. D. incorrect forecasts of consumer demand and foreign competition.
A. Externalities & market power
If the average income of an Australian is higher than the average income of a Russian, it is most likely because A. productivity is higher in Australia than in Russia. B. Australia has a more industrial economy than Russia. C. there is more competition in Australia than in Russia. D. labor unions are more powerful in Australia than in Russia.
A. productivity is higher in Australia than in Russia
A rational decision maker takes an action if and only if A. the marginal benefit of the action exceeds the marginal cost of the action. B. the marginal cost of the action exceeds the marginal benefit of the action. C. the marginal cost of the action is zero. D. the opportunity cost of the action is zero.
A. the marginal benefit of the action exceeds the marginal cost of the action
In an economy in which decisions are guided by prices and individual self-interest, there is A. the potential to achieve efficiency in production. B. a strong need for government intervention in the market. C. less efficiency than would be observed in a centrally-planned economy. D. more need for a strong legal system to control individual greed than would be needed in a centrally-planned economy.
A. the potential to achieve efficiency in production
For most students, the largest single cost of a college education is A. the wages given up to attend school. B. tuition, fees, and books. C. room and board. D. transportation, parking, and entertainment.
A. the wages given up to attend school
Large and long-run or persistent inflation is almost always caused by A. excessive government spending. B. excessive growth in the quantity of money. C. foreign competition. D. higher-than-normal levels of productivity.
B. Excessive growth in the quantity of money
With respect to the attainment of an efficient allocation of resources, which of the following statements is correct? A. Markets are always a good way to organize economic activity. B. Markets are often a good way to organize economic activity. C. Markets are seldom a good way to organize economic activity. D. Markets are never a good way to organize economic activity.
B. Markets are often a good way to organize economic activity
A typical society strives to get the most it can from its scarce resources. At the same time, the society attempts to distribute the benefits of those resources to the members of the society in a fair manner. In other words, the society faces a tradeoff between A. guns and butter. B. efficiency and equity. C. inflation and unemployment. D. work and leisure.
B. efficiency & equity
Economists are particularly adept at understanding that people respond to A. laws. B. incentives. C. punishments more than rewards. D. rewards more than punishments.
B. incentives
The adage "There is no such thing as a free lunch" is used to illustrate the principle that A. goods are scarce. B. people face tradeoffs. C. income must be earned. D. households face many decisions.
B. people face tradeoffs
A rationale for government involvement in a market economy is as follows: A. Markets sometimes fail to produce a fair distribution of economic well-being. B. Markets sometimes fail to produce an efficient allocation of resources. C. Property rights have to be enforced. D. All of the above are correct.
D. All the above are correct
The phenomenon of scarcity stems from the fact that A. most economies' production methods are not very good. B. in most economies, wealthy people consume disproportionate quantities of goods and services. C. governments restricts production of too many goods and services. D. resources are limited.
D. Resources are limited
Which of the following is not generally regarded as a legitimate reason for gov't to intervene in a market? A. To promote efficiency B. To promote equity C. To enforce property rights D. To protect an industry from foreign competition
D. To Protect an industry from foreign competition
When the government attempts to improve equity in an economy the result is often A. an increase in overall output in the economy. B. additional government revenue since overall income will increase. C. a reduction in equity. D. a reduction in efficiency.
D. a reduction in efficiency
If a copper refinery does not bear the entire cost of the smoke it emits, it will a. not emit any smoke so as to avoid the entire cost of the smoke. b. emit lower levels of smoke. c. emit an acceptable level of smoke. d. emit too much smoke.
D. emit too much smoke
Taxes adversely affect the allocation of resources in society because A. they do not always fall more heavily on the rich than on the poor. B. the taxes collected are not enough to finance government spending. C. not everyone pays taxes. D. they distort prices and thus distort the decisions of households and firms.
