Economics For Today 6th Edition Irvin B. Tucker - Solutions

Unlock the full potential of "Economics For Today 6th Edition" by Irvin B. Tucker with our comprehensive online resources. Access the answers key and solutions manual for a deeper understanding of each concept. Our solutions PDF offers solved problems and detailed questions and answers for every chapter. Enhance your learning with the test bank and chapter solutions, all crafted to provide step-by-step answers for every query. Whether you're looking for an instructor manual or a textbook guide, our free download ensures you have all the tools you need for success in economics.

10. To grow and prosper, less-developed countries must nota. invest in human capital.b. build a strong infrastructure.c. shift resources out of the production of consumer goods and into the production of capital goods.d. shift resources out of the production of capital goods and into the production
9. Which of the following can be a barrier to an LDC’s economic growth and development?a. Low population growth.b. A low level of human capital.c. Faster capital accumulation.d. More infrastructure.
8. Which of the following is correct?a. Economic development is more quantitative than economic growth.b. A country cannot achieve economic growth with a limited base of natural resources.c. Infrastructure is capital provided by the private sector.d. All of the above are true.e. All of the above
7. An outward shift of an economy’s production possibilities curve is caused by ana. increase in capital.b. increase in labor.c. advance in technology.d. all of the above are true.
6. Which of the following statements best describes the role played by prices in a command economy such as the former Soviet Union?a. Prices were used to allocate resources.b. Prices played the same role as in a market economy.c. Prices were used to ration final goods and services but not to
5. Which of the following statements is true about a command economy?a. Shortages occur because of complexities in the planning process.b. Planners determine what, how many, and for whom goods and services are to be produced.c. Planners often allocate goods and services through a rationing
4. If the Japanese price level falls relative to the price level in the United States, thena. Japanese buy less U.S. exports.b. the demand for dollars decreases.c. the supply of dollars increases.d. the value of the dollar falls.e. all of the above are true.
3. An increase in inflation in the United States relative to the rate in France would makea. U.S. goods relatively less expensive in the United States and in France.b. French goods relatively less expensive in the United States and U.S. goods relatively more expensive in France.c. French goods
2. Which of the following would cause the supply of dollars curve in the United States to shift to the right?a. Japanese imports become less popular.b. The value of the dollar falls.c. The supply of dollars decreases.d. Japanese imports became more popular.
1. Which of the following would cause the U.S. demand curve for Japanese yen to shift to the right?a. An increase in the U.S. inflation rate compared to the rate in Japan.b. A higher real rate of interest on investments in Japan than on investments in the United States.c. The popularity of Japanese
14. Which of the following groups makes long-term low-interest loans to less-developed countries(LDCs)?a. Agency for International Development (AID)b. New International Economic Order (NIEO)c. International Monetary Fund (IMF)d. World Bank
11. Which of the following is infrastructure?a. International Harvester tractor plantb. Waste and water system provided by governmentc. US Airways airplaned. Service of postal workers
2. According to the definition given in the text, which of the following is not an LDC?a. Indiab. Egyptc. Chinad. Ireland
3. Assume you are given the following data for country Alpha and country Beta: Country GDP Per Capita Alpha Beta $25,000 15,000 a. Based on the GDP per capita data given above, in which country would you prefer to live? b. Now assume you are given the following additional quality-of-life data. In
15. Karl Marx was a (an)a. nineteenth-century German philosopher.b. eighteenth-century Russian economist.c. fourteenth-century Polish banker.d. nineteenth-century Russian journalist.
14. In Marx’s ideal communist society, the statea. actively promotes income equality.b. follows the doctrine of laissez faire.c. owns resources and conducts planning.d. does not exist.
13. How many nations in the world today operate totally according to Karl Marx’s theory of communism?a. Noneb. Severalc. Only the United Statesd. Many
12. Karl Marx predicted which of the following?a. The market system would self-destruct.b. The “haves” would revolt against the“have-nots.”c. The wealthy were entitled to profits as their reward for risk taking.d. None of the above.
11. According to Karl Marx, under capitalism,a. profits would be shared fairly.b. incomes would be distributed equally.c. workers would be exploited and revolt against owners of capital.d. workers would actually own the factors of production.
