An increase in the public debt would most likely indicate that A) national saving has increased. B) the budget deficit has increased. C) the budget deficit has decreased. D) the trade deficit has decreased. ANSWER B
If the real interest rate is greater than the equilibrium real interest rate: A) interest rates tend to rise further. B) the quantity of credit supplied falls short of the quantity of credit demanded. C) the quantity of credit demanded falls short of the quantity of credit supplied. D) the quantity of credit demanded equals […]
Quantitative easing is likely to lead to a(n) ________. A) increase in unemployment rate B) decrease in the price level C) increase in the federal funds rate D) decrease in the federal funds rate ANSWER D
Which of the following is an example of a physical capital? A) A factory B) A worker C) A stock D) A bond ANSWER A
An economy experiences real growth over time with stable aggregate demand. This would likely result in A) decreasing prices. B) increased unemployment. C) increasing prices. D) secular inflation. ANSWER A
The part of consumption that is independent of disposable income is called A) autonomous consumption. B) fixed consumption. C) automatic consumption. D) personal consumption. ANSWER A
Which of the following is the rate of unemployment that occurs after all adjustments in the labor market have occurred? A) the structural rate of unemployment B) the cyclical rate of unemployment C) the natural rate of unemployment D) the frictional rate of unemployment ANSWER C
A person is preparing for a long automobile trip and cashes in a certificate of deposit for cash in case of emergencies along the way. This is an example of the A) transactions demand for money. B) asset demand for money. C) precautionary demand for money. D) wealth demand for money. ANSWER C
The share of net public debt owed to foreign residents today is close to A) 80 percent. B) 10 percent. C) 100 percent. D) 50 percent. ANSWER D
A rightward shift of long-run aggregate supply without any change in aggregate demand A) results in a lower price level. B) increases the price level along with an increase in real GDP. C) will leave real GDP unchanged. D) increases the price level without any change in real GDP. ANSWER A