Question 31 (1 point) () Listen The Marginal Propensity to Consume (MPC) is defined as the change in O Cover the change in DI. O income over the change in disposable income. O DI over the change in C. O total income over the change in net income. Question 32 (1 point) Listen The circular flow diagram is best described as a(n) O abstraction of little value in macroeconomics. O exact representation of the cause and effect relationship between spending and employment. O model that clarifies the relationship between spending and income. O model to explain the relationship between the federal deficit and tax revenues. Previous Page Next Page Page 16 of 30Question 33 (1 point) () Listen Economic theory is a deliberate simplification of factual relationships. seeks to disprove a hypothesis. is based mainly on assumptions. seeks to prove political ideals. Question 34 (1 point) E () Listen Figure 3-2 Capital Goods . D B E Consumer Goods In Figure 3-2, a point such as E is not obtainable. is an efficient use of resources. represents an inefficient allocation of resources. indicates that the society is a capitalist society. Previous Page Next Page Page 17 of 30Question 35 (1 point) E-I One of the factors causing the shrinking gap between rich and poor countries is 0 learning by poor countries. O increasing resource discoveries. 0 increasing populations in poor countries. 0 transfers of income from rich countries. Question 36 (1 point) E- The system of measurement for expressing macroeconomic data is called 0 national income accounting. 0 balance of payment accounting. 0 generally accepted ac counting principles. O double entry bookkeeping. Previous Page Page 18 of 30 Question 37 (1 point) eII Which of the following would cause an upward shi in the consumption function? O a stock market crash 0 an increase in the price level 0 a decrease in disposable income O a decrease in the price level Question 38 (1 point) E-I A rational decision is one that 0 satises all desires. O avoids the intentional allocation of resources. O assigns available resources in the manner most preferred by decision makers. O assigns available resources to the uses with the lowest opportunity costs. Previous Page Page 19 of 30 Question 39 (1 point) Listen The numerical value of the MPC is typically less than 1. equal to 1. greater than 1. unpredictable. Question 40 (1 point) ) Listen Figure 3-7 100 R 80 0 50 75 X What is the opportunity cost of moving from point B to point A in Figure 3-7? 20 units of X 50 units of X 25 units of X 75 units of X Previous Page Next Page Page 20 of 30Question 41 (1 point) E-I A supply schedule shows O the "market potential" for a product. 0 how much producers are willing and able to sell at different prices. O possible combinations of output under different conditions. O how much consumers would like to buy at different prices. O All of the above are correct. Question 42 (1 point) E-I Figu re 3-2 Capital Goods .II .D B C '3 Consumer Goods In Figure 3-2, a point such as D O can be obtained through new technology. O can never be obtained. O can only be obtained by a capitalist society. O represents a misallocation of resources. Previous Page Page 21 of 30 Question 43 (1 point) ) Listen Stagflation can be defined as a combination of O economic migration and inflation economic aggregation and deflation O economic stagnation and inflation economic aggregation and inflation Question 44 (1 point) Listen Which of the following would not be classified as capital formation? O buying shares of stock O building a new warehouse O purchasing new construction equipment O All would be considered capital formation. Previous Page Next Page Page 22 of 30Question 45 (1 point) () Listen Every economic decision involves a trade-off because of O theory. O opportunism. O consumption. O scarcity. O efficiency. Question 46 (1 point) 1) Listen Gross Domestic Product is the least inclusive aggregate used to measure the economy. Ototal of goods and services desired by consumers. most comprehensive measure of total output in the United States. most accurate measure of the trade balance of the United States. Previous Page Next Page Page 23 of 30Question 47 (1 point) eII When you subtract the expected rate of ination from the nominal rate of interest, you calculate the O real rate of interest. O real rate of ination. O expected rate of interest. 0 expected rate of price increases. Question 48 (1 point) eII The nominal interest rate is the sum of the O real interest rate and the historic rate of ination. 0 real interest rate and the expected rate of ination. O historic rate of inflation and the expected rate of ination. O expected rate of inflation and the rate of price level increase. Previous Page Page 24 of 30 Question 49 (1 point) E 4.1) Listen I The unemployment rate is the number of unemployed people, expressed as O a ratio of total employed to the population. O a ratio of unemployed to the total employed. 0 a percentage of the labor force. 0 a percentage of the population. Question 50 (1 point} E-I The term opportunity cost refers to the Q value of what is gained when a choice is made. difference between the value of what is gained and the value of what is forgone when a choice is made. Q value of what is forgone when a choice is made. O direct costs involved in making a choice. Previous Page Page 25 of 30 Question 51 (1 point) () Listen Most of the investment decisions in the U.S. economy are made by C consumers. O businesses. O governmental institutions. O international financial agencies. Question 52 (1 point) Listen People who failed to look for a job are classified as O unemployed. O underemployed. O out of the labor force. O part time employed. Previous Page Next Page Page 26 of 30Question 53 (1 point) E-I An example of an intermediate good would he a(n) O new tire for a used car. O tire for a new car. O All of the above. Question 54 (1 point) E-I A movement from one point to an another point on the same consumption function could be caused due to O changes in wealth. O an increase in the general price level. O decrease in the real interest rates. O changes in disposable income. Previous Page Page 27 of 30 Question 55 (1 point) ) Listen Figure 4-21 Price X Quantity Which price in Figure 4-21 is equilibrium? OPI OP 2 OP3 Question 56 (1 point) Listen How are money cost and opportunity cost related to each other? If markets function well, they are closely related. They are always identical in any economic system. Opportunity cost always exceeds money cost. Money cost is less than or equal to opportunity cost. In a market economy, they are always equal to each other. Previous Page Next Page Page 28 of 30Question 57 (1 point) E-I Full employment implies which of the following is reduced to zero? 0 cyclical unemployment only O frictional unemployment only O frictional and structural unemployment only O frictional, structural, and cyclical unemployment Question 58 (1 point) E-I In general, as productivity levels increase, the potential for productivity growth O decreases. O increases. 0 remains the same. 0 increases if GDP increases. Previous Page Page 29 of 30 Question 59 (1 point) () Listen Aggregate demand is the total demand for all intermediate and final goods. all monetary investments. real and financial investments. O all final goods and services. Question 60 (1 point) () Listen Figure 3-2 Capital Goods . D B Consumer Goods In Figure 3-2, a point such as A O is preferable over B. is an efficient use of resources. represents a misallocation of resources. O is not obtainable. Previous Page Next Page Page 30 of 30