Econ Assignments

Which of the following is true? * 0/1 A nation can have a comparative advantage in the production of a good only if it also has an absolute advantage. A nation cannot have an absolute advantage in the production of every good. A nation cannot have a comparative advantage in the production of every good. A nation can have a comparative advantage in the production of every good, but not an absolute advantage.

A nation cannot have a comparative advantage in the production of every good.

There are nontariff barriers in the form of _______________ regulations, in which certain textiles are made in the United States, shipped to other countries, combined in making apparel with textiles made in those other countries—and then re-exported back to the United States at a lower tariff rate. * 1/1 "rules of origin" dumping export quota import quota

"rules of origin"

High income countries are classified as having a GDP per capita that is greater than * 1/1 $21,556 $14,970 $17,964 $12,475

$12,475

International trade currently involves about _________________ worth of goods and services thundering around the globe. * 1/1 $2 trillion $20 trillion $200 billion $200 trillion

$20 trillion

"If I didn't have class tonight, I would save the $4 campus parking fee and spend four hours at work where I earn $10 per hour." The opportunity cost of attending class this evening is: * 1/1 $40 $44 $4 $0-

$44

In 2010, Americans had about _________ outstanding in credit card debts not paid on time. * 1/1 $900 billion $90 million $900 million $90 billion

$900 billion

Which of the following statements is incorrect? * 0/1 Employment insurance compensation increases the opportunity cost of being unemployed. Demand and supply curves for labor are constantly shifting. The typical employment insurance compensation is roughly one third of one's latest salary for up to 26 weeks. . Employment insurance compensation encourages longer job searches, which may lead to a better match between jobs and employees.

. Employment insurance compensation encourages longer job searches, which may lead to a better match between jobs and employees.

Which of the following is the percentage of annual US government spending allocated to foreign aid? * 1/1 1% 17% 21% 10%

1%

Once every __________, the Census Bureau does a comprehensive survey of housing and residential finance. * 1/1 10 years month 20 years 5 years

10 years

During the deep recessions of the early 1980s and of 2007-2009, unemployment reached roughly __________. * 1/1 40% 10% 30% 20%

10%

Through good economic years and bad, many European economies had unemployment rates hovering near _________ since the 1970s. * 1/1 5% 20% 1% 10%

10%

In the United States, a typical credit card interest rate ranges from _________ per year. * 1/1 .2% to .8% 22% to 28% 2% to 8% 12% to 18%

12% to 18%

The high-income economies of the world contain approximately __________ of the world's population and produce and consume ___________ of the World's GDP. * 1/1 14%; over 70% 12%; over 80% 14%; over 50% 12%; over 60%

12%; over 60%

The membership of the WTO includes about __________ nations. * 1/1 15 150 700 1500

150

Women composed __________ of the paid workforce in 1900 and 50% of the paid workforce in 2010. * 1/1 33% 18% 60% 2%

18%

During the Great Depression of the 1930s, the unemployment rate reached more than _________ of the labor force. * 1/1 65% 25% 45% 85%

25%

Billy Bob's Barber Shop knows that a 5 percent increase in the price of their haircuts results in a 15 percent decrease in the number of haircuts purchased. What is the elasticity of demand facing Billy Bob's Barber Shop? * 1/1 3.0 0.10 0.15 0.05

3.0

Of the world's population of 6.7 billion people, _________ are scraping by on incomes that average less than $2 per day. * 0/1 2.6 billion 260 million 5 billion 6.2 billion

5 billion

The demand for a product is unit elastic. At a price of $20, 10 units of a product are sold. If the price is increased to $40, then one would expect sales to equal: * 0/1 20 units. 0 units. 10 units. 5 units.

5 units.

Despite interlocking import quotas, tariffs, and nontariff barriers, the share of apparel sold in the United States that is imported rose from about _________ in 1999 to about ________ today. * 1/1 75%; 90% 10%; 25% 50%; 75% 25%; 50%

50%; 75%

Each month the Census Bureau carries out the Current Population Survey (CPS) (which has been carried out every month since 1940). A total of __________ households are contacted every month. * 1/1 600 60,000 600,000 6,000

60,000

A stronger euro is less favorable for: * 1/1 Canadian investors with money investments in Germany. American tourists traveling in France. Canadian firms selling in Germany. German tourists traveling abroad.

American tourists traveling in France.

Which of the following statements most likely lies within the realm of microeconomics? * 1/1 Unemployment rises during a recession and falls during an expansion. An increase in labor costs will increase the additional cost of producing another bus. An increase in government spending will increase the aggregate demand for goods and services in the economy. A rapid acceleration of the supply of money may create inflation.

An increase in labor costs will increase the additional cost of producing another bus.

Andy views beer and pizza as complements to one another. If the price of pizza decreases, economists would expect: * 1/1 Andy's demand for pizza to decrease. Andy's quantity of pizza demanded to decrease. Andy's demand for beer to increase Andy's demand for pizza to increase.

Andy's demand for beer to increase

_____________________ are a form of tax and spending rules that can affect aggregate demand in the economy without any additional change in legislation. * 1/1 Budget expenditures Standardized employment budgets Automatic stabilizers Discretionary fiscal policies

Automatic stabilizers

____________ is a completely inadequate mechanism ____________________ in a modern advanced economy. * 1/1 Money; to use as a unit of account Barter; for trying to coordinate trades Currency; for providing a medium of exchange Money; for providing a store of value

Barter; for trying to coordinate trades

Why is there scarcity? * 1/1 Because human wants are limited. Because the opportunity set determines this. Because our unlimited wants exceed our limited resources. Because theory dictates it.

Because our unlimited wants exceed our limited resources.

_____________ are a form of financial instrument through which corporations and governments borrow money from financial investors and promise to repay with interest. * 1/1 Certificates of deposit Time deposits Bonds Money market funds

Bonds

In the circular flow diagram model: * 1/1 households receive income from businesses in exchange for providing inputs and use that income to buy goods and services from businesses. businesses receive revenues from households in exchange for providing goods and services and use those revenues to buy inputs from households. households receive revenue for selling goods and services to businesses, and use that revenue to buy inputs from businesses. Both (a) and (b) are correct.

Both (a) and (b) are correct.

On April 1, 2009, in the middle of a recession, the government of the province of Ontario, Canada increased the provincial minimum wage from $8.75 to $9.50. What will the likely effect of this policy be? * 1/1 More people will be hired at the higher wage rate offsetting the effects of the recession. The higher wage will increase the supply of labor offsetting the effects of the recession. Both the leftward shift in the labor demand curve and the higher minimum wage will lead to an increase in the unemployment rate. Low income workers will be better able to survive the recession at the new, higher wage rate.

Both the leftward shift in the labor demand curve and the higher minimum wage will lead to an increase in the unemployment rate.

In the United States, which of the following government institutions would most likely provide economists with the basic data for merchandise trade? * 1/1 Department of Commerce Bureau of Economic Analysis Department of the Treasury Census Bureau

Census Bureau

Which of the following institutions determines the quantity of money in the economy as its most important task? * 1/1 Federal Reserve Board of Governors U.S. Department of the Treasury Federal Open Market Committee Central Bank

Central Bank

The ___________________ is the institution designed to control the quantity of money in the economy and also to oversee the: * 1/1 FDIC; responsibility for deposit insurance. FOMC; passing of tax and spending bills. FFIEC; day-to-day democratic control of policy. Central Bank; safety and stability of the banking system.

Central Bank; safety and stability of the banking system.

_______________________ that require the depositor to commit to leaving their funds in the bank for a certain period of time, in exchange for a higher rate of interest are also called ________________. * 1/1 Demand deposits; certificates of deposit Money market funds; time deposits Bonds; term deposits Certificates of deposit; time deposits

Certificates of deposit; time deposits

In _____________________________, firms and workers often build upon or copy technologies and industries developed by the technology leaders. * 1/1 China and India's converging economies South Africa's developing economy the Middle East's low-income economies Eastern Europe's disconnected economy

China and India's converging economies

Which of the following is an example of a pegged currency? * 1/1 British pound Euro Chinese yuan U.S. dollar

Chinese yuan

___________ is about two-thirds of the demand side of GDP, but it moves relatively little over time. * 1/1 Government Services Investment Consumption

Consumption

In which of the following countries will the national government have the greatest influence with respect to the nation's economy? * 1/1 Chile China Canada Cuba

Cuba

___________________________ in high-income countries is caused by the economy being in a recession. * 1/1 The natural rate of unemployment A cyclical standard of living A natural literacy rate Cyclical unemployment

Cyclical unemployment

In the U.S., all companies involved in international flows of capital must file reports, which are ultimately compiled by the: * 0/1 Department of Commerce. Census Bureau. Bureau of Economic Analysis. Department of the Treasury.

Department of the Treasury.

Which of the following statements most likely lies within the realm of macroeconomics? * 1/1 Anticipating that the benefits would outweigh costs involved, an undergraduate student purchases the course textbook. Due to an economic recession, manufacturing firms began implementing layoffs of their workforces. An increase in the price of automobiles will lead to a decrease in the quantity of automobiles demanded. Due to process innovations in computer chip manufacturing, the market supply of computers increased.

Due to an economic recession, manufacturing firms began implementing layoffs of their workforces.

____________ means selling goods below their cost of production. * 1/1 Dumping Protectionism Import quotas Non-tariff barriers

Dumping

_______________, which can be approximated by the growth of gross domestic product, ultimately determines the prevailing standard of living in a country. * 1/1 Trade balance Education Inflation Economic growth

Economic growth

_____________ - a term referring to the fact that for many goods, as the level of production increases, the average cost of producing each individual unit declines. * 1/1 Skill Specialization Economies of scale Division of labor

Economies of scale

______________________ argues that the productivity of workers will increase if they are paid more, and so employers will often find it worthwhile to pay their employees somewhat more than market conditions might dictate. * 1/1 Employer wage theory Equilibrium wage theory Employee wage theory Efficiency wage theory

Efficiency wage theory

When we want to measure wage inflation in the labor market, we use the: * 1/1 Employment Cost Index Product Price Index Employment Price Index Consumer Price Index

Employment Cost Index

An economics professor is discussing a measure of inflation over time based on a basket of goods comprised of all the components of GDP. Which measure is it? * 1/1 Consumer GDP GDP Price Index Consumer Price Index GDP Deflator

GDP Deflator

A nation's prosperity is sometimes measured in terms of ___________. * 1/1 GNP economic output GDP GDP per capita

GDP per capita

An economy's rate of productivity growth is closely linked to the growth rate of its ______________, although the two aren't identical. * 1/1 GDP per capita GNP technology output

GDP per capita

Some prominent members of the slow-economic growth country club include a high-income country like _________. * 1/1 Nigeria Somalia Bolivia Germany

Germany

_____________ are numerical limitations on the quantity of products that can be imported. * 1/1 Nontariff barriers Taxes Tariffs Import quotas

Import quotas

Which of the following is correct? * 1/1 An increase in the quantity of labor always leads to economic growth. A decrease in the productivity of labor leads to economic growth. Increased education adds to the stock of human capital, not unlike building factories adds to the stock of physical capital. Third World countries are rich in human capital.

