Q 41. The real business cycle theory emphasizes that intoday's modernage, ________ technology plays a significant role in causing economic fluctuations.

A.

shocks to

B.

advances in

C.

duplications in

D.

obsolete ideas in

Q43. Investments made"today" inmachines, equipment and buildings do not have an immediate effect on total capital stock.

True

False

Q44. We ADD to the GDP when goods produced abroad are sold in the United States.

True

False

Q45. Net investment is

A.

the total amount of new private investment purchases.

B.

what is left over from total new private investment after depreciation.

C.

gross investment plus depreciation.

D.

the total amount of private investmentpurchases, whether new or previouslyexisting.

Q46. Labor market equilibrium occurs at a real wage where the demand for labor exceeds the supply of labor.

True

False

Q47. Suppose bad weather in Florida unexpectedly results in a much smaller citrus crop than had been projected. This would tend to cause the labor demand curve for citrus pickers to shift to the

A.

right, decreasing wages.

B.

right, increasing wages.

C.

left, decreasing wages.

D.

left, increasing wages.

Q48. In a simple economy(without government or foreigntrade) where output can be purchased only by consumers or byfirms, saving must equal

A.

depreciation.

B.

consumption.

C.

income.

D.

investment.

Q51. Recall the Application about cultural factors in England and their relevance to the Industrial Revolution to answer the following question.

According to theApplication, the cultural habits of the rich filtered down through English society. These habits included all of the following virtues EXCEPT

A.

prudence.

B.

thrift.

C.

impulsive behavior.

D.

hard work.

Q52. The level of output produced when the labor market is in equilibrium is called

A.

potential output.

B.

natural output.

C.

product market equilibrium output.

D.

global production output.

Q53. Use the following information to answer the next severalquestions:

Scenario 1: Imagine that an economy produces twogoods, flashlights and fishing lures. In2015, the economy produced 70 flashlights and 40 fishinglures, and the prices of flashlights and fishing lures were$5 and$12, respectively. In2016, the economy produced 85 flashlights and 50 fishinglures, and the prices of flashlights and fishing lures were$7 and$15, respectively.

Based on the information in Scenario1, real GDP in 2016(in 2015dollars) in this economy was

A.

$830.

B.

$1,025.

C.

$1,090.

D.

$1,345.