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Which of the following will not result in a leftward shift of the market demand curve for labor? a decrease in labor productivity a decrease in demand for the firm's product an increase in the wage rate a decrease in the firm's product price
an increase in the wage rate
Match the terms with the actions ___The demand curve shifts to the right ___The demand curve shifts to the left ___There is a movement down the demand curve ___There is a movement up the demand curve 1.Demand goes down2.Demand goes up3.Quantity demanded goes down4.Quantity demanded goes up
2,1,4,3
If the price index moves from 107 to 110, the rate of inflation is: 3% 30% 28% 2.80%
2.80%
In 2009, 1 U.S. dollar purchased 1400 Korean won and in 2013 it purchased 900 Korean won. How much did 1000 Korean won cost in U.S. dollars in 2009 and 2013? 2009: .84 dollars, 2013: 1.09 dollars 2009: .72 dollars, 2013: 1 dollar 2009: .83 dollars, 2013: 1.12 dollars 2009: .71 dollars, 2013: 1.11 dollars
2009: .71 dollars, 2013: 1.11 dollars
In 2010, 1 Canadian dollar cost .56 British pounds and in 2012 it cost .63 British pounds. How much would 1 British pound purchase in Canadian dollars in 2010 and 2012? 2010: 1.78 dollars, 2012: 1.57 dollars 2010: 1.79 dollars, 2012: 1.59 dollars 2010: 1.87 dollars, 2012: 1.65 dollars 2010: 1.97 dollars, 2012: 1.75 dollars
2010: 1.79 dollars, 2012: 1.59 dollars
In 2010, 100 Japanese yen purchased 0.88 U.S. dollars and in 2013, it purchased 0.93 U.S. dollars. How much was 1 U.S. dollar worth in Japanese yen, in 2010 and 2013? 2010: 88 yen, 2013: 93 yen 2010: 100 yen, 2013: 114 yen 2010: 113.6 yen, 2013: 107.5 yen 2010: 112.4 yen, 2013: 105.3 yen
2010: 113.6 yen, 2013: 107.5 yen
Craigburg has a working age population of 20 million. Of those, 11 million are employed and 1 million are unemployed. The unemployment rate is ________ and the participation rate is __________. 5%; 55%. 8.3%; 60%. 8.3%; 55%. 5%; 60%.
8.3%; 60%.
When we want to measure wage inflation in the labor market, we use the: Consumer Price Index Product Price Index Employment Cost Index Employment Price Index
Employment Cost Index
A surplus happens when: Market price is above market equilibrium Market price is below market equilibrium Quantity demanded is greater than quantity supplied When supply is greater than demand Equilibrium price is above market price
Market price is above market equilibrium
________________________ equalizes the prices of internationally traded goods across countries. The foreign exchange rate A floating exchange rate Purchasing power parity An international parity rate
Purchasing power parity
Which of the following scenarios would cause an increase in the quantity of real GDP supplied? The aggregate price level has decreased and if the wages are sticky, businesses have hired more employees as labor has become cheaper. The aggregate price level has increased and if the wages are sticky, businesses have fired some employees as labor has become relatively more expensive. The aggregate price level has increased and if the wages are sticky, businesses have hired more employees as labor has become relatively cheaper.
The aggregate price level has increased and if the wages are sticky, businesses have hired more employees as labor has become relatively cheaper.
If government policy allows a country's currency to be determined in the exchange rate market, then that currency will be subject to: a hard peg policy. purchasing power parity. depreciation. a floating exchange rate.
a floating exchange rate.
Which of the following events would cause interest rates to increase? lower tax rates a higher discount rate lower reserve requirements an open market operation to buy bonds
a higher discount rate
If an economy experiences a decrease in aggregate demand due to a decline in consumer confidence and output falls below potential GDP, which of the following is likely to occur? more consumption and less saving adjustment back to potential GDP increase in price inflation a rise in unemployment
a rise in unemployment
After widespread press reports about the dangers of contracting "mad cow disease" by consuming beef from Canada, the likely economic effect on the U.S. demand curve for beef from Canada is: no change; only the supply curve for beef is likely to be affected. a shift of the demand curve for beef to the left. a movement down along the demand curve for beef to the right. a shift of the demand curve for beef to the right.
a shift of the demand curve for beef to the left.
