1. Gross national product measures the current market value of final output produced within a country by both domestic and foreign resources.
True or False
2.An increase in business inventories would be included in the investment component of GDP.
True or False
3.Critics of supply-side economics claim that it
a.favors the wealthy
b.increases federal debt
c.can be inflationary
d.all of the above
4.According to the classical economists, demand creates its own supply
True or False
5.Aggregate demand curves tend to be very flat
True or False
6.The Keynesian AS curve is
a. flat because of unemployed resources
b.vertical because of full employment
c.upward sloping
d.downward sloping
7.The Keynesian analysis assumes that ample resources will be available to increase production if planned investment increases when the economy is at less than full employment.
True or False
8.If planned injections increase by $100 per day and the MPC is four-fifths,
a. the multiplier will be 5
b. total daily spending will ultimately increase by $150
c.the MPS will be $25
d.all of the above
9.The consumption function shows the relationship between the income received by the economyâs households and the
a. amount they plan to spend on currently produced final output
b.amount of government spending
c.amount businesses plans to spend on investment
d.level of taxes on personal income
10.Prior to Keynes, the prevailing viewpoint concerning equilibrium in the economy was that of
a.supply-side economics
b.monetarism
c.classical economics
d.depression economics
1. Gross national product measures the current market value of final output produced within a country by both domestic and foreign resources.
True or False
2.An increase in business inventories would be included in the investment component of GDP.
True or False
3.Critics of supply-side economics claim that it
a.favors the wealthy
b.increases federal debt
c.can be inflationary
d.all of the above
4.According to the classical economists, demand creates its own supply
True or False
5.Aggregate demand curves tend to be very flat
True or False
6.The Keynesian AS curve is
a. flat because of unemployed resources
b.vertical because of full employment
c.upward sloping
d.downward sloping
7.The Keynesian analysis assumes that ample resources will be available to increase production if planned investment increases when the economy is at less than full employment.
True or False
8.If planned injections increase by $100 per day and the MPC is four-fifths,
a. the multiplier will be 5
b. total daily spending will ultimately increase by $150
c.the MPS will be $25
d.all of the above
9.The consumption function shows the relationship between the income received by the economyâs households and the
a. amount they plan to spend on currently produced final output
b.amount of government spending
c.amount businesses plans to spend on investment
d.level of taxes on personal income
10.Prior to Keynes, the prevailing viewpoint concerning equilibrium in the economy was that of
a.supply-side economics
b.monetarism
c.classical economics
d.depression economics
For unlimited access to Homework Help, a Homework+ subscription is required.
Related textbook solutions
Related questions
Question 1
The law of demand states that there is a direct relationship between supply and demand.
True
False
4 points
Question 2
Equilibrium is a state of balance between supply and demand.
True
False
4 points
Question 3
Goods are scarce for both rich and poor.
True
False
4 points
Question 4
"The big corporations in this country, like ExxonMobil and GM, have deep pockets and need to be hiring more people." This is a positive statement about economic policy.
True
False
4 points
Question 5
The law of supply states that there is a direct relationship between price and quantity demanded.
True
False
4 points
Question 6
In the circular flow model, firms own economic resources, and householdsbuy the manufactured products and services.
True
False
4 points
Question 7
Households play a dual role of providing the factors of production whilepurchasing the goods and services of firms.
True
False
4 points
Question 8
Opportunity cost is the lowest valued benefit that must be sacrificed asthe result of choosing an alternative.
True
False
4 points
Question 9
Scarcity denotes that our desire for a good exceeds the amount that isfreely available from nature.
True
False
4 points
Question 10
Economics is a social science concerned with satisfying man's unlimitedwants with limited resources.
True
False
4 points
Question 11
Joint output of individuals or nations will be maximized when goods areexchanged between parties in accordance with the law of"comparative advantage".
True
False
4 points
Question 12
The production possibilities frontier assumes that the level of technologyvaries when applying the model.
True
False
4 points
Question 13
Excess demand in the market will cause the price of a product to decline.
True
False
4 points
Question 14
Demand is measured on the vertical axis and supply on the horizontalaxis.
True
False
4 points
Question 15
A change in quantity demanded is a movement along the same demandcurve.
True
False
4 points
Question 16
As globalization and world trade proliferates, individual markets withincountries' economies become more competitive.
True
False
4 points
Question 17
Which growth theory compares a subsistence real wage rate to the actual real wage rate?
Classical growth theory | ||
Inflation growth theory | ||
Neoclassical growth theory | ||
New growth theory |
4 points
Question 18
Suppose the working age population in Tiny Town is 100 people. If 25 of these people are NOT in the labor force, the ________ equals ________.
unemployment rate; 25/100 Ã 100 | ||
employment rate; 25/75 Ã 100 | ||
labor force; 75 | ||
labor force; 25/100 Ã 100 |
4 points
Question 19
Suppose there is a rise in the real wage rate. As a result, the quantity of labor demanded:
increases. | ||
decreases. | ||
does not change because there is no change in the money wage rate. | ||
increases only if the price level also decreases. |
4 points
Question 20
GDP can be computed as the sum of:
all sales that have taken place in an economy over a period of time. | ||
the total expenditures of consumers and business over a period of time. | ||
the total expenditures of consumption, investment, and government expenditure on goods and services over a period of time. | ||
the total expenditures of consumption, investment, government expenditure on goods and services, and net exports over a period of time. |
4 points
Question 21
The real wage rate equals:
(100 x (money wage rate/price level) | ||
(100 x (price level/money wage rate) | ||
(money wage rate x (price level) | ||
(money wage + (number of hours worked/(price level) |
4 points
Question 22
If the CPI was 121.5 at the end of 2007 and 138.3 at the end of 2008, the inflation rate over these two years was:
10.2 percent. | ||
13.8 percent. | ||
12.2 percent. | ||
16.8 percent. |
4 points
Question 23
A movement along the production function is the result of a change in:
the quantity of labor. | ||
technology. | ||
capital. | ||
interest rates. |
4 points
Question 24
All of the following are part of fiscal policy EXCEPT:
setting tax rates. | ||
setting government spending. | ||
choosing the size of the government deficit. | ||
controlling the money supply. |
4 points
Question 25
Along a production possibilities frontier for real GDP and the quantity of leisure time, as leisure time increases, real GDP:
decreases. | ||
increases. | ||
stays the same. | ||
could increase, decrease or stay the same. |
1. | In the money market, money supply is determined by the central bank, such as the Fed in the U.S. Because of this, money supply curve is usually vertical in the short run, while the money demand curve is downward sloping. The quantity demanded of money has an inverse relationship with the interest rate, but a direct relationship with both the price level and real GDP. Therefore, when the general price level increases, what will most likely happen? | ||||||||||||||||
|
3. | Suppose workers become pessimistic about their future employment, which causes them to save more and spend less. If the economy is in the Keynesian range of the aggregate supply curve, then | ||||||||||||||||
|
5. | Which of the following will shift the aggregate demand curve to the left? | ||||||||||||||||
|
6. | Which of the following will shift the aggregate supply curve to the left? | ||||||||||||||||
|
8. | There are also two kinds of deflation, the demand-pull deflation and cost-push deflation. Then which of the following is most likely to be true? | ||||||||||||||||
|
9. | The short-run aggregate supply curve (SRAS) can be written as follows: Y = Yf + b (p - pe), where Y = real GDP, Yf = full-employment real GDP, p = price level, pe = expected price level, and b is a positive coefficient. The SRAS can be re-written as p = pe - (1/b)(Yf) + (1/b)(Y). Then which of the following is true? | ||||||||||||||||
|