All Quizzes

3. SEE QUIZ THREE FOR CHART FOR INDEX INCREASE

3. SEE QUIZ THREE FOR CHART FOR INDEX INCREASE

7. If the money supply exceeds money demand, people will ____ bonds which will cause bond prices to ____ and the nominal interest rate to _____ until money demand equals money supply. A. buy; rise; fall B. sell; fall; fall C. sell; rise; fall D. buy; fall; rise

A. buy; rise; fall (Quiz 9)

2. Industrial production, total sales, nonfarm employment, and after-tax household income are examples of _____ indicators of economic activity. A. coincident B. preceding C. lagged D. real

A. coincident (Quiz 7)

3. When actual investment is greater than planned investment: A. firms sold less output than expected. B. firms sold more output than expected. C. the quantity of output sold is the amount the firm expected to sell. D. the economy produces short-run equilibrium output.

A. firms sold less output than expected. (Quiz 8)

8. Prior to January 2000, the demand for money increased as people anticipated Y2K problems. If the Fed took no actions to offset this increase in money demand and assuming that the anticipated Y2K problems did not change money supply, then nominal interest rates would _____. A. increase B. decrease C. remain constant D. equal the real interest rates

A. increase (Quiz 9)

3. When Federal Reserve actions cause interest rates on newly issued bonds to decrease from 6% to 5%, the prices of existing bonds: A. increase. B. decrease. C. remain unchanged. D. decrease only if the coupon rate is less than 5%.

A. increase. (Quiz 6)

1. If the total expenditures of a typical family equaled $35,000 per year in 2010 and the exact same basket of goods and services cost $40,000 in the year 2015, the family's cost of living: A. increased by 14 percent. B. decreased by 12.5 percent. C. decreased by 14 percent. D. increased by 12.5 percent.

A. increased by 14 percent. (Quiz 3)

5. A year's tuition at a state university cost $250 in 1972 when the CPI equaled 0.418. The cost of a year's tuition at the same state university cost $3000 in 2015 when the CPI equaled 1.68. The real cost of tuition between 1972 and 2015: A. increased. B. decreased. C. remained constant. D. may have either increased or decreased.

A. increased. (Quiz 3)

8. If the price of motel rooms increases by 10% while the prices of other goods and services increase by 5 % on average, the relative price of motel rooms has: A. increased. B. decreased by 5%. C. increased by 2%. D. remained constant.

A. increased. (Quiz 3)

7. Fred and Wilma just had a baby girl and want to make sure they save enough in the future to send her to college. This is an example of the ____ motive for saving. A. life-cycle B. bequest C. private D. precautionary

A. life-cycle (Quiz 5)

5. To close a recessionary gap, the Fed ____ interest rates which ______ planned aggregate spending and _____ short-run equilibrium output. A. lowers; increases; increases B. raises; decreases; increases C. raises; decreases; decreases D. lowers; increases; decreases

A. lowers; increases; increases (Quiz 9)

7. The money supply in Macroland is currently 2,500, bank reserves are 200, currency held by public is 500, and banks' desired reserve/deposit ratio is 0.10. Assuming the values of the currency held by the public and the desired reserve/deposit ratio do not change, if the Central Bank of Macroland wishes to increase the money supply to 3,000, then it should conduct an open-market ____ government bonds to/from the public. A. purchase of 50 B. purchase of 250 C. purchase of 500 D. sale of 50

A. purchase of 50 (Quiz 6)

4. Crowding out is the tendency for increased government deficits to: A. reduce investment spending. B. increase investment spending. C. reduce consumption spending. D. increase consumption spending.

A. reduce investment spending. (Quiz 5)

10. In the long-run, the real interest rate is determined by ______, and in the short-run, the Federal Reserve can control the real interest rate by setting the nominal interest rate if inflation adjusts _____. A. saving and investment; slowly B. saving and investment; quickly C. the Federal Reserve; quickly D. the Federal Reserve; slowly

A. saving and investment; slowly (Quiz 9)

10. Two possible explanations for the decline in the natural rate of unemployment in the United States over the past twenty years are: A. the changing age structure of the population and more efficient labor markets. B. advances in computer technology and globalization. C. increasing wage inequality and skill-biased technological change. D. greater quantities of human capital and increased average labor productivity.

