Econ 202 - Final Study Guide

To find GDP, imports are subtracted from C + I + G + exports, because Select one: a. Imports do not create jobs. b. C + I + G + (exports minus imports) gives a measure of domestic demand and supply. c. money goes out if imports are purchased. d. All of the above.

C + I + G + (exports minus imports) gives a measure of domestic demand and supply.

The agreement between the U.S., the Dominican Republic and five small Central American countries that will eventually eliminate tariffs among all seven nations is called Select one: a. NAFTA b. CAFTA c. Mercosur d. GATT e. WTO

CAFTA

Assuming that national income is defined as all domestically earned wages plus all interest income (capitalists' total income or total return to capital), as immigration takes place and as a country's labor supply curve rises: Select one: a. National income rises b. National income falls c. National income stays the same d. Immigration's effect on national income cannot be determined

National income rises

Which of the following statements is true? Select one: a. Nearly all of the money that flows into the stock market goes directly to the corporation issuing the stock and ends up as new plant and equipment. b. New stock offerings and initial public offerings raise is extremely rare and usually is spent on advertising. c. Nearly all of the money that flows into the stock market buys stock that has already been issued. d. Bondholders lend money to a company and are therefore owners rather than creditors.

Nearly all of the money that flows into the stock market buys stock that has already been issued.

According to this graph, the tax revenue is the highest: (F is a little below 100%) Select one: a. when tax rate is close to zero. b. when tax rate is close to one hundred percent. c. when tax rate is significantly above the point F on the graph.. d. when Laffer curve intersects this curve. e. when tax rate is significantly below the point F on the graph.. f. None of the above.

None of the above.

Imagine a production possibility curve (PPC) with butter on the vertical axis, and guns on the horizontal axis. One point on the PPC is 100 butter and 50 guns. Which of the following is true? Select one: a. Slope of the PPC at that point is 2. b. Slope of the PPC at that point is 1/2. c. At that point the butter price of guns is 2. d. At that point the gun price of butter is 2. e. None of the above.

None of the above.

Suppose the Federal Reserve prints $1 million worth of hundred-dollar-bills and gives it to Bank of America. Bank of America pays for it by having its reserves lowered by $1 million. Next, a businesswoman cashes a check at Bank of America and walks out of the bank with $1 million in hundred-dollar-bills (the Bank of America manager makes sure that the businesswoman has armed bodyguards with her). Which of the following describes what happens to the economy after the businesswoman walks out with the cash? E1 is the original position. Assume that there is a large Deposit Multiplier. Select one: a. E1 > E2 b. E2 > E1 c. None of the above.

None of the above.

Which of the following is true? Select one: a. S = (G - T) + Xn - I b. G - Xn = I - S + T c. S = I + (T - G) + (import - export) d. None of the above.

None of the above.

https://moodle-2013-2014.fullerton.edu/pluginfile.php/1522949/question/questiontext/733244/17/3305279/Immigration.jpg Refer to the graph above. After immigration, US National Income: Select one: a. decreases by $20 million. b. Increases by $180 million. c. Decreases by $10 million d. Increases by $90 million. e. None of the above.

None of the above.

https://moodle-2013-2014.fullerton.edu/pluginfile.php/639379/question/questiontext/827643/7/2812881/10-3-2013%205-56-35%20PM.jpg Select one: a. MPC = 1.5 b. APC = 1.5 c. exports are negative. d. None of the above.

None of the above.

At equilibrium GDP Select one: a. Savings = investment, but aggregate demand does not equal aggregate supply. b. Savings = investment; and aggregate demand = aggregate supply. c. Savings does not equal investment and aggregate demand does not equal aggregate supply. d. Savings does not equal investment, but aggregate demand = aggregate supply.

Savings = investment; and aggregate demand = aggregate supply.

The transcontinental railroads completed in the 1860s, 1870s, and 1880s all bypassed the American Select one: a. Northeast b. Midwest c. South d. Far West

South

Of the motives for the demand for money recognized by John Maynard Keynes, Which motive is very sensitive to changes in interest rate? Select one: a. Transactions b. Psychological c. Speculative d. Precautionary

Speculative

Statement I: Insurance companies are a form of financial intermediary. Statement II: The United States Treasury generally borrows through financial intermediaries. Select one: a. Statement I is true and statement II is false. b. Statement II is true and statement I is false. c. Both statements are true. d. Both statements are false.

Statement I is true and statement II is false.

Statement I: When supply falls and demand stays the same, equilibrium price will decline and equilibrium quantity will decline. Statement II: When demand rises and supply stays the same, equilibrium price will rise and equilibrium quantity will rise. Select one: a. Statement I is true and statement II is false. b. Statement II is true and statement I is false. c. Both statements are true. d. Both statements are false

Statement II is true and statement I is false.

Suppose the following graph represents the US labor market. As a result of immigration, the US labor supply increases from S1 to S2. As a result: https://moodle-2013-2014.fullerton.edu/pluginfile.php/1522949/question/questiontext/733244/17/3305279/Immigration.jpg Select one: a. US wage falls and US capitalists gain $2 million. b. US wage falls and US capitalists gain $200 million. c. Total employment in the US rises and the native workers now earn $8, rather than $10. d. Total employment in the US rises and the US capitalists earn $750 million. e. After immigration, the original US (workers who were in the US before immigration) earn $3 billion. f. None of the above.

Total employment in the US rises and the native workers now earn $8, rather than $10.

Which statement is true? Select one: a. The largest six American banks are among the top 10 banks in the world. b. Bank of America is the largest American bank. c. There are no American banks among the largest 10 banks in the world. d. Two of the largest 10 banks in the world are Japanese.

Two of the largest 10 banks in the world are Japanese.

Consider a Keynesian economy represented by: C = 16 + 0.8 (Y - T) T = 10 I = 100 G = 100 Xn = 0 If taxes (T) are reduced to zero, what will be the effect on GDP (Y)? Select one: a. Y will go up by 40 b. Y will go down by 40 c. Y will go up by 50 d. Y will go down by 50 e. None of the above.

Y will go up by 40

You may have to do some research to answer this question. Consider the 2014 Federal Budget passed in January 2014. According to this budget, what is the share of an average US resident for the US military expenditure including the US spending on the wars? Select one: a. $55 b. $50,234 c. $1802 d. $938

$1802

Consider the graph below. https://moodle-2013-2014.fullerton.edu/pluginfile.php/1522949/question/questiontext/733244/23/3305159/9-18-2013%208-33-57%20PM.jpg What is the induced consumption (part of consumption that depends on income) when the disposable income is $6 trillion? Select one: a. $2 trillion b. $4 trillion c. $8 trillion d. $3 trillion.

$2 trillion

https://moodle-2013-2014.fullerton.edu/pluginfile.php/1522949/question/questiontext/733244/25/3311807/consfuntion.JPG Consider the graph above. When disposable income is $9 trillion, what is the the value of savings? Select one: a. $3.3 trillion,. b. $1.8 trillion c. $2 trillion d. $3 trillion e. None of the above or cannot be determined from the information given.

$2 trillion

Suppose a farmer sells a bushel of corn to a miller for $1; the miller makes it into flour and sells it to a baker for $2; the baker turns it into bread and sells it to a customer for $3. Calculating GDP the contribution of transactions would be Select one: a. $1.00. b. $2.00. c. $3.00. d. $6.00.

$3.00.

In Zaire, the level of inventory was $55 billion on January 1, 1994. $30 billion was spent on new plant and equipment during the year, $15 billion was spent on new residential housing, depreciation was $8 billion, and on December 31, 1994 the level of inventory was $59 billion. Capital stock was $60 billion on January 1, 1994. How much was inventory investment in 1994? Select one: a. $51 billion b. $4 billion c. $38 billion d. None of the above

$4 billion

The US defense budget for the fiscal year 2014 (without counting the war expenditures) is approximately: Select one: a. $1 trillion b. $521 billion c. $179 billion d. $720 billion

$521 billion

If a bank has no excess reserves, the reserve requirement is 20%, and it receives a new $1 million deposit, the bank can lend out Select one: a. $1.2 million. b. $1 million. c. $200,000. d. $800,000. e. None of the above.

$800,000

When disposable income is 1250, saving is https://moodle-2013-2014.fullerton.edu/pluginfile.php/639379/question/questiontext/686354/5/2812374/untitled.JPG Select one: a. -1000 b. - 500 c. 0 d. 500 e. 1000

-1000

https://moodle-2013-2014.fullerton.edu/pluginfile.php/639379/question/questiontext/750320/10/3324706/pic.png When disposable income is $1,000, the APS is Select one: a. .05. b. .10. c. .25. d. .50.

.05.