10. Which of the following is not a basic characteristic of capitalism?a. Economic decisions occur in markets.b. Factors of production are privately owned.c. Income is distributed on the basis of need.d. Businesses make their own product and price decisions.
9. The economic system in which private individuals own the factors of production isa. a planned economy.b. capitalism.c. collectivism.d. socialism.
8. Adam Smith, in his book The Wealth of Nations, advocateda. socialism.b. an economy guided by an “invisible hand.”c. government control of the “invisible hand.”d. the adoption of mercantilism.
7. Adam Smith wrote that thea. economic problems of eighteenth-century England were caused by free markets.b. government should control the economy with an “invisible hand.”c. pursuit of private self interest promotes the public interest in a market economy.d. public or collective interest is
6. In Adam Smith’s competitive market economy, the question of what goods to produce is determined by thea. “invisible hand” of the price system.b. “invisible hand” of government.c. “visible hand” of public interest.d. “visible hand” of laws and regulations.
5. The doctrine of laissez fairea. advocates an economic system with extensive government intervention and little individual decision making.b. was advocated by Adam Smith in his book The Wealth of Nations.c. was advocated by Karl Marx in his book Das Kapital.d. is described by none of the above.
4. When making economic decisions, Adam Smith urged society toa. follow the principle of self interest.b. follow the principle of public interest.c. transfer wealth according to need.d. provide equal income for all citizens.
3. Adam Smith stated that the role of government in society should be toa. provide defense.b. enforce contracts.c. do absolutely nothing.d. do both (a) and (b).
2. Command economies typically suffer froma. unemployment, but not underemployment.b. neither unemployment nor underemployment.c. both unemployment and underemployment.d. underemployment, but not unemployment.
1. The economic system in which all of the basic decisions are made through a centralized authority, such as a government agency, is termed aa. market economy.b. capitalistic economy.c. command economy.d. traditional economy.
18. An increase in the equilibrium price of a nation’s money could be caused by a (an)a. decrease in the supply of the money.b. decrease in the demand for the money.c. increase in the supply of the money.d. increase in the quantity of money demanded.
14. The belief that the government can do absolutely nothing in either the short run or the long run to reduce the unemployment rate, because people will anticipate the government’s actions, is held by thea. rational expectations school.b. neo-Keynesian school.c. classical school.d. supply-side
13. According to adaptive expectations theory, expansionary monetary and fiscal policies to reduce the unemployment rate area. useless in the long run.b. useless in the short run.c. ineffective on the price level.d. None of the above.
12. Most monetarists favora. frequent changes in the growth rate of the money supply to avoid inflation.b. placing the Federal Reserve under the Treasury.c. a steady, gradual shrinkage of the money supply.d. a constant increase in the money supply year after year equal to the potential annual
11.The Keynesian cause-and-effect sequence predicts that a decrease in the money supply will cause interest rates toa. fall, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.b. fall, boosting investment and shifting the AD curve rightward, leading to a
10. Assume a fixed demand for money curve, and the Fed decreases the money supply.In response, people willa. sell bonds, thus driving up the interest rate.b. sell bonds, thus driving down the interest rate.c. buy bonds, thus driving up the interest rate.d. buy bonds, thus driving down the interest
9. Assume the demand for money curve is stationary, and the Fed increases the money supply. The result is that peoplea. increase the supply of bonds, thus driving up the interest rate.b. increase the supply of bonds, thus driving down the interest rate.c. increase the demand for bonds, thus driving
8. Assume a fixed demand for money curve, and the Fed increases the money supply.In response, people willa. sell bonds, thus driving up the interest rate.b. sell bonds, thus driving down the interest rate.c. buy bonds, thus driving up the interest rate.d. buy bonds, thus driving down the interest
7. Assume the Fed decreases the money supply, and the demand for money curve is fixed. In response, people willa. sell bonds, thus driving up the interest rate.b. buy bonds, thus driving down the interest rate.c. buy bonds, thus driving up the interest rate.d. sell bonds, thus driving down the
6. In a two-asset economy with money and T-bills, the quantity of money that people will want to hold, other things being equal, can be expected toa. decrease as real GDP increases.b. increase as the interest rate decreases.c. increase as the interest rate increases.d. all of the above.