Movements in exchange rates can have a powerful effect on incentives to export and import, and thus on ________________ in the economy as a whole. aggregate supply aggregate demand direct investments portfolio investments
aggregate demand
In macroeconomics, _____________________ denotes the relationship between the total quantity of goods and services and the price level for output. macroeconomic equilibrium aggregate supply (AS) aggregate demand (AD) potential GDP
aggregate demand (AD)
During a recession, if a government uses an expansionary fiscal policy to increase GDP, the: aggregate supply curve will shift to the right. aggregate supply curve will shift to the left. aggregate demand curve will shift to the left. aggregate demand curve will shift to the right.
aggregate demand curve will shift to the right.
In macroeconomics, the connection from inputs to outputs for the entire economy is called _______________. a production function an aggregate production function human capital physical capital
an aggregate production function
If the economy is in a recessionary period, appropriate policies to pursue may include: a reduction in government spending that shifts the AD curve to the left. new business investment taxes that shift the AD curve to the left. an income tax cut that shifts the AD curve to the right.
an income tax cut that shifts the AD curve to the right.
Which of the following results in a rightward shift of the market demand curve for labor? a decrease in labor productivity a decrease in the firm's product price an increase in the wage rate an increase in demand for the firm's product
an increase in demand for the firm's product
Which of the following will not result in a rightward shift of the market supply curve for labor? a decrease in non-wage income an increase in the working-age population an increase in labor productivity an increase in immigration
an increase in labor productivity
The demand measure of GDP accounting adds together: wages and salaries, rent, interest, and profit. consumption, investment, government purchases, and trade balance. consumption, government purchases, wages and salaries, and trade balance. consumption, interest, government purchases, and trade balance.
consumption, investment, government purchases, and trade balance
A typical ____________________________ fiscal policy allows government to decrease the level of aggregate demand, through increases in taxes. expansionary contractionary discretionary standardized
contractionary
Which of the following represents a Keynesian point of view of macroeconomics? focus on long-term growth in the economy aggregate supply is the primary determinate of economic output creating increases in aggregate demand to reduce unemployment vertical aggregate supply
creating increases in aggregate demand to reduce unemployment
When the government passes a new law that explicitly changes overall tax or spending levels, it is enacting: discretionary fiscal policy. progressive fiscal policy. regressive fiscal policy. fiscal policy.
discretionary fiscal policy.
The neoclassical view holds that long-term expansion of potential GDP due to _______________________ will determine ____________________. economic growth; the size of the economy government spending; aggregate demand government spending; aggregate supply economic adjustments; cyclical unemployment
economic growth; the size of the economy
If a government reduces taxes in order to increase the level of aggregate demand, what type of fiscal policy is being used? discretionary contractionary standardized expansionary
expansionary
If you were to survey central bankers from around the world and ask them what they believe the primary task of monetary policy should be, what would the most popular answer likely be? leverage cycle bank runs fighting inflation bank supervision
fighting inflation
Which of the following terms is used to describe the set of policies that relate to government spending, taxation, and borrowing? financial policies monetary policies fiscal policies economic policies
fiscal policies
Final goods or services used to compute GDP refer to: the sum of all wages paid to laborers. the factors of production used to produce output. goods and services purchased by the ultimate users. the value of outstanding shares of stock of manufacturing firms.
goods and services purchased by the ultimate users
Which of the following best describes a fiscal policy tool? government spending bank lending financial capital markets household spending
government spending
If a country�s GDP increases, but its debt also increases during that year, then the country�s debt to GDP ratio for the year will _______________ in proportion to the magnitude of the changes. decrease because GDP increased increase because its debt increased increase increase or decrease
increase or decrease
__________ implies that pressure for price increases reaches across _______________markets, not just one. inflation; all deflation; most inflation; most deflation; all
inflation; most
The ____________ describes a situation where sufficient credit is available, but the economy experiences a reduction in consumption and investment. inflation rate effect interest rate effect wealth effect price effect
interest rate effect
Why is productivity growth considered to be the most important factor in the AD/ASAD/AS model? it shifts the AD curve in the long-term it shifts the AD curve in the short-term it shifts the AS curve in the short-term it shifts the AS curve in the long-term
it shifts the AS curve in the long-term
Suppose that a rise in business confidence has led to more investment in the economy and higher levels of output. In the short-run Keynesian analysis, the rise in aggregate demand will: lower unemployment. cause government to lower taxes. cause government to increase spending. exports will drop.
lower unemployment.