Increased education adds to the stock of human capital, not unlike building factories adds to the stock of physical capital.

Which of the following best describes the relationship between economic growth and literacy? * 1/1 There is no correlation between economic growth and literacy. Increased literacy initially stimulates economic growth by raising labor productivity, but as the economy grows and the opportunity cost of education rises, literacy declines. As the economy grows, literacy declines because it becomes less and less useful in a developed economy. Increased literacy stimulates economic growth by raising labor productivity, and as the economy grows, people consume more education.

Increased literacy stimulates economic growth by raising labor productivity, and as the economy grows, people consume more education.

The ____________________ is based on the prices of merchandise that are exported or imported. * 1/1 Foreign Price Index International Product Index Producer Price Index International Price Index

International Product Index

___________ is a small category that refers to the goods produced by one business that have yet to be sold to consumers, and are either still sitting in warehouses and on store shelves. * 1/1 Structures Inventories Services Durable Goods

Inventories

Suppose that everyone who has looked for a job for more than six months gave up in despair and stopped looking. What would happen to the unemployment rate? * 1/1 It would fall. It would increase. It would change, but the effect cannot be predicted. It would not change.

It would fall.

In an AD/AS model, the point where the economy has excess capacity is called the: * 1/1 crossing point of the potential GDP line Keynesian zone of the AS curve neoclassical zone of the AS curve intermediate zone of the AS curve

Keynesian zone of the AS curve

____________________________ will often cause monetary policy to be considered counterproductive because it makes it hard for the central bank to know when the policy will take effect? * 1/1 Long and variable time lags Quantitative easing Reserve requirements Altering the discount rate

Long and variable time lags

Which of the following terms is considered to be a narrow definition of the money supply that includes, among other things, currency? * 1/1 M1 savings M2 money

M1

________________ serves society in three functions: medium of exchange, unit of account, and store of value. * 1/1 Money Barter Currency A double coincidence of wants

Money

__________________ pool the deposits of many investors together and invest them in a safe way like short-term government bonds. * 1/1 Certificates of deposit Time deposits Savings deposits Money market funds

Money market funds

Despite many negative feelings, a number of governments have decided that reducing barriers to trade is at least potentially beneficial to their economy. Which of the following is an example of countries reducing barriers through free trade? * 1/1 NAFTA GTO G20 NATO

NAFTA

________________ economists place an emphasis on __________ run economic performance. * 1/1 Phillips; short Neoclassical; long Says; short Keynesian; long

Neoclassical; long

Are markets always in equilibrium? * 1/1 Yes, because very few things tend to alter supply and demand. No, they never "settle down" into a stable price and quantity. No, but if there is no outside interference, they tend to move toward equilibrium. Yes, they are always at the equilibrium point, or very close to it.

No, but if there is no outside interference, they tend to move toward equilibrium.

__________________ are ways that a nation can draw up regulations, inspections, and paperwork to make it more costly or difficult to import products. * 1/1 Tariffs Nontariff barriers Quotas Import ceilings

Nontariff barriers

The shape of the ______________ involves a tradeoff between unemployment and inflation. * 1/1 Keynesian demand curve Phillips curve aggregate supply curve

Phillips curve

________________________ are the result of improvements in human capital, physical capital, and technology interacting in a _____________________. * 1/1 Productivity improvements; market-driven economy Sustainable balances of trade; global economy Global economies; remarkably similar manner High income economies; command economy

Productivity improvements; market-driven economy

The race to the bottom scenario of global environmental degradation is explained roughly like this: * 1/1 Profit-seeking multinational companies shift their production from countries with strong environmental standards to countries with weak standards, thus reducing their costs and increasing their profits. Companies seek to influence environmental legislation standards are set to the lowest possible standards in the USA in order to maximize profits. Companies seek to reduce their costs of operations on plant and equipment design and this results in higher levels of pollution. Companies seek the lowest market prices on products in order to gain market share, resulting in inferior goods and increased waste and pollution.

Profit-seeking multinational companies shift their production from countries with strong environmental standards to countries with weak standards, thus reducing their costs and increasing their profits.

________________________ equalizes the prices of internationally traded goods across countries. * 1/1 A floating exchange rate The foreign exchange rate An international parity rate Purchasing power parity

Purchasing power parity

___________are funds that the bank keeps on hand that are not loaned out or invested in bonds. * 1/1 Demand deposits Reserves Time deposits Certificates of deposit

Reserves

_________________ results when an economy experiences high unemployment and high inflation at the same time. * 1/1 Reflation Recession Deflation Stagflation

Stagflation

__________________________ address the problem of economic growth by continually striving for a more educated workforce that can create, invest in and apply new technologies. * 1/1 Technological leaders Technologically disconnected nations Converging economies Command economies

Technological leaders

Which of the following institutions oversees the safety and stability of the U.S. banking system? * 1/1 The Federal Reserve Federal Financial Institutions Examination Council Federal Open Market Committee Office of the Comptroller of the Currency

The Federal Reserve

_____________________ is a term which refers to the widespread use of power-driven machinery and the economic and social changes that resulted in the first half of the 1800s. * 1/1 The living standard GDP per capita The Industrial Revolution Investment and inventions

The Industrial Revolution

________________________ is theoretically possible, even sensible: give an industry a short-term indirect subsidy through protection, and then reap the long-term economic benefits of having a vibrant healthy industry. * 1/1 Import quotas Protectionism The infant industry argument Dumping

The infant industry argument

Aggregate demand curves slope downwards for each of the following reasons EXCEPT * 1/1 The wealth effect: As the price level falls, the buying power of people's savings increases and induces them to spend more. The interest rate effect: As prices for outputs rise, it costs more to make the same purchases, driving up the demand for money, raising interest rates and reducing investment spending. The substitution effect: As the price level falls, people buy more of the cheaper goods and less of other goods. The foreign price effect: As the price level falls, U.S. become more attractive to foreigners and domestic residents, increasing net export spending.

The substitution effect: As the price level falls, people buy more of the cheaper goods and less of other goods.

Which of the following would be expected if the tariff on foreign-produced automobiles were increased? * 1/1 The domestic price of automobiles would fall. The supply of foreign automobiles to the domestic market would be reduced, causing auto prices to rise. The number of unemployed workers in the domestic automobile industry would rise. The demand for foreign-produced automobiles would increase, causing the price of automobiles to increase in other nations.

The supply of foreign automobiles to the domestic market would be reduced, causing auto prices to rise.

Steel mill wage costs increase by 18 percent over a year. What is the likely economic effect on the market for steel? * 1/1 The increase in wage costs will shift the demand curve for steel to the left, increasing the cost of steel. There is an increase in the cost of producing steel, which shifts the supply curve of steel to the left, thereby increasing the price of steel. There is a decrease in the cost of producing steel, which shifts the supply curve of steel to the left, thereby increasing the price of steel. There is an increase in the cost of producing steel, which shifts the supply curve of steel to the right, thereby increasing the price of steel.

There is an increase in the cost of producing steel, which shifts the supply curve of steel to the left, thereby increasing the price of steel.

What do goods like gasoline, tobacco, and alcohol typically share in common? * 1/1 A regressive tax is imposed on each of them. A progressive tax is imposed on each of them. They are all subject to government fiscal taxes. They are all subject to government excise taxes.

They are all subject to government excise taxes.

How do apple growers react to the news of medical research findings that suggest that eating apples leads to greater health benefits than were previously known? * 1/1 They decrease the supply of apples. They increase the supply of apples. They decrease the quantity of apples supplied. They increase the quantity of apples supplied.

They increase the quantity of apples supplied.

_______________________________ can set the stage for international financial investors first to send their funds to a country and cause an appreciation of its exchange rate and then to pull their funds out and cause a depreciation of the exchange rate and a financial crisis as well. * 0/1 Twin deficits Trade deficits Trade balance Crowding out

Trade balance

If the U.S. dollar weakens, which of the following parties will benefit? * 1/1 Australian firms selling in the U.S. Japanese investors who have money in the U.S. countries exporting to the U.S. U.S firms selling in Europe

U.S firms selling in Europe

The most commonly traded currency in foreign exchange markets is the: * 1/1 Chinese yuan. euro. U.S. dollar. British pound.

U.S. dollar.

If the government for the state of Washington collects $65.8 billion in tax revenues in 2013 and total spending in the same year is $74.8 billion, the result will be: * 1/1 a budget surplus. a budget deficit. an increase in payroll tax. an increase in excise tax.

a budget deficit.

Which of the following best denotes the reason for the existence of substantial black markets? * 0/1 a market-oriented economy government laws and rules the microeconomy a command economy

a command economy

What do the economies of Greece, Ireland and Germany all share? * 1/1 floating rate currencies they pegged their various currencies they unpegged their various currencies a common currency

a common currency

When a Central Bank takes action to decrease the money supply and increase the interest rate, it is following: * 1/1 a quantitative easing policy. a contractionary monetary policy. a loose monetary policy. an expansionary monetary policy.

a contractionary monetary policy.

Which of the following would most likely shift the production possibilities curve inward? * 1/1 a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time an increase in the number of hours factories are in use technological progress an increase in the production of capital goods

a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time

In macroeconomics, ___________________________ describes a situation in which two people each want to exchange some good or service that the other can provide. * 1/1 a medium of exchange a double coincidence of wants the usefulness of money interrelated banking

a double coincidence of wants

If government policy allows a country's currency to be determined in the exchange rate market, then that currency will be subject to: * 1/1 purchasing power parity. depreciation. a hard peg policy. a floating exchange rate.

a floating exchange rate.

