REVIEW 2

a

QN=158 (17883) Unemployment that exists because it takes time for workers to search for the jobs that suit them best is a. frictional unemployment, which contributes to the natural rate of unemployment. b. frictional unemployment, which does not contribute to the natural rate of unemployment. c. structural unemployment, which contributes to the natural rate of unemployment. d. structural unemployment, which does not contribute to the natural rate of unemployment.

b

QN=164 (17878) Which of the following is not an explanation for the existence of structural unemployment? a. efficiency wages b. job search c. minimum-wage laws d. unions

c

QN=167 (17894) Unions contribute to a. structural unemployment but not the natural rate of unemployment. b. the natural rate of unemployment but not structural unemployment. c. both structural unemployment and the natural rate of unemployment. d. neither structural unemployment nor the natural rate of unemployment.

a

QN=192 (17927) If the public decides to hold more currency and fewer deposits in banks, bank reserves a. decrease and the money supply eventually decreases. b. decrease but the money supply does not change. c. increase and the money supply eventually increases. d. increase but the money supply does not change.

b

QN=195 (17925) If the reserve ratio for all banks is 5 percent, then $2,500 of additional reserves can create up to a. $62,500 of new money. b. $50,000 of new money. c. $45,600 of new money. d. $37,500 of new money.

c

QN=196 (17902) Which of the following is not included in M1? a. (i) a $5 bill in your wallet b. (ii) $100 in your checking account c. (iii) $500 in your savings account d. All of (i), (ii), and (iii) are included in M1.

a

QN=202 (17912) If you deposit $100 of currency into a demand deposit at a bank, this action by itself a. does not change the money supply. b. increases the money supply. c. decreases the money supply. d. has an indeterminate effect on the money supply.

b

QN=214 (17930) When the money market is drawn with the value of money on the vertical axis, a decrease in the price level causes a a. movement to the right along the money demand curve. b. movement to the left along the money demand curve. c. shift to the right of the money supply curve. d. shift to the left of the money supply curve.

b

QN=235 (17941) According to monetary neutrality and the Fisher effect, an increase in the money supply growth rate eventually increases a. inflation, nominal interest rates, and real interest rates. b. inflation and nominal interest rates, but does not change real interest rates. c. inflation and real interest rates, but does not change nominal interest rates. d. neither inflation, nominal interest rates, nor real interest rates.

d

QN=238 (17940) According to the classical dichotomy, which of the following is affected by monetary factors? a. (i) nominal wages b. (ii) the price level c. (iii) nominal GDP d. All of (i), (ii), and (iii) are correct.

b

QN=240 (17944) When deciding how much to save, people care most about a. after-tax nominal interest rates. b. after-tax real interest rates. c. before-tax real interest rates. d. before-tax nominal interest rates.

c

QN=259 (17985) Clear Brook Farms, a U.S. manufacturer of frozen vegetarian entrees, sells cases of its product to stores overseas. Its sales a. decrease U.S. exports but increase U.S. net exports. b. decrease both U.S. exports and U.S. net exports. c. increase both U.S. exports and U.S. net exports. d. increase U.S. exports but decrease U.S. net exports.

d

QN=260 (17959) One year a country has negative net exports. The next year it still has negative net exports and imports have risen more than exports. a. its trade surplus fell. b. its trade surplus rose. c. its trade deficit fell. d. its trade deficit rose

d

QN=261 (17979) The increase in international trade in the United States is partly due to a. (i) improvements in transportation. b. (ii) advances in telecommunications. c. (iii) increased trade of goods with a high value per pound. d. All of (i), (ii), and (iii) are correct.

b

QN=268 (17973) A Swiss company sells chocolates to a retailer in the United States. These sales by themselves a. decrease U.S. net export and Swiss net exports. b. decrease U.S. net exports and increase Swiss net exports. c. increase U.S. and Swiss net exports. d. increase U.S. net exports and decrease Swiss net exports.

c

QN=272 (17999) Suppose that Egypt has a government budget surplus, and then goes into deficit. This change would a. increase national saving and shift Egypt's supply of loanable funds left. b. increase national saving and shift Egypt's demand for loanable funds right. c. decrease national saving and shift Egypt's supply of loanable funds left. d. decrease national saving and shift Egypt's demand for loanable funds right.

b

QN=279 (17996) Which of the following will decrease U.S. net capital outflow? a. (i) capital flight from the United States b. (ii) the government budget deficit increases c. (iii) the U.S. imposes import quotas d. None of (i), (ii), and (iii) is correct.

b

QN=280 (17990) A rise in the budget deficit a. shifts both the supply of loanable funds in the market for loanable funds and the supply of dollars in the market for foreign-currency exchange right. b. shifts both the supply of loanable funds in the market for loanable fund and the supply of dollars in the market for foreign-currency exchange left. c. shifts both the demand for loanable funds in the market for loanable funds and the demand for dollars in the market for foreign-currency exchange right. d. shifts both the demand for loanable funds in the market for loanable funds and the demand for dollars in the market for foreign-currency exchange left.

c

QN=285 (18013) Refer to Figure 32-6. Which of the following shifts show the effects of an import quota? a. (i) shifting the middle supply curve in panel c to the one to its left. b. (ii) shifting the demand curve from the right to the left in panel c. c. (iii) shifting the demand curve from the left to the right in panel c. d. None of (i), (ii), and (iii) is correct.

a

QN=317 (18042) The sticky-wage theory of the short-run aggregate supply curve says that the quantity of output firms supply will increase if a. the price level is higher than expected making production more profitable. b. the price level is higher than expected making production less profitable. c. the price level is lower than expected making production more profitable. d. the price level is lower than expected making production less profitable.