A. the changing age structure of the population and more efficient labor markets. (Quiz 7)

8. The income-expenditure multiplier leads to greater than one-for-one changes in output when autonomous spending changes because: A. the direct changes in spending change the income of producers which leads to additional changes in spending. B. multiple deposits are generated when new reserves are produced through fractional reserve banking. C. autonomous spending supports more output than induced spending. D. planned changes in inventories signal producers to adjust the level of output.

A. the direct changes in spending change the income of producers which leads to additional changes in spending. (Quiz 8)

2. Jordan has the following assets and liabilities: Two Cars: $10,000 House: $200,000 Mortgage: $100,000 Cash: $1,000 Car Loans: $3,000 Checking account balance: $2,000 Credit card balance: $1,000 Jordan's wealth is _____, the value of Jordan's assets is _____ and the value of Jordan's liability is _____. A. $107,000; $213,000; $100,000 B. $109,000; $213,000; $104,000 C. $111,000; $213,000; $100,000 D. $213,000; $317,000; $104,000

B. $109,000; $213,000; $104,000 (Quiz 5)

2. In 1998, average labor productivity in the U.S. was $66,381 per worker and 48.9% of the population was employed. What is the per capita GDP in 1998? A. $33,921. B. $32,460. C. $66,381. D. cannot be determined.

B. $32,460. (Quiz 4)

5. You expect a share of EconNews.Com to sell for $65 a year from now and to pay a $2 dividend per share in one year. What should you pay (rounded to the nearest dollar) for the stock today if you require an 8% return? A. $60 B. $62 C. $67 D. $70

B. $62 (Quiz 6)

4. The CPI in 1930 equaled 0.17. The CPI in 1931 equaled 0.15. The rate of inflation between 1930 and 1931 was ____ percent. A. -13.3 B. -11.8 C. 1.5 D. 13.3

B. -11.8 (Quiz 3)

10. On January 1, 2014, Anna invested $5,000 at 5% interest for one year. The CPI on January 1, 2014 stood at 1.60. On January 1, 2015, the CPI was 1.68. The real rate of interest earned by Anna was ____ percent. A. -5 B. 0 C. 5 D. 8

B. 0 (Quiz 3)

1. If planned aggregate spending in an economy can be written as PAE = 15,000 + 0.6Y - 20,000r, and potential output equals 36,000, what real interest rate must the Federal Reserve set to bring the economy to full employment? A. 0.02 B. 0.03 C. 0.04 D. 0.05

B. 0.03 (Quiz 9)

8. If the money supply grows by 5 percent per year, velocity grows by 1 percent per year, and real GDP grows by 3 percent per year, then the rate of inflation is approximately _______ percent per year. A. 1 B. 3 C. 5 D. 7

B. 3 (Quiz 6)

6. You are given the following information about the economy: Consumption: 8000 Investment: 1,000 Government purchases: 1,000 Net exports: 0 Government and interest payment: 500 Government tax collections: 1,700 Private saving is _____; public saving is ________; and national saving is ______. A. 800; 200; 600 B. 800; 200; 1,000 C. 1,000; 800; 1,000 D. 1,500; 700; 2,700

B. 800; 200; 1,000 (Quiz 5)

4. Which of the following is an example of investing in human capital? A. A firm replaces manually controlled production with a computer controlled procedure. B. A firm pays for workers to take college classes. C. A chemical firm supports research to develop new chemicals. D. A firm purchases new equipment for a manufacturing process.

B. A firm pays for workers to take college classes. (Quiz 4)

4. Which of the following transactions would be included in the GDP of the United States? A. Coca Cola produces soft drinks in England. B. Honda produces cars in Ohio. C. McDonalds sells hamburgers in Russia. D. Ford Motor Company produces cars in Mexico.