D. they distort prices & thus distort the decisions of households & firms
Refer to Figure 4-10. Which of the four graphs represents the market for pizza delivery in a college town as we go from summer to the beginning of the fall semester? a.A b.B c.C d.D
a. A (see phone pic)
Which of the following statements about GDP is correct? a. Nominal GDP values production at current prices, whereas real GDP values production at constant prices. b. Nominal GDP values production at constant prices, whereas real GDP values production at current prices. c. Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process. d. Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.
a. Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
Ralph pays someone to mow his lawn, while Mike mows his own lawn. Regarding these two practices, which of the following statements is correct? a. Only Ralph's payments are included in GDP. b. Ralph's payments as well as the estimated value of Mike's mowing services are included in GDP. c. Neither Ralph's payments nor the estimated value of Mike's mowing services is included in GDP. d. Ralph's payments are definitely included in GDP, while the estimated value of Mike's mowing services is included in GDP only if Mike voluntarily provides his estimate of that value to the government.
a. Only Ralph's payments are included in GDP
Which of the following is an acknowledged problem of the consumer price index (CPI) as a measure of the cost of living? a. The CPI fails to measure all changes in the quality of goods. b. The CPI displays a housing bias. c. The CPI accounts for changes in prices of some goods, but prices of certain goods are assumed to remain constant. d. All of the above are correct.
a. The CPI fails to measure all changes in the quality of goods.
A decrease in input costs to firms in a market will result in a.a decrease in equilibrium price and an increase in equilibrium quantity. b.a decrease in equilibrium price and a decrease in equilibrium quantity. c.an increase in equilibrium price and no change in equilibrium quantity. d.an increase in equilibrium price and an increase in equilibrium quantity.
a. a decrease in equilibrium price & an increase in equilibrium quantity
Policies such as rent control and import quotas persist in spite of the fact that economists are virtually united in their opposition to such policies, probably because a.economists have not yet convinced the general public that the policies are undesirable. b.economists engage in positive analysis, not normative analysis. c.economists have values that are different from the values of most non-economists. d.economists' theories are not easily confirmed or refuted in laboratory analysis.
a. economists have not yet convinced the general public that the policies are undesirable.
If the supply of a product decreases, we would expect a.equilibrium price to increase and equilibrium quantity to decrease. b.equilibrium price to decrease and equilibrium quantity to increase. c.equilibrium price and equilibrium quantity both to increase. d.equilibrium price and equilibrium quantity both to decrease.
a. equilibrium price to increase & equilibrium quantity to decrease
Which of the following items is included in U.S. GDP? a. goods produced by foreign citizens working in the United States b. the difference in the price of the sale of an existing home and its original purchase price c. known illegal activities d. None of the above is included in GDP.
a. goods produced by foreign citizens working in the United States
When the quality of a good improves, the purchasing power of the dollar a. increases, so the CPI overstates the change in the cost of living if the quality change is not accounted for. b. increases, so the CPI understates the change in the cost of living if the quality change is not accounted for. c. decreases, so the CPI overstates the change in the cost of living if the quality change is not accounted for. d. decreases, so the CPI understates the change in the cost of living if the quality change is not accounted for.
a. increases, so the CPI overstates the change in the cost of living if the quality change is not accounted for.
Unemployment would cause an economy to a.produce inside its production possibilities frontier. b.produce on its production possibilities frontier. c.produce outside its production possibilities frontier. d.experience an inward shift of its production possibilities frontier.
a. produce inside its production possibilities frontier
A country reported nominal GDP of $100 billion in 2006 and $75 billion in 2005; it reported a GDP deflator of 125 in 2006 and 120 in 2005. Between 2005 and 2006, a. real output and the price level both rose. b. real output rose and the price level fell. c. real output fell and the price level rose. d. real output and the price level both fell.
a. real output and the price level both rose.
When economists are trying to explain the world, they are a.scientists. b.policy advisers. c.in the realm of microeconomics rather than macroeconomics. d.in the realm of normative economics rather than positive economics.
a. scientists
Suppose that dairy products have risen in price relatively less than prices in general over the last several years. To which problem in the construction of the CPI is this "low" rate of price increase most relevant? a. substitution bias b. introduction of new goods c. unmeasured quality change d. income bias
a. substitution bias
In calculating the consumer price index, a fixed basket of goods is used. The quantities of the goods in the fixed basket are determined by a. surveying consumers. b. surveying sellers of those goods. c. working backward from the rate of inflation to arrive at imputed values for those quantities. d. arbitrary choices made by federal government employees.
a. surveying consumers
When an economy is operating inside its production possibilities frontier we know that a.there are unused resources or inefficiencies in the economy. b.all of the economy's resources are fully employed. c.economic growth would have to occur in order for the economy to move to a point on the frontier. d.in order to produce more of one good, the economy would have to give up some of the other good.
a. there are unused resources or inefficiencies in the economy
If an economy is producing efficiently, then a.there is no way to produce more of one good without producing less of another good. b.it is possible to produce more of both goods without increasing the quantities of inputs that are being used. c.it is possible to produce more of one good without producing less of the other. d.it is not possible to produce more of any good at any cost.
a. there is no way to produce more of one good without producing less of another good.