When the disposable income is 2500, the corresponding APS is: https://moodle-2013-2014.fullerton.edu/pluginfile.php/639379/question/questiontext/686354/5/2812374/untitled.JPG Select one: a. 0.1 b. 0 c. 1 d. 0.4 e. 0.5

0

If the multiplier is 10, the MPS is Select one: a. 2.0 b. 0.10 c. 0.5. d. 0.8. e. 0.9.

0.10

https://moodle-2013-2014.fullerton.edu/pluginfile.php/1522949/question/questiontext/733244/24/3311792/consfuntion.JPG Consider the graph above. What is the APS when disposable income is 12 trillion dollars? Select one: a. 0.4 b. 0.33 c. 0.67 d. 0.5 e. None of the above.

0.33

The MPS is https://moodle-2013-2014.fullerton.edu/pluginfile.php/639379/question/questiontext/686354/5/2812374/untitled.JPG Select one: a. 0.9 b. 0.8 c. 0.7 d. 0.6 e. 0.5

0.8

If the multiplier is 5, the MPC is Select one: a. 1.0 b. 2.0 c. 0.5. d. 0.8. e. 1.0.

0.8.

Refer to the graph below. When disposable income is 3,000, the APC is about https://moodle-2013-2014.fullerton.edu/pluginfile.php/639379/question/questiontext/852053/3/3422132/000001.png When disposable income is 3,000, the APC is about Select one: a. 1.00 b. 0.92 c. 0.75. d. 0.50

0.92

As a dollar is deposited in the bank, the bank lends out a fraction of the dollar by keeping R percent of the dollar as reserves. The fraction of the dollar given out as loan by the bank then finds its way to another bank and the process continues. The sum of this series is given by Select one: a. 1 + (1 + R) + (1 + R)2 + (1 + R)3 + (1 + R)4 + ..... = 1/(1 - R) b. 1 + (1 - R) + (1 - R)2 + (1 - R)3 + (1 - R)4 + ..... = 1/(1 + R) c. 1 + (1 - R) + (1 - R)2 + (1 - R)3 + (1 - R)4 + ..... = 1/ R d. 1 + (R) + (R)2 + (R)3 + (R)4 + ..... = 1/R e. 1 + (1 - R) + (1 - R)2 + (1 - R)3 + (1 - R)4 + ..... = 1/ (1-R) f. None of the above.

1 + (R) + (R)2 + (R)3 + (R)4 + ..... = 1/R

Consider the graph above. If our economy was operating at point O (where the two axes come together), we would have an unemployment rate of ______ percent. Select one: a. 0 b. 5 c. 50 d. 95 e. 100

100

Too-Oh-Too-Good Land has a consumption function given by: C = 50 + 0.75*(DI) Where C is consumption and DI = (Y - T) is disposable income. The following exogenous values are also known for Too-Oh-Too Good Land: Total taxes, T = 50; Government Expenditure = 125; Investment = 150; Net Exports = 0. What is the equilibrium level of income in this economy? Select one: a. 1150 b. 1450 c. 1600.25 d. None of the above.

1150

Consider the graph below. What is the multiplier? https://moodle-2013-2014.fullerton.edu/pluginfile.php/639379/question/questiontext/1015634/23/4155528/sLa21804_wb1202.png Select one: a. 2 b. 4 c. 5 d. 10

2

If the market basket of goods and services that the Commerce Department uses to calculate the CPI were to increase from $40,000 in the base year to $80,000 in the current year, the current year's CPI would be: Select one: a. 300 b. 150 c. 100 d. 2 e. 200 f. None of the above.

200

https://moodle-2013-2014.fullerton.edu/pluginfile.php/639379/question/questiontext/852053/1/3421416/10-7-2013%208-05-08%20PM.jpg Consider the graph above where the C+I line has an approximate slope of 0.8. When disposable income is 1000, investment (I) is Select one: a. 100 b. 200 c. 300 d. 580 e. 800

200

A country has the following consumption function: C = 200 + 0.9 Y Where C is consumption, Y is income. There are no taxes. The government expenditure in the country is 200, investment is 200, net export is -400. At what level of income (Y) does the C + I + G + Xn line intersect the 45 degree line where the vertical axis is C + I + G + Xn and the horizontal axis is Y? Select one: a. 2000 b. 2500 c. 3000 d. 582.67 e. None of the above.

2000

Assume that a country has a consumption function: C = 200 + 0.80 Y where C is consumption, Y is income. There are no taxes. Investment (I) in this country is 200. At what level of income will the following be true? Y = C + I Select one: a. 2000 b. 3000 c. 4000 d. 5000 e. None of the above.

2000

Autonomous consumption is https://moodle-2013-2014.fullerton.edu/pluginfile.php/639379/question/questiontext/686354/5/2812374/untitled.JPG Select one: a. 0 b. 1000 c. 2000 d. 2500 e. 3000

2000

Let Consumption (C), Investment (I) and government expenditure (G) be given by: C = 200 + 0.75 Y I = 200 G = 100 The line C + I + G will intersect the 45-degree line (with C + I + G on the vertical axis and Y on the horizontal axis) at: Select one: a. 2000 b. 3000 c. 4000 d. 5000 e. 6000 f. None of the above.

2000

The worst recession since World War II started in which year? Select one: a. 1957 b. 1973 c. 1981 d. 2007

2007

Consider the question above. Savings in this economy is: Select one: a. 75 b. 275 c. 225 d. 125 e. 275 f. 225

225

When disposable income is 2000, C is https://moodle-2013-2014.fullerton.edu/pluginfile.php/639379/question/questiontext/686354/5/2812374/untitled.JPG Select one: a. 2000 b. 2200 c. 2400 d. 2600 e. 2800

2400

https://moodle-2013-2014.fullerton.edu/pluginfile.php/639379/question/questiontext/686354/5/2812374/untitled.JPG Saving is negative below a disposable income of Select one: a. 0. b. 1500. c. 2500 d. 3000 e. 2000

2500

If the consumer price index were 233 last year, 265 today, a level of _____ next year would represent deflation. Select one: a. 661.3 b. 260.0 c. 301.3 d. 265 e. 333.1

260.0

If the consumer price index were 233.8 last year, 261.3 today, a level of _____ next year would represent disinflation. Select one: a. 261.3 b. 661.3 c. 283.1 d. 260.0 e. 301.3

283.1

https://moodle-2013-2014.fullerton.edu/pluginfile.php/639379/question/questiontext/750320/6/3324692/inv1.png When disposable income is 1,000, I is Select one: a. 1,900. b. 400. c. 1,400. d. 500.

400.

If the market basket of goods and services that the Commerce Department uses to calculate the CPI were to decline from $30,000 in the base year to $15,000 in the current year, the current year's CPI would be Select one: a. 300. b. 150. c. 100. d. 50. e. 0.

50.

Refer to the graph above. When disposable income is 3,000, saving is https://moodle-2013-2014.fullerton.edu/pluginfile.php/639379/question/questiontext/750320/6/3324692/inv1.png Select one: a. 0. b. 200. c. 400. d. 500.

500.

Wages and Salaries 4,400 Depreciation 650 Investment 400 Profits 350 Indirect Business Taxes 500 Rent 300 Interest 400 Given the data above, what is the National Income? Select one: a. 4150 b. 5450 c. 1050 d. None of the above

5450

Our capacity utilization rate is usually between (percentages) Select one: a. 10 and 30 b. 30 and 50 c. 50 and 70 d. 70 and 90

70 and 90

Use the figure below to answer this question. data:image/png;base64,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 Assume that Point X is associated with production of 500 cars and 1,000 trucks while Point Y is associated with production of 600 cars and 950 trucks. If Point Z is associated with production of 700 cars, then it is most reasonable to assume that Point Z is also associated with production of: Select one: a. 890 trucks. b. 950 trucks. c. 900 trucks. d. 1,100 trucks.

890 trucks.

Which is not counted in GDP? Select one: a. A Social Security check sent to a retiree. b. Government spending on highway building. c. Money spent on an airline ticket. d. Money spent by a company to build a new office park

A Social Security check sent to a retiree.

If S and I are fixed, then: Select one: a. A fall in government budget deficit will also increase a country's trade deficit. b. A fall in government budget deficit will decrease a country's trade deficit. c. A fall in government budget deficit will increase a country's trade deficit. d. A country must have a balanced trade.

A fall in government budget deficit will decrease a country's trade deficit.