B. Honda produces cars in Ohio. (Quiz 2)

7. For an economy starting from potential output, a decrease in planned investment in the short run results in a(n): A. expansionary output gap. B. recessionary output gap. C. increase in potential output. D. decrease in potential output.

B. recessionary output gap. (Quiz 8)

4. Changes in the growth rate of potential output and deviations of actual output from potential output are two logical explanations for: A. the decline in the natural rate of unemployment. B. short-term economic fluctuations. C. increasing wage inequality. D. skill-biased technological change.

B. short-term economic fluctuations. (Quiz 7)

3. The opportunity cost of an activity includes the value of: A. all of the alternatives that must be forgone. B. the nextbest alternative that must be foregone. C. the leastbest alternative that must be foregone. D. the chosen activity minus the value of the nextbest alternative.

B. the nextbest alternative that must be foregone. (Ch. 1)

2. If the Consumer Price Index increased from 1.52 to 1.65, then it must be the case that _____ relative to prices in the base year. A. all prices rose B. the weighted average level of prices rose C. all prices fell D. some prices rose and some prices fell

B. the weighted average level of prices rose (Quiz 3)

5. If the output gap equals -$200 million, then A. cyclical unemployment equals the sum of structural and frictional unemployment. B. there is a recessionary gap. C. there is no cyclical unemployment. D. potential GDP is less than actual GDP.

B. there is a recessionary gap. (Quiz 7)

2. Sydney purchases a newly-issued, two-year government bond with a principal amount of $10,000 and a coupon rate of 6% paid annually. One year before the bonds matures (and after receiving the coupon payment for the first year), Sydney sells the bond in the bond market. What price (rounded to the nearest dollar) will Sydney receive for his bond if the prevailing interest rate is 5%? A. $9,524 B. $10,000 C. $10,095 D. $10,600

C. $10,095 (Quiz 6)

4. Pat earns $25,000 per year (after taxes), and Pat's spouse, Chris, earns $35,000 (after taxes). They have two preschoolaged children. Childcare for their children costs $12,000 per year. Given that Chris doesn't want to stay home with the kids, regardless of what Pat does, Pat should stay home with the kids if, and only if, the value of Pat spending more time with the kids is greater than: A. $37,000 per year. B. $25,000 per year. C. $13,000 per year. D. $12,000 per year.

C. $13,000 per year. (Ch. 1)

10. The costs of economic growth include current consumption sacrificed for: A. physical capital formation. B. acquiring new human capital. C. research and development into new technologies. D. all of the above.

D. all of the above. (Quiz 4)

3. Growth in the share of population employed in the United States is likely to decline in the future because: A. increasing female labor force participation is predicted. B. increasing male labor force participation is predicted. C. population growth is expected to increase. D. an increasing proportion of those currently employed will be retiring.

D. an increasing proportion of those currently employed will be retiring. (Quiz 4)

7. Entrepreneurs contribute to increased average labor productivity in each of the following ways EXCEPT by: A. introducing new production methods. B. implementing new technological processes. C. developing new products. D. assigning workers to jobs.

D. assigning workers to jobs. (Quiz 4)

5. In the Keynesian cross diagram, the vertical intercept of the expenditure line equals _____ and the slope of the expenditure line equals _____. A. induced expenditures; autonomous expenditures B. autonomous expenditures; induced expenditures C. planned spending; unplanned spending D. autonomous expenditures; the mpc.

D. autonomous expenditures; the mpc. (Quiz 8)

9. In the short-run Keynesian model, to close an expansionary gap of $10 billion dollars government purchases must be: A. increased by $10 billion. B. decreased by $10 billion. C. increased by more than $10 billion. D. decreased by less than $10 billion.

