Econ Final
In the economy of Talikastan in 2015, consumption was $4000, exports were $800, GDP was $7500, imports were $200, and investment was $1000. What were Talikastan's government purchases in 2015? A. $1900 B. $1200 C. $2500 D. $4500
A. $1900.
Refer to Table 23-4. What was the growth rate of real GDP for 1931? A. -6.49%. Real GDP is a better gauge of economic well-being than nominal GDP. B. -6.93%. Nominal GDP is a better gauge of economic well-being than real GDP. C. -6.49%. Nominal GDP is a better gauge of economic well-being than real GDP. D. -6.93%. Real GDP is a better gauge of economic well-being than nominal GDP.
A. -6.49%. Real GDP is a better gauge of economic well-being than nominal GDP.
Refer to Table 23-4. What was the growth rate of real GDP for 1930? A. -8.62%. Real GDP is a better gauge of economic well-being than nominal GDP. B. -8.62%. Nominal GDP is a better gauge of economic well-being than real GDP. C. -9.43%. Nominal GDP is a better gauge of economic well-being than real GDP. D. -9.43%. Real GDP is a better gauge of economic well-being than nominal GDP.
A. -8.62%. Real GDP is a better gauge of economic well-being than nominal GDP.
If the multiplier is 6, then the MPC is A. 0.83. B. 0.71. C. 0.86. D. 0.16
A. 0.83.
Longview Corporation has a stock price of $60, has issued 1,000,000 shares of stock, has retained earnings of $3 million dollars, and a dividend yield of 5 percent. The price-earnings ratio for Longview stock is A. 10, which is low compared to historical standards of the market. B. 20, which is low compared to historical standards of the market. C. 20, which is high compared to historical standards of the market. D. 10, which is high compared to historical standards of the market.
A. 10, which is low compared to historical standards of the market.
Refer to Table 3-20. What is Theresa's opportunity cost of producing one bushel of wheat? A. 3/5 pound of beef B. 5/6 pound of beef C. 5/3 pounds of beef D. 6/5 pound of beef
A. 3/5 pound of beef
Of the following interest rates, which is the highest one at which you would prefer to have $170 ten years from today instead of $100 today? A. 5 percent B. 7 percent C. 3 percent D. 9 percent
A. 5 percent
Refer to Figure 28-3. At the equilibrium wage, how many workers are employed? A. 5,000 B. 1,000 C. 0 D. 9,000
A. 5,000.
Vince says that the present value of $500 to be received one year from today if the interest rate is 8 percent is more than the present value of $500 to be received two years from today if the interest rate is 4 percent. Terri says that $500 saved for two years at an interest rate of 3 percent has a larger future value than $500 saved for one years at an interest rate of 6 percent. A. Both Vince and Terri are correct. B. Only Terri is correct. C. Only Vince is correct. D. Neither Vince nor Terri is correct.
A. Both Vince and Terri are correct.
Refer to Figure 9-7. Which of the following is a valid equation for the gains from trade? A. Gains from trade = (1/2)(P1 - P0)(Q2 - Q1). B. Gains from trade = (1/2)(Q1)(P3 - P1). C. Gains from trade = (1/2)(P1 - P0)(Q1 + Q2). D. Gains from trade = (1/2)(P1 - P0)(Q2 - Q0)
A. Gains from trade = (1/2)(P1 - P0)(Q2 - Q1).
A basket of goods costs $800 in the U.S. In Belgium the basket of goods costs 640 euros and the exchange rate is .80 euros per U.S. dollar. In Japan the basket of goods costs 90,000 yen and the exchange rate is 90 yen per dollar. Which country has purchasing-power parity with the U.S.? A. Japan but not Belgium B. Belgium but not Japan C. both Belgium and Japan D. neither Belgium nor Japan
A. Japan but not Belgium
The government increases both its expenditures and taxes by $400 billion. There is no crowding out and no accelerator effect. Aggregate demand shifts by $400 billion. Which of the following is consistent with how far aggregate demand shifts? A. MPC = 1/2, and the effects of the increase in taxes is 1/2 as strong as the change in government expenditures. B. MPC = 3/4, and the effects of the increase in taxes is 3/4 as strong as the change in government expenditures C. MPC = 2/3, and the effects of the increase in taxes is 2/3 as strong as the change in government expenditures D. All of the above are correct
A. MPC = 1/2, and the effects of the increase in taxes is 1/2 as strong as the change in government expenditures. B. MPC = 3/4, and the effects of the increase in taxes is 3/4 as strong as the change in government expenditures C. MPC = 2/3, and the effects of the increase in taxes is 2/3 as strong as the change in government expenditures D. All of the above are correct
A firm has three different investment options. Option A will give the firm $10 million at the end of one year, $10 million at the end of two years, and $10 million at the end of three years. Option B will give the firm $15 million at the end of one year, $10 million at the end of two years, and $5 million at the end of three years. Option C will give the firm $30 million at the end of one year, and nothing thereafter. Which of these options has the highest present value? A. Option C B. Option A C. Option B D. The answer depends on the rate of interest, which is not specified here.
A. Option C
Refer to Figure 9-15. With the tariff, the quantity of saddles imported is A. Q3 - Q2. B. Q3 - Q1. C. Q4 - Q2. D. Q4 - Q1.
A. Q3 - Q2.
Which of the following is correct? A. The cyclical rate of unemployment is sometimes below the natural rate of unemployment. B. In the U.S. the natural rate of unemployment is frequently near 2%. C. The natural rate of unemployment fluctuates more than the cyclical rate of unemployment. D. None of the above is correct.
A. The cyclical rate of unemployment is sometimes below the natural rate of unemployment.
What will happen in the gasoline market now if buyers expect higher gasoline prices in the near future? A. The demand for gasoline will increase. B. The demand for gasoline will be unaffected. C. The supply of gasoline will increase. D. The demand for gasoline will decrease.
A. The demand for gasoline will increase.
Refer to Table 3-31. Relative to the rancher, the farmer has A. a comparative advantage in the production of potatoes; relative to the farmer, the rancher has a comparative advantage in the production of meat. B. a comparative advantage in the production of potatoes, because the rancher requires less time than the farmer to produce a pound of potatoes. C. an absolute advantage in the production of both meat and potatoes.
A. a comparative advantage in the production of potatoes; relative to the farmer, the rancher has a comparative advantage in the production of meat.
A creditor of a corporation holds A. bonds sold by the corporation. If the corporation experiences financial difficulties bond holders are paid before stock holders. B. stocks sold by the corporation. If the corporation experiences financial difficulties stock holders are paid before bond holders. C. stocks sold by the corporation. If the corporation experiences financial difficulties bond holders are paid before stock holders. D. bonds sold by the corporation. If the corporation experiences financial difficulties stock holders are paid before bond holders.
A. bonds sold by the corporation. If the corporation experiences financial difficulties bond holders are paid before stock holders.
When, in our analysis of the gains and losses from international trade, we assume that a country is small, we are in effect assuming that the country A. cannot affect world prices by trading with other countries. B. cannot have a significant comparative advantage over other countries. C. cannot experience significant gains or losses by trading with other countries. D. All of the above are correct.