The wealth or real balances effect indicates that Select one: a. An increase in the price level will increase the demand for money, increase interest rates, and reduce consumption and investment spending b. A lower price level will decrease the real value of many financial assets and therefore cause a decline in spending c. A higher price level will increase the real value of many financial assets and therefore cause a decline in spending d. A higher price level will decrease the real value of many financial assets and therefore cause a decline in spending

A higher price level will decrease the real value of many financial assets and therefore cause a decline in spending

Suppose the Federal Government suddenly increases its deficit (borrows funds in the domestic market). This change will lead to: Select one: a. A rightward shift in the demand for loanable funds and a rise in the interest rate. b. A rightward shift in the demand for loanable funds and a fall in the interest rate. c. A rightward shift in the supply of loanable funds and a rise in the interest rate. d. A leftward shift in the supply of loanable funds and a fall in the interest rate.

A rightward shift in the demand for loanable funds and a rise in the interest rate.

https://moodle-2013-2014.fullerton.edu/pluginfile.php/1522949/question/questiontext/733244/17/3305279/Immigration.jpg Refer to the graph above. Which of the following is correct? Select one: a. Before immigration. immigrants workers earned $8/hour. b. after immigration. immigrants workers earn $10/hour. c. Immigration has benefited the immigrants, the employers who hire the immigrants and the native workers, but it has hurt the native workers. d. After immigration,.native workers earn $8/hour. e. None of the above.

After immigration,.native workers earn $8/hour

Which statement is FALSE about the European Union? Select one: a. So-called "quality codes" between members ended. b. All 28 nations have given up their own currency and adopted the euro. c. Freight is able to move anywhere within the EU without check point delays and paperwork. d. Workers from an EU country can work in any other member country.

All 28 nations have given up their own currency and adopted the euro.

Consider the national income identity: Y = C + I + G + Xn If there are only three ways to dispose of our income (Y): Consume (C), save (S) and pay taxes (T), then the national income identity can rewritten/reinterpreted as (hint: use the identity that income must be either consumed, saved or be used to pay taxes: Y = C + S + T): Select one: a. I + G + Xn = S + T b. I = S + (T - G) - Xn c. Domestic investment equals savings plus government budget surplus plus trade deficit. d. All of the above.

All of the above.

From 2010 onwards, the US government has sought to end the "too-big-to-fail" phenomenon which stemmed from excessive risky loans made by large banks with their own money. and with their depositors' money. The restrictive policies put in place by the US government are rooted in or are the result of:: Select one: a. The Volcker Rule b. Dodd-Frank Act c. Misuse of collateralized debt obligations. d. All of the above.

All of the above.

Today, the U.S. is a major exporter of (among other things): Select one: a. Computer software b. entertainment goods and services c. financial, legal, medical, construction and industrial engineering services d. telecommunications e. travel services and tourism. f. management and consulting g. All of the above.

All of the above.

Which of the following is true? Select one: a. The completion of the transcontinental railroad system in the 1880s eventually made the United States the world's first mass market. b. Southern manufacturers were hurt by the high protective tariffs of the 19th century that kept out cheaper British manufactured goods. c. Agricultural inventions such as John Deere's steel plows greatly improved farm productivity. d. All of the choices are true.

All of the choices are true.

According to the rational expectationists Select one: a. the so-called recessionary and inflationary gaps of the 1970s did not exist. b. even if there were a recession or substantial inflation, the best government policy would be to do nothing. c. the dramatic oil price shocks of 1973 and 1979 created declines in aggregate supply, lowering the natural level of real GDP. d. the prime economic mover is aggregate supply, not aggregate demand. e. All of the choices/statements are true.

All of the choices/statements are true.

Statement I: A credit card is now considered money. Statement II: Although gold is not part of our official money supply, it does all the jobs that money does. Select one: a. Statement I is true and statement II is false. b. Statement II is true and statement I is false. c. Both statements are true. d. Both statements are false.

Both statements are false.

Which of the following statements is true? I. The phenomenon of diminishing marginal returns leads to the phenomenon of increasing marginal costs. II. The phenomenon of constant marginal returns leads to the phenomenon of constant marginal costs. Select one: a. Statement I is true, Statement II is false. b. Statement II is true, Statement I is false. c. Both statements are true d. Both statements are false.

Both statements are true

Statement I: The federal budget deficit more than doubled between 1987 and 1992. Statement II: High federal budget deficits tend to push up real interest rates. Select one: a. Statement I is true and statement II is false. b. Statement II is true and statement I is false. c. Both statements are true. d. Both statements are false.

Both statements are true.

Statement I: While the corporation is the dominant form of enterprise in the industrialized world, it is a very new development in the Islamic Middle East. Statement II: Most of the productions and sales of General Electric, General Motors, ExxonMobile, Ford, Chevron and Apple occur outside the United States. Select one: a. Statement I is true and statement II is false. b. Statement II is true and statement I is false. c. Both statements are true. d. Both statements are false.

Both statements are true.

Which of the following statements is true? I. If the production possibility curve is a straight line, the corresponding supply curves of the two goods are horizontal. II. If the production possibility curve is a concave, the corresponding supply curves of the two goods are both upward sloping. Select one: a. Statement I is true, Statement II is false. b. Statement II is true, Statement I is false. c. Both statements are true. d. Both statements are false.

Both statements are true.

If countries specialize and then trade: Select one: a. World output rises only if one country gets a lower price from trade. b. World output falls. c. price rises d. Each country may lose jobs in one industry.

Each country may lose jobs in one industry.

Exam 1

Exam 1 question sets

Exam 2

Exam 2 question sets

Exam 3

Exam 3 question sets

Exam 4

Exam 4 question sets

Consider the graph above. PPC1 refers to the production possibility curve of Country 1 and PPC2 refers to the production possibility curve of Country 2. We can say that Country 2 has a higher GDP compared to Country 1. PPC 1 @ 10 butter, between 5/10 guns PPC 3 @ 15 butter, 15 guns Select one: a. True b. False

False

Consider the graph above. PPC1 refers to the production possibility curve of Country 1 and PPC2 refers to the production possibility curve of Country 2. We can say that Country 2 has a higher per capita income compared to Country 1. Select one: True False

False

If we add all goods (rather than all final goods) to calculate GDP, the value of GDP will double because all goods then will be counted twice. Select one: a. True b. False

False

https://moodle-2013-2014.fullerton.edu/pluginfile.php/639379/question/questiontext/852053/22/3422551/10-9-2013%204-45-25%20PM.jpg The graph shows that when disposable income is $13 trillion, consumption must be $12 trillion. Select one: a. True b. False

False

Susan had to drop out of labor force for a year because she had a baby and there was no childcare available. She has now reentered the labor force and she is looking for full-time employment. Use the following choices regarding the various types of unemployment to describe her situation. Select one: a. Frictional unemployment b. Structural unemployment c. Natural unemployment d. Cyclical unemployment

Frictional unemployment

Which of the following economists/philosophers was/is opposed to the Keynesian idea of government intervention during a recession? Select one: a. Friedrich Hayek b. Paul Krugman c. Barack Obama d. Karl Marx

Friedrich Hayek

When GM buys an automobile component part from a firm in Fullerton, California: Select one: a. GM is outsourcing. b. GM is off-shoring. c. GM is increasing US balance of payments d. GM is losing money because Fullerton firms are not as efficient as firms in South Korea.

GM is outsourcing.

Which of the following is true? Select one: a. The United States spends more as a percentage of GDP than any other nation on foreign aid. b. The largest federal government purchase of goods and services is Social Security. c. Government purchases, but not transfer payments, are counted in Gross Domestic Product (GDP). d. Net interest on the national debt is only one percent of total federal government spending.

Government purchases, but not transfer payments, are counted in Gross Domestic Product (GDP).

Which of the following European Union (EU) nations has not adopted the euro? Select one: a. France b. Great Britain c. Germany d. Italy

Great Britain

Which of the following schedules represent(s) a progressive tax? https://moodle-2013-2014.fullerton.edu/pluginfile.php/639379/question/questiontext/852053/12/3422393/10-9-2013%203-46-36%20PM.jpg Select one: a. I and III b. I c. II d. I and II e. III

I and III

A distinguishing feature of the US economy from 1970 until today is that: Select one: a. Imports and exports as percent of US GDP have risen fairly consistently (with a few exceptions) almost every year. b. Imports and exports as percent of US GDP have fallen fairly consistently (with a few exceptions) almost every year. c. US exports have risen faster than US imports. d. None of the above.

Imports and exports as percent of US GDP have risen fairly consistently (with a few exceptions) almost every year.

Which statement is true? Select one: a. Americans pay the highest taxes in the world. b. Public goods may be provided by private enterprises. c. The economic role of the federal government has shrunk over the last 30 years. d. In 1990 and in 1993 tax rates for the rich were increased substantially.

In 1990 and in 1993 tax rates for the rich were increased substantially.