5. When the Fed buys government securities, ita. lowers the cost of borrowing from the Fed, encouraging banks to make loans to the general public.b. raises the cost of borrowing from the Fed, discouraging banks from making loans to the general public.c. increases the amount of excess reserves that
4. When the Fed sells government securities, ita. lowers the cost of borrowing from the Fed, encouraging banks to make loans to the general public.b. raises the cost of borrowing from the Fed, discouraging banks from making loans to the general public.c. increases the amount of excess reserves that
3. The Monetary Control Act of 1980a. allowed savings and loan associations to offer checking accounts.b. allowed more institutions to offer checking account services.c. created greater competition among various financial institutions.d. all of the above.e. none of the above.
2. Which of the following groups oversees and administers the Federal Reserve System?a. The House of Representatives.b. The President’s Council of Economic Advisors.c. The U.S. Treasury Department.d. None of the above; the Fed is an independent agency.
1. Key Concept: Money Supply Definitions Suppose you transfer $1,000 from your checking account to your savings account. How does this action affect the M1 and M2 money supplies?a. M1 and M2 are both unchanged.b. M1 falls by $1,000, and M2 rises by $1,000.c. M1 is unchanged, and M2 rises by
11. Voluntary wage-price restraints are known asa. wage-price controls.b. price rollbacks.c. wage-price guidelines.d. anti-inflation commitments.
9. Based on rational expectations theory, what happens to the inflation rate and the unemployment rate in the following situations?a. Initially, the economy is operating at the natural unemployment rate of 4 percent, and the inflation rate is also 4 percent. People correctly anticipate that an
8. Use Exhibit 8 to answer the questions below.a. Which points represent the natural unemployment rate?b. Which points represent an unemployment rate below the natural unemployment rate?c. Which points represent an unemployment rate above the natural unemployment rate?d. Explain points A and D on
7. Keynesians believe monetary and fiscal policymakers should stabilize the business cycle.Compare the political business cycle to Keynesian policy objectives.
4. Suppose you flipped an honest coin 10 times and heads came up 8 times. You are about to toss the coin another 10 times. Using adaptive expectations, how many heads do you expect? Based on rational expectations, how many heads do you expect?
13. In Exhibit 13, a move from M1 to M2a. increases the money supply, causing the interest rate to rise from i2 to i1.b. increases the money supply, causing the interest rate to fall from i1 to i2.c. decreases the money supply, causing the interest rate to rise from i2 to i1.d. decreases the money
7. Based on the equation of exchange, the money supply in the economy is calculated asa. M ¼ V/PQ.b. M ¼ V(PQ).c. MV ¼ PQ.d. M ¼ PQ V.
5. Assume the demand for money curve is fixed and the Fed increases the money supply. The result is that the price of bondsa. rises.b. remains unchanged.c. falls.d. None of the above occurs.
12. Why is the shape of the aggregate supply curve important to the Keynesian-monetarist controversy?
6. “A monetarist investigator might say that the sewer flow of 6,000 gallons an hour consisted of an average of 200 gallons in the sewer at any one time with a complete turnover of the water 30 times every hour.”1 Interpret this statement using the equation of exchange.
7. The cost to a member bank of borrowing from the Federal Reserve is measured by thea. reserve requirement.b. price of securities in the open market.c. discount rate.d. yield on government bonds.
15. Which of the following is not part of the Federal Reserve System?a. Council of Economic Advisorsb. Board of Governorsc. Federal Open Market Committeed. 12 Federal Reserve District Bankse. Federal Advisory Council
10. Which definition of the money supply includes credit cards, or “plastic money”?a. M1b. M2c. All of the aboved. None of the above
6. The M1 definition of the money supply consists ofa. coins and currency in circulation.b. coins and currency in circulation, checkable deposits, and traveler’s checks.c. Federal Reserve notes, gold certificates, and checkable deposits.d. Federal Reserve notes and bank loans.
5. M1 refers toa. the most narrowly defined money supply.b. currency held by the public plus checking account balances and traveler’s checks.c. the smallest dollar amount of the money supply definitions.d. all of the above.