A. cannot affect world prices by trading with other countries.
Consider the market for new DVDs. If DVD players became cheaper, buyers expected DVD prices to fall next year, used DVDs became more expensive, and DVD production technology improved, then the equilibrium price of a new DVD would A. could rise, fall, or remain unchanged. B. stay the same. C. rise. D. fall.
A. could rise, fall, or remain unchanged.
Sectoral changes in demand A. create frictional unemployment, while firms paying wages above equilibrium to attract a better pool of candidates creates structural unemployment. B. create structural unemployment, while firms paying wages above equilibrium to attract a better pool of candidates creates frictional unemployment. C. and firms paying wages above equilibrium to attract a better pool of candidates both create structural unemployment. D. and firms paying wages above equilibrium to attract a better pool of candidates both create frictional unemployment.
A. create frictional unemployment, while firms paying wages above equilibrium to attract a better pool of candidates creates structural unemployment.
A newspaper article informs you that most businesses reduced production in the last quarter but also sold from their inventories during the last quarter. Based on this information GDP likely A. decreased. B. stayed the same. C. increased. D. may have increased, decreased, or stayed the same.
A. decreased.
Other things the same, when the interest rate rises, the present value of future revenues from investment projects A. falls, so investment spending falls. B. rises, so investment spending falls. C. rises, so investment spending rises. D. falls, so investment spending rises.
A. falls, so investment spending falls.
In recent years, the Federal Reserve has conducted policy by setting a target for the A. federal funds rate. B. growth rate of the money supply. C. size of the money supply. D. discount rate.
A. federal funds rate.
All Fed purchases and sales of A. government bonds are conducted at the New York Fed's trading desk. B. corporate stocks and bonds are conducted at the New York Fed's trading desk. C. real estate and other real assets are conducted by the Federal Open Market Committee. D. All of the above are correct.
A. government bonds are conducted at the New York Fed's trading desk.
Refer to Table 29-5. Suppose the bank faces a reserve requirement of 10 percent. Starting from the situation as depicted by the T-account, a customer deposits an additional $60,000 into his account at the bank. If the bank takes no other action it will A. have $64,000 in excess reserves. B. have $4,000 in excess reserves. C. be in a position to make new loans equal to $6,000 D. None of the above is correct.
A. have $64,000 in excess reserves.
You are better off choosing $100 today rather than $200 in 9 years if the interest rate is A. higher than about 8 percent.6 B. lower than about 10 percent. C. higher than about 10 percent. D. lower than about 8 percent.
A. higher than about 8 percent.6
In the simple circular-flow diagram, A. households own the factors of production. B. land, labor, and capital flow from households to firms. C. households buy all the goods and services that firms produce. D. All of the above are correct.
A. households own the factors of production. B. land, labor, and capital flow from households to firms. C. households buy all the goods and services that firms produce. D. All of the above are correct.
Other things the same, if the long-run aggregate supply curve shifts left, prices A. increase and output decreases. B. and output both increase. C. and output both decrease. D. decrease and output increases
A. increase and output decreases.
A tariff on a product A. increases the domestic quantity supplied. B. is a direct quantitative restriction on the amount of a good that can be imported. C. increases domestic consumer surplus. D. All of the above are correct.
A. increases the domestic quantity supplied.
The Fed's policy decisions have an important influence on A. inflation in the long run and employment and production in the short run. B. inflation in the short run and employment and production in the short run. C. inflation in the short run and employment and production in the long run. D. inflation in the long run and employment and production in the long run.
A. inflation in the long run and employment and production in the short run.
Refer to Table 23-7. From 1976 to 1977, A. inflation was 33.3% and output grew at a rate of 20%. B. inflation was 33.3% and output grew at a rate of 60%. C. inflation was 50% and output grew at a rate of 20%. D. inflation was 50% and output grew at a rate of 60%.
A. inflation was 33.3% and output grew at a rate of 20%.
Money is the most liquid asset available because A. it is a medium of exchange. B. it is a unit of account. C. it is a store of value. D. it has intrinsic value.
A. it is a medium of exchange.
Assume the MPC is 0.8. Assuming only the multiplier effect matters, a decrease in government purchases of $100 billion will shift the aggregate demand curve to the A. left by $500 billion. B. left by $180 billion. C. right by $180 billion. D. right by $400 billion.
A. left by $500 billion.
Other things the same, if a country saves more, then A. net capital outflow rises, so net exports rise. B. net capital outflow falls, so net exports fall. C. net capital outflow falls, so net exports rise. D. net capital outflow rises, so net exports fall
A. net capital outflow rises, so net exports rise.
Scenario 25-1. An economy's production form takes the form Y = AF(L, K, H, N). Refer to Scenario 25-1. K represents the quantity of A. physical capital only. B. nonrenewable natural resources. C. human capital only. D. human capital and physical capital combined.
A. physical capital only.
Industrial machinery is an example of A. physical capital. B. something that influences productivity. C. a factor of production that in the past was an output from the production process. D. All of the above are correct.
A. physical capital. B. something that influences productivity. C. a factor of production that in the past was an output from the production process. D. All of the above are correct.
Almost all variation in living standards is attributable to differences in countries' A. productivity. B. taxes. C. systems of public education. D. population growth rates.
A. productivity.
The Fed can increase the money supply by conducting open-market A. purchases or by lowering the discount rate. B. purchases or by raising the discount rate. C. sales or by lowering the discount rate. D. sales or by raising the discount rate.
A. purchases or by lowering the discount rate.
Refer to Table 3-21. Jamaica has a comparative advantage in the production of A. radios and Norway has a comparative advantage in the production of coolers. B. coolers and Norway has a comparative advantage in the production of radios. C. neither good and Norway has a comparative advantage in the production of both goods. D. both goods and Norway has a comparative advantage in the production of neither good.
A. radios and Norway has a comparative advantage in the production of coolers.
Which of the following statements is correct? In 2010, A. real income per person in the U.S. was about 6 times that in China. B. real income per person in China was more than 2 times that in India. C. the typical resident of India had less real income than the typical resident of England in 1870. D. All of the above are correct.
A. real income per person in the U.S. was about 6 times that in China. B. real income per person in China was more than 2 times that in India. C. the typical resident of India had less real income than the typical resident of England in 1870. D. All of the above are correct.
A major difference between tariffs and import quotas is that A. tariffs raise revenue for the government, but import quotas create surplus for those who get the licenses to import. B. tariffs help domestic consumers, and import quotas help domestic producers. C. tariffs create deadweight losses, but import quotas do not. D. All of the above are correct.
A. tariffs raise revenue for the government, but import quotas create surplus for those who get the licenses to import.
You have eaten two bowls of ice cream at Sundae School Ice Cream store. You consider eating a third. As a rational consumer you should make your choice by comparing A. the benefits from eating one more bowl of ice cream to how much one more bowl of ice cream costs. B. the benefits from eating one more bowl of ice cream to how much three bowls of ice cream costs. C. the benefits from eating all three bowls of ice cream to how much one more bowl of ice cream costs. D. the benefits from eating all three bowls of ice cream to how much three bowls of ice cream costs.