If the economy is in recession with high unemployment and output below potential GDP, then __________________ would cause the economy to return to its potential GDP. * 1/1 a loose monetary policy a tight monetary policy higher interest rates fewer loanable funds

a loose monetary policy

A rule that every imported product must be opened by hand and inspected with a magnifying glass, by one of just three government inspectors available at any given time might be referred to as __________________. * 1/1 an import quota a government bureaucracy a quota a non-tariff barrier

a non-tariff barrier

If an economy experiences a decrease in aggregate demand due to a decline in consumer confidence and output falls below potential GDP, which of the following is likely to occur? * 1/1 adjustment back to potential GDP a rise in unemployment increase in price inflation more consumption and less saving

a rise in unemployment

After widespread press reports about the dangers of contracting "mad cow disease" by consuming beef from Canada, the likely economic effect on the U.S. demand curve for beef from Canada is: * 1/1 a movement down along the demand curve for beef to the right. a shift of the demand curve for beef to the left. no change; only the supply curve for beef is likely to be affected. a shift of the demand curve for beef to the right.

a shift of the demand curve for beef to the left.

The imposition of a price ceiling on a market often results in: * 1/1 a surplus an increase in investment in the industry. a decrease in discrimination on the part of sellers. a shortage

a shortage

A tariff differs from a quota in that a tariff is: * 1/1 a tax imposed on imports, whereas a quota is an absolute limit to the number of units of a good that can be imported. levied on exports, whereas a quota is imposed on imports. levied on imports, whereas a quota is imposed on exports. a tax levied on exports, whereas a quota is a limit on the number of units of a good that can be exported.

a tax imposed on imports, whereas a quota is an absolute limit to the number of units of a good that can be imported.

If imports exceed exports, as in recent years, then __________ exists. * 1/1 a trade imbalance trade disequilibrium a trade surplus a trade deficit

a trade deficit

Only one of the following statements about trade surplus and capital flow is correct. Which one is it? * 1/1 a trade surplus means that there is a net outflow of capital a trade surplus means that there is a net inflow of capital a trade surplus exists if there is a net outflow of capital excluding foreign borrowing and lending a trade surplus exists if there is a net inflow of capital excluding foreign borrowing and lending

a trade surplus means that there is a net outflow of capital

Jethro has a(n) ____________________ in all aspects of camping: he is faster at carrying a backpack, gathering firewood, paddling a canoe, setting up tents, making a meal, and washing up. * 1/1 absolute advantage opportunity cost comparative advantage relative advantage

absolute advantage

When one nation can produce a product at lower cost relative to another nation, it is said to have a(n)____________________in producing that product. * 1/1 relative advantage production efficiency absolute advantage economy of scale

absolute advantage

What distinguishes the real value of a statistic from the nominal value of a statistic? * 1/1 real interest rate timing of announcement adjusting for GDP deflator adjusting for inflation

adjusting for inflation

In the neoclassical view, changes in ____________________ can only have a short-run impact on output and on unemployment. * 1/1 aggregate demand tax levels aggregate supply wage levels

aggregate demand

Movements in exchange rates can have a powerful effect on incentives to export and import, and thus on ________________ in the economy as a whole. * 1/1 aggregate supply direct investments portfolio investments aggregate demand

aggregate demand

When a shift in ________________ occurs, rational expectations hold that its impact on output and employment will only be temporary. * 1/1 wage levels aggregate supply aggregate demand price levels

aggregate demand

In macroeconomics, _____________________ denotes the relationship between the total quantity of goods and services and the price level for output. * 1/1 macroeconomic equilibrium potential GDP aggregate demand (AD) aggregate supply (AS)

aggregate demand (AD)

A vertical AS curve means that the level of aggregate supply (or potential GDP) will determine the real GDP of the economy, regardless of the level of: * 1/1 real unemployment. aggregate demand. cyclical unemployment. inflationary pressures.

aggregate demand.

The labor force consists of: * 1/1 all adults who are working, plus those not working. all adults who are able to work. discouraged workers, employed workers, plus those actively seeking work. all adults who are working or actively seeking work.

all adults who are working or actively seeking work.

Any given demand or supply curve is based on the ceteris paribus assumption that _________________________. * 1/1 all else is held equal no one knows which variables will change and which will remain constant. what is true for the individual is not necessarily true for the whole. everything is variable.

all else is held equal

In what way is each and every one of the economies of the more than 200 countries of the world similar? * 1/1 all have their own distinctive characteristics all use the same macroeconomic policies each focuses on a neoclassical perspective each focuses on a Keynesian perspective

all have their own distinctive characteristics

Which of the following is considered to be a relatively weak tool of monetary policy? * 1/1 reducing the money supply quantitative easing reserve requirements altering the discount rate

altering the discount rate

Colombia produces coffee with less labor and land than any other country; it therefore necessarily has: * 1/1 both a comparative and absolute advantage in coffee production. an absolute advantage and comparative disadvantage in coffee production. an absolute advantage in coffee production a comparative advantage in coffee production

an absolute advantage in coffee production

In macroeconomics, the connection from inputs to outputs for the entire economy is called _______________. * 1/1 a production function physical capital an aggregate production function human capital

an aggregate production function

Which of the following denotes a common misunderstanding about exchange rates? * 1/1 a weaker currency must be better than a stronger currency an appreciating currency must be better than a stronger currency an appreciating currency must be better than a depreciating currency a depreciating currency must be better than an appreciating currency

an appreciating currency must be better than a depreciating currency

In macroeconomics, _____________________________ describes a situation where a bank's liabilities can be withdrawn in the short-term while its assets are being repaid in the long-term. * 1/1 an asset-liability time mismatch diversification reserve ratio a negative net worth

an asset-liability time mismatch

The federal government levies _____________________________ on people who pass assets ____________________________, either after death or during life. * 1/1 a progressive tax; to non-family members an excise tax; to their children an estate and gift tax; to the next generation a regressive tax; to non-family members

an estate and gift tax; to the next generation

To compare the GDP of two different countries with different currencies, it is necessary to use _________________________. * 1/1 foreign currency currency rates per capita GDP an exchange rate

an exchange rate

To compare the GDP of two different countries with different currencies, it is necessary to use _________________________. * 1/1 per capita GDP currency rates foreign currency an exchange rate

an exchange rate

Which of the following will not result in a rightward shift of the market supply curve for labor? * 1/1 an increase in immigration a decrease in non-wage income an increase in labor productivity an increase in the working-age population

an increase in labor productivity

If exports and imports: * 1/1 are equal, then trade is balanced. are imbalanced, then a trade surplus exists. are equal, then the economy is unhealthy. are imbalanced, then a trade deficit exits.

are equal, then trade is balanced.

In economics, the demand for a good refers to the amount of the good that people: * 1/1 need to achieve a minimum standard of living. would like to have if the good were free. are willing and able to buy at various prices. will buy at alternative income levels.

are willing and able to buy at various prices.

Which of the following are most likely classified by economists as consumer durable goods? * 1/1 drugs, toys, magazines, books automobiles, furniture food, clothing stocks, bonds

automobiles, furniture

Which of the following terms is sometimes used to describe the balance of trade? * 0/1 balance of financial investment balance of payments balance of investment capital balance of capital flows

balance of payments

A ______________________ means that government spending and taxes are equal. * 1/1 discretionary fiscal policy balanced budget fiscal budget contractionary fiscal policy

balanced budget

What is the name given to the macroeconomic equation MV = PQ? * 1/1 basic quantity equation of output basic velocity of money equation basic velocity of price equation basic quantity equation of money

basic quantity equation of money

Most real-world choices aren't about getting all of one thing or another, instead, most choices involve _________________, which involves comparing the benefits and costs of choosing a little more or a little less of a good. * 0/1 benefit analysis opportunity cost marginal analysis utility

benefit analysis

Many cooks view butter and margarine to be substitutes. If the price of butter rises, then in the market for margarine: * 0/1 the equilibrium price will rise and the equilibrium quantity will decrease. both the equilibrium price and quantity will rise. the equilibrium price will rise, while the change to equilibrium quantity is indeterminate. the equilibrium price will fall and the equilibrium quantity will fall.

both the equilibrium price and quantity will rise.

A ______________________ is created each time the federal government spends more than it collects in taxes in a given year. * 1/1 budget deficit corporate tax regressive tax budget surplus

budget deficit

If the state of Washington's government collects $75 billion in tax revenues in 2013 and total spending in the same year is $74.8 billion, the result will be a: * 1/1 budget deficit. decrease in proportional taxes. decrease in payroll tax. budget surplus.

budget surplus.

The rise in unemployment that occurs because of a recession is known as cyclical unemployment, because it is closely tied to the ______________. * 1/1 natural rate of unemployment supply curve business cycle labor supply

business cycle

A central bank that wants to increase the quantity of money in the economy will: * 1/1 raise the discount rate. sell bonds in open market operations. reverse quantitative easing. buy bonds in open market operations.

buy bonds in open market operations.

In a market-oriented economy, the amount of a good that is produced is primarily decided by the interaction of: * 1/1 all consumers. buyers and sellers. producers and input suppliers. producers and government planning committees.

buyers and sellers.

The nature of demand indicates that as the price of a good increases: * 1/1 more of it is desired. more of it is produced. suppliers wish to sell less of it. buyers desire to purchase less of it.

buyers desire to purchase less of it.

Atlantic Bank is required to hold 10% of deposits as reserves. If the central bank increases the discount rate, how would Atlantic Bank respond? * 1/1 it can make more loans with increased loan assets by increasing its reserves its balance sheet will be unchanged by noting a decrease in net worth

by increasing its reserves

How are the specific interest rates for the lending and borrowing markets determined? * 1/1 by the forces of supply and demand through open market operations by altering the discount rate U.S. Treasury Department Board policy

by the forces of supply and demand

Specialization: * 1/1 allows workers to develop skills by working on a large number of tasks leads to greater self-sufficiency. can lead to an increase in overall production. is always the result of an inefficient use of resources

can lead to an increase in overall production.

When society has a higher level of capital per person, it is called ______________. * 1/1 physical capital technological gains capital deepening human capital

capital deepening

Which of the following is not included in GDP? * 1/1 cash income paid to a day laborer that is not reported to the tax authorities the payments for a chiropractor's services the fees for legal services rendered by your lawyer the replacement of brake pads on your six-year-old vehicle

cash income paid to a day laborer that is not reported to the tax authorities

When governments are borrowers in financial capital markets, which of the following is least likely to be a possible source of the funds from a macroeconomic point of view? * 1/1 increase in household savings central bank prints more money decrease in borrowing by private firms foreign financial investors

central bank prints more money

Ricardian equivalence means that: * 1/1 changes in investment offset any changes in the government deficit. changes in exports offset any changes in the government deficit. changes in imports offset any changes in the government deficit. changes in private savings offset any changes in the government deficit.

changes in private savings offset any changes in the government deficit.

