QUESTION 26

1. An economy that is an active participant in international trade is

		an economy whose currency value fluctuates widely.
		an open economy.
		an egalitarian economy.
		a closed economy.

2 points

QUESTION 27

1. An educated populace contributes to economic growth because

		education allows workers to develop skills that increase their productive capabilities.
		educated people are more likely to live in poverty.
		educated people understand the importance of protectionism.
		schools provide many jobs for teachers.

2 points

QUESTION 28

1. An increase in U.S. prices relative to Japanese prices will

		decrease both U.S. exports and imports.
		increase total planned spending on U.S. goods and services.
		increase U.S. imports and decrease U.S. exports.
		decrease U.S. imports and increase U.S. exports.

2 points

QUESTION 29

1. An increase in aggregate demand is shown by

		the movement down along the aggregate demand curve.
		a leftward shift in the aggregate demand curve.
		a movement up along the aggregate demand curve.
		a rightward shift in the aggregate demand curve.

2 points

QUESTION 30

1. An increase in the U.S. price level causes a

		movement up the U.S. aggregate demand curve.
		movement down the U.S. aggregate demand curve.
		shift of the U.S. aggregate demand curve to the right.
		shift of the U.S. aggregate demand curve to the left.

2 points

QUESTION 31

1. An increase in the amount of money in circulation would cause a

		shift of the aggregate demand curve to the right.
		shift of the aggregate demand curve to the left.
		movement down the aggregate demand curve.
		movement up the aggregate demand curve.

2 points

QUESTION 32

1. An increase in the marginal propensity to save

		increases autonomous consumption.
		increases the marginal propensity to consume.
		decreases the value of the multiplier.
		increases the value of the multiplier.

2 points

QUESTION 33

1. An increase in the quantity demanded is shown by

		a movement up along a demand curve.
		a movement down along a demand curve.
		a leftward shift of the demand curve.
		a rightward shift of the demand curve.

2 points

QUESTION 34

1. An inflationary gap is the amount by which

		total planned production exceeds total planned real expenditures in the long run.
		the short-run equilibrium level of nominal GDP is above the short-run level of real GDP.
		the short-run equilibrium level of nominal GDP is below the short-run level of real GDP.
		the short-run equilibrium level of real GDP is above the full-employment level of real GDP.

2 points

QUESTION 35

1. An outward shift of the production possibilities curve demonstrates

		economic growth.
		a cyclical shock.
		an increased rate of inflation.
		a recession.

2 points

QUESTION 36

1. An upward-sloping short-run aggregate supply curve suggests that

		prices and wages are completely inflexible.
		prices and wages are completely flexible.
		prices and wages adjust in part to short-run demand changes.
		real GDP is determined by aggregate supply.

2 points

QUESTION 37

1. Annie had a job as a human resource manager of a restaurant chain that went out of business due to a downturn in the economy. She looked for work for six months and gave up because she was convinced that she could not find a suitable job to fit her skill set. In this instance she would be counted as a

		job leaver.
		discouraged worker.
		labor force participant.
		reentrant.

2 points

QUESTION 38

1. Annie had a job as a human resource manager of a restaurant chain that went out of business due to a downturn in the economy. This is an example of

		cyclical unemployment.
		structural unemployment.
		seasonal unemployment.
		technological unemployment.

2 points

QUESTION 39

1. Another way of stating that investment is independent of real disposable income is to say that it is

		inversely related.
		autonomous.
		complementary.
		directly related.

2 points

QUESTION 40

1. Assume that a GM car sells for $20,000 in the United States and that the exchange rate is $1 = 1.1 euros. For purchasing power parity to hold, the same car in Italy should sell for

		20,000 euros.
		18,182 euros.
		22,000 euros.
		16,542 euros.

2 points

QUESTION 41

1. Assume that the nominal GDP for a given year is equal to $12,400 billion and the GDP deflator equals 112. Real GDP for that year is approximately

		$11,071.4 billion.
		$12,512.0 billion.
		$12,228.1 billion.
		$13,888.0 billion.

2 points

QUESTION 42

1. Assuming that Y_d= $20,000 and C = $22,000, we would find that the average propensity to consume would be equal to

		0.9.
		1.1.
		0.8.
		1.8.

2 points

QUESTION 43

1. Assuming that Y_d= $20,000 and C = $22,000, we would find that the average propensity to save equals

		1.1.
		-0.1.
		-0.8.
		0.9.

2 points

QUESTION 44

1. Assuming that turkey, chicken, pork, and beef are substitutes, suppose that the price of turkey has fallen. This will, other things being equal

		reduce demand for chicken, pork, and beef.
		increase quantity demanded of beef.
		increase demand for chicken, pork, and beef.
		leave demand for chicken, pork, and beef unchanged.

2 points

QUESTION 45

1. Assuming there are 90 million people employed in the United States and 2 million people unemployed, the unemployment rate would therefore approximately equal

		4.8 percent.
		10.1 percent.
		3.7 percent.
		2.2 percent.

2 points

QUESTION 46

1. At the end of the nineteenth century, populists advocated the issuance of new money backed by silver. What was the reason for their agenda?

		Populists thought that the mining of more silver would increase long-run aggregate supply.
		Populists thought that it would be easier for Americans to export goods from other countries if the currency were backed by silver.
		Populists thought that having more money in circulation would increase aggregate demand, thereby combating deflation.
		Populists thought that having more money in circulation would increase long-run aggregate supply.

2 points

QUESTION 47

1. At the market clearing price

		there is neither a shortage nor a surplus.
		the supply and demand curves intersect.
		quantity supplied equals quantity demanded.
		All of the above are correct.

2 points

QUESTION 48

1. At the point at which planned real consumption spending is equal to real disposable income

		the consumption function intersects the savings function.
		the consumption function intersects the 45-degree line.
		the consumption function is above the 45-degree line.
		the consumption function is below the 45-degree line.

2 points

QUESTION 49

1. Autonomous consumption

		is measured by the intercept of the consumption function and the Y-axis.
		is equal to the minimum savings.
		is the reciprocal of consumption.
		is measured by the slope of the consumption function.

2 points

QUESTION 50

1. Autonomous consumption is defined as

		the real consumption spending by the autonomous government.
		the level of real consumption spending that is equal to real disposable income.
		the consumption of foreign-made goods independent of exchange rates.
		the level of real consumption spending that is independent of real disposable income.