9.

Since producers must be compensated for the rising opportunity cost that accompanies increases in output,

  

technical inefficiency would not exist in the long run

   

the supply curve usually slopes upward

   

the law of demand applies to most markets

   

the demand curve usually slopes downward

10.Which of the following is the most detail-orientated approach used to calculate GDP?
value added
expenditure
all of listed measurements
none of the listed measurements
factor payments

11.Unemployment that has an entirely macroeconomic cause is called
frictional unemployment
cyclical unemployment
tactical unemployment
seasonal unemployment
structural unemployment

12.The phase of the business cycle characterized by rising output is called a(n)
depression
expansion
trough
recession
financial bubble

13.Which of the following would be counted in U.S. GDP?
the purchase of 50 shares of Apply stock
the purchase of a $1,000 government savings bond
the purchase of an old house
the purchase of a new textbook
the purchase of 50 acres commercial land

14.

If a good is a normal good then

  

bnormal goods are never substituted for it

   

a decline in income will increase the amount of it that consumers will purchase

   

a rise in income or wealth will increase the amount of the good that consumers will purchase

   

normal consumers will always demand it

   

other things equal, no consumer will buy it

15.Which of the following best describes the term deflation?
an increasing inflation rate
a falling inflation rate
a negative inflation rate
a negative price level

16.

If the full-employment rate of unemployment (Natural Rate of Unemployment) is 5 percent, and the economy is experiencing a 9 percent unemployment rate as of January 2010, what is the rate of cyclical unemployment?

  

2 percent

   

-2 percent

   

14 percent

   

-3 percent

   

4 percent

17.The wage rate that workers should really care about is
the real wage rate
neither the real wage rate nor the nominal wage rate
the nominal wage rate
the nominal wage rate multiplied by the real wage rate

18.Why would workers and retirees want to have their wages and benefits indexed to the Consumer Price Index (CPI)?
to maintain their purchasing power during years of rising prices, which means inflation adjusted
to maintain their purchasing power during periods of declining output
to lower their purchasing power during rising prices
to maintain their purchasing power during years of rising output

19.If the demand for a product increases, we would expect equilibrium price
to increase and equilibrium quantity to decrease.
to decrease and equilibrium quantity to increase.
and equilibrium quantity to both increase.
and equilibrium quantity to both decrease.

20.

Suppose the economy includes two distinct groups of people: wage earners and goods sellers. If the price level increases by 50 percent and nominal wages remain unchanged,

  

there will be no redistribution of purchasing power because all private wage earners in the U.S. economy receive indexed wages

   

real wages will remain the same because nominal wages do not change

   

income will be redistributed from goods sellers to wage earners

   

income will be redistributed from wage earners to goods sellers

   

there will be no redistribution of purchasing power because only changes in real income can change the distribution of income

21.

The limitation of CPI includes,

  

ignoring real vs. nominal conversation

   

comparison of shopping

   

ignore non-market output

   

underestimating goods substitution

   

irrational choice in decision making

22.

Price floors set ______ the equilibrium price cause

  

below, surpluses.

   

above, a new market equilibrium.

   

below, a greater number of exchanges.

   

above, surpluses.

   

above, shortages.