When nations increase production in their area of _________ and trade with each other, both sides can benefit. * 1/1 relative advantage opportunity cost absolute advantage comparative advantage

comparative advantage

__________________ identifies the area where a producer's absolute advantage is relatively greatest, or where the producer's absolute disadvantage in productivity is relatively least. * 1/1 productivity advantage relative advantage opportunity cost comparative advantage

comparative advantage

What matters most in determining the efficient distribution of production over the world is: * 0/1 efficiency. absolute advantage. the allocation of resources. comparative advantage.

comparative advantage.

When demand is inelastic: * 1/1 consumers are not very responsive to changes in price. demand curves appear to be fairly flat. price elasticity of demand is greater than 1. the percentage change in quantity demanded resulting from a price change is greater than the percentage change in price.

consumers are not very responsive to changes in price.

he demand measure of GDP accounting adds together: * 1/1 consumption, investment, government purchases, and trade balance. wages and salaries, rent, interest, and profit. consumption, government purchases, wages and salaries, and trade balance. consumption, interest, government purchases, and trade balance.

consumption, investment, government purchases, and trade balance.

A typical ____________________________ fiscal policy allows government to decrease the level of aggregate demand, through increases in taxes. * 1/1 standardized discretionary expansionary contractionary

contractionary

Many _____________ countries have a legacy of government economic controls. * 1/1 high-income Sub-Saharan technologically disconnected converging

converging

Developing the means to increase human capital, and using existing technology to connect to the global economy are generally associated with growth policies of: * 1/1 all nations. technologically disconnected nations. nations that are technology leaders. converging nations.

converging nations.

In 2019, Microsoft will pay corporate income tax to the federal government based on the company's _ * 1/1 excise profits corporate profits proportional tax rate optional tax rate

corporate profits

In the 1970s and 1980s, labor unions commonly negotiated wage contracts that had _______________________ which guaranteed that their wages would keep up with inflation. * 1/1 cost of living adjustments inflation ceiling guarantees inflation protection plans wage protection clauses

cost of living adjustments

When __________________, a firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right. * 1/1 prices rise costs of production fall equilibrium is achieved there is a population increase

costs of production fall

The central bank uses a ____________________ monetary policy to offset business related economic contractions and expansions? * 1/1 contractionary laissez faire countercyclical loose

countercyclical

Which of the following represents a Keynesian point of view of macroeconomics? * 1/1 focus on long-term growth in the economy aggregate supply is the primary determinate of economic output vertical aggregate supply creating increases in aggregate demand to reduce unemployment

creating increases in aggregate demand to reduce unemployment

The process of banks making loans in financial capital markets is intimately tied to the: * 1/1 creation of money. financial stress levels of banks. redistribution of wealth. home construction industry.

creation of money.

An increase in government borrowing can: * 1/1 increase the incentive to invest in technology. allow private investment to expand. cause a substantial decrease in interest rates. crowd out private investment in physical capital.

crowd out private investment in physical capital.

Economists typically rely on a broader measure of international trade known as the ___________________, which includes _____________________________. * 1/1 current trade balance; finance, law, and software product design. current account balance; telecommunications, computers, finance, law, and advertising. current account balance; goods, services, international income flows, and foreign aid. current trade balance; foreign aid announced by the government.

current account balance; goods, services, international income flows, and foreign aid.

When the economy of a country is operating close to its full capacity: * 1/1 cyclical unemployment is close to zero. the unemployment rate is less than the natural rate of unemployment. unemployment is close to zero. the unemployment rate is greater than the natural rate of unemployment.

cyclical unemployment is close to zero.

From a neoclassical viewpoint, government should focus less on: * 1/1 controlling inflation. aggregate supply. cyclical unemployment. long-term growth.

cyclical unemployment.

The type of unemployment that occurs because of a recession is called: * 1/1 seasonal unemployment. frictional unemployment. the natural rate of unemployment. cyclical unemployment.

cyclical unemployment.

An increase in the government's budget surplus will cause the interest rate to: * 1/1 increase. decrease. remain the same. either increase or decrease.

decrease.

Another term used to describe negative inflation is: * 1/1 hyperinflation counter inflation GDP deflator deflation

deflation

Melanie decided to save 20% of her annual earnings for 10 years so she would have a down payment for a house. After 5 years, what change in the economy would cause an increase in the purchasing power of the funds she has managed to save? * 1/1 depression recession stagflation deflation

deflation

The situation where the buying power of money in terms of goods and services increases is called: * 1/1 hyperinflation. stationary pricing. inflation. deflation.

deflation.

Which of the following would be classified in the M1 category of the money supply? * 1/1 money market deposit savings deposits demand deposits certificates of deposit

demand deposits

With respect to measuring the money supply, which of the following terms describes a checking account? * 1/1 cash certificates demand certificates demand deposits currency deposits

demand deposits

The law of ____________________________ explains why people and societies rarely make all-or-nothing choices. * 1/1 diminishing marginal utility utility marginal analysis consumption

diminishing marginal utility

What term is used to describe the interest rate charged by the central bank when it makes loans to commercial banks? * 1/1 Fed rate open market rate reserve requirement discount rate

discount rate

When the government passes a new law that explicitly changes overall tax or spending levels, it is enacting: * 1/1 regressive fiscal policy. progressive fiscal policy. discretionary fiscal policy. reactionary fiscal policy.

discretionary fiscal policy.

In the first chapter of The Wealth of Nations, Smith introduces the idea of the __________, which means the way in which the work required to produce a good or service is divided into a number of tasks that are performed by different workers. * 1/1 task economy modern economy interconnected economy division of labor

division of labor

The infant industry argument for protectionism suggests that an industry must be protected in the early stages of its development so that: * 1/1 it will not be subjected to a takeover from a foreign competitor. domestic producers can attain the economies of scale to allow them to compete in world markets. firms will be protected from subsidized foreign competition. there will be adequate supplies of crucial resources in case they are needed for national defence.

domestic producers can attain the economies of scale to allow them to compete in world markets.

The U.S. trade deficit can disappear without raising legitimate concerns over disruption to the economy if: * 1/1 domestic savings rates increases and foreign investment gradually decreases. all tariffs are doubled and import quotas are reduced by half. foreign investors sell their U.S. dollar investments and stop investing in the U.S. economy. the U.S. immediately ceases trade with all foreign countries.

domestic savings rates increases and foreign investment gradually decreases.

The concept of ____________________ means that as the measure of output goes up, average costs of production decline—at least up to a point. * 1/1 relative advantage economies of scale absolute advantage comparative advantage

economies of scale

The unemployment rate may overestimate the true extent of unemployment if: * 0/1 many part-time employees would like to work fulltime, but are unable to get the additional work. many people who claim to be unemployed actually work in the underground economy. people falsely claim that they are actively seeking work in order to receive unemployment benefits. either B) or C) occurs.

either B) or C) occurs.

Trade surpluses and trade deficits can be __________________ for an economy in certain circumstances. * 1/1 beneficial harmful either a or b neither a or b

either a or b

Demand is said to be ___________ when the quantity demanded is very responsive to changes in price. * 1/1 elastic independent inelastic unit elastic

elastic

Supply is said to be ____________ when the quantity supplied is very responsive to changes in price. * 1/1 elastic unit elastic inelastic independent

elastic

Youth smoking seems to be more __________ than adult smoking—that is, the quantity of youth smoking will fall by a greater percentage than the quantity of adult smoking in response to a given percentage increase in price. * 1/1 elastic cross-price elastic inelastic unitary elastic

elastic

A price cut will increase the total revenue a firm receives if the demand for its product is: * 0/1 unit inelastic. unit elastic. elastic. inelastic.

elastic.

Which of the following is generally accepted as a valid criticism of the production of useful goods and services? * 0/1 government involvement economic freedom the black market environmental pollution

environmental pollution

Whether the economy is in a recession is illustrated in the AD/AS model by how close the _____________________ is to the potential GDP line. * 1/1 AS and AD curve AS curve equilibrium AD curve

equilibrium

The _________ is the only price where quantity demanded is equal to quantity supplied. * 1/1 horizontal axis intercept equilibrium price vertical axis intercept market price

equilibrium price

The _______________ is the quantity where quantity demanded and quantity supplied are equal at a certain price. * 1/1 demand schedule equilibrium quantity quantity demanded supply schedule

equilibrium quantity

The _____________ is an example of a large-scale common currency. * 1/1 euro dollar pound franc

euro

A central bank must be concerned about whether a large and unexpected ___________________________ will drive most of the country's existing banks into bankruptcy. * 1/1 exchange rate depreciation increase in foreign investments interest rate increase exchange rate appreciation

exchange rate depreciation

A business cycle reflects changes in economic activity, particularly real GDP. The stages of a business cycle are: * 1/1 expansion, trough, recession, boom expansion, peak, recession, trough contraction, recession, expansion, boom trough, expansion, recession, peak

expansion, peak, recession, trough

If a government reduces taxes in order to increase the level of aggregate demand, what type of fiscal policy is being used? * 1/1 expansionary contractionary discretionary standardized

expansionary

Regardless of the outcome in the long run, ______________________ has the effect of stimulating the economy in the short run. * 1/1 expansionary monetary policy contractionary monetary policy reverse quantitative easing policy tight monetary policy

expansionary monetary policy

From a macroeconomic perspective, a payment made by a foreign firm to a U.S. investor looks just like an: * 1/1 export of a service. import of a good. export of a good. import of a service.

export of a service.

Goods and services produced in one country that are then sold in other countries are called ____________. * 1/1 exports surplus items economic stimulants tradeable items

exports

If the supply curve for housing is perfectly inelastic, then a reduction in demand will cause the equilibrium price to: * 1/1 rise and the equilibrium quantity to fall. fall and the equilibrium quantity to stay the same. rise and the equilibrium quantity to stay the same. fall and the equilibrium quantity to fall.

fall and the equilibrium quantity to stay the same.