D. decreased by less than $10 billion. (Quiz 8)

2. If the income-expenditure multiplier equals 4 and a 1 percentage point increase in the real interest rate reduces autonomous spending by 100 units, then a 1,000 unit recessionary gap can be eliminated by _____ the real interest rate by _____ percentage points. A. increasing; 10 B. increasing; 4 C. increasing; 2.5 D. decreasing; 2.5

D. decreasing; 2.5 (Quiz 9)

9. If firms maintain preset prices in the short run, then the primary cause of outputs gaps is changes in: A. potential output. B. prices. C. capital and technology. D. economywide spending.

D. economywide spending. (Quiz 7)

1. In the Keynesian model deviations of output from potential are caused by: A. fluctuations in average labor productivity. B. random output shocks. C. changing asset prices. D. fluctuations in aggregate spending.

D. fluctuations in aggregate spending. (Quiz 8)

9. Velocity is determined by: A. the Federal Reserve. B. the size of the government budget deficit. C. average labor productivity times the population growth rate. D. payments methods and technology.

D. payments methods and technology. (Quiz 6)

9. Comparisons of economic activity over time should be made using: A. nominal GDP adjusted for unemployment. B. nominal GDP per capita. C. current-dollar GDP. D. real GDP.

D. real GDP. (Quiz 2)

5. In the year, 2015 Janice Quinn sells a five-year-old car to Used Car, Inc. for $3,000. In the same year, Used Car, Inc. resells the car to Ima Goner for $3,500. What is the contribution of this transaction to GDP in the year 2015? A. $0 B. $500 C. $3,000 D. $6,500

A. $0 (Quiz 2)

5. If total government tax collections equal $200 billion, transfer payments equal $75 billion, and government interest payments equal $10 billion, then net taxes equal: A. $115 billion. B. $125 billion. C. $190 billion. D. $275 billion.

A. $115 billion. (Quiz 5)

7. In Macroland, a country that operates according to Okun's law, potential GDP equals $10 trillion, the actual rate of unemployment is 8 percent, and the natural unemployment rate is 6 percent. What is real GDP in Macroland? A. $9.6 trillion B. $9.8 trillion C. $10 trillion D. $10.2 trillion

A. $9.6 trillion (Quiz 7)

9. What might cause a demand function to shift to the right? A. An increase in the price of a substitute. B. An increase in the product's own price. C. An increase in the price of a complement. D. A decrease in the price of a substitute.

A. An increase in the price of a substitute. (Ch. 1)

5. Mike and Tom debone chicken breasts for Ted's Chicken Co. Mike is new and can only debone 30 chicken breasts per hour by hand, while Tom's experience allows him to debone 60 chicken breasts per hour by hand. Ted buys one new machine that can debone 100 chicken breasts per hour. Both Mike and Tom work the same 40 hours per week, but one of them is assigned to operate the machine instead of deboning the chicken breasts by hand. To obtain maximum average hourly productivity, ____ is assigned to use the machine and their combined average hourly productivity as a team is ____ chicken breasts A. Mike; 65 B. Mike; 80 C. Tom; 65 D. Tom; 100

B. Mike; 80 (Quiz 4)

6. If planned aggregate expenditure (PAE) in an economy equals 2,000 + .8Y and potential output (Y*) equals 11,000, then this economy has: A. an expansionary gap. B. a recessionary gap. C. no output gap. D. no autonomous expenditure.

B. a recessionary gap. (Quiz 8)

10. Ex-post (in an accounting sense), Savings _____ equals Investment. However, ex-ante, ______ savings may very well be different from _______ investment. It is the ______ which adjusts to make desired savings equal to desired investment. A. sometimes; public; private; inflation rate B. always; desired; desired; real interest rate C. always; actual; actual; nominal interest rate D. never; actual; actual; real interest rate

B. always; desired; desired; real interest rate (Quiz 5)

3. Federal Reserve actions that increase nominal interest rates and decrease the money supply A. close a recessionary gap. B. close an expansionary gap. C. raise the monetary policy rule. D. raise bond prices.