The unemployment rate may underestimate the true extent of unemployment if: many people have a part time as well as a full time job. there are a large number of people working in the underground economy. many people become discouraged and cease looking for work. employees increase the number of hours they work overtime.
many people become discouraged and cease looking for work.
The effect of substitution bias is that the rise in the price of a fixed basket of goods over time tends to ___________________ the rise in a consumer�s true cost of living, because it doesn�t take into account that the person can substitute between goods according to changes in their relative prices. stabilize understate overstate reduce
overstate
The neoclassical perspective on macroeconomics emphasizes that in the long run, the economy seems to rebound back to its _____________ and its ____________________. long term growth; cyclical unemployment potential GDP; natural rate of unemployment natural level of output; cyclical unemployment rate real GDP; natural rate of unemployment
potential GDP; natural rate of unemployment
A __________________________ policy will cause a greater share of income to be collected from those with high incomes than from those with lower incomes. proportional tax regressive tax progressive tax excise tax
progressive tax
Low-wage U.S. workers suffer from protectionism in all the industries that they don�t work in, because: protectionism provides a barrier to entry to the job markets that the low-wage earners want entry to. protectionism forces them to pay higher prices for basic necessities like clothing and food. protectionism will encourage foreign workers to apply for American jobs. protectionism will prevent them from applying for those jobs in other industries.
protectionism forces them to pay higher prices for basic necessities like clothing and food.
One factors that complicate the calculation of the inflation rate is: quality bias sometimes called new product bias preferential bias complimentary product bias consumer behavior bias
quality bias sometimes called new product bias
A supply curve is a graphical illustration of the relationship between price, shown on the vertical axis, and ____________, shown on the horizontal axis. demand price quantity supplied supply
quantity supplied
When the share of individual income tax collected by the government from people with higher incomes is smaller than the share of tax collected from people with lower incomes, then the tax is ____________________. optional proportional progressive regressive
regressive
If government tax policy requires Peter to pay $15,000 in tax on annual income of $200,000 and Paul to pay $10,000 in tax on annual income of $100,000, then the tax policy is: optional. progressive. proportional. regressive.
regressive.
Which of the following will have the greatest influence on the slope of the demand curve in a single market model? wealth effects substitute goods full employment higher wages
substitute goods
One of the reasons that a rise in the price of a fixed basket of goods over time tends to overstate the rise in a consumer�s true cost of living, is: substitution bias attribution bias complimentary bias preference bias
substitution bias
Foreign direct investment is the term used to describe purchases of firms in another country that involve ______________________. internationally traded goods across countries using another currency taking a management responsibility the exchange rate market
taking a management responsibility
When the central bank decides it will sell bonds using open market operations: interest rates decrease. the money supply increases. the money supply decreases. the money supply is unaffected.
the money supply decreases.
When consumers and businesses have greater confidence that they will be able to repay in the future, _______________________. the quantity demanded of financial capital at any given interest rate will remain unchanged. the quantity demanded of financial capital at any given interest rate will shift to the left. the quantity demanded of financial capital at any given interest rate will shift to the right. the quantity demanded of financial capital at any given interest rate will achieve equilibrium.
the quantity demanded of financial capital at any given interest rate will shift to the right.
Exchange rates are an effective way to analyze the price of one currency in terms of another currency with _________________________. distinctive trade-offs and risks exchange rate policy monetary policy the tools of demand and supply
the tools of demand and supply
In the AS-AD model depicting economic growth, the vertical line that represents potential GDP will gradually shift to the left in the long run. the upward sloping line that represents potential GDP will shift to the right in the long run. the vertical line that represents potential GDP will gradually shift to the right in the long run.
the vertical line that represents potential GDP will gradually shift to the right in the long run.
In the neoclassic model, economic growth over time shifts potential GDP and the ______________ gradually to the right. vertical AS curve vertical AD curve vertical Phillips curve 45 degree AD curve
vertical AS curve
Economists typically measure economic growth by tracking: the employment rate. the unemployment rate. averaged GDP growth real GDP per capita.
real GDP per capita.