In order to avoid double counting, statisticians just count the __________________. * 1/1 intermediate goods and services final inventories durable goods and nondurable goods final goods and services

final goods and services

In modern economies, _____________________ receive money from savers and provide funds to borrowers. * 1/1 governments credit unions financial intermediaries banks

financial intermediaries

The main public policies of technological leading countries are _______________ focused on investment, including investment in human capital, in technology, and in physical plant and equipment. * 1/1 fiscal policies economic policies monetary policies market-orientated policies

fiscal policies

Which of the following terms is used to describe the set of policies that relate to government spending, taxation, and borrowing? * 1/1 monetary policies economic policies fiscal policies financial policies

fiscal policies

The __________________ in an AD/AS diagram is most relevant to Keynes's Law. * 1/1 AD curve AS curve steep portion of the AS curve flat portion of the AS curve

flat portion of the AS curve

The circular flow diagram of economic activity is a model of the: * 1/1 flow of goods, services, and payments between households and firms. role of unions and government in the economy. influence of government on business behavior. interaction among taxes, prices, and profits.

flow of goods, services, and payments between households and firms.

Which of the following government policies would be supported by neoclassical macroeconomic assumptions? * 1/1 focus on real GDP and cyclical unemployment focus on long-term growth and on controlling inflation focus on short-term recession and controlling inflation focus on combating depression and cyclical unemployment

focus on long-term growth and on controlling inflation

People or firms use one currency to purchase another currency at the 1/1 international parity market foreign exchange market international currency exchange foreign currency exchange

foreign exchange market

The _____________________________ is the largest market in the world economy. * 1/1 foreign currency market foreign exchange market international currency market international exchange market

foreign exchange market

The extent of _______________________ will depend on how easy it is for workers to learn about alternative jobs, which may reflect the ease of communications about job prospects in the economy. * 1/1 seasonal unemployment cyclical employment frictional unemployment cyclical unemployment

frictional unemployment

Some recent economic research has suggested that African countries' economic growth may have been limited by __________________ . * 0/1 population technological challenges government interventionism geography and climate

geography and climate

A reduction in government borrowing can: * 0/1 give private investment an opportunity to expand. decrease the incentive to invest. increase the interest rate. crowd out private investment in human capital.

give private investment an opportunity to expand.

In the ______________, households receive goods and services and pay firms for them. * 1/1 savings market labor market goods and services market financial capital market

goods and services market

Final goods or services used to compute GDP refer to: * 1/1 the sum of all wages paid to laborers. the value of outstanding shares of stock of manufacturing firms. the factors of production used to produce output. goods and services purchased by the ultimate users.

goods and services purchased by the ultimate users.

A country's current account balance refers to a broad measure of the balance of trade that includes: * 1/1 goods and services, international flows of income, and foreign aid. merchandise, foreign aid and imported domestic services. goods, foreign capital investments, exported domestic services. merchandise, services, and foreign capital investments.

goods and services, international flows of income, and foreign aid.

At the outset of the 21st century, most global trade took the form of: * 1/1 trade surpluses in the service sector. equal trade in goods and services. goods, rather than services. services, rather than goods.

goods, rather than services.

The effects of inflation are seen in: * 1/1 goods and services only wages and income levels only services and wages only goods, services, wages and income levels

goods, services, wages and income levels

In a command economy, the __________ either makes most economic decisions itself or at least strongly influences how the decisions are made. * 1/1 government business sector market firm

government

From a macroeconomic point of view, which of the following is a source of demand for financial capital? * 1/1 government borrowing domestic household private savings savings by households and firms foreign financial investment

government borrowing

Which of the following best describes a fiscal policy tool? * 1/1 bank lending household spending financial capital markets government spending

government spending

Which of the following is not a short-run impact of imposing quotas on the American industries they seek to protect? * 1/1 domestic production and sales by the protected industries increase government tax revenues increase prices of the goods produced by protected industries increase consumers' real incomes decrease

government tax revenues increase

For most high-income countries of the world, GDP _________________ over time. * 1/1 has risen gradually has sharply risen has proven to be stable has declined slightly

has risen gradually

Factors like health, education, human rights, crime, personal safety, and cleanliness of environment all: * 1/1 fail to capture diversities that make up the global economy. have a slight impact on the standard of living of a country. have a large impact on the standard of living of a country. fail to capture the standard of living in a precise manner.

have a large impact on the standard of living of a country.

Which of the government policies below is most unlikely to encourage per capita economic growth? * 1/1 special subsidies for capital-intensive forms of production high taxes on companies that spend a lot on capital formation promotion of education and training programs for workers the use of tax revenues for investment and capital formation

high taxes on companies that spend a lot on capital formation

Unemployment rates in the nations of Europe have typically been ____________ than in the United States. * 1/1 higher the same lower better

higher

A ____________________________ is one economic mechanism by which government borrowing can crowd out private investment. * 1/1 larger trade surplus smaller trade surplus higher interest rate deficit decrease

higher interest rate

If the government's budget deficit increases while the economy is producing substantially less then potential GDP and expansionary monetary policy is implemented, then any ________________ from government borrowing would be _____________________________ from that monetary policy. * 1/1 inflationary increase in price level; crowding out private investment lower interest rates; largely offset by the higher interest rates higher interest rates; largely offset by the lower interest rates increase in interest rates; reduced by private sector investment

higher interest rates; largely offset by the lower interest rates

A perfectly elastic supply curve is: * 1/1 vertical. horizontal. downward sloping to the left. encouraging workers to carpool.. upward sloping to the right.

horizontal.

Consumption is the purchase of goods and services by: * 1/1 foreign buyers government households business firms

households

On the demand side of GDP, consumption by _____________ is the largest component of GDP, accounting for about two-thirds of the GDP in any year. * 1/1 government businesses services households

households

An import quota or tariff on French wine that raises the prices for wine will probably: * 1/1 hurt both domestic wine drinkers and domestic wine producers because of a reduction in competition. hurt both domestic wine drinkers and domestic wineries, but this will be more than offset by a reduction in driving fatalities. hurt domestic wineries, which will lose business as a result of the higher prices. hurt domestic wine drinkers but help domestic wineries, which will gain from the higher prices.

hurt domestic wine drinkers but help domestic wineries, which will gain from the higher prices.

In the early 1990's extremely high inflation rates of 2500% were common in Russia. During that time, we can say that as a result of those inflation rates, Russia was experiencing ___________________. * 1/1 perpetual inflation hyperinflation hypo inflation ultra inflation

hyperinflation

A government will likely ____________________________ to encourage investment in technology R&D by private firms? * 1/1 reduce R&D grants to nonprofit organizations reduce R&D grants to universities spend more on R&D in government laboratories implement fiscal policy establishing tax incentives

implement fiscal policy establishing tax incentives

According to international trade theory, a country should: * 1/1 import goods in which it has an absolute advantage. import goods in which it has an absolute disadvantage. export goods in which it has an absolute advantage. import goods in which it has a comparative disadvantage.

import goods in which it has a comparative disadvantage.

Tariffs are taxes imposed on _________________. * 1/1 hazardous goods surplus goods imported products exported products

imported products

The term __________ is used to describe what those in one country buy from those in other countries. * 1/1 imports trade exports surplus

imports

By June, 2010, the U.S. government owed $13.6 trillion dollars ________________ that, over time, has remained unpaid. * 1/1 from decreases in income tax from decreases in excise tax from decreases in corporate tax in accumulated government debt

in accumulated government debt

Inflation implies that the level of all prices _____________________. * 1/1 decrease stay the same increase none of the above

increase

The longer the time period considered, the more the elasticity of supply tends to: * 1/1 midway between the two equilibria. converge to zero remain constant increase

increase

Raising an existing tariff on grapes from Argentina will: * 1/1 increase American consumption of domestically produced grapes. increase total American consumption of grapes. increase domestic production of grapes. increase American imports of grapes from Argentina.

increase American consumption of domestically produced grapes.

If a country's GDP increases, but its debt also increases during that year, then the country's debt to GDP ratio for the year will _______________ in proportion to the magnitude of the changes. * 1/1 increase because its debt increased decrease because GDP increased increase or decrease increase

increase or decrease

Improvements in the productivity of labor will tend to: * 0/1 decrease the supply of labor. increase the supply of labor. decrease wages. increase wages.

increase wages.

After the USA introduces a tariff in the market for gigastraps, the price of gigastraps in the USA will: * 1/1 decrease. increase. change in an indeterminate manner. remain the same.

increase.

Import tariffs generally ________ the output of domestic producers of the affected products and also _________ the output of domestic exporters. * 1/1 increase; increase increase; decrease decrease; decrease decrease; increase

increase; decrease

Which of the following is most likely to contribute to economic growth as measured by GDP per capita? * 1/1 rapid population growth an increase in marginal tax rates increased capital formation the imposition of tariffs and quotas on imported goods

increased capital formation

When a price, wage, or interest rate is adjusted automatically with inflation, it is said to be __________. * 1/1 semi-indexed nominally adjusted COLAed indexed

indexed

The demand schedule for a good: * 1/1 indicates the quantities that will be purchased at alternative market prices. indicates the quantity that people will buy at the prevailing price. indicates the quantities that suppliers will sell at various market prices. is determined primarily by the cost of producing the good.

indicates the quantities that will be purchased at alternative market prices.

Demand is said to be _____________ when the quantity demanded is not very responsive to changes in price. * 1/1 independent unit elastic elastic inelastic

inelastic

When economists are sketching examples of demand and supply, it is common to sketch a demand or supply curve that is close to vertical, and then to refer to that curve as _________. * 1/1 elastic income elasticity inelastic unitary elasticity

inelastic

Taxes on goods with __________ demand curves will tend to raise more tax revenue for the government than taxes on goods with __________ demand curves. * 1/1 unit elastic; inelastic inelastic; elastic elastic; inelastic elastic; unit elastic

inelastic; elastic

A lender demands an interest rate in part to compensate for any expected ___________, so that the money that is repaid in the future will have at least as much buying power as the money that was originally loaned. * 1/1 inflation risk premium opportunity costs compound interest

inflation

The percentage change in the price level from one time period to the next, whether the price level is measured in terms of money or as a price index, will be the _____________. * 1/1 producer price Index consumer price index inflation rate price index rate

inflation rate

To a macroeconomist, a trade deficit is synonymous with which of the following? * 0/1 inflow of goods and services outflow of financial capital outflow of goods and services inflow of financial capital

inflow of financial capital

The ____________ describes a situation where sufficient credit is available, but the economy experiences a reduction in consumption and investment. * 1/1 price effect wealth effect inflation rate effect interest rate effect

interest rate effect

Which of the following best describes a monetary policy tool? * 0/1 taxes government spending household savings interest rates

interest rates

As the aggregate price level in an economy rises, ____________________. * 1/1 interest rates increase exports decrease investment increases consumer demand increases

interest rates increase

When the central bank decides to increase the discount rate, the: * 1/1 interest rates increase. interest rates are unaffected. money supply increases. interest rates decrease.

interest rates increase.