2. Which of the following is not a characteristic of money?a. It provides a way to measure the relative value of goods and services.b. It is always backed by something of high intrinsic value, such as gold or silver.c. It is generally acceptable as a medium of exchange.d. It allows for saving and
4. What backs the U.S. dollar? Include the distinction between commodity money and fiat money in your answer.
15. If Congress fails to pass a budget before the fiscal year starts, then federal agencies may continue to operate only if Congress has passed aa. balanced budget amendment.b. deficit reduction plan.c. conference resolution.d. continuing resolution.
14. An advocate of supply-side fiscal policy would advocate which of the following?a. Subsidies to produce technological advances.b. Reduction in regulation.c. Reduction in resource prices.d. Reduction in taxes.e. All of the above.Causation Chain Game
13. Automatic stabilizers “lean against the prevailing wind” of the business cycle becausea. wages are controlled by the minimum-wage law.b. federal expenditures and tax revenues change as the level of real GDP changes.c. the spending and tax multipliers are constant.d. they include the power
12. If no fiscal policy changes are implemented to fight inflation, suppose the aggregate demand curve will exceed the current aggregate demand curve by$900 billion at any level of prices. Assuming the marginal propensity to consume is 0.90, this increase in aggregate demand could be prevented bya.
11. Which of the following would be an appropriate discretionary fiscal policy to use when the economy is in a recession?a. Increased government spending.b. Higher taxes.c. A balanced-budget reduction in both spending and taxes.d. An expansion in the money supply.
10. Demand-pull inflation is caused bya. an increase in aggregate demand.b. a decrease in aggregate demand.c. an increase in aggregate supply.d. a decrease in aggregate supply.
9. Cost-push inflation occurs when thea. aggregate demand curve shifts leftward while the aggregate supply curve is fixed.b. aggregate supply curve shifts leftward while the aggregate demand curve is fixed.c. aggregate demand curve shifts rightward while the aggregate supply curve is fixed.d.
8. If a new method for obtaining oil from dry oil fields is found, then we will seea. the AS curve shift to the left.b. a movement to the left along the AD curve.c. the AD curve shift to the left.d. the AD curve shift to the right.e. the AS curve shift to the right.
7. According to classical theory, if the aggregate demand curve decreased and the economy experienced unemployment, thena. the economy would remain in this condition indefinitely.b. the government must increase spending to restore full employment.c. prices and wages would fall quickly to restore
6. The horizontal segment of the aggregate supply curvea. shows that real GDP can increase only by affecting the economy’s price level.b. shows that real GDP can increase without affecting the economy’s price level.c. depicts a positive relationship between real GDP and the price level.d.
5. Which of the following could not be expected to shift the aggregate demand curve?a. Net exports fall.b. Consumption spending decreases.c. An increase in government spending.d. A change in real GDP.
4. Which of the following is not a reason for the downward slope of an aggregate demand curve?a. Real balance or wealth effect.b. Real interest rate effect.c. Net exports effect.d. All of the above are reasons.
3. The ratio of the change in GDP to an initial change in aggregate expenditures(AE) is thea. spending multiplier.b. permanent income rate.c. marginal expenditure rate.d. marginal propensity to consume.
2. Which of the following will increase investment spending?a. More optimistic business expectations.b. An increase in interest rates.c. An increase in business taxes.d. A decrease in capacity utilization.e. All of the above.
1. The consumption function will shift for all of the following reasons excepta. a change in a household’s real assets.b. a change in interest rates.c. expectations of price changes.d. changes in a households’ disposable incomes.e. changes in taxation policy.
7. Which of the following statements is true?a. The most important source of tax revenue for the federal government is individual income taxes.b. The most important source of tax revenue for state and local governments is sales taxes.c. The second most important source of revenue for state and
3. Which of the following contributed the largest percentage of total federal government expenditures in 2007 (excluding federal grants)?a. Interest on the national debtb. Education and healthc. National defensed. Income security
2. Which of the following accounted for the second largest percentage of total federal government expenditures in 2007?a. Income securityb. National defensec. Interest on the national debtd. Education and health
1. Since 1975, total government expenditures as a percentage of GDP in the United States havea. fallen by half.b. remained fairly constant at about one-third.c. grown from one-fourth to one-half.d. grown from one-quarter to one-third.