A. the benefits from eating one more bowl of ice cream to how much one more bowl of ice cream costs.
Refer to Figure 30-1. When the money supply curve shifts from MS1 to MS2, A. the equilibrium value of money decreases. B. the equilibrium price level decreases. C. the supply of money has decreased. D. the demand for goods and services will decrease.
A. the equilibrium value of money decreases.
Ralph is a plumber. Which of the following are included in his human capital? A. the knowledge he learned on the job, but not the tools he uses B. the knowledge he learned on the job, and the tools he uses C. the tools he uses, but not the knowledge he learned on the job D. neither the knowledge he learned on the job nor the tools he uses
A. the knowledge he learned on the job, but not the tools he uses.
Diminishing marginal utility of wealth implies that the utility function is A. upward-sloping and has decreasing slope. B. downward-sloping and has decreasing slope. C. downward-sloping and has increasing slope. D. upward-sloping and has increasing slope.
A. upward-sloping and has decreasing slope.
Suppose a country has government expenditures of $3,500, taxes of $2,200, consumption of $9,000, exports of $2,500, imports of $2,700, transfer payments of $750, capital depreciation of $800, and investment of $3,000. GDP equals A. $24,450. B. $15,300. C. $20,700. D. $11,550.
B. $15,300.
Michael values a stainless steel refrigerator for his new house at $3,500, but he succeeds in buying one for $3,000. Michael's consumer surplus is A. $3,000. B. $500. C. $6,500. D. $3,500.
B. $500.
Refer to Table 3-13. Which of the following points would be on Juanita's production possibilities frontier, based on a 40-hour week? A. (120 cellular phones programmed, 295 cellular phones tested) B. (130 cellular phones programmed, 225 cellular phones tested) C. (140 cellular phones programmed, 155 cellular phones tested) D. Both (a) and (b) would be on Juanita's production possibilities frontier.
B. (130 cellular phones programmed, 225 cellular phones tested).
Refer to Figure 3-7. If Bintu must work 2 hours to make each cup, then her production possibilities frontier is based on how many hours of work? A. 4 hours B. 16 hours C. 8 hours D. 2 hours
B. 16 hours.
Of the following interest rates, which is the highest one at which the present value of $200 ten years from today is greater than $150? A. 8 percent B. 2 percent C. 4 percent D. 6 percent
B. 2 percent
The nominal exchange rate is 2 Barbados dollars per U.S. dollar. If the price of a good in Barbados is 3 Barbados dollars and the price in the U.S. is 2 U.S. dollars, what is the real exchange rate to the nearest 100th? A. .75 Barbados goods per U.S. good B. 3 Barbados goods per U.S. good C. 1.33 Barbados goods per U.S. good D. none of the above is correct
B. 3 Barbados goods per U.S. good
Refer to Table 4-6. If these are the only four sellers in the market, then the market quantity supplied at a price of $10 is A. 11 units. B. 44 units. C. 25 units. D. 3 units.
B. 44 units.
Suppose that the adult population is 4 million, the number of unemployed is 0.25 million, and the labor-force participation rate is 75%. What is the unemployment rate? A. 6.25% B. 8.3% C. 9.1% D. 18.75%
B. 8.3%.
Refer to Table 23-4. If prices had remained constant between 1929 and 1930, Nominal GDP would have decreased A. 9.43%. B. 8.62%. C. 13.6%. D. 11.97%.
B. 8.62%.
Refer to Figure 9-11. Consumer surplus in this market after trade is A. A. B. A + B + D. C. C + B. D. B + C + D.
B. A + B + D.
Refer to Figure 2-1. Raymond buys a refrigerator for his new home. To which of the arrows does this transaction directly contribute? A. A only B. A and B C. C only D. C and D
B. A and B
Refer to Figure 34-2. A decrease in Y from Y1 to Y2 is explained as follows: A. The Federal Reserve increases the money supply, causing the money-demand curve to shift from MD1 to MD2; this shift of MD causes r to increase from r1 to r2; and this increase in r causes Y to decrease from Y1 to Y2. B. An increase in P from P1 to P2 causes the money-demand curve to shift from MD1 to MD2; this shift of MD causes r to increase from r1 to r2; and this increase in r causes Y to decrease from Y1 to Y2. C. A decrease in P from P2 to P1 causes the money-demand curve to shift from MD1 to MD2; this shift of MD causes r to increase from r1 to r2; and this increase in r causes Y to decrease from Y1 to Y2. D. An increase in the price level causes the money-demand curve to shift from MD2 to MD1; this shift of MD causes r to decrease from r2 to r1; and this decrease in r causes Y to decrease from Y1 to Y2.
B. An increase in P from P1 to P2 causes the money-demand curve to shift from MD1 to MD2; this shift of MD causes r to increase from r1 to r2; and this increase in r causes Y to decrease from Y1 to Y2.
Refer to Figure 7-15. When the price rises from P1 to P2, which area represents the increase in producer surplus due to new producers entering the market? A. A B. B C. G D. A+B
B. B.
Refer to Figure 3-22. Which of the following statements is correct regarding absolute advantage? A. Alice has an absolute advantage in the production of pizzas while Betty has an absolute advantage in the production of lemonade. B. Betty has an absolute advantage in the production of both lemonade and pizzas. C. Alice has an absolute advantage in the production of lemonade while Betty has an absolute advantage in the production of pizzas. D. Alice has an absolute advantage in the production of both lemonade and pizzas.
B. Betty has an absolute advantage in the production of both lemonade and pizzas.
Refer to Figure 9-11. The change in total surplus in this market because of trade is A. B, and this area represents a gain in total surplus. B. D, and this area represents a gain in total surplus. C. C, and this area represents a loss of total surplus. D. A, and this area represents a loss of total surplus.
B. D, and this area represents a gain in total surplus.
Which of the following is correct? A. If the Fed sells bonds in the open market, then the money supply curve shifts right. A change in the price level does not shift the money supply curve. B. If the Fed purchases bonds in the open market, then the money supply curve shifts right. A change in the price level does not shift the money supply curve. C. If the Fed purchases bonds, then the money supply curve shifts right. An increase in the price level shifts the money supply curve right. D. If the Fed sells bonds, then the money supply curve shifts right. A decrease in the price level shifts the money supply curve right.
B. If the Fed purchases bonds in the open market, then the money supply curve shifts right. A change in the price level does not shift the money supply curve.
Two individuals engage in the same two productive activities. In which of the following circumstances would neither individual have a comparative advantage in either activity? A. One individual is faster at both activities than the other individual. B. One individual's opportunity costs are the same as the other individual's opportunity costs. C. One individual's production possibilities frontier is steeper than the other individual's production possibilities frontier. D. None of the above is correct; one of the two individuals always will have a comparative advantage in at least one of the two activities.
B. One individual's opportunity costs are the same as the other individual's opportunity costs.
Refer to Figure 9-15. With the tariff, the domestic price and domestic quantity demanded are A. P1 and Q4. B. P2 and Q3. C. P2 and Q2. D. P1 and Q1.