In a market-oriented economy, private firms will undertake most of the _____________________________, and ________________ should seek to avoid a long series of large budget deficits that might crowd out such investment. * 1/1 investment in human capital; monetary policy economic growth activities; monetary policy economic growth activities; fiscal policy investment in physical capital; fiscal policy

investment in physical capital; fiscal policy

From a neoclassical perspective, which of the following would most likely be viewed as an element that underpins long-run productivity growth in the economy? * 1/1 flexible price levels investments in human capital flexible market forces higher unemployment

investments in human capital

Investment in human capital: * 1/1 is of minor importance to economic growth. can be acquired through on-the-job training. is an important source of economic growth. is characterized by both B) and C).

is characterized by both B) and C).

If a nation has a comparative disadvantage in the production of some commodity: * 1/1 it can gain from international trade in that commodity only if it has an absolute advantage in that commodity. it can still gain from international trade in that commodity, by getting it at a lower opportunity cost than if it produced it domestically. it cannot gain from international trade in the commodity. it cannot gain from international trade unless it has an absolute advantage in every other commodity.

it can still gain from international trade in that commodity, by getting it at a lower opportunity cost than if it produced it domestically.

If the Canadian dollar is strengthening, then: * 1/1 Canada has purchasing power parity. Canada has adopted a hard peg policy. it has been unpegged from other currencies. it has appreciated in terms of other currencies.

it has appreciated in terms of other currencies.

Scarcity implies that: * 1/1 consumers would be willing to purchase the same quantity of a good at a higher price. it is impossible to completely fulfill the unlimited human desire for goods and services with the limited resources available. at the current market price, consumers are willing to purchase more of a good than suppliers are willing to produce. consumers are too poor to afford the goods and services available.

it is impossible to completely fulfill the unlimited human desire for goods and services with the limited resources available.

Why is productivity growth considered to be the most important factor in the AD/ASAD/AS model? * 1/1 it shifts the AD curve in the long-term it shifts the AS curve in the long-term it shifts the AS curve in the short-term it shifts the AD curve in the short-term

it shifts the AS curve in the long-term

In the ____________, households work and receive payment from firms. * 1/1 labor market savings market financial investment market financial capital market

labor market

Economists refer to this pattern, the ___________________________________, which means that as a person receives more of a good, the additional or marginal utility from each additional unit of the good declines. * 1/1 production possibilities frontier law of trade-offs law of diminishing marginal utility law of increasing marginal utility

law of diminishing marginal utility

Intra-industry trade between similar trading partners allows the gains from ________________ that arise when firms and workers specialize in the production of a certain product. * 1/1 learning and innovation creating the value chain relative advantage comparative advantage

learning and innovation

Since Baltimore passed the first __________ in 1994, several dozen cities enacted similar laws in the late 1990s and into the 2000s. * 1/1 price floor price ceiling living wage law minimum wage

living wage law

When nations desire a healthy macroeconomy, they typically focus on three goals, one of these being: * 0/1 balanced budget assuring competition between firms prudent monetary policy low inflation

low inflation

A prolonged period of budget deficits may lead to ___________________. * 1/1 outflows of financial capital abroad lower inflation increasing exchange rates lower economic growth

lower economic growth

Trade allows each country to take advantage of ______________ in the other country. * 1/1 specialization worker productivity economies of scale lower opportunity costs

lower opportunity costs

Suppose that a rise in business confidence has led to more investment in the economy and higher levels of output. In the short-run Keynesian analysis, the rise in aggregate demand will: * 1/1 cause government to increase spending. lower unemployment. exports will drop. cause government to lower taxes.

lower unemployment.

What do growth in standard of living, low unemployment, low inflation, and a sustainable balance of trade all share in common? * 1/1 microeconomic policy goals of developed countries main universal goals of macroeconomic policy microeconomic policy goals of undeveloped countries lack of diversity in undeveloped countries in the World

main universal goals of macroeconomic policy

The unemployment rate may underestimate the true extent of unemployment if: * 1/1 many people have a part time as well as a full time job. there are a large number of people working in the underground economy. many people become discouraged and cease looking for work. employees increase the number of hours they work overtime.

many people become discouraged and cease looking for work.

Most choices involve _________________, which involves comparing the benefits and costs of choosing a little more or a little less of a good. * 1/1 marginal analysis utility the budget constraint consumption

marginal analysis

As a person receives more of a good, the _______________ from each additional unit of the good declines. * 1/1 sunk costs budget constraint marginal utility utility

marginal utility

In a _______________________, most economic decisions about what to produce, how to produce it, and for whom to produce it are made by buyers and sellers. * 1/1 macroeconomy market-oriented economy command economy microeconomy

market-oriented economy

The idea behind comparative advantage reflects the possibility that one party: * 1/1 with an absolute advantage in producing two different may export goods both of those goods to the other party. may be able to produce everything relatively more efficiently than another party. may be able to produce something at a lower opportunity cost than another party. may be able to produce something at a lower dollar cost than another party.

may be able to produce something at a lower opportunity cost than another party.

If mollusk shells were accepted as a method of payment in modern-day markets, what economic role would they play in the financial system? * 1/1 medium of exchange capital exchange currency exchange unit of exchange

medium of exchange

In modern economies, credit cards are a _________________ because of their wide acceptance as a method of payment for both goods and services. * 1/1 medium of exchange unit of exchange store of value unit of account

medium of exchange

In 2010, Tara used $50,000.00 from funds she had invested in certificates of deposit as a down payment to buy a house. What function did this portion of her investments serve when she made the down payment? * 1/1 unit of exchange. store of value. unit of account. medium of exchange.

medium of exchange.

An economics professor is discussing a measure of trade that involves a comparison of exports and imports of goods for the year just ended. What name is given to this measurement? * 1/1 export trade balance merchandise trade balance import trade balance current account balance

merchandise trade balance

The basic difference between macroeconomics and microeconomics is that: * 0/1 macroeconomics is concerned with generalization while microeconomics is concerned with specialization. microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned with the forest (aggregate markets). macroeconomics is concerned with groups of individuals while microeconomics is concerned with single countries. microeconomics looks at the forest (aggregate markets) while macroeconomics looks at the trees (individual markets).

microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned with the forest (aggregate markets).

Which of the following is omitted in a barter transaction? * 0/1 store of value medium of exchange trade money

money

The ___________________ argument tends to view inflation as a cost that offers no offsetting gains in terms of lower unemployment. * 1/1 Keynesian market forces flexible wage and price neoclassical

neoclassical

Many economists believe that the trend toward greater wage inequality across the U.S. economy was primarily caused by ___________________. * 1/1 the recession the rise of global markets new technologies inflation

new technologies

The reasons that nations trade includes the fact that: * 1/1 labor costs are too high in some countries to efficiently produce goods. different countries have different levels of greed. the wants of their citizens exceeds their productive capacity. no one country produces all of what citizens within the country want.

no one country produces all of what citizens within the country want.

Philosophers draw a distinction between positive statements, which describe the world as it is, and ___________________s, which describe how the world should be. * 1/1 opportunity cost trade-off budget constraint normative statement

normative statement

Country Alpha and Country Beta initially have the same real GDP per capita. Country Alpha experiences no economic growth, while Country Beta grows at a sustained rate of 5 percent. In 14 years, Country Alpha's GDP will be approximately _________ that of Country Beta. * 1/1 triple double one-fourth one-half

one-half

While one occasionally sees references to inflation over short time periods, the term typically implies a(n)_____________ in prices. * 1/1 ongoing decrease short term decrease short term rise ongoing rise

ongoing rise

Attending college is a case where the ________________ exceeds the monetarycost. * 1/1 opportunity cost marginal analysis marginal utility budget constraint

opportunity cost

The slope of the production possibility frontier is determined by the ________________ of expanding production of one good, measured by how much of the other good would be lost. * 1/1 comparative advantage absolute advantage opportunity cost relative cost

opportunity cost

The theory of comparative advantage shows that the gains from international trade do not just result from the absolute advantage of producing at lower cost, but also from pursuing comparative advantage and producing at a lower ___________. * 1/1 opportunity cost comparative cost relative cost absolute cost

opportunity cost

The underlying reason why trade benefits both sides of a trading arrangement is rooted in the concept of * 1/1 opportunity cost absolute advantage specialization maximum production

opportunity cost

A university student who is enrolled in school fulltime and not seeking employment is considered: * 1/1 underemployed. out of the labor force. employed in leisure. unemployable, and not counted in official statistics.

out of the labor force.

Reginald looked for work for six months but could not find a job to his liking. He now spends his time at the beach. For purposes of employment he is considered: * 1/1 out of the labor force. underemployed. unemployed. employed in the underground economy.

out of the labor force.

The effect of substitution bias is that the rise in the price of a fixed basket of goods over time tends to ___________________ the rise in a consumer's true cost of living, because it doesn't take into account that the person can substitute between goods according to changes in their relative prices. * 1/1 overstate reduce stabilize understate

overstate

In uncertain economic times, ____________________ serves as a way of preserving economic value that can be spent or consumed in the future. * 1/1 refinancing your home mortgage owning gold obtaining a credit card buying a new car

owning gold

The elasticity of supply is defined as the ________ change in quantity supplied divided by the _______ change in price. * 1/1 percentage; marginal marginal; percentage total; percentage percentage; percentage

percentage; percentage

Philosophers draw a distinction between ___________________, which describe the world as it is, and normative statements, which describe how the world should be. * 1/1 negative statements tradeoffs utilitarianism that prices are stable. positive statements

positive statements

The term "full employment GDP" is synonymous with which of the following? * 1/1 Keynesian zone potential GDP aggregate GDP macroeconomic equilibrium

potential GDP

In the long-run neoclassical view, when wages and prices are flexible, ________________________ determine the size of real GDP. * 1/1 potential GDP and aggregate supply potential GDP and aggregate demand levels of output and aggregate supply levels of wages and aggregate demand

potential GDP and aggregate supply

The maximum quantity that an economy can produce, given its existing levels of labor, physical capital, technology, and institutions, is called: * 1/1 real GDP. aggregate supply. potential GDP. aggregate demand.

potential GDP.

