What happens when the price level falls? Total planned real spending remains constant. Total planned real spending also falls. Planned real spending on goods increases but planned real spending on services falls. Total planned real spending increases. QUESTION 68 Which of the following statements is TRUE about the interest rate effect? A lower price level lowers the interest rate, which causes businesses and consumers to increase their desired spending. A higher price level lowers the interest rate, which causes business and consumers to increase their desired spending. The interest rate effect is why the aggregate demand curve is upward sloping. Expenditures will change as a result of a change in the real value of money balances when there is a change in the price level. QUESTION 69 Research indicates that countries with lower tariff rates experience higher rates of economic growth. countries with lower tariff rates experience lower rates of economic growth. there is no relationship between the level of tariff rates and economic growth. countries with higher tariff rates experience higher rates of economic growth. QUESTION 70 Countries with higher rates of saving have a greater number of poor people. have a large population. have higher rates of growth. experience lower growth rates in the future. QUESTIUN 41 If the U.S. economy enters a recession, the entire population will be partially unemployed. economy experiences full employment. unemployment rate tends to increase. labor force tends to increase. QUESTION 42 Which of the following would NOT be considered unemployed? a job leaver who is looking for a better job an individual fired by her employer a new entrant to the labor force a newly retired worker QUESTION 43 The Consumer Price Index (CPI) is a statistical measure of a weighted average of prices of commodities that firms produce and sell. price index measuring the changes in prices of all new goods and services produced in the economy. statistical measure of a weighted average of prices of a specific set of goods and services purchased by consumers in urban areas. statistical measure of average prices using annually updated weights based on surveys of consumer spending. QUESTION 44 The term "market basket" means a collection of goods that is used by a typical family. collection of goods that changes every year and is defined by Congress. collection of goods that is purchased during a holiday season. collection of goods that can fit into an average shopping cart. Capital goods are a special type of consumption goods. are consumed because they enhance the enjoyment consumers obtain from other goods and services. refer to the expenses that a company incur for producing other types of goods. are goods used to make consumer goods and services. QUESTION 14 The division of labor refers to creating jobs that all people can perform at the same level. workers performing multiple tasks. separating men and women in the workforce. workers being assigned specific tasks. QUESTION 15 A demand curve is a graphical representation of the demand schedule. horizontal line connecting amounts demanded at various income levels. graphical representation of allemative demands. graphical relationship, that includes several things such as tastes, time, and supphy. QUESTION 16 When income falls the demand for a normal goods rises. there is a movement downward along the demand curve for a normal good. there is a movement downward along the demand curve for an inferior good. the demand for an inferior goods rises
