Question
Question 21 Recognition lag, implementation lag, and impact lag are all examples of A crowding-out. B savings shifts. C time lags that accompany policy decisions.
Question 21
Recognition lag, implementation lag, and impact lag are all examples of
A crowding-out.
B savings shifts.
C time lags that accompany policy decisions.
D automatic stabilizers.
E fiscal policies.
Question 22
The use of the money supply to influence the economy is
A called fiscal policy.
B called countercyclical policy.
C called monetary policy.
D initiated through actions of Congress.
E part of automatic stabilization.
Question 23
When you buy a new car built by Ford, it is included in the ________ category of gross domestic product (GDP).
A consumption
B investment
C government purchases
D export
E import
Question 24
An activity's marginal benefit is ________ at the optimal quantity.
A zero
B greater than zero
C less than zero
D equal to the marginal cost
E greater than the marginal cost
Question 26
Laura leaves her job as an accountant, where she earns $80,000 per year, to start her own business. After the first year, her business earns a profit of $60,000. How would an economist describe the profitability of Laura's career change?
A Laura had a profit of $140,000.
B Laura had a loss of $20,000.
C Laura had a profit of $20,000.
D Laura had a profit of $60,000.
E Laura had a loss of $80,000.
28 If over a period of time real gross domestic product (GDP) increases while nominal GDP decreases, then this implies
A a significant rise in the price level.
B a significant drop in the price level.
C that real GDP is much less than nominal GDP.
D that the given period occurs before the base period.
E that the given period year occurs after the base period.
Question 29
If real gross domestic product (GDP) grew by 4 percent and nominal GDP grew by 3 percent, then the inflation rate was
A 1 percent.
B -1 percent.
C 7 percent.
D 12 percent.
E 0 percent.
Question 30
Which of the following is an example of frictional unemployment?
A Raymond loses his job as a steel worker because the economy is in a downturn.
B Chad graduates with his master's degree in economics and is searching for an analyst job.
C Edith has decided to retire after 35 years of working at the state prison.
D Cameron quits his job at the circus to volunteer for the Red Cross.
E Jasmine loses her job as a newspaper editor because the publication has gone digital.
Question 31
In the equation MV=PY, the variable M stands for the
median rate of inflation.
movement of goods.
movement of prices.
quantity of money.
velocity of money.
Question 32
Inflation creates uncertainty because
A nominal values of prices and wages are unknown.
B it rapidly increases output.
C real interest rates, prices, and wages are unknown.
D borrowing continues at a rapid pace, creating a "false boom."
E although price confusion problems are eliminated, the shoe-leather costs are exacerbated.
Question 33
Assume deflation is occurring in a nation; the implication(s)
A are that both real and nominal interest rates are positive.
B are that both real and nominal interest rates are negative.
C is that the nominal interest rate exceeds the real interest rate.
D is that the real rate of interest exceeds the nominal rate of interest.
E is that time preferences in the nation have fallen.
Question 34
An interest rate best represents ________ to borrowers and ________ to savers.
A cost; return
B return; cost
C rate of change; static value
D static value; rate of change
E nominal return; real return
Question 36
In the last decade, the U.S. savings rate has
A rebounded somewhat.
B dropped to new lows.
C leveled off around the historical average.
D begun to come down from unusually high levels.
E climbed to historic highs.
Question 37
Joe Kowalski invents a new product, and this new product becomes cheaper over time. This can be problematic because
A the consumer price index (CPI) will include Joe's new product immediately if it is a consumer good, but as a consumer good, it will not be included in the gross domestic product (GDP) deflator.
B the percent change in the consumer price index (CPI) will be distorted, but the change in the gross domestic product (GDP) deflator will not be, regardless of whether the C product is a consumer good or a producer good.
C it is unlikely the consumer price index (CPI) will include Joe's new product immediately, even if it is a consumer good.
D money illusion will cause consumers to buy more of this good than the consumer price index (CPI) would otherwise reflect.
E this good might be produced in a geographic location that is not included in the consumer price index (CPI).
Question 38
When actual unemployment is less than its natural rate
a the economy is producing below its long-run capabilities.
b the economy is producing within its long-run capabilities.
c resources are employed at levels that are not sustainable in the long run.
d resources are employed at levels that are sustainable in the long run.
e output is less than full-employment output.
Question 39
Individuals who are not working but are willing to work and who have looked for a job in the past 12 months but have not sought employment in the past four weeks are defined as
a unemployed.
b employed.
c unhappy workers.
d discouraged workers.
e retired.
Question 41
A country lowers trade barriers and institutes monetary and price stability. As a result, the annual growth rate of gross domestic product (GDP) increases from 2 percent to 4 percent per year. All else the same, in 35 years, GDP will be ________ as high as if there were no reform.
a 50 percent
b twice
c three times
d five times
e four times
Question 42
All countries have some resources and technology available to them. The ones that grow fastest are the ones that
a hoard their resources and never use them.
b invade other countries to capture their resources.
c have the institutions in place that allow those resources to be fully exploited.
d allow other countries to extract their resources for payment.
e require that all resources are collectively owned.
Question 43
The model used to study business cycles is the ________ model.
a labor
b savings
c growth
d aggregate demand-aggregate supply
e interest rate
Question 44
A lawn service company has 20 lawn mowers. This year they buy 3 new ones and get rid of 2 old ones. In this case, investment is equal to ________ and net investment is equal to ________.
a 3; 3
b 3; 1
c 3; 2
d 5; 3
e 3; 5
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