5. What is the difference between the marginal tax rate and the average tax rate?
14. Using the aggregate expenditure-output model, assume the aggregate expenditures (AE) line is above the 45-degree line at full-employment GDP.This vertical distance is called a (an)a. inflationary gap.b. recessionary gap.c. negative GDP gap.d. marginal propensity to consume gap.
13. To close the recessionary gap and achieve fullemployment real GDP shown in Exhibit 9, the government should cut taxes bya. $0.60 trillion.b. $1 trillion.c. $2 trillion.d. $3 trillion.
11. In Exhibit 9, the spending multiplier for this economy is equal toa. 1²/³.b. 2¹/².c. 3.d. 5.
5. How are changes in the MPC, changes in the MPS, and the size of the multiplier related?Answer the following questions:a. What is the multiplier if the MPC is 0?0.33? 0.90?b. Suppose the equilibrium real GDP is $100 billion and the MPC is 4/5. How much will the equilibrium output change if
12. Key Concept: Cost-push Inflation Cost-push inflation is due toa. labor cost increases.b. energy cost increases.c. raw material cost increases.d. all of the above.
11. Key Concept: Real Income Real income in Year X is equal to Year X nominal income a. 100 Year X real GDP Year X nominal income b. x 100 Year X real output Year X nominal income C. CPI/100 d. Year X nominal income CPI.
10. Suppose the price of gasoline rose and consumers cut back on their use of gasoline relative to other consumer goods. This situation contributed to which bias in the consumer price index?a. Substitution bias.b. Transportation bias.c. Quality bias.d. Indexing bias.
9. Inflation is measured by an increase ina. homes, autos, and basic resources.b. prices of all products in the economy.c. the consumer price index (CPI).d. none of the above.
8. Consider a broom factory that permanently closes because of foreign competition.If the broom factory’s workers cannot find new jobs because their skills are no longer marketable, then they are classified asa. seasonally unemployed.b. frictionally unemployed.c. structurally unemployed.d.
7. John Steinbeck’s Cannery Row describes a character who takes his own life because of poor job prospects. If he was an unemployed person who gave up looking for work, he would be considereda. chronically unemployed.b. a discouraged worker.c. a member of the labor force.d. Frictionally
6. A business cycle is the period of time in whicha. a business is established and ceases operations.b. there are four phases: peak, recession, trough, and recovery.c. the price level varies with real GDP.d. expansion and contraction of economic activity are equal.e. none of the above are true.
5. A business cycle is thea. period of time in which expansion and contraction of economic activity are equal.b. period of time in which there are three phases: peak, depression, and recovery.c. recurring growth and decline in real GDP.d. period of time in which a business is established and ceases
4. The equation for determining real GDP for year X is a. nominal GDP for year X average nominal GDP b. nominal GDP for year X GDP for year X C. d. - 100. nominal GDP for year X GDP chain-price index for year X nominal GDP for year X average family income 100. x 100.
3. If the underground economy is sizable, then GDP willa. understate the economy’s performance.b. overstate the economy’s performance.c. fluctuate unpredictably.d. accurately reflect this subterranean activity.
2. Using the expenditure approach, GDP equals a. C+I+G+(X-M). b. C+I+G+(X+M). C. C+I-G+(X-M). d. C+I+G (X-M).
1. Which of the following items is included in the calculation of GDP?a. Purchase of 100 shares of General Motors stock.b. Purchase of a used car.c. The value of a homemaker’s services.d. Sale of Gulf War military surplus.e. None of the above would be included.
15. Which of the following statements is true?a. Demand-pull inflation is caused by excess total spending.b. Cost-push inflation is caused by an increase in resource costs.c. If nominal interest rates remain the same and the inflation rate falls, real interest rates increase.d. If real interest
14. Suppose you place $10,000 in a retirement fund that earns a nominal interest rate of 8 percent. If you expect inflation to be 5 percent or lower, then you are expecting to earn a real interest rate of at leasta. 1.6 percent.b. 3 percent.c. 4 percent.d. 5 percent.
13. Cost-push inflation is due toa. excess total spending.b. too much money chasing too few goods.c. resource cost increases.d. the economy operating at full employment.

Showing 1 - 100 of 1964

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Last

Economics For Today 6th Edition Irvin B. Tucker - Solutions

Step by Step Answers