econ.
How do expansionary policies differ from contractionary policies?
A. Expansionary policies seek to reduce the severity of recessions, while contractionary policies seek to slow down the economy when it grows too fast. B. Expansionary policies seek to increase economic growth and increase employment, while contractionary policies seek to reduce the risk of excessive price inflation. C. Expansionary policies seek to shift the labor demand curve to the right, while contractionary policies seek to shift it to the left. (All of the above.)
Suppose the following table shows the supply schedule and demand schedule for windshield wiper fluid in Country 1. Fill in the blank at the top of each column, indicating whether it represents the supply or demand for windshield wiper fluid.
Qd-million oz (first coulomb) Qs- million oz (second coulomb) Graph: -d negative slope & s positive slope crossing at (50,10) mark point
The aggregate production function describes the relationship between the ____________.
aggregate GDP of a nation and its factors of production.
Marginal analysis ▼ sometimes always never picks out ▼ a different the same optimum as minimization of total cost.
always the same
Central banks undertake quantitative easing programs to ____________.
work around the problems when short-term nominal interest rates approach zero. more forcefully and directly impact the interest rates relevant for investment decisions. (a & c)
Upper A woman sells old CDs at a garage sale for $ 85 that she had collected over the years at a total cost of $ 400. In this case, current GDP
does not change
Would countercyclical policy still be enacted if central bankers were appointed by popular vote?
no
Factors of production are the ____________.
nputs used to produce other goods and services in an economy.
Consumer sentiment is likely to be __________ with real GDP.
positively correlated
Scott loves to go to baseball games, especially home games of the Cincinnatti Reds. All else equal, he likes to sit close to the field. He also likes to get to the stadium early to watch batting practice. The closer he parks to the stadium the more batting practice he is able to watch (the garages all open simultaneously). Find Scott's optimal seat type and parking garage using the information that follows. Scott's optimal seat type is Scott's optimal parking is
club seating under stadium parking
As the real interest rate rises, the opportunity cost of current consumption ▼ . This causes the credit supply curve to have a ▼ slope. If an economy has a large aging population that is increasing, one would expect the credit supply curve to shift ▼ .
rises positive rightward
By how much would current GDP change in response to each of the following transactions? Dell sells a $ 2 comma 000 computer right off the assembly line to a student. In this case, current GDP
rises by $2,000
Suppose that, in the United States, the inflation rate is at 3.2 percent (the target inflation rate is 2 percent). Rapidly rising prices and low interest rates have spurred business to hire more workers and invest in new facilities. Which of the following is likely to be true of the U.S. economy if there is a rapid rise in prices and low interest rates?
The U.S. economy could experience unsustainable expansion, resulting in a sharp economic downturn.
What policies could the government and the central bank use to achieve the goal of slowing down the economic expansion?
The government could raise taxes and/or reduce expenditures, while the central bank could raise interest rates.
Changing corporate tax rates is an example of countercyclical ____ policy. If the government lowers corporate tax rates, its goal would be a ________shift of the _________________ curve
Fiscal, rightward, labor demand
Which of the following statements regarding marginal analysis is true?
If total cost is rising, marginal cost could be falling.
Based on your answers in the previous parts, which of the following functions is likely to be true if the central bank works independently?
It would be able to control short-term interest rates to regulate inflation.
For Belgium, the opportunity cost of producing 1 million pounds of chocolate is 250 comma 000 gourmet pastries, whereas for Italy the opportunity cost is 750 comma 000 gourmet pastries. Given the information above, a possible loser from trade is ____________.
Italian chocolate makers
In this case, _______ has the comparative advantage in grilling hamburgers.
Moe
Which of the following mechanisms can the Fed use to implement a contractionary countercyclical monetary policy?
Selling government bonds in an open market operation.
Maria can purchase shirts for $20.50 each. She considers the benefit of one shirt to be $45.00, but with each additional shirt she purchases the benefit decreases by $5. According to the Principle of Optimization at the Margin, Maria will purchase ___shirts. (Enter your response as a whole number.)
The Principle of Optimization at the Margin states that an optimal feasible alternative has the property that moving to it makes you better off and moving away from it makes you worse off. According to the Principle of Optimization at the Margin, Maria will purchase 5 shirts.
Use the data in the table below to fill in the last two columns that represent the total market demand and supply for the newly formed economic union. (Upper Q Subscript Upper D Superscript 1 represents the quantity demanded for Country 1, while Upper Q Subscript Upper S Superscript 3 represents the quantity supplied for Country 3.)
The market demand curve (Upper Q Subscript Upper D Superscript Upper M) is the sum of the individual demand curves of all potential buyers. This new market demand curve is found by summing the quantity demanded at each price for the countries within the economic union. The market supply curve (Upper Q Subscript Upper S Superscript Upper M) is the sum of the individual supply curves of all the potential sellers. This new market supply curve is found by summing the quantity supplied at each price for the countries within the economic union. Aggregating quantity demanded and supplied means fixing the price and adding up the quantities that each country either demands or supplies. It is important to remember that quantities are being added together, not prices.
Which of the following would not be considered a cause for concern with economic experiments?
The subjects are often randomized.
f the labor force is 180 million and the unemployment rate is 7.0 percent, the number of people considered employed is ______ million. (Round your response to two decimal places.) If the labor force participation rate is 80 percent, the number of potential workers is ______million. (Round your response to two decimal places.)