B. P2 and Q3.
If a U.S. citizen buys a dress made in Nepal by a Nepalese firm, then A. U.S. consumption decreases, U.S. net exports increase, and U.S. GDP increases. B. U.S. consumption increases, U.S. net exports decrease, and U.S. GDP is unaffected. C. U.S. consumption increases, U.S. net exports decrease, and U.S. GDP decreases. D. U.S. consumption decreases, U.S. net exports increase, and U.S. GDP is unaffected.
B. U.S. consumption increases, U.S. net exports decrease, and U.S. GDP is unaffected.
In which of the following instances is the present value of the future payment the largest? A. You will receive $1,000 in 10 years and the annual interest rate is 3 percent. B. You will receive $1,000 in 5 years and the annual interest rate is 5 percent. C. You will receive $2,400 in 15 years and the annual interest rate is 8 percent. D. You will receive $2,000 in 10 years and the annual interest rate is 10 percent.
B. You will receive $1,000 in 5 years and the annual interest rate is 5 percent.
An increase in the interest rate could have been caused by A. a fall in the price level causing the money-demand curve to shift rightward. B. a rise in the price level causing the money-demand curve to shift rightward. C. a fall in the price level causing the money-demand curve to shift leftward. D. a rise in the price level causing the money-demand curve to shift leftward.
B. a rise in the price level causing the money-demand curve to shift rightward.
If a central bank wants to counter the change in the price level caused by an adverse by an supply shock, it could changes the money supply to shift. A. aggregate demand right B. aggregate demand left C. aggregate supply right D. aggregate supply left.
B. aggregate demand left
Which of the following policies would be advocated by proponents of stabilization policy when the economy is experiencing severe unemployment? A. an increase in tax rates B. an increase in government purchases C. a decrease in the money supply D. an increase in interest rates.
B. an increase in government purchases
Monetary policy A. must be described in terms of interest-rate targets. B. can be described either in terms of the money supply or in terms of the interest rate. C. cannot be accurately described in terms of the interest rate or in terms of the money supply. D. must be described in terms of money-supply targets.
B. can be described either in terms of the money supply or in terms of the interest rate.
Any point on a country's production possibilities frontier represents a combination of two goods that an economy A. can produce using some portion, but not all, of its resources and technology. B. can produce using all available resources and technology. C. will never be able to produce. D. may be able to produce in the future with more resources and/or superior technology.
B. can produce using all available resources and technology.
Refer to Figure 4-7. The movement from Db to Da in the market for potato chips could be caused by a(n) A. increase in the price of a pretzels. B. decrease in income, assuming that potato chips are a normal good. C. decrease in the price of potato chips. D. announcement by the FDA that potato chips lower cholesterol.
B. decrease in income, assuming that potato chips are a normal good.
Bolivia had a smaller budget deficit in 2003 than in 2002. Other things the same, we would expect this reduction in the budget deficit to have A. increased both interest rates and investment. B. decreased interest rates and increased investment. C. increased interest rates and decreased investment. D. decreased both interest rates and investment.
B. decreased interest rates and increased investment.
Refer to Table 4-3. If these are the only four buyers in the market, then when the price increases from $1.00 to $1.50, the market quantity demanded A. decreases by 1.75 units. B. decreases by 7 units. C. decreases by 24 units. D. increases by 2 units
B. decreases by 7 units.
Among economic models, the circular-flow diagram is unusual in that it A. features more than one type of market. B. does not involve mathematics. C. features flows of dollars. D. drastically simplifies the real world.
B. does not involve mathematics.
Other things the same, when the price level falls, interest rates A. rise, which means consumers will want to spend less on homebuilding. B. fall, which means consumers will want to spend more on homebuilding. C. rise, which means consumers will want to spend more on homebuilding. D. fall, which means consumers will want to spend less on homebuilding.
B. fall, which means consumers will want to spend more on homebuilding.
If households view a tax cut as temporary, then the tax cut A. has more of an affect on aggregate demand than if households view it as permanent. B. has less of an affect on aggregate demand than if households view it as permanent. C. has the same affect as when households view the cut as permanent. D. has no affect on aggregate demand.
B. has less of an affect on aggregate demand than if households view it as permanent.
Susan switches from going to Speedy Lube for an oil change to changing the oil in her car herself. Which of the following is correct? The value of changing the oil is A. included in GDP whether Susan pays Speedy Lube to change it or changes it herself. B. included in GDP if Susan pays Speedy Lube to change it but not if she changes it herself. C. included in GDP if Susan changes it herself, but not if she pays Speedy Lube to change it. D. not included in GDP whether Susan pays Speedy lube to change it or she changes it herself.
B. included in GDP if Susan pays Speedy Lube to change it but not if she changes it herself.
Efficiency wages A. decrease productivity but reduce unemployment. B. increase productivity but increase unemployment. C. increase productivity and reduce unemployment. D. decrease productivity and increase unemployment.
B. increase productivity but increase unemployment.
Suppose an increase in interest rates causes rising unemployment and falling output. To counter this, the Federal Reserve would A. decrease the money supply. B. increase the money supply. C. increase government spending. D. decrease government spending
B. increase the money supply.
In a market economy, scarcity of resources is most clearly reflected in A. supply. B. market prices. C. demand. D. the stock of the resource.
B. market prices.
The one variable that stands out as the most significant explanation of large variations in living standards around the world is A. prices. B. productivity. C. preferences. D. population.
B. productivity.
Refer to U.S. Financial Crisis. U.S. net exports would A. fall which by itself would decrease aggregate demand. B. rise which by itself would increase aggregate demand. C. fall which by itself would increase aggregate demand. D. rise which by itself would decrease aggregate demand.
B. rise which by itself would increase aggregate demand.
Unions contribute to A. frictional but not structural unemployment. B. structural but not frictional unemployment. C. neither frictional nor structural unemployment. D. both frictional and structural unemployment.
B. structural but not frictional unemployment.
Minimum wages create unemployment in markets where they create a A. surplus of labor. Minimum wage laws are the predominant reason for unemployment in the U.S. B. surplus of labor. Minimum wage laws are not the predominant reason for unemployment in the U.S. C. shortage of labor. Minimum wage laws are the predominant reason for unemployment in the U.S. D. shortage of labor. Minimum wage laws are not the predominant reason for unemployment in the U.S.
B. surplus of labor. Minimum wage laws are not the predominant reason for unemployment in the U.S.
The efficient markets hypothesis implies A. that no stock is efficiently valued. B. that all stocks are fairly valued all the time and that no stock is a better buy than any other. C. that some stocks may be better buys than others and stock experts can determine which ones. D. that all stocks are fairly valued all the time, but that some stocks may be better buys than other.
B. that all stocks are fairly valued all the time and that no stock is a better buy than any other.
A production possibilities frontier shifts outward when A. the desires of the economy's citizens change. B. the economy experiences economic growth. C. opportunity costs are lessened. D. at least one of the basic principles of economics is violated.
