Which of the following relationships is most likely to exhibit zero correlation? A) The relationship between the amount received as unemployment benefits in China and the unemployment rate in Canada B) The relationship between education and income C) The relationship between income and savings D) The relationship between wind velocity and rotational speed of wind […]
The short-run aggregate supply curve in modern Keynesian analysis is A) downward sloping. B) horizontal. C) vertical. D) upward sloping. ANSWER D
Money is still useful during times of inflation because A) it still retains the characteristic of predictability of value. B) its opportunity cost falls as inflation rises. C) more money can be made so people can still purchase the goods and services they want. D) it is not a liquid asset. ANSWER A
________ occurs when the direction of cause and effect is mixed up in a study. A) Adverse causality B) Omitted variable bias C) Reverse causality D) Limited information bias ANSWER C
Consider the above figure. At a price level of 150 A) total planned production exceeds total planned real expenditures. B) total planned real expenditures exceed total planned real production. C) the price level would rise. D) inventories of unsold goods decline. ANSWER A
A factory in Techland could not sell 20% of its output during a certain year due to a decrease in demand for its product. Which of the following would have happened if it produced 20% less? A) Techland’s GDP would have been higher. B) Techland’s GDP would have been lower. C) Techland’s trade deficit would […]
If the Fed wants to lower the federal funds rate through open market operations, it ________. A) decreases tax rates B) increases tax rates C) sells bonds D) buys bonds ANSWER D
Which of the following is a problem associated with extreme levels of poverty? A) High life expectancy B) High infant mortality C) High literacy D) Low fertility ANSWER B
A major difference between the transactions demand for money and the precautionary demand is that the A) transactions demand is for emergencies while the precautionary demand is for every day expenditures. B) transactions demand involves expected expenditures while the precautionary demand involves unexpected expenditures. C) transactions demand means that people are foregoing interest but they […]
Double counting occurs when: A) inputs are included in the calculation of the gross domestic product. B) household production is included in the calculation of the gross domestic product. C) depreciation is included in the calculation of the gross domestic product. D) unsold inventories are included in the calculation of the gross domestic product. […]