B. close an expansionary gap. (Quiz 9)

10. If short-run equilibrium output equals 10,000, the income-expenditure multiplier equals 10, and potential output (Y*) equals 9,000, then government purchases must ________ to eliminate any output gap. A. increase by 10 B. decrease by 100 C. increase by 1000 D. decrease by 1000

B. decrease by 100 (Quiz 8)

6. In Macroland there is $1,000,000 in currency that can either be held by the public or used by banks as reserves. Banks' desired reserve/deposit ratio is 10%. If the public of Macroland decides to hold more currency, increasing the proportion they hold from 50% to 75%, the money supply in Macroland will ______. A. increase. B. decrease. C. remain the same. D. either increase or decrease.

B. decrease. (Quiz 6)

2. Suppose that the extra cost to Tim of a third glass of soda is zero because he's at a restaurant that gives free refills. According to the CostBenefit Principle Tim should: A. drink a third glass of soda. B. drink a third glass of soda if the extra benefit of doing so is positive. C. drink a third glass of soda if his total benefit from drinking soda is positive. D. not drink a third glass of soda.

B. drink a third glass of soda if the (Ch. 1)

1. Two reasons savers keep deposits at banks are to: A. secure mortgages and to purchase stocks. B. earn a return on their savings and to facilitate making payments. C. lower interest rates and to increase the money supply. D. equalize loan supply and demand and to earn interest.

B. earn a return on their savings and to facilitate making payments. (Quiz 6)

10. If a bank's desired reserve/deposit ratio is .33 and it has deposit liabilities of $100 million and reserves of $50 million, it: A. has too few reserves and will reduce its lending. B. has too many reserves and will increase its lending. C. has the correct amount of reserves and outstanding loans. D. should increase the amount of its reserves.

B. has too many reserves and will increase its lending. (Quiz 6)

2. National defense services provided by the military are: A. included in GDP at market prices. B. included in GDP at cost. C. excluded from GDP because they are not sold in markets. D. excluded from GDP because they are intermediate goods.

B. included in GDP at cost. (Quiz 2)

7. You can spend $5 for lunch and you would like to have two double cheeseburgers. When you get to the restaurant, you find out the price for double cheeseburger has increased from $2.50 to $2.99. You decide to have just one double cheeseburger for lunch. This is best described as a(n): A. substitution effect. B. income effect. C. buyer's reservation price effect. D. seller's reservation price effect.

B. income effect. (Ch. 1)

6. In an economy where planned aggregate spending is given by PAE = 5,500 + .6Y - 20,000 r, the central bank is currently setting the interest rate at 0.06 (6 percent). If potential output equals 11,250, the central bank must ____ the interest rate to close the __________ gap. A. lower; expansionary B. lower; recessionary C. raise; recessionary D. raise; expansionary

B. lower; recessionary (Quiz 9)

1. Economic activity moves from a period of expansion to a _______ and then moves into a period of _______ until it reaches a _____. A. peak; expansion; trough B. peak, recession; trough C. trough; expansion; peak D. trough; recession; peak

B. peak, recession; trough (Quiz 7)

8. If the actual rate of unemployment equals the natural rate of unemployment, then: A. potential output is greater than real GDP. B. potential output equals real GDP. C. potential output is less than real GDP. D. there is a recessionary gap.

B. potential output equals real GDP. (Quiz 7)

7. Inflation in the health-care sector apparently is overstated because the CPI does not adequately adjust for _____ changes. A. price B. quality C. volume D. quantity

B. quality (Quiz 3)

8. Last summer, real estate prices in your town soared. You started noticing more "For Sale" signs in your neighbors' yards. You conclude that: A. people don't like to live in your neighborhood anymore. B. when housing prices rose, they started to exceed some of your neighbors' reservation prices. C. the demand curve for housing in your town has shifted to the left while supply remained constant. D. the supply curve for housing in your town has shifted to the right while demand has remained constant.