Refer to Figure 4-7. At a price of $15, a.there would be a shortage of 400 units. b.there would be a surplus of 400 units. c.there would be a shortage of 200 units. d.there would be an excess demand of 200 units.
a. there would be a shortage of 400 units (see phone pic)
One thing economists do to help them understand how the real world works is as follows a.They make assumptions. b.They ignore the past. c.They try to capture every aspect of the real world in the models they construct. d.All of the above are correct.
a. they make assumptions
4.In building economic models, economists often omit a.assumptions. b.theories. c.details. d.equations.
c. details
In a certain economy in 2005, GDP amounted to $5,000; consumption amounted to $3,000; government purchases were equal to investment; and the value of imports exceeded the value of exports by $200. It follows that government purchases amounted to a. $900. b. $1,100. c. $1,250. d. $1,325.
b. $1,100
The 2005 CPI was 196 and the 1982 CPI was 96.5. If your parents put aside $1,000 for you in 1982, how much would you have needed in 2005 in order to buy what you could have bought with the $1,000 in 1982? a. $1,834.20 b. $2,031.09 c. $2,308.89 d. None of the above is correct.
b. $2,031.09
Tyler and Camille both live in Oklahoma. A new-car dealer in Oklahoma bought a new car from the manufacturer for $17,000 and sold it to Tyler for $20,000. Later that year, Tyler sold the car to Camille for $15,000. By how much did these transactions contribute to U.S. GDP for the year? a. $17,000 b. $20,000 c. $35,000 d. $52,000
b. $20,000
Suppose the CPI was 104 in 1967, and suppose currently the CPI is 390. According to the CPI, $10 in 1967 purchased the same number of goods and services as a. $28.88 purchases today. b. $37.50 purchases today. c. $42.64 purchases today. d. $104.00 purchases today.
b. $37.50 purchases today.
Andrew is offered a job in Little Rock, where the CPI is 80, and a job in New York, where the CPI is 125. Andrew's job offer in Little Rock is for $42,000. How much does the New York job have to pay in order for the two salaries to represent about the same purchasing power? a. $74,667 b. $65,625 c. $60,900 d. $52,500
b. $65,625
Which of the following statements is correct? a.Buyers determine supply and sellers determine demand. b.Buyers determine demand and sellers determine supply. c.Buyers and sellers as one group determine supply, but only buyers determine demand. d.Buyers and sellers as one group determine demand, but only sellers determine supply.
b. Buyers determine demand & sellers determine supply
Which of the following statements is correct about the extent of disagreement among economists? a.There is a great deal of agreement among economists on virtually every economic issue. Correct Response b.There is a great deal of agreement among economists on many important economic issues. c.All disagreements among economists are attributable to differences in their values. d.All disagreements among economists are attributable to the fact that different economists have different degrees of faith in the validity of alternative economic theories.
b. There is a great deal of agreement among economists on many important economic issues
Today's demand curve for gasoline could shift in response to a.a change in today's price of gasoline. b.a change in the expected future price of gasoline. c.a change in the number of sellers of gasoline. d.All of the above are correct.
b. a change in the expected future price of gasoline
Grapes are a. always counted as an intermediate good. b. counted as an intermediate good only if they are used to produce another good such as wine. c. counted as an intermediate good only if they are consumed. d. counted as an intermediate good, whether they are used to produce another good or consumed.
b. counted as an intermediate good only if they are used to produce another good such as wine.