As a country's labor supply curve shifts to the right: Select one: a. Income of the capitalists falls. b. Income of the capitalists rises. c. Income of the capitalists remains the same d. Effect on capitalists' income cannot be determined.

Income of the capitalists rises.

Which of the following is a sequence of events following an expansionary monetary policy? Select one: a. Increase in money supply leads to an increase in the rate of interest, which, in turn, leads to an outward shift in the economy's aggregate demand curve. Given a horizontal aggregate supply curve, GDP rises.. b. Increase in money supply leads to an decrease in the rate of interest, which, in turn, leads to an outward shift in the economy's aggregate demand curve. Given a horizontal aggregate supply curve, GDP rises. c. Increase in money supply leads to an increase in the rate of interest, which, in turn, leads to a downward shift in the economy's aggregate demand curve. Given a horizontal aggregate supply curve, GDP rises.. d. Increase in money supply leads to a decrease in the rate of interest, which, in turn, leads to an upward shift in the economy's aggregate demand curve. Given a horizontal aggregate supply curve, GDP rises.. e. None of the above.

Increase in money supply leads to a decrease in the rate of interest, which, in turn, leads to an upward shift in the economy's aggregate demand curve. Given a horizontal aggregate supply curve, GDP rises..

Refer to the graph above. what is the implicit inflationary gap or the implicit deflationary gap? https://moodle-2013-2014.fullerton.edu/pluginfile.php/639379/question/questiontext/1015634/23/4155528/sLa21804_wb1202.png Select one: a. Inflationary gap: $1500 billion b. deflationary gap: $1500 billion c. Inflationary gap: $500 billion d. deflationary gap: $500 billion e. 0

Inflationary gap: $500 billion

According to Keynesians Select one: a. An increase in aggregate demand will always lead to inflation. b. An increase in aggregate demand will eventually lead to deflation. c. An increase in aggregate demand will eventually lead to less real GDP. d. Insufficient aggregate demand could keep an economy in a depression for an extended period of time.

Insufficient aggregate demand could keep an economy in a depression for an extended period of time.

If, at a point of time, suppliers supply a GDP of Y but find that Y > C + I + G + Xn Then Select one: a. Inventories will accumulate b. There will be a shortage of inventories. c. G will rise d. I will fall e. none of the above.

Inventories will accumulate

The least stable sector of GDP is Select one: a. Government Sector. b. Investment Sector. c. Consumer Sector. d. Net exports.

Investment Sector.

Which of the following statements about the Social Security tax is not true? Select one: a. It is a progressive tax. b. It came into existence in 1935. c. It is imposed on employers and employees. d. It is a payroll tax.

It is a progressive tax.

Which of the following statements would be acceptable to an economist who believes in Rational Expectations? Select one: a. It is absurd to believe that people will not respond to the anticipated effect of fiscal and monetary policies. b. workers assume next year's inflation rate will be equal to this year's rate. c. workers generally suffer from money illusion: they do not think of their wages in any other way than in nominal terms. d. forecasts of inflation are always wrong; therefore, no one can anticipate the effects of government policies.

It is absurd to believe that people will not respond to the anticipated effect of fiscal and monetary policies.

The current Chairperson of the US Federal Reserve Board is (picture and name: both must be correct): Select one: a. Alan Greenspan. b. Paul Volker. c. Ben Bernanke. d. Janet Yellen.

Janet Yellen.

If a country is in a recession, which of the following policies would probably be supported by Hayek or Keynes? Select one: a. Friedrich Hayek would support a policy of an increased taxes and a higher government expenditure. b. Friedrich Hayek would support a policy of lower taxes and a higher government expenditure. c. John Maynard Keynes would support a policy of an increased taxes and a higher government expenditure. d. John Maynard Keynes would support a policy of lower taxes and a higher government expenditure.

John Maynard Keynes would support a policy of lower taxes and a higher government expenditure.

Consider the graph above. Which movement between two points represents economic growth? Select one: a. J to K b. K to L c. L to M d. M to N

K to L

John Maynard Keynes did NOT accept the classical assumption that Select one: a. the velocity of money is constant in the short run. b. full employment is the natural state of the economy. c. money balances are held only for transaction purposes. d. interest rates do not affect the quantity of money demanded. e. Keynes did not accept any of the above assumptions.

Keynes did not accept any of the above assumptions.

What was the dominant economic theory used to attempt to recover from the Great Recession? Select one: a. Classical b. Monetarist c. Keynesian d. Behaviorist e. Supply side

Keynesian

Which statement is true? Select one: a. Large denomination time deposits are part of M2 but not M3. b. Large denomination time deposits are part of M3 but not M2. c. Small denomination time deposits are part of M2 but not M3. d. Small denomination time deposits are part of M3 but not M2.

Large denomination time deposits are part of M3 but not M2.

Which statement is true? Select one: a. Large denomination time deposits are part of M2 but not M3. b. Large denomination time deposits are part of M3 but not M2. c. Small denomination time deposits are part of M2 but not M3. d. Small denomination time deposits are part of M3 but not M2.

Large denomination time deposits are part of M3 but not M2.

Which of the following is not a characteristic of sole proprietorship? Select one: a. Simplicity of control b. Limited availability of capital c. Relatively free from regulation d. Limited liability

Limited liability

Too-Oh-Too-Good Land has a consumption function given by: C = 100 + 0.8*(DI) Where C is consumption and DI is disposable income. The following exogenous values are also known for Too-Oh-Too Good Land: Total taxes, T = 50; Government Expenditure = 150; Investment = 150; Net Exports = 60. Using correct labels, draw the Aggregate Expenditure curve for this economy (Similar to the following graph - which has different values of I, G, etc.) Clearly show the coordinates of the intersection point between the C + I + G + Xn line that you have derived with the 45-degree line on the Keynesian Cross graph above. What is the value of Y? Now suppose the government expenditure goes up by 100 (G is now 250). Show the new situation graphically. How does the C + I + G + Xn line shift? What is the new value of Y? To answer this question, upload a PDF file which should include your graph. If you cannot do this, upload a JPG file. It may be simplest to draw this by hand, scan it, convert to PDF and then upload it. Please do not use your phone to take a picture of your graph and upload your graph. Those are hard to read. If you are not able to use a scanner, use the graphics program on your computer (such as Microsoft Paint or similar) to draw your graph. You can also use Microsoft PowerPoint to create the graph.

Look on excel sheet

Which of these relations is correct? Select one: a. APC - APS = 1 b. MPC + MPS = 1 c. APC + MPC = 1 d. 1 + MPC = MPS

MPC + MPS = 1

Which statement is the most accurate? Select one: a. Free trade zones rarely lower tariff barriers. b. Most large industrial nations are members of a free trade zone. c. NAFTA is, by far, the largest free trade zone in terms of imports and exports. d. Over the last 15 years, more nations have been leaving free trade zones than joining them.

Most large industrial nations are members of a free trade zone.

Which statement is true? Select one: a. A person earning $100,000 pays $10,000 in payroll tax. b. Most taxpayers pay more in payroll tax than in personal income tax. c. The Medicare tax rate is 6.2%. d. There is no such thing as a regressive tax.

Most taxpayers pay more in payroll tax than in personal income tax.

Which of the following is a nondurable good? Select one: a. TV b. Car c. Computer d. Music Concert

Music Concert

Which statement is true? Select one: a. Stockholders and bondholders are both owners of a corporation. b. Neither stockholders or bondholders are owners of a corporation. c. Only stockholders are owners of a corporation. d. Only bondholders are owners of a corporation.

Only stockholders are owners of a corporation.

If MV rises from 250 to 375, Select one: a. PQ will fall by 50%. b. PQ will remain the same. c. PQ will rise by 50%. d. PQ will rise by 100%.

PQ will rise by 50%.

Given the graph below, If aggregate demand shifts from AD2 to AD3, what happens to the level of prices and to output? https://moodle-2013-2014.fullerton.edu/pluginfile.php/639379/question/questiontext/1015634/22/4155525/sLa21804_wb1102.png Select one: a. Price level rises, output falls b. Price level rises, output rises c. Price level falls, output falls d. Price level falls, output rises

Price level rises, output rises

________________________completely changed the face of the United States in the 25 years following World War II. Select one: a. Almost constant warfare b. Suburbanization c. Welfare spending d. Tax Cuts.

Suburbanization

When the spread between short-term rates (Fed Funds Rate) and long-term rates (10-year treasury bonds rate) goes up Select one: a. All interest rates rise b. taxes rise c. The Index of Leading Indicators rises d. Consumer price index rises

The Index of Leading Indicators rises

The Joneses have a taxable income of $18,000, all in the form of wages. They have three children, and they take the standard deduction. Which statement is true? Select one: a. The Joneses pay more in Social Security tax than in personal income tax. b. The Joneses pay more in personal income tax than in Social Security tax. c. The Joneses pay about the same amount in Social Security tax and personal income tax. d. It is impossible to determine if the Joneses pay more in Social Security tax than in personal income tax.

