Points to the left of the LM schedule show that a. the amount of money supplied exceeds the amount of money demanded. b. saving plus taxes will exceed investment plus government purchases. c. the amount of money demanded exceeds the amount of money supplied. d. investment plus government purchases will exceed saving plus taxes. […]
When drawn against the real interest rate, the output supply curve unambiguously shifts to the right if A) current capital decreases. B) current total factor productivity decreases. C) future total factor productivity decreases. D) current or future taxes increase. ANSWER D
When drawn against the real interest rate, the output supply curve is upward sloping because labor supply is A) increasing in the real interest rate and labor demand is independent of the real interest rate. B) decreasing in the real interest rate and labor demand is independent of the real interest rate. C) independent of […]
An increase in total factor productivity could be the result of A) adverse weather. B) the addition of new machinery. C) new hires. D) the introduction of new manufacturing methods. ANSWER D
The aggregate demand curve for labor is the a. vertical summation of the individual firms’ demand curves. b. horizontal summation of the individual firms’ demand curves. c. horizontal summation of all the individual supply curves. d. vertical summation of the individual firms’ supply curves. ANSWER B
Tariffs are ________. A) taxes levied on goods imported into the United States B) levied by state and local governments C) the primary source of federal revenues D) taxes on goods exported from the United States ANSWER A
Assuming an decrease in money demand, then to keep interest rates constant the Fed must a. keep the money supply constant. b. conduct an open market sale of bonds. c. reduce the required ratio. d. both b and c. e. None of the above ANSWER D
Which of the following are not included as a component of national income? a. Corporate profits b. Compensation of employees c. Net interest income d. Capital gains and capital losses ANSWER D
If the short-run aggregate supply curve is shifting down repeatedly, it is rather likely that ________. A) output is declining repeatedly, relative to potential output B) the long-run aggregate supply curve is shifting to the left C) negative price shocks are recurring D) all of the above E) none of the above ANSWER E
Among 33 major economies, government spending (relative to GDP) in the United States is ________. A) relatively low B) remarkably high C) about average D) lowest of all ANSWER A
