ECON 2X03 Lecture 8: June 13, 2016
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1. Which of the following is likely to happen if the Fed buys Treasury securities from banks?
interest rate rises; investment falls |
interest rate rises; investment rises |
interest rate falls; investment rises |
interest rate falls; investment falls |
2. The main goal of monetary policy is to shift
AD. |
SRAS. |
LRAS. |
both AD and SRAS. |
both AD and LRAS. |
3. Which of the following is true regarding the effects of an expansionary monetary policy?
Printing more money will affect real GDP only in the short run because all prices do not adjust fully in the short run. |
Printing more money will affect real GDP both in the short and long run because inflation is a natural occurrence of expansionary monetary policy. |
Printing more money will not lower the value of money in the short run because prices are fully flexible in the short run. |
Printing more money will ultimately raise the value of money in the long run because prices are fully flexible in the long run. |
4. In which of the following cases are you likely to be adversely affected by unexpected inflation?
You, the owner of a local restaurant, charge the price of lamb lasagna as per the daily market rate of lamb. |
You purchase Mountain Dew every day from the dormitory vending machine, which keeps its prices fixed for the entire school year. |
You, the owner of an airline company, sign a two-year contract for airline fuel. |
You deposit $10,000 in a bank account for 5 years for a fixed interest rate of 1%. |
5. The Phillips curve depicts the relation between
real GDP and price level. |
price level and inflation rate. |
unemployment rate and inflation rate. |
unemployment rate and real GDP. |
6. Which of the following statements is true regarding the shapes of short-run and long-run Phillips curves?
The short-run Phillips curve is vertical and the long-run Phillips curve is downward sloping. |
The short-run Phillips curve is downward sloping and the long-run Phillips curve is vertical. |
Both the short-run and long-run Phillips curves are downward sloping. |
Both the short-run and long-run Phillips curves are vertical. |
7. Suppose the table below lists the actual annual inflation rates for 2010 to 2015. What would be the most likely predictions people make about the inflation rate for 2016 based on adaptive and rational expectations theories, respectively?
Year | Actual Inflation rate |
2010 | 0% |
2011 | 0% |
2012 | 3% |
2013 | 3% |
2014 | 6% |
2015 | 6% |
6% and 3% |
6% and 9% |
6% and 12% |
9% and 6% |
3% and 6% |
8. Which of the following can change relatively quickly in the short-run?
the price of a latte in a coffee shop |
the salary of a finance professor |
the rent paid for a store |
1. Which of the following groups of countries are all advanced economies?
Hong Kong, Japan, France, and the United Kingdom |
||
Italy, the United States, China, and Russia |
||
Singapore, Russia, France, and Chad |
||
Australia, Brazil, and the United States |
QUESTION 2
1. The most people live in ________ economies and the fewest people live in ________ economies.
developing; emerging market |
||
advanced; emerging market |
||
emerging market; developing |
||
advanced; developing |
QUESTION 3
1. Households and firms in the U.S. economy interact with those in the rest of the world in the ________ market and the ________ market.
goods; financial |
||
government; goods |
||
goods; factor |
||
financial; factor |
QUESTION 4
1. As a factor of production, oil reserves are counted as
labor. |
||
capital. |
||
entrepreneurship. |
||
land. |
QUESTION 5
1. ________ the owners of the factors of production, while ________ what amounts of those factors to hire.
Households are; the government determines |
||
Firms are; households determine |
||
The government is; firms determine |
||
Households are; firms determine |
QUESTION 6
1. The emerging market economies are
the nations that are currently agricultural in nature. |
||
most of the nations of Western Europe. |
||
the largest grouping including the nations of China and India. |
||
in the transition from state-owned production to free markets. |
QUESTION 7
1. In the United States, the productive factor that, as a group, receives the largest fraction of the nation's total income was
consumption of goods and services. |
||
entrepreneurship. |
||
capital. |
||
labor. |
QUESTION 8
1. Items bought by individuals to provide personal enjoyment are termed
personal goods. |
||
consumption of goods. |
||
consumption or investment goods. |
||
standard goods. |
QUESTION 9
1. In the advanced economies, ________ of the factories use advanced capital equipment and in the developing economies ________ of the factories use advanced capital equipment