The Joneses pay more in Social Security tax than in personal income tax.

For time series data, what is unique about a time period where real GDP equal nominal GDP? Select one: a. The base year for the price index b. GDP = C + I + G + Xn c. Exports exceed imports d. A high rate of inflation exists

The base year for the price index

Which statement is the most accurate? Select one: a. The impact lag of monetary policy is considerably shorter than the impact lag of fiscal policy. b. The decision lag of monetary policy is often shorter than the decision lag of fiscal policy. c. The impact lag of monetary policy is anywhere from three to six months. d. The level of corporate investment is very responsive to even slight changes in the interest rate.

The decision lag of monetary policy is often shorter than the decision lag of fiscal policy.

If you were a creditor (you lend money) you would prefer Select one: a. The price level to fall after you lend b. CPI to rise after you lend c. Unanticipated inflation d. high unemployment after you lend

The price level to fall after you lend

Which of these is not investment? Select one: a. A decline in inventory b. The building of a shopping mall c. The purchase of ABC-Capital Cities by Disney d. The building of an automobile assembly line

The purchase of ABC-Capital Cities by Disney

Which of the following industrial changes allowed the smallest start-up manufacturers to compete with great industrial capitalists? Select one: a. A positive trade balance at the turn of the 20th century. b. The completion of the national railroad network. c. The development of the moving assembly line as a division of labor in manufacturing. d. The transition from private electric generators to centralized utility based power production.

The transition from private electric generators to centralized utility based power production.

Which of the following is NOT one of a group of variables that make up the Index of Leading Indicators? Select one: a. New building permits issued b. The unemployment rate c. Index of stock prices d. The money supply e. The average workweek of production workers in manufacturing

The unemployment rate

Which statement is true? Select one: a. Subsidy payments to farmers were almost completely phased out in 2007. b. The so-called new economy of the 1990s was neither new, nor very different from the economy of the previous 25 years. c. Until the time of the Great Depression, the United States was primarily an agricultural nation. d. There were no recessions during the presidency of Bill Clinton (January 1993-January 2000).

There were no recessions during the presidency of Bill Clinton (January 1993-January 2000).

If the economy is in the vertical portion of the AS curve, what will be the effect on an increase in the price level on the level of employment? Select one: a. There will be substantial increase in employment b. There will be a less than proportional increase in employment c. There will be no change in employment d. Cannot be predicted from the information given

There will be no change in employment

If you were a debtor you would prefer Select one: a. Deflation b. Disinflation c. Unanticipated inflation d. Anticipated inflation

Unanticipated inflation

Which of the following is incorrect? Select one: a. As the American average price level rises, American goods become relatively more expensive so that our exports fall and our imports rise. b. As the average price level falls, the interest rate declines, and interest-rate sensitive spending increases. c. When the average price level increases, real balances increase, businesses and households find themselves wealthier and therefore increase their spending. d. An increase in aggregate supply tends to increase real domestic output and reduce the average price level.

When the average price level increases, real balances increase, businesses and households find themselves wealthier and therefore increase their spending.

Which statement is true? Select one: a. When there is a recessionary gap, we are spending too much and taxes should be raised. b. When there is a recessionary gap we are spending too little and taxes should be raised. c. When there is a recessionary gap, we are spending too much and taxes should be lowered. d. When there is a recessionary gap we are spending too little and taxes should be lowered.

When there is a recessionary gap we are spending too little and taxes should be lowered.

Consider the table above. After specialization, Algeria now produces only planes and Zaire produces only trains, but people who used to ride trains in Algeria and fly planes in Zaire are not happy about the specialization. They petition the government in each country to give them at least the old outputs of trains and planes. In other words, Algerians want at least 5 trains and the people of Zaire want at least 5 planes. So the trade representatives of Algeria and Zaire get together and recommend that the countries exchange trains and planes at a one-to-one ratio. In other words, one plane can be sold (exported) to buy (import) one plane. Which of the following statements is then correct? Select one: a. Planes are more expensive than trains. So this strategy will not work. b. If such exchanges are permitted, both countries will lose. c. With exports and imports at the price suggested, both countries cannot get back to their pre-trade situation. So at least one country will reject the price of one-for-one trade. d. With exports and imports at the price suggested, both countries can get back to their pre-trade situation and have extra goods (planes or trains) to enjoy

With exports and imports at the price suggested, both countries can get back to their pre-trade situation and have extra goods (planes or trains) to enjoy

Production of Trains and Planes before Specialization Algeria, planes - 20 Algeria, trains - 10 Zaire, planes - 10 Zaire, trains - 20 Assume that both Algeria and Zaire initially produce trains and planes in the quantities described above. In each country, 50% of all resources are devoted to each industry. Now suppose Algeria devotes all its resources to train production and Zaire devotes all its resources to plane production. Ignoring the effects on all other countries: Select one: a. World production of trains would rise. b. World production of both trains and planes would rise. c. World production of planes would rise. d. World production of both trains and planes would fall.

World production of both trains and planes would fall.

https://moodle-2013-2014.fullerton.edu/pluginfile.php/639379/question/questiontext/852053/1/3421416/10-7-2013%208-05-08%20PM.jpg Refer to the graph above. When disposable income is 1000, Saving is Select one: a. Zero b. -100 c. -200 d. -300 e. None of the above.

Zero

If the government's budget is balanced at the start of a recession, and the government is attempting to stabilize the economy through fiscal policy Select one: a. a budget surplus would be expected. b. a budget deficit would be expected. c. government spending, taxes, and transfer payments must all be reduced in a fashion that preserves a balanced budget. d. it should increase government spending, lower taxes, and increase transfer payments in a manner that preserves a balanced budget. e. government spending, taxes, and transfer payments must remain unchanged.

a budget deficit would be expected.

If the government's budget has a deficit at the start of a recession, and the government is attempting to stabilize the economy through fiscal policy Select one: a. a budget surplus would be expected. b. a budget deficit would be worsened. c. government spending, taxes, and transfer payments must all be intreased in a fashion that preserves a balanced budget. d. it should increase government spending, lower taxes, and increase transfer payments in a manner that preserves a balanced budget. e. government spending, taxes, and transfer payments must remain unchanged.

a budget deficit would be worsened.

The Business Cycle Dating Committee of the National Bureau of Economic Research would most likely classify which of the following as a recession? Select one: a. a one-tenth of 1 percent decline in real GDP for two consecutive quarters b. an increase in the unemployment rate for two consecutive months c. a decline in nonfarm payrolls, industrial production, and personal income over six months d. a 1 percent rate of deflation over at least three months accompanied by rising interest rates

a decline in nonfarm payrolls, industrial production, and personal income over six months

The national debt is ____ of the United States government and ___ of the people who hold it. Select one: a. an asset; an asset b. a liability; a liability c. an asset; a liability d. a liability; an asset.

a liability; an asset.

Net exports is a negative figure when Select one: a. a nation's exports of goods and services exceed its imports b. depreciation exceeds gross private domestic investment c. the economy's stock of capital is declining d. a nation's imports of goods and services exceed its exports

a nation's imports of goods and services exceed its exports

Since the GATT agreement in 1947, the world has experienced Select one: a. virtually no unfair trading practices among nations. b. the complete elimination of tariffs and other trade barriers among nations. c. a reduction of trade barriers among nations in the WTO. d. all of the choices are true.

a reduction of trade barriers among nations in the WTO.

During recession. both supply-siders and Keynesians recommend: Select one: a. a tax cut. But Keynesians recommend this because they want to increase aggregate demand and supply siders recommend this because they want to decrease aggregate supply. b. a tax cut. But Keynesians recommend this because they want to decrease aggregate demand and supply siders recommend this because they want to decrease aggregate supply. c. a tax cut. But Keynesians recommend this because they want to increase aggregate demand and supply siders recommend this because they want to increase aggregate supply. d. a tax increase. But Keynesians recommend this because they want to increase aggregate demand and supply siders recommend this because they want to decrease aggregate supply. e. a tax increase. But Keynesians recommend this because they want to reduce aggregate demand and supply siders recommend this because they want to decrease aggregate supply. f. None of the above.

a tax cut. But Keynesians recommend this because they want to increase aggregate demand and supply siders recommend this because they want to increase aggregate supply.