B. the economy experiences economic growth.
Using the liquidity-preference model, when the Federal Reserve decreases the money supply, A. the short-run aggregate-supply curve shifts to the left. B. the equilibrium interest rate increases. C. the quantity of goods and services demanded is unchanged for a given price level. D. the aggregate-demand curve shifts to the right.
B. the equilibrium interest rate increases
If the price of a good in the U.S. is $10 and the unit of foreign currency is the dinar, in which case is the real exchange rate 5/4? A. the foreign price is 5 dinars and the exchange rate is 2/5 dinars per dollar B. the foreign price is 4 dinars and the exchange rate is 1/2 dinars per dollar C. the foreign price is 5 dinars and the exchange rate is 2.5 dinars per dollar D. the foreign price is 4 dinars and the exchange rate is 2 dinars per dollar
B. the foreign price is 4 dinars and the exchange rate is 1/2 dinars per dollar
Disposable income is A. the total income earned by a nation's permanent residents. B. the income that households and businesses have remaining after satisfying their obligations to the government. C. the income that households and non-corporate businesses receive. D. the total income earned by a nation's residents in the production of goods and services.
B. the income that households and businesses have remaining after satisfying their obligations to the government.
A rational decisionmaker takes an action if and only if A. the opportunity cost of the action is zero. B. the marginal benefit of the action exceeds the marginal cost of the action. C. the marginal cost of the action exceeds the marginal benefit of the action. D. the marginal cost of the action is zero.
B. the marginal benefit of the action exceeds the marginal cost of the action.
A simultaneous decrease in both the demand for MP3 players and the supply of MP3 players would imply that A. both the value of MP3 players to consumers and the cost of producing MP3 players has decreased. B. the value of MP3 players to consumers has decreased, and the cost of producing MP3 players has increased. C. both the value of MP3 players to consumers and the cost of producing MP3 players has increased. D. the value of MP3 players to consumers has increased, and the cost of producing MP3 players has decreased.
B. the value of MP3 players to consumers has decreased, and the cost of producing MP3 players has increased.
A simultaneous increase in both the demand for MP3 players and the supply of MP3 players would imply that A. the value of MP3 players to consumers has decreased, and the cost of producing MP3 players has increased. B. the value of MP3 players to consumers has increased, and the cost of producing MP3 players has decreased. C. both the value of MP3 players to consumers and the cost of producing MP3 players has increased. D. both the value of MP3 players to consumers and the cost of producing MP3 players has decreased.
B. the value of MP3 players to consumers has increased, and the cost of producing MP3 players has decreased.
Refer to Figure 9-5. With trade, producer surplus is A. $1,000. B. $500. C. $2,000. D. $1,500
C. $2,000.
Bountiful Tractors has a share price of $60, retained earnings of $2 per share, and a dividend yield of 2 percent. What is Bountiful Tractor's price-earnings ratio? A. 30 B. 15 C. 18.75 D. 23.1
C. 18.75
Refer to Figure 30-3. Suppose the relevant money-supply curve is the one labeled MS1; also suppose the economy's real GDP is 30,000 for the year. If the money market is in equilibrium, then the velocity of money is approximately A. 9.0 B. 1.5 C. 6.0 D. 3.0
C. 6.0
Alexis and Tara both mine salt. Alexis mines 300 pounds in 20 hours. Tara mines 400 pounds in 40 hours. Which of the following is correct? A. Alexis's productivity is greater than Tara's. This difference cannot be explained by a difference in the physical capital each has. B. Tara's productivity is greater than Alexis's. This difference could be explained by Tara having more physical capital than Alexis. C. Alexis's productivity is greater than Tara's. This difference could be explained by Alexis having more physical capital than Tara. D. Tara's productivity is greater than Alexis's. This difference cannot be explained by a difference in the physical capital each has.
C. Alexis's productivity is greater than Tara's. This difference could be explained by Alexis having more physical capital than Tara.
Sam, an American citizen, prepares meals for his family at home. Ellen, a Canadian citizen, commutes to the U.S. to help prepare meals at a restaurant in Idaho. Whose value of services preparing meals is included in U.S. GDP? A. Sam's but not Ellen's. B. Sam's and Ellen's. C. Ellen's but not Sam's. D. Neither Sam's nor Ellen's.
C. Ellen's but not Sam's.
Refer to Political Instability Abroad. What would happen to the dollar? A. It would appreciate in foreign exchange markets making U.S. goods less expensive compared to foreign goods. B. It would depreciate in foreign exchange markets making U.S. goods more expensive compared to foreign goods. C. It would appreciate in foreign exchange markets making U.S goods more expensive compared to foreign goods. D. It would depreciate in foreign exchange markets making U.S. goods less expensive compared to foreign goods.
C. It would appreciate in foreign exchange markets making U.S goods more expensive compared to foreign goods.
In 1975 tuition at Wattsomata University was $2,500 and the consumer price index was 80. In 2011 tuition was $12,000 and the price index was 320. Which of the following is correct? A. Nominal tuition was higher in 1975, real tuition was higher in 2011. B. Nominal tuition was higher in 2011, real tuition was higher in 1975. C. Nominal and real tuition were both higher in 2011. D. Nominal and real tuition were both higher in 1975.
C. Nominal and real tuition were both higher in 2011.
Which of the following statements is not correct? A. An invisible hand leads buyers and sellers to an equilibrium that maximizes total surplus. B. Market power can cause markets to be inefficient. C. The invisible hand can remedy all types of market failures. D. Externalities can cause markets to be inefficient.
C. The invisible hand can remedy all types of market failures.
Acme Home Builders, Inc., has built 24 houses so far this year at a total cost to the company of $4.80 million. If the company builds a 25th house, its total cost will increase to $5.05 million. Which of the following statements is correct? A. If the company can sell the 25th house for at least $202,000, then it should build it. B. For the first 24 houses, the average cost per house was $205,000. C. The marginal cost of the 25th house, if it is built, will equal $250,000. D. All of the above are correct.
C. The marginal cost of the 25th house, if it is built, will equal $250,000.
A U.S. grocery chain purchases olive oil from Tunisia and sells it to U.S. consumers. In which of the following is this transaction included? A. neither U.S. consumption nor U.S. imports B. U.S. consumption but not U.S. imports C. U.S. consumption and U.S. imports D. U.S. imports but not U.S. consumption
C. U.S. consumption and U.S. imports.
GA wind farm in Iowa buys a large turbine generator from a Swedish-owned factory located in Connecticut that uses workers who live in Connecticut. As a result, A. U.S. investment and GNP increase by the same amount, but U.S. GDP increases by a smaller amount. B. U.S. investment, GDP, and GNP all increase by the same amount. C. U.S. investment and GDP increase by the same amount, but U.S. GNP increases by a smaller amount. D. U.S. investment increases, but GDP and GNP are unaffected by the purchase.