In a competitive market, a.only a few sellers sell the same product. b.each seller has a limited degree of control over the price of his product. c.if one buyer chooses to purchase a large quantity of the product, the price will rise. d.if one seller withholds his product from the market, prices will rise.
b. each seller has a limited degree of control over the price of his product
A market supply curve is determined by a.vertically summing individual supply curves. b.horizontally summing individual supply curves. c.finding the average quantity supplied by sellers at each possible price. d.finding the average price at which sellers are willing and able to sell a particular quantity of the good.
b. horizontally summing individual supply curves
The real interest rate tells you a. how fast the number of dollars in your bank account rises over time. b. how fast the purchasing power of your bank account rises over time. c. the number of dollars in your bank account today. d. the purchasing power of your bank account today.
b. how fast the purchasing power of your bank account rises over time.
A rational decision maker takes an action only if the a. marginal benefit is less than the marginal cost. b. marginal benefit is greater than the marginal cost. c. average benefit is greater than the average cost. d. marginal benefit is greater than both the average cost and the marginal cost.
b. marginal benefit is greater than the marginal cost
One way to characterize the difference between positive statements and normative statements is as follows: a.Positive statements tend to reflect optimism about the economy and its future, whereas normative statements tend to reflect pessimism about the economy and its future. b.Positive statements offer descriptions of the way things are, whereas normative statements offer opinions on how things ought to be. c.Positive statements involve advice on policy matters, whereas normative statements are supported by scientific theory and observation. d.Economists outside of government tend to make normative statements, whereas government-employed economists tend to make positive statements.
b. positive statements offer descriptions of the way things are, whereas normative statements offer opinions on how things ought to be.
.Each of the following is a determinant of demand except a.tastes. b.technology. c.expectations. d.the prices of related goods.
b. technology
By scientific method we mean.. a.the use of modern electronic testing equipment to understand the world. b.the dispassionate development and testing of theories about how the world works. c.the use of controlled laboratory experiments to understand the way the world works. d.finding evidence to support preconceived theories about how the world works.
b. the dispassionate development & testing of theories about how the world works
Gross domestic product serves as a measure of two things: a. the total spending of everyone in the economy and the total saving of everyone in the economy. b. the total income of everyone in the economy and the total expenditure on the nation's output of goods and services. c. the value of the nation's output of goods and services for domestic citizens and the value of the nation's output of goods and services for the rest of the world. d. the nation's saving and the nation's investment.
b. the total income of everyone in the economy & the total expenditure on the nation's output of goods & services
A production possibilities frontier can shift outward if a.government increases the amount of money in the economy. b.there is a technological improvement. c.resources are shifted from the production of one good to the production of the other good. d.the economy abandons inefficient production methods in favor of efficient production methods.
b. there is a technological improvement
The consumer price index is used to a. differentiate gross national product from net national product. b. turn dollar figures into meaningful measures of purchasing power. c. characterize the types of goods and services that consumers purchase. d. measure the quantity of goods and services that the economy produces.
b. turn dollar figures into meaningful measures of purchasing power.
Recent changes in methods used to compute the CPI have made the a. upward bias in the CPI inflation rate more severe than it used to be. b. upward bias in the CPI inflation rate less severe than it used to be. c. downward bias in the CPI inflation rate more severe than it used to be. d. downward bias in the CPI inflation rate less severe than it used to be.
b. upward bias in the CPI inflation rate less severe than it used to be.
Babe Ruth's 1931 salary was $80,000. Government statistics show a consumer price index of 15.2 for 1931 and 195 for 2005. Ruth's 1931 salary was equivalent to a 2005 salary of about a. $536,000. b. $828,000. c. $1,026,000. d. $1,216,000.
c. $1,026,000.
Ruth collected Social Security payments of $220 a month in 1985. If the price index rose from 90 to 105 between 1985 and 1986, then her Social Security payments for 1986 should have been about a. $252.43. b. $253.00. c. $256.67. d. None of the above is correct.
c. $256.67.