NDP may be found by __________ Select one: a. adding together money spent on goods and services and incomes received by the factors of production b. subtracting incomes received by the factors of production from the money spent on goods and services c. subtracting the money spent on goods and services from the incomes received by the factors of production d. adding the money spent on final goods and services, then subtracting depreciation.

adding the money spent on final goods and services, then subtracting depreciation.

Cyrus McCormick and Eli Whitney were important in the technology of Select one: a. steel. b. automobiles. c. agriculture. d. oil.

agriculture.

Investment, as the term is used in economics, includes Select one: a. the purchase of an acre of land for speculative purposes. b. the funding of an individual retirement account. c. an annual increase in the inventory of unsold packages of potato chips at a convenience store. d. your purchase of 100 shares of stock in Apple Computer Company

an annual increase in the inventory of unsold packages of potato chips at a convenience store.

One form of "cost-push inflation," economists refer to are Select one: a. attempts by labor to raise wages that result in increases in prices. b. rising prices due to excessive levels of government spending financed by open-market operations through the Fed. c. rising prices due to excessive levels of aggregate demand. d. the rise in total sales revenue attributable to price-tag changes rather than to real volume changes.

attempts by labor to raise wages that result in increases in prices.

We use the value added approach in calculating GDP to Select one: a. avoid double counting. b. account for market price differences. c. account for changes in population.

avoid double counting.

The velocity of circulation of money is typically greater than 1 Select one: a. under no circumstances. b. only if the unemployment rate is relatively low. c. because the same money is exchanged a number of times each year. d. because of inflation. e. only if the Fed is pursuing an expansionary monetary policy.

because the same money is exchanged a number of times each year.

If the Fed sells Treasury bills then Select one: a. the price of Treasury bills will fall. b. the market rate of interest on Treasury bills will rise. c. both the price of Treasury bills will fall and the market rate of interest on Treasury bills will rise. d. neither the price nor the market rate of interest of Treasury bills will be affected.

both the price of Treasury bills will fall and the market rate of interest on Treasury bills will rise.

According to Keynes, Select one: a. supply creates its own demand. b. the problem during recessions was inadequate aggregate supply. c. investment spending was necessary to get us out of a depression. d. budget deficits were good during recessions.

budget deficits were good during recessions.

Wages, rent, interest, and profits flow from Select one: a. business firms to households. b. households to business firms. c. business firms to the government. d. the government to business firms.

business firms to households.

In recent years, the FED has attempted to reduce the long term interest rates (such as mortgage rates) by by: Select one: a. selling treasury bills b. buying treasury bills c. by using Quantitative Easing (QE). d. by increasing taxes for the wealthy. e. None of the above.

by using Quantitative Easing (QE).

If the price were set at $14, there would be price __________, that would cause a ___________ of ______ units. Select one: a. floor, shortage, 25 b. floor, surplus, 30 c. ceiling, shortage, 25 d. ceiling, surplus, 30

ceiling, shortage, 25

The largest component of GDP is Select one: a. net exports. b. investment. c. consumption. d. government purchases.

consumption.

According to the Laffer curve, when very low marginal tax rates are lowered, tax revenue will: Select one: a. decline b. be given to me, an Econ 202 student. (I Know you are an optimist, but please don't choose this!) c. stay the same. d. increase slightly. e. increase substantially.

decline

In the year 2929 our gross investment will be $5.0 trillion and our depreciation will be $6 trillion. In 2929 our capital stock will Select one: a. increase by $1 trillion. b. decrease by $1 trillion. c. increase by $11 trillion. d. increase by a number between $5 trillion and $6 trillion.

decrease by $1 trillion.

Keynesian macroeconomic theory has been summarized as the idea that Select one: a. supply creates its own demand. b. demand creates its own supply. c. demand quickly adjusts in order to accommodate changes in the quantity of output. d. full employment is assured in long-run equilibrium. e. full employment is assured in short-run equilibrium.

demand creates its own supply.

Quantity Supplied Price Quantity Demanded 30 5 10 25 4 15 20 3 20 15 2 25 10 1 30 If the quantities in the demand schedule above were reduced by 2 units at each price, you would conclude that Select one: a. demand increased b. demand decreased. c. the demand curve shifted to the right. d. both demand increased and the demand curve shifted to the right.

demand decreased.

The Social Security tax is Select one: a. direct and progressive. b. direct and regressive. c. indirect and progressive. d. indirect and regressive.

direct and regressive.

A key advantage of a partnership over a proprietorship is Select one: a. limited liability b. division of responsibility c. perpetual life of the business firm d. none of the above

division of responsibility

Required reserves are Select one: a. equal to total reserves minus excess reserves. b. equal to total reserves minus checkable deposits. c. always less than total reserves. d. determined by multiplying the level of checkable deposits times the discount rate. e. always equal to outstanding loans times the reserve requirement ratio.

equal to total reserves minus excess reserves.

When the Fed buys United States bonds, Select one: a. excess reserves in commercial banks are increased immediately. b. the banking system will decrease the number of loans that are made. c. total bank reserves are decreased. d. the value of the money multiplier slowly declines to a new stationary level. e. the money supply will eventually decline as banks are forced to call loans due to meet reserve requirements.

excess reserves in commercial banks are increased immediately.

GDP is $7 trillion. If consumption is $4 trillion, investment is $1 trillion, and government purchases are $2 trillion, then Select one: a. exports are equal to imports. b. exports exceed imports by $1 trillion. c. exports must be zero, imports must be zero too. d. Net exports are equal to C+I+G

exports are equal to imports.

The most progressive tax listed here is the Select one: a. Social Security tax b. federal personal income tax c. federal excise tax d. state sales tax

federal personal income tax

According to classical macroeconomic theory, Select one: a. aggregate supply automatically adjusts to shifts in aggregate demand. b. demand creates its own supply. c. flexible prices, wages, and interest rates assure full-employment equilibrium. d. desired investment typically exceeds desired saving.

flexible prices, wages, and interest rates assure full-employment equilibrium.

https://moodle-2013-2014.fullerton.edu/pluginfile.php/1522949/question/questiontext/733244/11/3305237/3-15-2013%203-14-31%20PM.jpg If the government sets a price at $24 (price not allowed go below $24), there would be an effective price __________, that would cause about a ___________ of ______ units. Select one: a. floor, surplus, 10 b. ceiling, shortage, 10 c. floor, shortage, 15 d. ceiling, surplus, 15 e. None of the above,

floor, surplus, 10

If the price was set at $28, there would be a price ___________, that would cause a ___________ of ______ units. Select one: a. floor, shortage, 25 b. floor, surplus, 30 c. ceiling, shortage, 25 d. ceiling, surplus, 30

floor, surplus, 30

Kimberly quit her job as a computer programmer, spent two weeks in Hawaii, and is now looking for (and expects to soon find) another job. She is _____ unemployed. Select one: a. psychologically b. structurally c. frictionally d. cyclically

frictionally

What led to the bankruptcy of many goldsmiths was that they: Select one: a. had a reserve ratio that was too high b. had a reserve ratio that was too low c. lent out gold coins instead of receipts d. lent out receipts instead of gold coins

had a reserve ratio that was too low

Keynes believed that during recession. starting from an equilibrium position, if savings increase, consumption will decrease. Then: Select one: a. prices would increase causing savings to be reduced further. b. the interest rate will decline and equate savings and investment. c. higher savings will reduce demand and result in unemployment. d. wage rates would decline reducing excess savings. e. prices would increase causing savings to be reduced.

higher savings will reduce demand and result in unemployment.

The classical economists' aggregate supply curve is vertical. Select one: a. both in the short run and in the long run b. in neither the short run nor the long run c. in the short run, but not in the long run d. in the long run, but not in the short run

in the long run, but not in the short run

If our deficit falls steadily over the next five years our national debt will Select one: a. increase at an increasing rate. b. increase at a decreasing rate. c. decrease at an increasing rate. d. decrease at a decreasing rate.

increase at a decreasing rate.

The largest source of federal tax revenue comes from Select one: a. individual income taxes. b. social insurance receipts. c. corporation income taxes. d. excise taxes.

individual income taxes.

The Monetarists view a world characterized by steep aggregate supply curves. This means that they expect Select one: a. large increases in output to bring rapid inflation. b. decreases in output to bring rapid inflation. c. decreases in output to bring no inflation at all. d. inflation even in the absence of increases in output.

inflation even in the absence of increases in output.

In the 1930s our main economic problem, said John Maynard Keynes, was : Select one: a. inflation b. insufficient aggregate demand. c. too much government interference with the economy. d. huge budget deficits.

insufficient aggregate demand.

When a bank loan is re-paid, the supply of money Select one: a. is constant, but its composition will have changed. b. is decreased. c. is increased. d. may either increase or decrease.

is decreased.