C. U.S. investment and GDP increase by the same amount, but U.S. GNP increases by a smaller amount.
Which of the following both increase the money supply? A. a decrease in the discount rate and an increase in the interest rate on reserves B. an increase in the discount rate and an increase in the interest rate on reserves C. a decrease in the discount rate and a decrease in the interest rate on reserves D. an increase in the discount rate and a decrease in the interest rate on reserves
C. a decrease in the discount rate and a decrease in the interest rate on reserves
Refer to Figure 2-12. Which of the following would most likely have caused the production possibilities frontier to shift outward from A to B? A. a decrease in unemployment B. an increase in the availability of capital-producing resources C. a general technological advance D. a technological advance in the consumer goods industries
C. a general technological advance
Most goods and services produced at home A. are included in GDP while most goods and services produced illegally are excluded from GDP. B. and most goods and services produced illegally are included in GDP. C. and most goods and services produced illegally are excluded from GDP. D. are excluded from GDP while most goods and services produced illegally are included in GDP
C. and most goods and services produced illegally are excluded from GDP.
Suppose a fall in stock prices makes people feel poorer. The decrease in wealth would induce people to A. increase consumption, shown by shifting the aggregate-demand curve to the right. B. increase consumption, shown as a movement to the right along a given aggregate-demand curve. C. decrease consumption, shown by shifting the aggregate-demand curve to the left. D. decrease consumption, shown as a movement to the left along a given aggregate-demand curve
C. decrease consumption, shown by shifting the aggregate-demand curve to the left.
High and unexpected inflation has a greater cost A. for those who hold a little money than for those who hold a lot of money. B. for those whose wages increase by as much as inflation than for those who are paid a fixed nominal wage. C. for savers in high income tax brackets than for savers in low income tax brackets. D. for those who borrow than for those who save.
C. for savers in high income tax brackets than for savers in low income tax brackets.
When economists refer to intangible items, they are referring to such things as A. illegal goods, and the value of such items is excluded from GDP. B. illegal goods, and the value of such items is included in GDP. C. hair styling and dental care, and the value of such items is included in GDP. D. hair styling and dental care, and the value of such items is excluded from GDP.
C. hair styling and dental care, and the value of such items is included in GDP.
In the context of the aggregate-demand curve, the interest-rate effect refers to the idea that, when the price level increases, A. the real value of money decreases; in turn, the real value of the dollar increases in foreign exchange markets, which decreases net exports. B. households increase their holdings of money; in turn, interest rates decrease, which reduces spending on investment goods. C. households increase their holdings of money; in turn, interest rates increase, which reduces spending on investment goods. D. the real value of money decreases; in turn, interest rates increase, which decreases net exports.
C. households increase their holdings of money; in turn, interest rates increase, which reduces spending on investment goods.
After the terrorist attacks on September 11, 2001, governments within the United States raised expenditures to increase security at airports. These purchases of goods and services are A. not included in GDP since they do not represent production. B. not included in GDP since the government collects taxes to pay for them. C. included in GDP since government expenditures on goods and services are included in GDP. D. included in GDP only to the extent that the federal government, rather than state or local governments, paid for them.
C. included in GDP since government expenditures on goods and services are included in GDP.
Refer to Figure 4-1. The movement from point A to point B on the graph shows a(n) A. increase in demand. B. decrease in demand. C. increase in quantity demanded. D. decrease in quantity demanded.
C. increase in quantity demanded.
Which of the following is not included in either M1 or M2? A. demand deposits B. money market mutual funds C. large time deposit D. money market deposit accounts
C. large time deposit
Productivity is the amount of goods and services A. produced for each hour of a worker's time. It is not linked to a nation's economic policies. B. an economy produces. It is linked to a nation's economic policies. C. produced for each hour of a worker's time. It is linked to a nation's economic policies. D. an economy produces. It is not linked to a nation's economic policies.
C. produced for each hour of a worker's time. It is linked to a nation's economic policies.
The sticky-wage theory of the short-run aggregate supply curve says that when the price level rises more than expected, A. production is more profitable and employment falls. B. production is less profitable and employment falls. C. production is more profitable and employment rises. D. production is less profitable and employment rises.
C. production is more profitable and employment rises.
In a particular country in 1999, the average worker had to work 20 hours to produce 55 units of output. In that same country in 2009, the average worker needed to work 28 hours to produce 77 units of output. In that country, the productivity of the average worker A. increased by 5 percent between 1999 and 2009. B. increased by 2 percent between 1999 and 2009. C. remained unchanged between 1999 and 2009. D. decreased by 3 percent between 1999 and 2009
C. remained unchanged between 1999 and 2009.
Evidence from research studies by economists A. shows that increased unemployment benefits increase the job search efforts of the unemployed. B. shows that increased unemployment benefits have virtually no effect on the job search efforts of the unemployed. C. shows that increased unemployment benefits decrease the job search efforts of the unemployed. D. is conflicting on what increased unemployment benefits do to the job search efforts of the unemployed.
C. shows that increased unemployment benefits decrease the job search efforts of the unemployed.
Refer to Figure 2-2. If the flow of goods and services is part of what is represented by the inner loop of this circular-flow diagram, then A. households must be sellers of output. B. the flow of revenue to firms is also part of what is represented by the inner loop. C. the flow of factors of production is also part of what is represented by the inner loop. D. the flow of income paid to households is also part of what is represented by the inner loop.
C. the flow of factors of production is also part of what is represented by the inner loop.
People choose to hold a larger quantity of money if A. the interest rate rises, which causes the opportunity cost of holding money to rise. B. the interest rate rises, which causes the opportunity cost of holding money to fall. C. the interest rate falls, which causes the opportunity cost of holding money to fall. D. the interest rate falls, which causes the opportunity cost of holding money to rise.
C. the interest rate falls, which causes the opportunity cost of holding money to fall.
Refer to Figure 27-5. Suppose Dexter begins with $1,300 in wealth. Starting from there, A. the pain of losing $500 of his wealth would exceed the pleasure of adding $500 to his wealth. B. the pain of losing $500 of his wealth would equal the pleasure of adding $500 to his wealth. C. the pleasure of adding $500 to his wealth would exceed the pain of losing $500 of his wealth. D. This cannot be determined from the graph.
C. the pleasure of adding $500 to his wealth would exceed the pain of losing $500 of his wealth.
Real and nominal variables are highly intertwined, and changes in the money supply change real GDP. Most economists would agree that this statement accurately describes A. both the short run and the long run. B. the long run, but not the short run. C. the short run, but not the long run. D. neither the long run nor the short run.
C. the short run, but not the long run.
The economy of Mainland uses gold as its money. If the government discovers a large reserve of gold on their land A. the demand for money increases and the value of money rises. B. the supply of money decreases and the value of money rises. C. the supply of money increases and the value of money falls. D. the demand for money decreases and the value of money falls.
C. the supply of money increases and the value of money falls.
Abraham drinks Mountain Dew. He can buy as many cans of Mountain Dew as he wishes at a price of $0.55 per can. On a particular day, he is willing to pay $0.95 for the first can, $0.80 for the second can, $0.60 for the third can, and $0.40 for the fourth can. Assume Abraham is rational in deciding how many cans to buy. His consumer surplus is A. $1.00. B. $0.50. C. $0.60. D. $0.70.