The neoclassical perspective on macroeconomics emphasizes that in the long run, the economy seems to rebound back to its _____________ and its ____________________. * 1/1 real GDP; natural rate of unemployment natural level of output; cyclical unemployment rate long term growth; cyclical unemployment potential GDP; natural rate of unemployment

potential GDP; natural rate of unemployment

The elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in __________. * 1/1 the slope in the supply curve the slope of the demand curve price quantity supplied

price

In contrast to goods and services markets, ______________ are rare in labor markets, because rules that prevent people from earning income are not politically popular. * 1/1 living wage laws minimum wages price ceilings price floors

price ceilings

The U.S. economy has two main sources for financial capital; _______________________ and ____________________________. * 1/1 private sector investment; inflows of foreign financial investment from abroad private savings from U.S. households and firms; government borrowing private savings from U.S. households and firms; inflows of foreign financial investment. private sector investment; government borrowing

private savings from U.S. households and firms; inflows of foreign financial investment.

The Producer Price Index is based on prices paid for supplies and inputs by: * 1/1 government the small business sector producers of goods and services consumers

producers of goods and services

The value of what businesses provide to other businesses is captured in the final products at the end of the __________ chain. * 0/1 value production service supply

production

Over the long run, ____________ per hour is the most important determinant of the average wage level in any economy. * 0/1 productivity demand supply dollars

productivity

The value of what is produced per worker, or per hour worked, is called ____________. * 0/1 productivity economic growth GDP per capita human capital

productivity

An additional investment in human capital, especially for the low-income nations of the world, will likely directly increase which of the following? * 1/1 consumer orientated spin-offs productivity and economic growth highly qualified teachers increased levels of R&D spending

productivity and economic growth

In the neoclassical model, the AS curve shifts to the right over time as_______________________ and potential GDP expands. * 1/1 the level of real output drops productivity increases aggregate demand increases

productivity increases

A __________________________ policy will cause a greater share of income to be collected from those with high incomes than from those with lower incomes. * 1/1 regressive tax excise tax progressive tax proportional tax

progressive tax

To achieve a high standard of living, a nation should: * 1/1 promote economic growth. increase the tax deduction for child dependents. use less capital and more labor in the production process.o increase welfare payments to the poor.

promote economic growth.

A ________________________________ is calculated as a flat percentage of income earned, regardless of level of income. * 1/1 estate and gift tax proportional tax progressive tax regressive tax

proportional tax

Low-wage U.S. workers suffer from protectionism in all the industries that they don't work in, because: * 1/1 protectionism provides a barrier to entry to the job markets that the low-wage earners want entry to. protectionism forces them to pay higher prices for basic necessities like clothing and food. protectionism will prevent them from applying for those jobs in other industries. protectionism will encourage foreign workers to apply for American jobs.

protectionism forces them to pay higher prices for basic necessities like clothing and food.

If a government decides to finance an investment in ________________ with higher taxes or ____________________ in other areas, it need not worry that it is crowding out private investment. * 1/1 hydroelectric dams and windmills; government R&D roads and bridges; increased borrowing water supply and sewers; by raising capital spending public physical capital; lower government spending

public physical capital; lower government spending

Which of the following is described as an innovative and nontraditional method used by the Federal Reserve to expand the quantity of money and credit during the recent U.S. recession? * 1/1 quantitative easing increased discount rate open market operations increased reserves requirements

quantitative easing

A demand curve shows the relationship between price and ______________ on a graph. * 1/1 economies of scale quantity produced quantity demanded costs

quantity demanded

_____________ refers to the total number of units that are purchased at that price. * 1/1 supply quantity quantity demanded market quantity

quantity demanded

A central bank that desires to reduce the quantity of money in the economy can: * 1/1 raise the reserve requirement. buy bonds in open market operations. engage in quantitative easing. lower the discount rate.

raise the reserve requirement.

A straightforward example of a ____________, often used for simplicity, is the interest rate. * 0/1 financial investment rate of return price floor price ceiling

rate of return

After reports of the subprime mortgage crisis began to appear in the media, which of the following most likely caused housing prices to fall? * 1/1 neoclassical theory rational expectations cyclical expectations Keynesian theory

rational expectations

The theory of _____________________ holds that people will use all information available to them to form the most accurate possible expectations about the future. * 1/1 Keynesian economics Neoclassical economics rational expectations adaptive expectations

rational expectations

In an AD/AS model: * 1/1 the CPI is shown on the vertical axis. the GDP deflator always slopes upwards. the potential GDP always slopes downwards. real GDP is shown on the horizontal axis.

real GDP is shown on the horizontal axis.

Economists typically measure economic growth by tracking: * 1/1 the employment rate . averaged GDP growth real GDP per capita. the unemployment rate.

real GDP per capita.

The nominal value of any economic statistic refers to the number that is actually announced at that time, while the ________________ refers to the statistic after it has been adjusted for inflation. * 1/1 net value real value adjusted value empirical value

real value

If South Dakota's governor reports a budget surplus in 2011, that state government likely: * 1/1 equalized spending and taxes in that year. increased the proportional tax level. received more in taxes than it spent in that year. increased the corporate income tax rate.

received more in taxes than it spent in that year.

Which of the following is an example of one of the major categories in the overall CPI? * 1/1 apparel and accessories entertainment recreation transportation and insurance

recreation

When the share of individual income tax collected by the government from people with higher incomes is smaller than the share of tax collected from people with lower incomes, then the tax is * 1/1 proportional regressive progressive optional

regressive

Which of the following terms is used to describe the proportion of deposits that banks are legally required to deposit with the central bank? * 1/1 discount requirements monetary requirements reserve requirements deposit requirements

reserve requirements

The price elasticity of demand measures the: * 1/1 responsiveness of quantity demanded to a change in quantity supplied. responsiveness of price to a change in quantity demanded. responsiveness of quantity demanded to a change in price. responsiveness of quantity demanded to a change in income.

responsiveness of quantity demanded to a change in price.

If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to: * 1/1 rise and the equilibrium quantity to rise. rise and the equilibrium quantity to stay the same. stay the same and the equilibrium quantity to fall. rise and the equilibrium quantity to fall.

rise and the equilibrium quantity to stay the same.

A more efficient means of processing algae to produce an anticancer drug is discovered. As a result, the supply curve for the drug will: * 1/1 shift to the left, decreasing the price of the drug. shift to the right, increasing the price of the drug. shift to the left, increasing the price of the drug. shift to the right, decreasing the price of the drug

shift to the right, decreasing the price of the drug

The time lag for monetary policy is typically ________________ the time lag for fiscal policy. * 1/1 longer than about the same as the same as shorter than

shorter than

Which of the following will strongly influence a nation's level of trade? * 1/1 government trade policy, its history of trade, and the size of its economy ratio of exports to GDP, balance of trade, and government trade policy size of its government, its history of trade, and its geographic location size of its economy, its geographic location, and its history of trade

size of its economy, its geographic location, and its history of trade

A typical Keynesian aggregate supply (AS) curve _______________ and a typical Keynesian Phillips curve _____________. * 0/1 slopes upward; slopes downward is vertical; is vertical slopes downward; slopes downward slopes upward; slopes upward

slopes upward; slopes downward

Some nations that seek to produce all of their own needs face the problem that: * 1/1 they can deplete their natural resources as a result. the opportunity cost of producing some of their own goods is lower than that of trading with others for them. some industries are too small to be efficient if restricted to their domestic markets alone. they will not be able to satisfy the wants of all of their citizens.

some industries are too small to be efficient if restricted to their domestic markets alone.

The ____________________ in an AD/AS diagram is most relevant to Say's Law. * 1/1 flat portion of the AS curve steep portion of the AS curve AD curve AS curve

steep portion of the AS curve

One of the reasons that a rise in the price of a fixed basket of goods over time tends to overstate the rise in a consumer's true cost of living, is: * 1/1 complimentary bias preference bias substitution bias attribution bias

substitution bias

The lesson of __________ is to forget about the money that's irretrievably gone and instead to focus on the marginal costs and benefits of future options. * 1/1 marginal analysis budget constraints marginal utility sunk costs

sunk costs

A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied; conversely, especially good weather would shift the _________________________. * 0/1 demand curve to the right supply curve to the left supply curve to the right demand curve to the left

supply curve to the right

A ___________________________________ can lead to disruptive economic patterns and heavy strains on a country's banking and financial system. * 1/1 sustained pattern of large budget deficits prolonged period of trade surpluses sustained pattern of large trade deficits prolonged period of budget surpluses

sustained pattern of large budget deficits

For firms engaged in international lending and borrowing, ____________________ can have an enormous effect on profits. * 1/1 foreign direct investment foreign portfolio investment trade-offs and risks swings in exchange rates

swings in exchange rates

Foreign direct investment is the term used to describe purchases of firms in another country that involve ______________________. * 1/1 the exchange rate market using another currency taking a management responsibility internationally traded goods across countries

taking a management responsibility

What do Africa, southern Mexico, and tropical areas of Central America and Brazil all share in common? * 1/1 rapid growth rates technological exclusion command economies high per capita GDPs

technological exclusion

Since the late 1950s, economists have performed "growth accounting" studies in the United States. These have determined that ________________ is typically the most important contributor to U.S. economic growth. * 1/1 physical capital human capital a market orientation technology

technology

The quantitative easing policies adopted by the Federal Reserve are usually thought of as: * 1/1 a relatively weak tool. traditional monetary policies. short term loans to fill out reserves. temporary emergency measures.

temporary emergency measures.

The most commonly cited measure of inflation in the United States is: * 1/1 the Consumer Price Index (CPI). the Deflationary Price Index (DPI) the Inflationary Price Index (IPI) the Cumulative Price Index (CPI)

the Consumer Price Index (CPI).

If a nation merges its currency with another nation to create a single currency, what must it give up? * 1/1 the ability to purchase currency in foreign exchange markets the ability to fight recessions and control inflations the ability to sell currency in foreign exchange markets the ability to determine its own nationally-oriented monetary policy

the ability to determine its own nationally-oriented monetary policy

The term "merchandise trade balance" is used to describe: * 1/1 the balance of trade in services. the level of trade in services. the level of trade in goods. the balance of trade in goods.

the balance of trade in goods.