virtually all; none |
||
some; some |
||
virtually all; virtually all |
||
virtually all; some |
QUESTION 10
1. The productive resource that includes all the "gifts of nature" is called
land. |
||
labor. |
||
entrepreneurship. |
||
capital. |
QUESTION 11
1. What would be an example of government good?
Donald Trump purchases furniture for his office. |
||
Antonio, the manager of the local Taco Hut, purchases a new deep fryer. |
||
The local driver's license office purchases a new digital camera and printer. |
||
Jake buys an iPhone. |
QUESTION 12
1. The world population is approximately ________ people.
2 trillion |
||
680 million |
||
6.8 billion |
||
6.8 million |
QUESTION 13
1. Computers and insurance coverage produced in the United States and sold to people in other nations are categorized as
U.S. exports of goods and services. |
||
U.S. government goods and services. |
||
foreign capital goods. |
||
U.S. consumer goods and services. |
QUESTION 14
1. Of the following, the federal government obtains most revenue from
corporate income taxes. |
||
excise taxes. |
||
sales taxes. |
||
social security taxes. |
QUESTION 15
1. Items bought by businesses to help produce other goods and services are called
capital goods. |
||
government goods and services. |
||
consumption of goods and services. |
||
exports of goods and services. |
QUESTION 16
1. The majority of the income earned in the United States is paid in
profit. |
||
interest. |
||
rent. |
||
wages. |
QUESTION 17
1. Dan missed class the day the professor covered the circular flow model. Dan asked his friend Joan to explain markets to him. Joan correctly stated that a market
must include a written contract between buyers and sellers. |
||
requires a physical location for buyers and sellers to get together. |
||
is only a place to purchase groceries. |
||
is an arrangement that brings buyers and sellers together. |
QUESTION 18
1. The United States possesses a large amount of human capital. As a result of this fact, in the United States, there is a
highly skilled and educated labor force. |
||
a large number of kind and generous humans. |
||
a large number of people and a great deal of land. |
||
a large amount of machinery and equipment. |
QUESTION 19
1. Which of the following correctly lists the categories of factors of production?
labor, machines, buildings, capital, and entrepreneurship |
||
land, buildings, capital, and entrepreneurship |
||
land, labor, capital, and entrepreneurship |
||
forests, fish, buildings, capital, and entrepreneurship |
QUESTION 20
1. Which of the following correctly lists the categories of factors of production?
capital, money, and labor |
||
hardware, software, land, and money |
||
land, labor, capital, and entrepreneurship |
||
machines, buildings, land, and money |
QUESTION 21
1. In the United States, the poorest 20 percent of households receive roughly ________ percent of total income.
10 |
||
3 |
||
15 |
||
20 |
QUESTION 22
1. What would be an example of a consumption service?
Jake buys an iPhone. |
||
The local driver's license office purchases a new digital camera and printer. |
||
Antonio, the manager of the local Taco Hut, purchases a new deep fryer. |
||
Rhianna gets a haircut. |
QUESTION 23
1. The total value of capital in the United States is around
$47 trillion. |
||
$10 trillion. |
||
$100 trillion. |
||
$79 trillion. |
QUESTION 24
1. An export good is a good produced
by foreigners in the United States and purchased by U.S. households. |
||
in another country and purchased by U.S. residents. |
||
in the United States and sold to foreigners living in the United States. |
||
in the United States and sold in other countries. |
QUESTION 25
1. ________ paid for the use of land; ________ paid for the services of labor; and ________ paid for the use of capital.
Interest is; wages are; profit is |
||
Rent is; wages are; interest is |
||
Rent is; interest is; wages are |
||
Mortgages are; interest is; wages are |
1. Which of the following groups of countries are all advanced economies?
Hong Kong, Japan, France, and the United Kingdom |
||
Italy, the United States, China, and Russia |
||
Singapore, Russia, France, and Chad |
||
Australia, Brazil, and the United States |
QUESTION 2
1. The most people live in ________ economies and the fewest people live in ________ economies.
developing; emerging market |
||
advanced; emerging market |
||
emerging market; developing |
||
advanced; developing |
QUESTION 3
1. Households and firms in the U.S. economy interact with those in the rest of the world in the ________ market and the ________ market.
goods; financial |
||
government; goods |
||
goods; factor |
||
financial; factor |
QUESTION 4
1. As a factor of production, oil reserves are counted as
labor. |
||
capital. |
||
entrepreneurship. |
||
land. |
QUESTION 5
1. ________ the owners of the factors of production, while ________ what amounts of those factors to hire.