The classical theory predicts that an increase in the supply of savings will Select one: a. lower interest rates and reduce investment. b. lower interest rates and expand investment. c. raise interest rates and reduce investment. d. raise interest rates and expand investment.

lower interest rates and expand investment.

mports tend to Select one: a. raise our rate of inflation. b. lower our Consumer Price Index. c. reduce our unemployment rates. d. reduce national welfare

lower our Consumer Price Index.

Imports tend to Select one: a. raise our rate of inflation. b. lower our rate of inflation. c. have no effect on our rate of inflation. d. reduce national welfare

lower our rate of inflation.

In reality, all economic systems are Select one: a. mixed. b. command. c. capitalistic. d. democratic. e. socialistic. f. autocratic

mixed.

A wage earning household making $25,000 a year pays Select one: a. more in Social Security tax than in personal income tax. b. more personal income tax than in Social Security tax. c. about the same in Social Security tax as in personal income tax. d. No Social security tax.

more in Social Security tax than in personal income tax.

When there is inflation Select one: a. real GDP increases faster than nominal GDP b. nominal GDP increases faster than real GDP c. nominal GDP and real GDP increase at the same rate d. there is no way of telling whether nominal GDP or real GDP increases faster

nominal GDP increases faster than real GDP

Consider the graph above. At point S0 Select one: a. one cloth can be exchanged for 2 wheat. b. one cloth can be exchanged for 1/2 wheat. c. Price of cloth is $2. d. Price of wheat is $2. e. None of the above.

one cloth can be exchanged for 2 wheat.

John Maynard Keynes identified several motives for holding money. Which motive did Keynes not identify? Select one: a. transactions b. precautionary c. psychological d. speculative

psychological

A debit card Select one: a. is considered part of M1. b. is just like credit card in that you pay for it with a check at a later time. c. purchase takes money out of your checking account. d. is considered part of M2. e. None of the above.

purchase takes money out of your checking account.

Consider the table above When the price is $5 Select one: a. quantity supplied is greater than quantity demanded and, therefore, price must rise to get to equilibrium. b. quantity supplied is greater than quantity demanded and, therefore, price must fall to get to equilibrium. c. quantity demanded is greater than quantity supplied and, therefore, price must rise to get to equilibrium. d. quantity demanded is greater than quantity supplied and, therefore, price must fall to get to equilibrium.

quantity supplied is greater than quantity demanded and, therefore, price must fall to get to equilibrium.

Ch. 1 and 2

quiz

Ch. 10

quiz

Ch. 11

quiz

Ch. 12

quiz

Ch. 13

quiz

Ch. 14

quiz

Ch. 15 quiz

quiz

Ch. 3 and 4

quiz

Ch. 5

quiz

Ch. 6

quiz

Ch. 7

quiz

Ch. 8

quiz

Ch. 9

quiz

To close a recessionary gap Keynesians would Select one: a. raise G and raise taxes. b. lower G and lower taxes. c. raise G and lower taxes. d. lower G and raise taxes.

raise G and lower taxes.

The Fed increases the money supply by buying securities for $300 million. The impact of this increase, in the long-run, would be to Select one: a. raise the average price level and increase the level of real GDP. b. raise the average price level, but real GDP (output) would stay the same. c. raise the real supply of loanable funds, lower the interest rate, and increase the demand for output. d. raise the real supply and demand for loanable funds with an increase in the interest rate.

raise the real supply of loanable funds, lower the interest rate, and increase the demand for output.

If people take into account the expected behavior of fiscal and monetary authorities in forecasting the behavior of inflation rates, they are most likely forming their projections using Select one: a. behavioral expectations. b. adaptive expectations. c. contractionary expectations. d. inflationary expectations. e. rational expectations.

rational expectations.

Stagflation describes a condition whereby Select one: a. inflation is caused by forces external to the aggregate supply/aggregate demand analysis. b. real GDP increases but nominal GDP stagnates at a relatively constant level. c. real GDP declines at a relatively constant price level. d. potential real GDP stagnates. e. real GDP rises or falls very little but inflation persists at fairly high rates.

real GDP rises or falls very little but inflation persists at fairly high rates.

If GDP rose from $8 trillion to $12 trillion, and prices rose by 50 percent, over this period Select one: a. real GDP fell by 100 percent. b. real GDP fell by 50 percent. c. real GDP stayed the same. d. real GDP rose by 100 percent

real GDP stayed the same.

Among the following cases, which one would be considered to be unemployed? Someone who Select one: a. worked three days in the last month but is now out of work. b. is ready, willing, and able to work, but gave up looking for work three months ago. c. reported to the state employment office last week but is not very enthusiastic about finding a job.

reported to the state employment office last week but is not very enthusiastic about finding a job.

The federal funds rate is the interest rate for Select one: a. reserves that banks borrow from the Fed. b. the preferred customers of the banks. c. reserves borrowed by one bank from another bank. d. banks belonging to the Federal Reserve System.

reserves borrowed by one bank from another bank.

The demand for money schedule shows that the quantity of money that people want to hold Select one: a. rises as income rises. b. falls as income rises. c. falls as the interest rate rises. d. falls as the real price of money rises.

rises as income rises.

People tend to hold more money as the rate of inflation ___ and as the level of income ___. Select one: a. rises; rises b. falls; falls c. rises; falls d. falls; rises

rises; rises

The essential difference between sales and excise taxes is that Select one: a. sales taxes apply to a wide range of products, while excises taxes apply only to a select group of products. b. sales taxes are consumption taxes, while excise taxes are not. c. excise taxes apply to a wide range of products, while sales taxes apply only to a select group of products. d. excise taxes are consumption taxes, while sales taxes are not.

sales taxes apply to a wide range of products, while excises taxes apply only to a select group of products.

Most state revenue comes from the _____ tax and most local revenue comes from the _____ tax. Select one: a. property; property b. sales; sales c. sales; property d. property; sales

sales; property

If the FED was attempting to reduce the money supply, the proper policies would be: Select one: a. sell govt securities, raise reserve requirements, and lower the discount rate. b. sell govt securities, lower reserve requirements, and lower the discount rate. c. buy govt securities, raise reserve requirements, and raise the discount rate. d. sell govt securities,raise reserve requirements, and raise the discount rate.

sell govt securities,raise reserve requirements, and raise the discount rate.

If the current equilibrium output level is above the full-employment output level, the Fed could consider Select one: a. selling government securities, raising the discount rate, and raising the required reserve ratio. b. selling government securities, lowering the discount rate, and raising the required reserve ratio. c. buying government securities, lowering the discount rate, and raising the required reserve ratio. d. buying government securities, raising the discount rate, and raising the required reserve ratio. e. selling government securities, raising the discount rate, and lowering the required reserve ratio.

selling government securities, raising the discount rate, and raising the required reserve ratio.

During the course of a bad recession the Fed would probably be doing each of the following, except Select one: a. selling securities on the open market. b. lowering interest rates. c. lowering reserve requirements. d. lowering the discount rate.

selling securities on the open market.

A public good is Select one: a. a good deed done by someone who refuses payment. b. something produced as sold by the government, e.g., electricity provided by the Tennessee Valley Authority. c. something whose consumption by one person does not prevent its consumption by other people. d. something that is good for our country, but not necessarily for private individuals. e. like a restaurant such as Denny's that is open 24 hours and thus addresses a public need.

something whose consumption by one person does not prevent its consumption by other people.

The _____ demand for money is most sensitive to interest rate changes. Select one: a. transactions b. precautionary c. speculative

speculative

Which government reform or program did not occur in the 1930s? Select one: a. the creation of the Federal Deposit Insurance Corporation (FDIC) b. the GI bill of rights c. the creation of the Securities Exchange Commission d. the Social Security System

the GI bill of rights

If taxable income is rising and if the marginal tax rate is greater than the average tax rate, then Select one: a. the average tax rate must be rising. b. the average tax rate must be falling. c. the average tax rate may be either rising or falling. d. the tax is regressive.

the average tax rate must be rising.

If the marginal tax rate is more than the average tax rate, then Select one: a. the average tax rate must be rising. b. the average tax rate must be falling. c. the average tax rate may be either rising or falling. d. the tax structure is regressive.

the average tax rate must be rising.

In the "classical" region of the aggregate supply curve, (choose the best answer) Select one: a. because there are substantial amounts of unemployed resources, output can be increased without driving up prices. b. the economy is at the maximum output level, so only the composition of output can be changed, the quantity of output cannot be increased. c. the economy is on the production possibilities frontier. d. attempts to expand output will result in increases in both prices and output. e. the economy is at the maximum output level, so only the composition of output can be changed, the quantity of output cannot be increased AND the economy is on the production possibilities frontier.

the economy is at the maximum output level, so only the composition of output can be changed, the quantity of output cannot be increased AND the economy is on the production possibilities frontier.