Table 24-1 year Peaches Pecans 2005 $11 per bushel $6 per bushel 2006 $12 per bushel $10 per bushel Refer to Table 24-1. Suppose the typical consumer basket consists of 10 bushels of peaches and 15 bushels of pecans. Using 2005 as the base year, the CPI for 2006 is a. 100. b. 120. c. 135. d. 270. e. None of the above.
c. 135
If the nominal interest rate is 8 percent and rate of inflation is 5.5 percent, then the real interest rate is a. 13.5 percent. b. 12 percent. c. 2.5 percent. d. -2.5 percent.
c. 2.5 percent
Suppose that demand decreases and supply decreases. What would you expect to occur in the market for the good? a.Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. b.Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. c.Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous. d.Both equilibrium price and equilibrium quantity would increase.
c. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
Suppose that twenty-five years ago a country had nominal GDP of $1,000, a GDP deflator of 200, and a population of 100. Today it has nominal GDP of $3,000, a GDP deflator of 400, and population of 150. What happened to the real GDP per person? a. It more than doubled. b. It increased, but it less than doubled. c. It was unchanged. d. It decreased.
c. It was unchanged.
Which of the following statements is correct? a. The value of all intermediate goods and final goods is included in GDP. b. The value of intermediate goods is included in GDP only if those goods were produced in the previous year. c. The value of intermediate goods is included in GDP only if those goods are added to firms' inventories to be used or sold at a later date. d. The value of intermediate goods is never included in GDP.
c. The value of intermediate goods is included in GDP only if those goods are added to firms' inventories to be used or sold at a later date.
When the relative price of a good increases, consumers will respond by buying a. a larger quantity of that good and a larger quantity of substitutes for that good. b. a larger quantity of that good and a smaller quantity of substitutes for that good. c. a smaller quantity of that good and a larger quantity of substitutes for that good. d. a smaller quantity of that good and a smaller quantity of substitutes for that good.
c. a smaller quantity of that good and a larger quantity of substitutes for that good.
Lead is an important input in the production of crystal. If the price of lead decreases, other things equal, we would expect the supply of a.crystal to be unaffected. b.crystal to decrease. c.crystal to increase. d.lead to increase.
c. crystal to increase
If the demand for a product increases, we would expect a.equilibrium price to increase and equilibrium quantity to decrease. b.equilibrium price to decrease and equilibrium quantity to increase. c.equilibrium price and equilibrium quantity both to increase. d.equilibrium price and equilibrium quantity both to decrease.
c. equilibrium price & equilibrium quantity both to increase
Which of the following statistics is usually regarded as the best single measure of a society's economic well-being? a. the unemployment rate b. the inflation rate c. gross domestic product d. the trade deficit
c. gross domestic product (GDP)
In the CPI, goods and services are weighted according to a. how long a market has existed for each good or service. b. the extent to which each good or service is regarded by the government as a necessity. c. how much consumers buy of each good or service. d. the number of firms that produce and sell each good or service.
c. how much consumers buy of each good or service.
A company that formerly produced software went out of business because too many potential customers bought illegally-produced copies of the software instead of buying the product directly from the company. This instance serves as an example of a. market power. b. market failure. c. inadequate enforcement of property rights. d. the invisible hand at work.
c. inadequate enforcement of property rights
Goods that go into inventory and are not sold during the current period are a. counted as intermediate goods and so are not included in current period GDP. b. counted in current GDP only if the firm that produced them sells them to another firm. c. included in current period GDP as inventory investment. d. included in current period GDP as consumption.
c. included in current period GDP as inventory investment.
You know an economist has crossed the line from scientist to policy adviser when he or she a.claims that the problem at hand is widely misunderstood by non-economists. b.talks about the evidence. c.makes normative statements. d.makes positive statements
c. makes normative statements
For the purpose of calculating GDP, investment is spending on a. stocks, bonds, and other financial assets. b. real estate and financial assets. c. new capital equipment, inventories, and structures, including new housing. d. capital equipment, inventories, and structures, excluding household purchases of new housing.
c. new capital equipment, inventories, and structures, including new housing.
Refer to Figure 2-8. If this economy puts all of its resources into the production of bathtubs it could produce a.20 barrels and 12 bathtubs. b.no barrels and 14 bathtubs. c.no barrels and 16 bathtubs. d.More information is required in order to make this determination.
c. no barrels & 16 bathtubs (see phone pic)
Refer to Figure 4-9. If the price is $10, there would be a a.shortage of 200 and price would rise. b.surplus of 200 and price would fall. c.shortage of 600 and price would rise. d.surplus of 600 and price would fall.
c. shortage of 600 & price would rise (see phone pic)
A COLA automatically raises the wage rate when a. GDP increases. b. taxes increase. c. the consumer price index increases. d. the producer price index increases.
c. the consumer price index increases.