Households are; the government determines |
||
Firms are; households that determine |
||
The government is; firms determine |
||
Households are; firms that determine |
QUESTION 6
1. The emerging market economies are
the nations that are currently agricultural in nature. |
||
most of the nations of Western Europe. |
||
the largest grouping including the nations of China and India. |
||
in the transition from state-owned production to free markets. |
QUESTION 7
1. In the United States, the productive factor that, as a group, receives the largest fraction of the nation's total income was
consumption of goods and services. |
||
entrepreneurship. |
||
capital. |
||
labor. |
QUESTION 8
1. Items bought by individuals to provide personal enjoyment are termed
personal goods. |
||
consumption of goods. |
||
consumption or investment goods. |
||
standard goods. |
QUESTION 9
1. In the advanced economies, ________ of the factories use advanced capital equipment and in the developing economies ________ of the factories use advanced capital equipment
virtually all; none |
||
some; some |
||
virtually all; virtually all |
||
virtually all; some |
QUESTION 10
1. The productive resource that includes all the "gifts of nature" is called
land. |
||
labor. |
||
entrepreneurship. |
||
capital. |
QUESTION 11
1. What would be an example of government good?
Donald Trump purchases furniture for his office. |
||
Antonio, the manager of the local Taco Hut, purchases a new deep fryer. |
||
The local driver's license office purchases a new digital camera and printer. |
||
Jake buys an iPhone. |
QUESTION 12
1. The world population is approximately ________ people.
2 trillion |
||
680 million |
||
6.8 billion |
||
6.8 million |
QUESTION 13
1. Computers and insurance coverage produced in the United States and sold to people in other nations are categorized as
U.S. exports of goods and services. |
||
U.S. government goods and services. |
||
foreign capital goods. |
||
U.S. consumer goods and services. |
QUESTION 14
1. Of the following, the federal government obtains most revenue from
corporate income taxes. |
||
excise taxes. |
||
sales taxes. |
||
social security taxes. |
QUESTION 15
1. Items bought by businesses to help produce other goods and services are called
capital goods. |
||
government goods and services. |
||
consumption of goods and services. |
||
exports of goods and services. |
QUESTION 16
1. The majority of the income earned in the United States is paid in
profit. |
||
interest. |
||
rent. |
||
wages. |
QUESTION 17
1. Dan missed class the day the professor covered the circular flow model. Dan asked his friend Joan to explain markets to him. Joan correctly stated that a market
must include a written contract between buyers and sellers. |
||
requires a physical location for buyers and sellers to get together. |
||
is only a place to purchase groceries. |
||
is an arrangement that brings buyers and sellers together. |
QUESTION 18
1. The United States possesses a large amount of human capital. As a result of this fact, in the United States, there is a
highly skilled and educated labor force. |
||
a large number of kind and generous humans. |
||
a large number of people and a great deal of land. |
||
a large amount of machinery and equipment. |
QUESTION 19
1. Which of the following correctly lists the categories of factors of production?
labor, machines, buildings, capital, and entrepreneurship |
||
land, buildings, capital, and entrepreneurship |
||
land, labor, capital, and entrepreneurship |
||
forests, fish, buildings, capital, and entrepreneurship |
QUESTION 20
1. Which of the following correctly lists the categories of factors of production?
capital, money, and labor |
||
hardware, software, land, and money |
||
land, labor, capital, and entrepreneurship |
||
machines, buildings, land, and money |
QUESTION 21
1. In the United States, the poorest 20 percent of households receive roughly ________ percent of total income.
10 |
||
3 |
||
15 |
||
20 |
QUESTION 22
1. What would be an example of a consumption service?
Jake buys an iPhone. |
||
The local driver's license office purchases a new digital camera and printer. |
||
Antonio, the manager of the local Taco Hut, purchases a new deep fryer. |
||
Rhianna gets a haircut. |
QUESTION 23
1. The total value of capital in the United States is around
$47 trillion. |
||
$10 trillion. |
||
$100 trillion. |
||
$79 trillion. |
QUESTION 24
1. An export good is a good produced
by foreigners in the United States and purchased by U.S. households. |
||
in another country and purchased by U.S. residents. |
||
in the United States and sold to foreigners living in the United States. |
||
in the United States and sold in other countries. |
QUESTION 25
1. ________ paid for the use of land; ________ paid for the services of labor; and ________ paid for the use of capital.
Interest is; wages are; profit is |
||
Rent is; wages are; interest is |
||
Rent is; interest is; wages are |
||
Mortgages are; interest is; wages are |