Econ

The money supply will increase as a result of which of the following?

(A) A decrease in the required reserve ratio

Which of the following must exist to allow for mutual benefit from specialization and trade between two countries?

(A) Comparative advantage in the production of a good or service

Which of the following will cause the aggregate demand curve to shift to the left?

(A) Expectations of surpluses of goods in the future

The practice of buying at a low price and selling at a high price for a certain profit is called

(A) arbitrage

A decrease in real investment stemming from higher interest rates due to government purchases is most commonly called

(A) crowding out

In the aggregate expenditure / Keynesian Cross model, saying that some components are autonomous means that they

(A) do not depend on income

Expansionary fiscal policy would best be prescribed to

(A) eliminate a recessionary gap

The Keynesian AS curve is

(A) horizontal at low levels of output

Classical economists believe

(A) in the quantity theory of money- that both the velocity and the quantity of goods and services sold per period are fairly stable

In a given period, the average price level in the country of Sherwood tripled, and Robin's income increased from $30,000 to $60,000. What happened to Robin's nominal and real income?

(A) increased decreased

The primary functions of an economic system are to answer to questions

(A) what, how, and for whom to produce

In the figure above, when real GDP is $4 trillion, unplanned investment is

(B) $1 trillion

Which of the following would be an example of fiat money?

(B) Dollar bills

Classical economists generally believe that I. wages fluctuate quickly II. Say's Law does not hold III. input and output prices will stay in line with each other IV. the government should not worry about maintaining aggregate demand at an adequate level

(B) I, III, and IV only

The figure above illustrates a

(B) Phillips curve

A professional singer who loses his voice may have a hard time finding employment because he or she has no marketable skills. This is an example of which of the following?

(B) Structural unemployment

When full-employment output

(B) a recessionary gap exists

The aggregate supply curve will shift to the right in response to

(B) an increase in investment in capital

According to Keynesian economists,

(B) fiscal policy is more effective than monetary policy

A budget deficit exists when

(B) government spending exceeds tax collections for a given period

Economics is most accurately described as the study of

(B) how to make choices given limited resources with unlimited desires

Inflation in excess of 50 percent per year is called

(B) hyperinflation

Droughts, technical glitches, and restrictions on the use of resources can all result in

(B) supply shocks

The long-run classical aggregate supply curve is

(B) vertical at full-employment output

The balanced budget multiplier is

(C) 1

Which of the following is a direct, accurate link within the circular flow?

(C) Households expenditures result in revenues for firms via the product markets.

Which of the following is the most likely to be a deterrent to growth in the economy?

(C) Increases in the interest rate

A difference between M1 and M2 is that

(C) M2 includes savings deposits

Kevin wants shoes and grows turnips. Lisa wants turnips and makes sheet metal. Bob wants sheet metal and makes shoes. Which function of money will cater most directly to the situation at hand?

(C) Medium of exchange

Marginal propensity to consume is

(C) The selling of bonds by the Federal Reserve

When the value of the U.S. dollar appreciates relative to other currencies, which of the Following is the most likely to occur?

(C) U.S. residents will take more vacations in foreign countries.

In order to reduce or eliminate crowding out, expansionary fiscal policy can be accompanies by

(C) expansionary monetary policy

According to Thomas Malthus and his followers

(C) population will grow geometrically and food production will grow more slowly

It is a monetarist point of view that

(C) the money supply should be increased steadily

Suppose that Tiger Woods buys a golf ball in England for $1 and the marginal propensity to consume in England is 0.75. What is the total increase in England's real GDP resulting from Mr. Wood's purchase?

(D) $4

The formula for the money multiplier is

(D) 1 / Required reserve ratio

According to the theory of rational expectations, an increase in government spending to increase AD as illustrated in the figure above will be met with which of the following

(D) A decrease in AS

On a bank's balance sheet, which of the following is considered a liability?

(D) Deposits

Which of the following is illustrated in the figure above? I. Stagflation II. Cost-push inflation III. Supply-side inflation IV. Demand-pull inflation

(D) IV only

Which of the following results from stagflation?

(D) The Phillips curve shifts to the right

If technology makes production less expensive and at the same time exports decrease, which of the following will result with certainty?

(D) The price level will decrease

A fixed output level in the long run at full-employment output corresponds with which of the following shapes of the long-run Phillips curve?

(D) Vertical

The upward sloping section of the aggregate supply curve can be explained by

(D) accurate information within firms about how their prices compare to the overall price level

Assuming there is no statistical discrepancy, a trade surplus must be offset elsewhere in the

(D) current-account or capital account only

The GDP Deflator differs from the CPI in that the GDP Deflator

(D) incorporates current year quantities in its calculations

One of the primary issues covered within Macroeconomics is

(D) inflation

According to Say's Law,

(D) supply creates its own demand

The aggregate demand curve has a negative slope in part because when the price level increases

(D) the interest rate increases

Julia would spend $30 per week even if she made no income. Her weekly income is $1,000 and her marginal propensity to consume is 0.5. How much does Julia save per week?

(E) $470

Which of the following will shift the demand curve for the Mexican peso to the left?

(E) A decrease in the international demand for Mexican-made textiles

Which of the following creates the tradeoff depicted by the Phillips curve?

(E) A rightward shift in the aggregate demand curve

Among those hurt by inflation are I. borrows at fixed interest rates II. individuals on fixed incomes III. those with savings earning fixed interest rates IV. restaurant owners

(E) II, III, and IV only

Which of the following is included in U.S. GDP? I. The value of movies made in Africa by U.S. citizens. II. The value of olive oil made in Italy and sold in the U.S. III. The value of blue jeans made in the U.S. and sold in Japan. IV. The value of wine made in the U.S. by Canadian citizens.

(E) III and IV only

Having a fractional reserve banking system means that

(E) a bank cannot lend out all of its deposits

In order to go from national income to GDP, one must

(E) all of the above

The aggregate demand curve is

(E) not found by adding product demand curves horizontally or vertically

Every choice results in a foregone best alternative, which economist call the

(E) opportunity cost

The real interest rate is

(E) the nominal interest rate minus anticipated inflation

If prices are expected to rise more slowly in the future,

(E) these expectations will become reality

If oil supplies are fixed, which of the following is the least likely to happen?

We will use up all of the oil