B. when housing prices rose, they started to exceed some of your neighbors' reservation prices. (Ch. 1)

5. Due to the fact that Curly used his frequent flyer miles to fly to visit Moe, Curly told Moe that it didn't cost him anything to visit. Is Curly correct? A. Yes, because Curly's frequent flyer miles made the trip free. B. Yes, because Curly could stay at Moe's house for free. C. No, because Curly could have used his frequent flyer miles to go somewhere else instead. D. No, because Curly had to pay for earlier trips in order to earn the frequent flyer miles.

C. No, because Curly could have used his frequent flyer miles to go somewhere else instead. (Ch. 1)

8. Empirical studies indicate that the maximum amount of air pollution occurs _______ levels of real GDP per person. A. at the highest B. at the lowest C. at intermediate D. equally at all

C. at intermediate (Quiz 4)

4. Changes in consumption and planned investment spending resulting from changes in the real interest rate alter: A. the money supply. B. money demand. C. autonomous expenditures. D. induced expenditures.

C. autonomous expenditures. (Quiz 9)

6. According to Okun's Law, each extra percentage point of ___ unemployment is associated with a ____ percentage point increase in the output gap, measured in relation to potential output. A. frictional; 2 B. frictional; 4 C. cyclical; 2 D. cyclical; 4

C. cyclical; 2 (Quiz 7)

1. The rise in average living standards experienced by most industrialized countries: A. has been continuous over the course of human history. B. was more rapid before 1870 than after 1870. C. has been more rapid since 1950 than before 1950. D. has resulted primarily from an increase in population worldwide.

C. has been more rapid since 1950 than before 1950. (Quiz 4)

1. Economics is best defined as the study of: A. inflation, interest rates and the stock market. B. supply and demand. C. how people make choices in the face of scarcity and the implications of those choices for society as a whole. D. the financial concerns of businesses and individuals.

C. how people make choices in the face of scarcity and the implications of those choices for society as a whole. (Ch. 1)

9. Governments contribute to increased average labor productivity in each of the following ways EXCEPT by: A. establishing well-defined property rights. B. maintaining political stability. C. imposing taxes on wages. D. allowing the free and open exchange of ideas.

C. imposing taxes on wages. (Quiz 4)

4. The current price of a stock increases when: A. expected future dividends decrease. B. the expected future price of the stock decreases. C. interest rates decrease. D. the perceived riskiness of the stock increases.

C. interest rates decrease. (Quiz 6)

10. In the base year, real GDP ______ nominal GDP. A. is greater than B. is less than C. is equal to D. could be greater than or less than

C. is equal to (Quiz 2)

9. The supply of saving equals desired (or, ex-ante) _____ and the demand for saving equals desired (or, ex ante) _____. A. investment; national saving B. investment; public saving C. national saving; investment D. national saving; capital

C. national saving; investment (Quiz 5)

9. The Federal Reserve can: A. simultaneously set any money supply and any nominal interest rate target. B. set the target money supply and target nominal interest rate independently. C. only set a money supply target that is consistent with the target nominal interest rate. D. only target the money supply, not the nominal interest rate.

C. only set a money supply target that is consistent with the target nominal interest rate. (Quiz 9)

1. When economists use market values to aggregate output, they sum the: A. number of items produced. B. quantity of items produced. C. price times the quantity of each item produced. D. inputs of each item produced.

C. price times the quantity of each item produced. (Quiz 2)

3. When recessions are the result of slowing growth in potential output, the government's best response is a policy to: A. increase aggregate demand. B. decrease aggregate demand. C. promote saving and investment. D. reduce government spending.