Inflation can be calculated in terms of how the overall cost of ___________________ changes over time. * 1/1 all goods and services all goods the basket of goods all services

the basket of goods

Gomer decides to spend an hour playing basketball rather than studying. His opportunity cost is: * 1/1 nothing, because he had a free pass into the sports complex to play basketball. the increase in skill he obtains from playing basketball for that hour. nothing, because he enjoys playing basketball more than studying. the benefit to his grades from studying for an hour

the benefit to his grades from studying for an hour

The opportunity cost of attending university is likely to include all except which of the following? * 1/1 tuition fees the cost of required textbooks the income you forgo in order to attend classes the cost of haircuts received during the school term

the cost of haircuts received during the school term

When a business firm makes an investment in physical capital, what is that investment subject to? * 1/1 economic output and productivity the discipline of the market political orientated incentives state and local government incentives

the discipline of the market

In most developed countries, the government plays a large role in society's investment in human capital through _________________________. * 1/1 tax incentives private sector R&D the education system

the education system

Many high-income nations are approaching a situation in which: * 1/1 the elderly will soon form a much larger share of the population. they will intentionally aim for a low standard of living. the demands of the elderly will cause an unsustainable trade imbalance. they will intentionally aim for high rates of unemployment and inflation.

the elderly will soon form a much larger share of the population.

When Mataeo buys Euros through _________________________, he will use his U.S. dollars to pay for them. * 1/1 the foreign exchange market the currency exchange market a floating exchange market foreign currency market

the foreign exchange market

Because China and the East Asian tigers are _________________________, their economies have all experienced rapid economic growth rates. * 1/1 the highest savers in the world, often saving one-third or more of GDP technologically disconnected, they encourage their firms to participate in world markets rely on using technology developed by technological leaders overly reliant on a legacy of government economic controls

the highest savers in the world, often saving one-third or more of GDP

Which of the following is unlikely to affect the rate of economic growth? * 0/1 the level of government spending technological change the quality of available resources the quantity of available resources

the level of government spending

In a discussion of economics, which of the following would exert the most influence on an individual firm's decision to hire workers? * 0/1 household income the macroeconomy wage levels the firm's income

the macroeconomy

When the central bank lowers the reserve requirement on deposits: * 1/1 the money supply and interest rates decrease. the money supply decreases and interest rates increase. the money supply increases and interest rates decrease. the money supply and interest rates increase.

the money supply increases and interest rates decrease.

The most significant real economic cost of high unemployment is: * 1/1 the lost tax revenue that might have been paid by persons if they had worked. the money cost of retraining persons to obtain new jobs. the money cost of unemployment insurance payments to the unemployed. the potential goods and services that might have been produced but weren't.

the potential goods and services that might have been produced but weren't.

As depicted in _________________________________, it is necessary to give up some of one good to gain more of the other good. * 1/1 utility the production possibilities frontier allocative efficiency scarcity

the production possibilities frontier

Whenever there is a surplus at a particular price, the quantity sold at that price will equal: * 1/1 the quantity supplied at that price. (quantity demanded plus quantity supplied)/2. the quantity supplied minus the quantity demanded. the quantity demanded at that price.

the quantity demanded at that price.

If aggregate supply is vertical, then aggregate demand does not affect: * 1/1 the quantity of output. either wages or prices. the causes of inflationary changes in price level. inflationary pressures that accompanies any rise in output.

the quantity of output.

Whenever there is a shortage at a particular price, the quantity sold at that price will equal: * 1/1 the quantity supplied at that price. (quantity demanded plus quantity supplied)/2. the quantity supplied minus the quantity demanded. the quantity demanded at that price.

the quantity supplied at that price.

Assume that the level of domestic investment in a country rises, while the level of private and public saving remains unchanged. In these circumstances: * 1/1 government borrowing will increase sharply. the rise in domestic investment will mean a higher trade deficit. the trade deficit will decline sharply. the rise in domestic investment will mean a higher trade surplus.

the rise in domestic investment will mean a higher trade deficit.

If new manufacturers enter the computer industry, then (ceteris paribus): * 1/1 the supply curve shifts to the right. some established manufacturers must exit the industry. the supply curve shifts to the left. the demand curve shifts to the left.

the supply curve shifts to the right.

Exchange rates are an effective way to analyze the price of one currency in terms of another currency with _________________________. * 1/1 exchange rate policy distinctive trade-offs and risks monetary policy the tools of demand and supply

the tools of demand and supply

In the national savings and investment identity framework, an inflow of savings from abroad is, by definition, equal to: * 1/1 the trade surplus. domestic household savings the trade deficit. private sector investment.

the trade deficit.

Potential GDP in the U.S. will be unaffected by ____________________. * 1/1 government institutions the unemployment rate technology the amount of capital available

the unemployment rate

GDP is: * 1/1 the sum of all currency and coins in circulation. the value of all final good and services produced anywhere in the world by a nation's firms. the value of all final goods and services produced by a government. the value of all final goods and services produced domestically.

the value of all final goods and services produced domestically.

The opportunity cost of producing a pair of pants in the USA is 5 bushels of wheat, while in China, it is 2 bushels of wheat. As a result: * 1/1 China has a comparative advantage over the USA in the production of wheat. The USA has a comparative advantage over China in the production of pants. there can be mutual gains from trade to the two countries if the USA exports wheat to China in exchange for pants. there can be mutual gains from trade to the two countries if the USA exports pants to China in exchange for wheat.

there can be mutual gains from trade to the two countries if the USA exports wheat to China in exchange for pants.

According to the law of supply: * 1/1 there is a direct relationship between price and the quantity supplied. there is an inverse relationship between price and quantity demanded. there is an inverse relationship between price and the quantity supplied. there is a direct relationship between price and quantity demanded.

there is a direct relationship between price and the quantity supplied.

When quantity demanded decreases in response to a change in price: * 0/1 there is a movement up along the demand curve. the demand curve shifts to the left. the demand curve shifts to the right. there is a movement down along the demand curve.

there is a movement up along the demand curve.

When quantity demanded decreases in response to a change in price: * 0/1 there is a movement up along the demand curve. the demand curve shifts to the right. there is a movement down along the demand curve. the demand curve shifts to the left.

there is a movement up along the demand curve.

Why do smaller economies around the world typically face more volatile inflation? * 1/1 the fundamentals of growth are the same in every country they address inflation concerns without restricting trade and thus lose benefits businesses are distracted from focusing on real productivity gains they can be unsettled by international movements of capital and goods

they can be unsettled by international movements of capital and goods

Insofar as government public policy is concerned, the best way to battle unemployment would be __________________. * 1/1 to minimize recessions to maximize unemployment insurance duration to maximize unemployment payments to minimize labor unions

to minimize recessions

The money multiplier is equal to the _______________ in the economy divided by the original _________________. * 1/1 quantity of money; total money total money; quantity of money reserve ratio; original quantity of reserves original quantity of reserves; reserve ratio

total money; quantity of money

The gap between exports and imports in a nation's economy is called the ___________. * 1/1 trade inventory trade balance trade deficit trade surplus

trade balance

The term _____________ describes circumstances where a country's imports exceed its exports. * 1/1 trade balance trade imbalance trade surplus trade deficit

trade deficit

From a macroeconomic perspective, an economic transaction in the form of a financial investment is synonymous with which of the following? * 1/1 trade resulting from unilateral transfers trade in the financial capital market a stream of payments leaving the country a productive economic asset

trade in the financial capital market

A __________________ often results in an outflow of financial capital leaving the domestic economy and being invested in the global economy. * 1/1 twin surplus trade surplus trade deficit fiscal deficit

trade surplus

The term _____________ describes circumstances where a country's exports exceed its imports. * 1/1 trade imbalance trade deficit trade surplus trade balance

trade surplus

The unemployment rate measures: * 1/1 unemployed workers as a percentage of the population. the number of people unemployed divided by the number of people employed. unemployed workers as a percentage of the labor force. unemployed workers as a percentage of the population age over-sixteen.

unemployed workers as a percentage of the labor force.

Frictional unemployment is: * 1/1 unemployment that is due to the friction of competing ideological systems. unemployment caused by lack of training and education. unemployment caused by automation in the workplace. unemployment that is due to normal turnover in the labor market.

unemployment that is due to normal turnover in the labor market.

Demand is said to be __________ when the quantity demanded changes at the same proportion as the price. * 1/1 independent inelastic unit elastic elastic

unit elastic

In macroeconomics, a _______________ describes the common way in which market values are measured in an economy. * 1/1 unit of account medium of exchange unit of exchange store of value

unit of account

But nearly all supply curves share a basic similarity: they slope ________________. * 1/1 up from right to left down from right to left down from left to right up from left to right

up from left to right

In deciding how many hours to work, Beulah will make a choice that maximizes her _______; that is, she will choose according to her preferences for leisure time and income. * 0/1 production possibilities frontier utility budget constraint opportunity set

utility

Say's Law argues that a given ____________________ must create an equivalent ________________________ somewhere else in the economy. * 1/1 total quantity of goods; price level for output potential GDP; value of supply value of supply; value of demand natural rate of unemployment; full employment GDP

value of supply; value of demand

When other factors such as health and illiteracy rates are added to global comparisons of GDP and population, which of the following is likely to be revealed? * 1/1 2% of the world's GDP comes from agriculture in low-income countries rough comparisons between regions as data are not available the similarity in the low degree of urbanization very wide differences in the standard of living

very wide differences in the standard of living

Which of the following is a building block of neoclassical economics? * 1/1 wages and prices will adjust in a flexible manner sticky wages and prices the size of the economy is determined by real GDP aggregate demand model

wages and prices will adjust in a flexible manner

A depreciating U.S. dollar is ________________ because it is worth ___________ in terms of other currencies. * 1/1 a problem for exporters; less beneficial to importers; more strengthening; more weakening; less

weakening; less

The _________________ means that a higher price level leads to lower real wealth. * 1/1 wealth effect employment effect foreign price effect interest rate effect

wealth effect

If labor demand is downward sloping and labor supply is upward sloping, then when labor demand rises faster than labor supply, it is expected that real wages _______________. * 1/1 will increase will stay the same may increase, decrease or stay the same depending on the relative slopes. will decrease

will increase

International trade is fundamentally a ________________________. * 1/1 war which is won by the strongest win-lose situation win-win situation lose-lose situation

win-win situation