From the late 1980s to 2000, the natural rate of unemployment A) fluctuated up and down, following the path of the actual rate of unemployment. B) gradually declined. C) climbed sharply. D) held constant. ANSWER B
An arrangement that allows buyers and sellers to exchange things is called A) a market. B) a contract. C) money. D) efficient. ANSWER A
If the depreciation rate in an economy is 10%, and the capital stock in the economy is $1,000, the level of investment required to keep the economy at a steady state is equal to: A) $110. B) $1,000. C) $250. D) $100. ANSWER D
Because resources are limited A) people must make choices. B) firms will be forced out of business. C) only the very wealthy can get everything they want. D) the availability of goods will be limited but the availability of services will not. ANSWER A
The value of a country’s exports during a particular year was $120,000 and the value of its imports was $85,000. Which of the following is true? A) The country ran a fiscal deficit of $205,000 during that year. B) The country ran a trade surplus of $35,000 during that year. C) The country ran a […]
To test the effectiveness of a newly developed medicine, 300 patients suffering from a heart ailment were divided into two groups of 150 people each. One group was treated with the new medicine, while the other was treated with the existing medicine that is already widely used. In this scenario, identify the treatment group and […]
For the capital stock of the economy to remain constant over time the amount of investment: A) must exceed the depreciated value of capital stock. B) must be less than the depreciated value of capital stock. C) must be equal to the depreciated value of capital stock times the savings rate of the economy. D) […]
Everything else remaining unchanged, what is likely to happen to the equilibrium real interest rate and quantity of credit if the credit demand curve shifts to the right? A) Both equilibrium rate of interest and quantity of credit will decrease. B) The equilibrium rate of interest will decrease and the quantity of credit will increase. […]
If the Fed maintains an expansionary monetary policy, ________. A) the M2 measure of money decreases B) the real interest rate increases C) banks make less loans D) bank deposits increase ANSWER D
Which statement is TRUE about a comparison of economic freedom with political freedom? A) Economic freedom is more important than political freedom when considering positive economic growth. B) Economic freedom leads to positive economic growth while political freedom leads to negative economic growth. C) Political freedom is more important than economic freedom when considering positive […]