C. promote saving and investment. (Quiz 7)

8. Holding other factors constant, a decrease in the tax rate on the revenue generated by capital will: A. shift the savings graph to the right; reduce the equilibrium real rate of interest and increase national saving in equilibrium. B. shift the savings graph to the left; raise the equilibrium real rate of interest and decrease national saving in equilibrium. C. shift the investment graph to the right; raise the equilibrium real rate of interest and increase investment in equilibrium. D. shift the investment graph to the left; reduce the equilibrium real rate of interest and decrease investment in equilibrium

C. shift the investment graph to the right; raise the equilibrium real rate of interest and increase investment in equilibrium. (Quiz 5)

6. Most economists agree that ______ is/are the single most important source of productivity improvements. A. increases in human capital B. increases in physical capital C. technological advances D. discoveries of natural resources

C. technological advances (Quiz 4)

6. As coffee becomes more expensive, Joe starts drinking tea, and therefore quantity demanded for coffee decreases. This is called: A. the income effect. B. the change in equilibrium. C. the substitution effect. D. a shift in the demand curve.

C. the substitution effect. (Ch. 1)

6. A labor contract provides for a first-year wage of $10 per hour, and specifies that the real wage will rise by 3 percent in the second year of the contract and by another 3 percent in the third year. The CPI is 1.00 in the first year, 1.07 in the second year, and 1.15 in the third year. What dollar wage must be paid in the third year? A. $10.00 B. $10.61 C. $11.15 D. $12.20

D. $12.20 (Quiz 3)

1. Chris earns $1,500 per week and spends $1,000 per week on living expenses, puts $200 in a savings account, and buys $300 worth of shares in a stock mutual fund. Chris's saving is ____ and Chris's saving rate is _____. A. $200; 13.3% B. $200; 20% C. $300; 20% D. $500; 33.3%

D. $500; 33.3% (Quiz 5)

2. Dave's Mirror Company produces $1,250,000 worth of mirrors this year. They expect to sell $1,000,000 worth of mirrors over the year. The company purchases $300,000 of new equipment during the year. Sales for the year turn out to be $900,000. Actual investment by Dave's Mirror Company equals _____ and planned investment equals _______. A. $250,000; $150,000 B. $300,000; $200,000 C. $550,000; $450,000 D. $650,000; $550,000

D. $650,000; $550,000 (Quiz 8)

9. Joy's Java Café needs $4,000 cash per day for customer transactions. Joy has a choice between going to the bank first thing on Monday morning to withdraw $20,000 - enough cash for the whole week - or going to the bank first thing every morning for $4,000 each time. Joy puts the cost of going to the bank at $3 per trip. Assume that funds left in the bank earn precisely enough interest to keep their purchasing power unaffected by inflation. Joy's Java Cafe is open 5 days a week for 50 weeks each year. When the inflation rate is 10% Joy goes to the bank everyday instead of once a week. Joy's annual shoe leather costs of inflation equal _____. A. $ 3 B. $150 C. $600 D. $750

D. $750 (Quiz 3)

4. In Macroland autonomous consumption equals 100, the marginal propensity to consume equals .75, net taxes are fixed at 40, planned investment is fixed at 50, government purchases are fixed at 150, and net exports are fixed at 20. Planned Aggregate Expenditure equals _______ and the short run equilibrium output equals _______ A. .25Y; $290. B. 320 + .25Y; $1,600. C. .75Y; $290. D. 290 + .75Y; $1160.

D. 290 + .75Y; $1160. (Quiz 8)

10. Suppose that the equilibrium price of rice falls and the equilibrium quantity falls. Which of the following best fits the observed data? A. An increase in demand with supply constant. B. An increase in demand coupled with a decrease in supply. C. An increase in demand coupled with an increase in supply. D. A decrease in demand with supply constant.

D. A decrease in demand with supply constant. (Ch. 1)

3. Which of the following is an example of a final good? A. New computer software sold to a computer manufacturer for installation in new computers B. The services provided by lawyers to a computer manufacturer C. Computer chips sold to a computer manufacturer for installation in new computers D. A new computer sold to a business firm.

D. A new computer sold to a business firm. (Quiz 2)

3. Which of the following is a flow? A. Saving B. Consumption C. Income D. All of the above.

D. All of the above. (Quiz 5)

Go Back And Review Table on Quiz 2 Three questions (Quiz 2)

Go Back And Review Table on Quiz 2 Three questions (Quiz 2)