D. $0.70.
A country has $3 billion of domestic investment and net exports of -$2 billion. What is its saving? A. -$1 billion B. -$2 billion C. $2 billion D. $1 billion
D. $1 billion
Refer to Scenario 26-3. For this economy, GDP equals A. $1,460 B. $1,480. C. $1,505. D. $1,455.
D. $1,455.
If the reserve ratio is 6 percent, then $9,000 of additional reserves can create up to A. $54,000 of new money. B. $159,000 of new money. C. $141,000 of new money. D. $150,000 of new money.
D. $150,000 of new money.
Refer to Table 7-10. If there is only one unit of the good available for purchase, and if the buyers bid against each other for the right to purchase it, then the good will sell for A. $27 or slightly less B. $15 or slightly more C. $12 or slightly less D. $19 or slightly more
D. $19 or slightly more
Refer to Figure 7-14. If the market price increases to $130 due to an increase in demand, then producer surplus is A. $1,800. B. $975. C. $1,950. D. $900.
D. $900.
If domestic residents of other countries purchase $600 billion of U.S. assets and U.S residents purchase $500 billion of foreign assets, then U.S. net capital outflow is A. -$100 billion and the U.S. has a trade surplus. B. $100 billion and the U.S. has a trade surplus. C. $100 billion and the U.S has a trade deficit. D. -$100 billion and the U.S. has a trade deficit
D. -$100 billion and the U.S. has a trade deficit
If a $1,000 increase in income leads to an $800 increase in consumption expenditures, then the marginal propensity to consume is A. 0.2 and the multiplier is 1.25. B. 0.2 and the multiplier is 1.25. C. 0.8 and the multiplier is 8. D. 0.8 and the multiplier is 5.
D. 0.8 and the multiplier is 5.
Refer to Figure 3-22. Which of the following prices would result in an mutually advantageous trade for Alice and Betty? A. 100 pizzas for 220 pitchers of lemonade B. 100 pizzas for 100 pitchers of lemonade C. 100 pizzas for 125 pitchers of lemonade D. 100 pizzas for 180 pitchers of lemonade
D. 100 pizzas for 180 pitchers of lemonade
In 2009, the imaginary nation of Mainland had a population of 7,000 and real GDP of 210,000. In 2010 the population was 7,300 and real GDP of 223,380. Over the year in question, real GDP per person in Mainland grew by A. 4 percent, which is about the same as average U.S. growth over the last one-hundred years. B. 2 percent, which is high compared to average U.S. growth over the last one-hundred years. C. 4 percent, which is high compared to average U.S. growth over the last one-hundred years. D. 2 percent, which is about the same as average U.S. growth over the last one-hundred years.
D. 2 percent, which is about the same as average U.S. growth over the last one-hundred years.
Stock in Tasty Greens Restaurants is selling at $80 per share with 1 million shares outstanding. Last year, Tasty Greens earned $4 million, of which it retained $2.4 million for future investments. The dividend yield on the stock is A. 3 percent. B. 8 percent. C. 5 percent. D. 2 percent.
D. 2 percent.
Suppose that an economy produces 20,000 units of good A which sells at $3 a unit and 40,000 units of good B which sells at $1 per unit. Production of good A contributes A. 1/3 times as much to GDP as the production of good B. B. 2/3 times as much to GDP as production of good B. C. 3 times as much to GDP as the production of good B. D. 3/2 times as much to GDP as the production of good B.
D. 3/2 times as much to GDP as the production of good B.
In the United States, a three-pound can of coffee costs about $5. If the exchange rate is 0.8 euros per dollar and a three-pound can of coffee in Belgium costs 7 euros. What is the real exchange rate? A. 7/4 cans of Belgian coffee per can of U.S. coffee B. 5.6/5 cans of Belgian coffee per can of U.S. coffee C. 5/5.6 cans of Belgian coffee per can of U.S. coffee D. 4/7 cans of Belgian coffee per can of U.S. coffee
D. 4/7 cans of Belgian coffee per can of U.S. coffee
Refer to Table 26-2. Which company had the highest earnings per share? A. Eli Lilly and Co. B. Kraft C. Kellog Co. D. Boeing Co
D. Boeing Co
Refer to Table 7-1. If the price of the product is $130, then who would be willing to purchase the product? A. Calvin B. Calvin, Sam, Andrew, and Lori C. Calvin, Sam, and Andrew D. Calvin and Sam
D. Calvin and Sam
Suppose the government eliminates all environmental regulations and, as a result, the production of goods and services increases, but there is considerably more pollution. Based on this scenario, which of the following statements is correct? A. GDP would definitely increase, despite the fact that GDP includes environmental quality. B. GDP could either increase or decrease because GDP excludes environmental quality. C. GDP would definitely decrease because GDP includes environmental quality. D. GDP would definitely increase because GDP excludes environmental quality.
D. GDP would definitely increase because GDP excludes environmental quality.
Which of the following statements best captures the relationship between microeconomics and macroeconomics? A. Microeconomics is oriented toward policy studies, whereas macroeconomics is oriented toward theoretical studies. B. For the most part, microeconomists are unconcerned with macroeconomics, and macroeconomists are unconcerned with microeconomics. C. Microeconomists study markets for small products, whereas macroeconomists study markets for large products. D. Microeconomics and macroeconomics are distinct from one another, yet they are closely related.
D. Microeconomics and macroeconomics are distinct from one another, yet they are closely related.
The natural rate of unemployment (i) is the economy's desirable level of unemployment. (ii) cannot be affected by economic policy. (iii) is typically constant over time. A. (i), (ii), and (iii) B. (i) and (ii) only C. (iii) only D. None of the above is correct.
D. None of the above is correct.
Which of the following is correct? A. The typical citizen of China today has about one-half as much real income as the typical citizen of America today. B. Over the last 100 years Japan had a higher average growth rate than the United States. It follows that, today, the standard of living in Japan is higher than in the United States. C. The typical person in Bangladesh today has about twice the real income of a typical American 100 years ago. D. None of the above is correct.
D. None of the above is correct.
Which of the following statements applies to economics, as well as to other sciences such as physics? A. Experiments are considered valid only when they are conducted in a laboratory. B. Economics, as well as other sciences, is concerned primarily with abstract concepts. C. Good theories do not need to be tested. D. Real-world observations often lead to theories.
D. Real-world observations often lead to theories.
Suppose there is a surplus in the money market. A. This could have been created by a decrease in the money supply. The value of money will fall. B. This could have been created by an increase in the money supply. The value of money will rise. C. This could have been created by a decrease in the money supply. The value of money will rise. D. This could have been created by an increase in the money supply. The value of money will fall.
D. This could have been created by an increase in the money supply. The value of money will fall.
An increase in the price level and a reduction in output would result from A. a fall in stock prices. B. an increase in government expenditures. C. an increase in taxes. D. a decrease in the supply of an important resource.
D. a decrease in the supply of an important resource.
Refer to Table 3-39. Korea should specialize in the production of A. neither good and import both goods. B. cars and import airplanes. C. both goods and import neither good. D. airplanes and import cars.