A key issue in the present disagreement between Keynesian and monetarist economists is whether Select one: a. monetary policy can bring the economy to full employment. b. the economy is better off with policymakers adopting a strict rule or using their discretion to set policies. c. monetary policy can influence interest rates. d. fiscal policy involves the use of taxation. e. federal budgets must be financed.

the economy is better off with policymakers adopting a strict rule or using their discretion to set policies.

If depreciation exceeds gross investment, we can say that Select one: a. the economy's stock of capital is shrinking. b. the economy's stock of capital is growing. c. net investment is zero. d. net investment is positive.

the economy's stock of capital is shrinking.

Which of the following policy actions taken by richer countries would be most favored by poor countries? Select one: a. the elimination of agricultural subsidies b. the elimination of tariffs on industrial goods c. more vigorous enforcement of environmental laws d. government promotion of labor union membership

the elimination of agricultural subsidies

Keynesian economists (as opposed to monetarist economists) argue that Select one: a. the economy will quickly return to equilibrium via natural forces. b. the government should use macro policy to keep the economy from getting too far from full employment equilibrium. c. monetary policy should be used according to strict rules. d. Keynesian economists argue all of these statements.

the government should use macro policy to keep the economy from getting too far from full employment equilibrium.

The monetarists believe Select one: a. the Federal Reserve is very effective at fighting inflation. b. the key to stable economic growth is a constant rate of increase in the money supply. c. expansionary monetary policy will permanently reduce the interest rate. d. the money supply must increase at the same rate as the price level.

the key to stable economic growth is a constant rate of increase in the money supply.

The law of increasing costs is based on each of the following, except Select one: a. the law of scarcity. b. the law of diminishing marginal returns. c. diseconomies of scale. d. factor suitability.

the law of scarcity.

In a progressive tax structure, Select one: a. the marginal tax rate exceeds the average tax rate. b. vertical equity exists. c. the average tax rate rises as income falls. d. all the choices.

the marginal tax rate exceeds the average tax rate.

For Monetarists, the monetary rule states that: Select one: a. the federal budget must be balanced every year b. the money supply must increase at the same rate as the price level c. the money supply must remain a constant from year to year d. the money supply must be increased at a constant rate

the money supply must be increased at a constant rate

The multiplier effect occurs because Select one: a. when national income rises, the MPC increases, prompting further increases in income. b. the new income generated by an increase in aggregate demand will be spent, each time becoming new income again. c. the level of national income must be multiplied by the average propensity to consume to find total consumption spending. d. what business firms view as spending is viewed by households as income, so that new investment automatically becomes new income.

the new income generated by an increase in aggregate demand will be spent, each time becoming new income again.

f the production possibilities frontier were a straight line, Select one: a. the Law of Increasing Cost would still apply. b. the opportunity cost of producing one good would decrease as more of another good is produced. c. the opportunity cost of producing one good would increase as more of another good is produced. d. the opportunity cost of producing one good would remain the same as more of another good is produced.

the opportunity cost of producing one good would remain the same as more of another good is produced.

https://moodle-2013-2014.fullerton.edu/pluginfile.php/1522949/question/questiontext/733244/11/3305237/3-15-2013%203-14-31%20PM.jpg Refer to the graph above. If the government sets a price floor at $12 Select one: a. there would be a temporary surplus, then prices would fall to equilibrium. b. the price floor would not have any effect on this market. c. then quantity demanded would be less than quantity supplied. d. there would be a permanent surplus, at least until the price floor was lifted.

the price floor would not have any effect on this market.

The discount rate refers to Select one: a. the penalty paid by risky bank borrowers; that is, the amount of interest they pay in excess of the prime rate. b. the rate at which banks write off bad loans. c. the rate at which assets lose their real value as a result of inflation. d. the rate at which money loses its value as a result of inflation. e. the rate of interest that the Fed charges on loans to commercial banks and thrift institutions.

the rate of interest that the Fed charges on loans to commercial banks and thrift institutions.

When the receipts given by goldsmiths to depositors were used to make purchases, Select one: a. the gold standard was created. b. existing banking laws were violated. c. the receipts became in effect paper money. d. a fractional reserve banking system was created.

the receipts became in effect paper money.

The deposit expansion multiplier is Select one: a. the reserve ratio. b. the excess reserves. c. the reciprocal of the required reserve ratio. d. the reciprocal of the discount rate. e. equal to 1.

the reciprocal of the required reserve ratio.

Which of the following is NOT an example of a transfer payment? Select one: a. the salaries received by social workers employed by the federal government b. food stamps c. unemployment compensation d. social security payments

the salaries received by social workers employed by the federal government

In constructing the consumer price index for the current year, we use: Select one: a. the average price of a "bundle" of goods purchased in a base year is divided by the prices of the same bundle that existed during the current year. b. the average price of a "bundle" of goods purchased during a base year is divided into the price that existed in the current year. c. the total cost of a "bundle" of goods purchased in a base year is divided by the cost of the same bundle that existed during the current year. d. the total cost of a "bundle" of goods purchased in the current year is divided by the cost of the same bundle that existed during the base year.

the total cost of a "bundle" of goods purchased in the current year is divided by the cost of the same bundle that existed during the base year.

A liquidity trap is most likely will occur when Select one: a. there is a severe recession and interest rates are relatively high b. there is a severe recession and interest rates are relatively low c. there is great prosperity and interest rates are relatively high d. there is great prosperity and interest rates are relatively low

there is a severe recession and interest rates are relatively low

Checkable deposits are classified as money because Select one: a. they can be readily used in the making of purchases and payment of debts. b. banks hold currency equal to the value of their outstanding deposits. c. they are ultimately the obligations of the Treasury. d. they earn interest income for the depositor.

they can be readily used in the making of purchases and payment of debts.

The main criticism leveled at the rational expectations school of economic thought is that Select one: a. they assume too much influence due to monopoly power. b. they just go too far in ascribing rationality to the general population. c. the assumption that the velocity of circulation is predictable in the short run is not borne out by the facts. d. the assumption that labor union contracts create a rigid wage structure is unrealistic.

they just go too far in ascribing rationality to the general population.

Each of the following is an example of discretionary fiscal policy, except Select one: a. public works programs. b. changing tax rates. c. changes in the level of government spending. d. unemployment insurance benefits.

unemployment insurance benefits.

If aggregate production in the economy exceeds aggregate purchases Select one: a. unintended inventory investment is positive. b. inventories will be drawn down. c. there is upward pressure on real GDP. d. aggregate purchases will tend to increase until equilibrium is achieved. e. firms are selling more during the year than they are producing.

unintended inventory investment is positive.

The opportunity cost of holding money Select one: a. is zero because money is not an economic resource. b. varies inversely with the interest rate. c. varies directly with the interest rate. d. varies inversely with the level of national income.

varies directly with the interest rate.

Which of the following is a definition of velocity? Select one: a. velocity = value of transactions divided by Money Stock b. velocity = real GNP divided by money stock c. velocity = nominal GNP divided by real GNP d. velocity = money stock divided by real GNP

velocity = value of transactions divided by Money Stock

The relationship between bond prices and interest rates is Select one: a. when bond prices fall, interest rates rise. b. when bond prices rise, interest rates rise. c. when interest rates rise, bond prices rise. d. none of the above.

when bond prices fall, interest rates rise.

Algeria, trains = 10 Algeria, planes = 20 Zaire, trains = 20 Zaire, planes = 10 Assume that both Algeria and Zaire initially produce trains and planes in the quantities described above. In each country, 50% of all resources are devoted to each industry. Now suppose Algeria devotes all its resources to plane production and Zaire devotes all its resources to train production. Ignoring the effects on all other countries: Select one: a. World production of trains would rise. b. World production of planes would rise. c. world production of both traIns and planes would rise. d. world production of both trans and planes would fall.

world production of both traIns and planes would rise.

If you wrote a check for $37.55 to pay your phone bill and sent it to Verizon, Select one: a. your bank's deposits will go down by $37.55 and its reserves would go up by $37.55. b. your bank's deposits would go up by $37.55 and its reserves would go down by $37.55. c. your bank's deposits would go down by $37.55 and its reserves would go down by $37.55. d. your bank's deposits would go up by $37.55 and its reserves would go up by $37.55.

your bank's deposits would go down by $37.55 and its reserves would go down by $37.55.

At the point where C line crosses the 45-degree line, saving is Select one: a. positive. b. negative. c. zero. d. There is not enough information to know this.

zero.