The unemployment rate is the percentage of the labor force that is unemployed: Unemployment rate equals 100 % times (Unemployed Over Labor force) The labor force participation rate is the percentage of potential workers who are in the labor force: Labor force participation rate equals 100 % times (Labor force Over Potential workers) In this scenario, the number of people considered employed is 167.40 million and the number of potential workers is 225.00 million.
Which of the following is likely to be true if the central bankers were political appointees that could be hired and fired by the president?
They would be reluctant to increase the federal funds rate during an economic expansion.
Suppose that two workers, Joe and Moe, work at a fast-food restaurant. Joe can grill 50 hamburgers per hour or fry 25 pounds of french fries per hour. Moe can grill 80 hamburgers per hour or fry 20 pounds of french fries per hour. Using comparative advantage, determine whether Joe or Moe should grill hamburgers. The opportunity cost to Joe of grilling hamburgers is ____ pounds of french fries. (Round your response to two decimal places.)
This implies that Joe forgoes 25 pounds of french fries for every 50 hamburgers that he grills, or 25/50 = 0.50 forgone pounds of french fries for every hamburger that he grills.
Why would central banks want to clamp down when the economy is growing?
To prevent inflationary forces from gathering momentum. To block the formation of unsustainable speculative asset bubbles. (a & c)
Quantitative easing is ____________.
a variation on the central bank's traditional manner of conducting open market operations. B. an attempt by the central bank to more directly impact long-term interest rates. C. the central bank's purchase of long-term bonds in the open market. Your answer is not correct.D. all of the above.
An economic enterprise that defines and upholds property rights incentivizes citizens to work and save. This example of ▼ efficiently utilizes factors of production in order to move from a ▼ society to a ▼
and institutional labor-intensive capital-intensive
Kevin can write 250 textbook pages per year or edit 500 textbook pages per year. Amy can write 120 textbook pages per year or edit 480 textbook pages per year. In this scenario, Kevin has the absolute advantage in _____________ textbook pages and Amy has the comparative advantage in ___________
both editing and writing editing
To support an undervalued currency, a foreign government would need to ____________.
buy dollars and sell its local currency.
An experiment would be conducted to determine __________ among the chosen variables. Subjects should be assigned ________ selectively randomly to either a test or control group in order to get the most unbiased comparison.
causation randomly
GDP per capita ▼ account for distribution; consequently, economic growth may actually reduce ▼
does not equality
whom she formerly paid $ 60 comma 000 a year. After they are married comma her husband continues to wait on her as before comma and she continues to support him as before minus but as a husband rather than as an employee comma that is comma not with a regular salary. In this case, current GDP
falls by $60,000
What are the similarities and the differences between monetary and fiscal policies?
he manner (or ways) in which they work. d The aspect of the labor market they impact. s The result their implementation seeks to achieve. s The entities (or authorities) that oversee them. d
For any price above $5 absolutely nobody will buy your lemonade, but for any price below $5 you find that you are able to sell as much lemonade as you like.
horizontal line @ 5
In general, apartment rental prices __________ as the opportunity cost of commuting rises, indicating a strong ____________ relationship between rents and commutes.
increase negative
Given the circumstances, the countercyclical monetary policy adopted by the Federal Reserve is likely to result in a(n)
increase in the federal funds rate
The opportunity cost to Moe of grilling hamburgers is _________ nothing pounds of french fries. (Round your response to two decimal places.)
in contrast, Moe forgoes 20 pounds of french fries for every 80 hamburgers that he grills, or 20/80 = 0.25 forgone pounds of french fries for every hamburger that he grills.
The average number of initial applications for unemployment insurance is likely to be __________ with real GDP
negatively correlated
Making a prediction today about the world's population in twenty years based on current growth trends is an example of _______ economics. Advising the residents of a town to choose a toll road over a freeway extension due to a limited budget and high trucking usage is an example of ________ economics.
positive normative
The Conference Board publishes data on Business Cycle Indicators (BCI). The Composite Index of Leading Economic Indicators is one of the three components of the BCI. Changes in leading economic indicators usually precede changes in GDP. Some of the variables tracked by the index are listed below. i. The average weekly hours worked by manufacturing workers ii. The average number of initial applications for unemployment insurance iii. The amount of new orders for capital goods unrelated to defense iv. The amount of new building permits for residential buildings v. The S&P 500 stock index vi. Consumer sentiment Examine each variable and explain whether it is likely to be positively correlated, negatively correlated, or uncorrelated with real GDP. The average weekly hours worked by manufacturing workers is likely to be ▼
positive correlation
The amount of new building permits for residential buildings is likely to be__________ with read GDP
positively correlated
The amount of new orders for capital goods unrelated to defense is likely to be ▼ with real GDP.
positively correlated
The S&P 500 stock index is likely to be _________ with real GDP
positively correlated
When graphing the new total market supply and demand curves, these curves will be _________ the individual countries' demand curves, since these curves are derived by _________.
to the right of; summing quantities at a given price.
There is only one buyer. For any price above $100, this buyer wants nothing. For any price at or below $100, this buyer wants exactly 20 units.
vertical line @ 20 stops at 100
Appendectomy is a life-saving operation that some people need. Regardless of the price, the quantity demanded is 300,000 every year.
vertical line @ 300,000
