A firm’s production function is the relationship between: A) the inputs employed by the firm and the resulting costs of production. B) the factors of production and the resulting outputs of the production process. C) the demand for a firm’s output and the quantity it is able to produce with available resources. D) the firm’s […]
Under a fixed exchange rate system, to prevent the depreciation of the dollar as a result of a balance of payments deficit, the Fed will increase the demand for dollars by supplying a foreign currency from its reserve assets. Indicate whether the statement is true or false ANSWER TRUE
The government passed the Economic Recovery Act in October 2008 to prevent the financial crisis from continuing to worsen. A controversial component of this act was the A) temporary decrease in the federal deposit insurance limit. B) sale of new subprime mortgage assets. C) borrowing of $150 million from AIG. D) Troubled Asset Relief Program […]
Everything else held constant, if income tax rates were lowered, then A) the interest rate on municipal bonds would fall. B) the interest rate on Treasury bonds would rise. C) the interest rate on municipal bonds would rise. D) the price of Treasury bonds would fall. ANSWER C
Which of the following is not included in GDP? A) Unpaid maintenance of your house by your spouse. B) Services such as those provided by lawyers and dentists. C) The estimated rental (imputed) value of owner-occupied housing. D) Production by foreign citizens in the U.S. ANSWER A
Which of the following bank assets is the most liquid? A) consumer loans B) reserves C) state and local government securities D) U.S. government securities ANSWER B
Which of the following is not a characteristic of the broiler chicken industry? A) A significant degree of industry concentration, with the four largest firms producing 40 percent of the industry’s output. B) A significant degree of real and subjective product differentiation. C) An inability of individual firms to have any influence market price. D) […]
Which investment bank filed for bankruptcy on September 15, 2008 making it the largest bankruptcy filing in U.S. history? A) Lehman Brothers B) Merrill Lynch C) Bear Stearns D) Goldman Sachs ANSWER A
Under a gold standard, a continual balance of surplus in any country can be sustained only as long as the country’s gold reserves hold out. Indicate whether the statement is true or false ANSWER FALSE
If an economy has aggregate output of $20 trillion, then aggregate income is A) $10 trillion. B) $20 trillion. C) $30 trillion. D) $40 trillion. ANSWER B