Which of the following would be considered a topic of study in macroeconomics? a.the effect of agricultural price support programs on the cotton industry b.the effect on U.S. steel producers of an import quota imposed on foreign steel c.the effect of an increasing inflation rate on national living standards d.the effect of an increase in the price of imported coffee beans on the U.S. coffee industry
c. the effect of an increasing inflation rate on national living standards
Estimates of the values of which of the following non-market goods or services are included in GDP? a. the value of unpaid housework b. the value of vegetables and other foods that people grow in their gardens c. the estimated rental value of owner-occupied homes d. All of the above are included.
c. the estimated rental value of owner-occupied homes
Refer to Figure 4-8. If there is currently a shortage of 30 units of the good, then a.the law of demand predicts that the price will rise by $5 to eliminate the shortage. b.the law of supply predicts that the price will rise by $5 to eliminate the shortage. c.the law of supply and demand predicts that the price will rise by $3 to eliminate the shortage. d.the law of supply and demand predicts that the price will fall from its current level by an indeterminate amount, exacerbating the shortage.
c. the law of supply & demand predicts that the price will rise $3 to eliminate the shortage (see phone pic)
In Japan in 2000, nominal interest rates were 1.5 percent and the inflation rate was -0.5 percent. The real interest rate was a. -2 percent. b. -1 percent. c. 1 percent. d. 2 percent.
d. 2 percent
The negative relationship between price and quantity demanded a.applies to most goods in the economy. b.is represented by a downward-sloping demand curve. c.is referred to as the law of demand. d.All of the above are correct.
d. All of the above are correct
Which of the following statements is (are) correct? a.Relative to other scientists, economists find it more difficult to generate useful data. b.Theory and observation are important in economics as well as in other sciences. c.To obtain data, economists often rely upon the natural experiments offered by history. d.All of the above are correct.
d. All of the above are correct
GDP does not reflect a. the value of leisure. b. the value of goods and services produced at home. c. the quality of the environment. d. All of the above are correct.
d. All of the above are correct.
Which of the following statements is accurate? a. In rich countries, people typically live into their late seventies, while in poor countries, people typically live only until their fifties or early sixties. b. In rich countries, almost all citizens can read, while in poor countries, about half the population is illiterate. c. Poor countries tend to have higher infant mortality rates, higher maternal mortality, and higher rates of child malnutrition than do rich countries. d. All of the above are correct.
d. All of the above are correct.
Which of these statements is a normative statement (as opposed to a positive statement)? a.Gasoline prices ought to be lower than they are now. b.The federal government should raise taxes on wealthy people. c.The social security system is a good system and it deserves to be preserved as it is. d.All of the above are normative statements.
d. All the above are normative statements
Refer to Figure 4-10. Which of the four graphs represents the market for peanut butter after a major hurricane hits the peanut-growing south? a.A b.B c.C d.D
d. D (see phone pic)
The proportion of slum housing in the United States has fallen from 50% of the housing stock in 1940 to about 3% today. What is the best explanation for this? a.The government has had many housing programs and policies (e.g. public housing) that have led to the large rise in housing quality. b.The income tax deduction for mortgage interest payments has lowered the cost of buying good quality housing. c. Construction costs in the United States are very low. d.Economic growth over time and the large rise in the standard of living since 1940 has led to rising demand for good quality housing.
d. Economic growth over time and the large rise in the standard of living since 1940 has led to rising demand for good quality housing.
Which among the following statements is correct about the relationship between inflation and interest rates? a. There is no relationship between inflation and interest rates. b. The interest rate is determined by the rate of inflation. c. In order to fully understand inflation, we need to know how to correct for the effects of interest rates. d. In order to fully understand interest rates, we need to know how to correct for the effects of inflation.
d. In order to fully understand interest rates, we need to know how to correct for the effects of inflation.