D. airplanes and import cars.
Which of the following would not shift the supply curve for mp3 players? A. an improvement in the technology used to produce mp3 players B. a decrease in the number of sellers of mp3 players C. an increase in the price of plastic, an input into the production of mp3 players D. an increase in the price of mp3 players
D. an increase in the price of mp3 players
Paper dollars A. are commodity money and gold coins are fiat money. B. and gold coins are both commodity monies. C. and gold coins are both fiat monies. D. are fiat money and gold coins are commodity money.
D. are fiat money and gold coins are commodity money.
Consumer surplus in a market can be represented by the A. distance from the demand curve to the horizontal axis. B. area below the demand curve and above the horizontal axis. C. distance from the demand curve to the vertical axis. D. area below the demand curve and above the price.
D. area below the demand curve and above the price.
Refer to Figure 26-4. If the equilibrium quantity of loanable funds is $56 billion and if the rate of inflation is 5 percent, then the equilibrium nominal interest rate is A. 11 percent. B. between 6 percent and 8 percent. C. approximately 6 percent. D. between 11 percent and 13 percent.
D. between 11 percent and 13 percent.
A model that shows how dollars flow through markets among households and firms is called the A. production possibilities frontier. B. comparative advantage model. C. demand and supply diagram. D. circular-flow diagram.
D. circular-flow diagram.
When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an importer of a particular good, A. consumer surplus increases and total surplus decreases in the market for that good. B. consumer surplus decreases and total surplus decreases in the market for that good. C. consumer surplus decreases and total surplus increases in the market for that good. D. consumer surplus increases and total surplus increases in the market for that good.
D. consumer surplus increases and total surplus increases in the market for that good.
Other things the same, continued increases in the money supply lead to A. a one-time permanent increase in both prices and real GDP. B. continued increases in the price level and real GDP. C. continued increases in real GDP but not continued increases in the price level. D. continued increases in the price level but not continued increases in real GDP
D. continued increases in the price level but not continued increases in real GDP
Other things the same, if workers and firms expected prices to rise by 2 percent but instead they rise by 3 percent, then A. employment falls and production rises. B. employment and production fall. C. employment rises and production falls. D. employment and production rise.
D. employment and production rise.
If U.S. consumers decrease their demand for cell phones from Finland, then other things the same Finland's A. imports fall and net exports rise. B. imports and net exports fall. C. exports fall and net exports rise. D. exports and net exports fall.
D. exports and net exports fall.
Countries with low GDP per person tend to have A. fewer infants with low birth weight. B. more access to safe drinking water. C. lower rates of child malnutrition. D. higher rates of infant mortality.
D. higher rates of infant mortality.
A government budget deficit affects the supply of loanable funds, rather than the demand for loanable funds, because A. markets for government debt are fundamentally different from markets for private debt. B. of our assumption that the economy is closed. C. in our model of the loanable funds market, we define "loanable funds" as the flow of resources available from private saving. D. in our model of the loanable funds market, we define "loanable funds" as the flow of resources available to fund private investment.
D. in our model of the loanable funds market, we define "loanable funds" as the flow of resources available to fund private investment.
Exceptionally favorable growing conditions in the vineyards of Napa Valley would cause a(n) A. decrease in the supply of wine, increasing price. B. decrease in the demand for wine, decreasing price. C. increase in the demand for wine, increasing price. D. increase in the supply of wine, decreasing price.
D. increase in the supply of wine, decreasing price.
Other things the same, an increase in the price level causes the interest rate to A. decrease, the dollar to depreciate, and net exports to increase. B. increase, the dollar to depreciate, and net exports to increase. C. decrease, the dollar to appreciate, and net exports to decrease. D. increase, the dollar to appreciate, and net exports to decrease.
D. increase, the dollar to appreciate, and net exports to decrease.
If an economy uses silver as money, then that economy's money A. serves as a store of value but not as a medium of exchange. B. serves as a medium of exchange but not as a unit of account. C. has no intrinsic value. D. is commodity money.
D. is commodity money.
A reduction in the inflation rate would make relative prices A. more variable, making it more likely that resources will be allocated to their best use. B. less variable, making it less likely that resources will be allocated to their best use. C. more variable, making it less likely that resources will be allocated to their best use. D. less variable, making it more likely that resources will be allocated to their best use.
D. less variable, making it more likely that resources will be allocated to their best use.
When the money market is drawn with the value of money on the vertical axis, an increase in the price level causes a A. shift to the right of the money demand curve. B. movement to the left along the money demand curve. C. shift to the left of the money demand curve. D. movement to the right along the money demand curve.
D. movement to the right along the money demand curve.
Lucy quit her job because she was unhappy at work. Genevieve was fired because she frequently surfed the Internet rather than working on her assigned tasks. Who is eligible for unemployment insurance benefits? A. Genevieve but not Lucy B. both Lucy and Genevieve C. Lucy but not Genevieve D. neither Lucy nor Genevieve
D. neither Lucy nor Genevieve
A country that currently does not trade with other countries could benefit by A. restricting imports and promoting exports. B. restricting both imports and exports. C. promoting imports and restricting exports. D. not restricting trade.
D. not restricting trade.
When there is an excess supply of money, A. people will try to get rid of money causing interest rates to rise. Investment increases. B. people will try to get rid of money causing interest rates to rise. Investment decreases. C. people will try to get rid of money causing interest rates to fall. Investment decreases. D. people will try to get rid of money causing interest rates to fall. Investment increases
D. people will try to get rid of money causing interest rates to fall. Investment increases
Refer to Table 23-5. In 2017, this country's A. real GDP was $1250, and the GDP deflator was 138.9. B. real GDP was $900, and the GDP deflator was 128.0. C. real GDP was $1250, and the GDP deflator was 128.0. D. real GDP was $900, and the GDP deflator was 138.9.
D. real GDP was $900, and the GDP deflator was 138.9.
If, at the current price, there is a surplus of a good, then A. quantity demanded equals quantity supplied. B. the market must be in equilibrium. C. the price is below the equilibrium price. D. sellers are producing more than buyers wish to buy.
D. sellers are producing more than buyers wish to buy.
A improvement in production technology will shift the A. supply curve to the left. B. demand curve to the right. C. demand curve to the left. D. supply curve to the right.
D. supply curve to the right.
In which case below does a person's purchasing power from saving increase the most? A. the nominal interest rate = 8% and inflation = 4% B. the nominal interest rate = 10% and inflation = 8% C. the nominal interest rate = 9% and inflation = 6% D. the nominal interest rate = 7% and inflation = 2%
D. the nominal interest rate = 7% and inflation = 2%
If there is a shortage of loanable funds, then A. the quantity of loanable funds supplied is greater than the quantity of loanable funds demanded and the interest rate is above equilibrium. B. the quantity of loanable funds supplied is greater than the quantity of loanable funds demanded and the interest rate is below equilibrium. C. the quantity of loanable funds demanded is greater than the quantity of loanable funds supplied and the interest rate is above equilibrium. D. the quantity of loanable funds demanded is greater than the quantity of loanable funds supplied and the interest rate is below equilibrium.
D. the quantity of loanable funds demanded is greater than the quantity of loanable funds supplied and the interest rate is below equilibrium.