The tradeoff between inflation and unemployment a. implies that policies designed to reduce unemployment also reduce inflation. b. was eliminated by improved economic policies in the 1900s. c. is a long-run tradeoff, persisting for decades, according to most economists. d. None of the above are correct.
d. None of the above are correct
Table 1: The information in the table below pertains to the Uniited States. Year Nominal GDP (Billions) GDP Deflator (%) 2005 $6,000 80 2006 $8,000 100 2007 $10,000 200 Refer to Table 1. From this information we can conclude that a. Real GDP was higher in 2007 than 2005. b. Real GDP was lower in 2006 than in 2007. c. Real GDP was higher in 2007 than in 2005. d. Real GDP was higher in 2006 than in 2005. e. None of the above is corrrect.
d. Real GDP was higher in 2006 than in 2005.
The information in the table below pertains to the United States. Year GDP Deflator (%) 2008 90 2009 100 2010 110 2011 120 2012 150 Refer to Table 2. From this information we can conclude that a. The rate of inflation between 2008 and 2009 was 10%. b. The rate of inflation between 2011 and 2012 was 30% c. The rate of inflation between 2009 and 2011 was 10%. d. The rate of inflation between 2008 and 2010 was 22.2%. e. None of the above is correct.
d. The rate of inflation between 2008 and 2010 was 22.2%
Refer to Figure 4-2. The movement from D to D1 could be caused by a.an increase in price. b.a decrease in the price of a complement. c.a technological advance. d.a decrease in the price of a substitute.
d. a decrease in the price of a substitute (see phone pic)
Which of these events would cause the consumer price index to overstate the increase in the cost of living? a. Car makers benefit from a new technology that allows them to sell higher-quality cars to consumers with no increase in price. b. Energy prices decrease, and consumers respond by buying more gas and electricity. c. A new good is introduced that renders cellular telephones inferior and obsolete. d. All of the above are correct.
d. all of the above are correct
Refer to Figure 2-4. The opportunity cost of obtaining 15 additional toasters by moving from point D to point C is a.10 toothbrushes. b.20 toothbrushes. c.30 toothbrushes. d.none of the above; the economy cannot move from point D to point C.
d. none of the above (see phone pic)
If real GDP doubles and the GDP deflator doubles, then nominal GDP a. remains constant. b. doubles. c. triples. d. quadruples.
d. quadruples
Production possibilities frontiers are usually bowed outward. This is because a.the more resources a society uses to produce one good, the fewer resources it has available to produce another good. b.it reflects the fact that the opportunity cost of producing a good decreases as more and more of that good is produced. c.of the effects of technological change. d.resources are specialized, that is, some are better at producing particular goods rather than other goods.
d. resources are specialized, that is, some are better at producing particular goods rather than other goods
In a market economy, economic activity is guided by a. the government. b. corporations. c. central planners. d. self-interest and prices.
d. self-interest & prices
Which of the following topics are more likely to be studied by a macroeconomist than by a microeconomist? a. the effect of taxes on the prices of airline tickets, the profitability of automobile-manufacturing firms, and employment trends in the food-service industry b. the price of beef, wage differences between genders, and antitrust laws c. how consumers maximize utility, and how prices are established in markets for agricultural products d. the percentage of the labor force that is out of work, and differences in average income from country to country
d. the percentage of the labor force that is out of work, and differences in average income from country to country
When constructing a production possibilities frontier, which of the following assumptions is not made? a.The economy produces only two goods or two types of goods. b.Firms produce goods using factors of production. c.The technology available to firms is given. d.The quantities of the factors of production that are available are increasing over the relevant time period.
d. the qualities of the factors of production that are available are increasing over the relevant time period
When the price of a good or service changes, a.the supply curve shifts in the opposite direction. b.the demand curve shifts in the opposite direction. c.the demand curve shifts in the same direction. d.there is a movement along a given demand curve.
d. there is a movement along a given demand curve
Refer to Figure 2-4. The opportunity cost of obtaining 10 additional toasters by moving from point B to point A is a.10 toothbrushes. b.20 toothbrushes. c.30 toothbrushes. d.zero, since the economy has the additional resources to produce 10 additional toasters.
d. zero, since the economy has the additional resources to produce 10 additional toasters (see phone pic)
New York City has had some form of rent control since 1942. A key problem or problems that this policy has caused are: a.An oversupply of rental housing. b.There has been a long-run housing shortage. c. The quantity of rental housing supply is greater than the quantity of housing demanded. d.The quality of the rental housing stock has deteriorated over time as landlords have reduced maintenance expenditures. e. both b and d
e. both b & d