Refer to the scenario above. Which of the following statements is true of the model? A) The model predicts that two additional years of education is likely to increase future earnings by 60 percent. B) The prediction of the model can be applied to unlimited years of additional education. C) The predictions of this model […]
A monetary system is preferable over the barter system because it A) is easier to track by the government. B) limits cash leakages. C) reduces transaction costs. D) is determined by the Congress. ANSWER C
Which of the following factors of production is least likely to show diminishing marginal product? A) Capital B) Labor C) Technology D) Land ANSWER C
Refer to the scenario above. Which of the followings statements is true of the model? A) According to the model two additional years of education will increase an individual’s future wages 1.20 times. B) The predictions of this model can be verified empirically. C) According to the model two additional years of education will increase […]
If the real interest rate is greater than the nominal interest rate in an economy: A) inflation must be negative in the economy. B) inflation must be positive in the economy. C) inflation must be zero in the economy. D) the nominal interest rate must be equal to zero. ANSWER A
Continuous increase in investment in which of the following is most likely to cause sustained growth? A) Capital B) Technology C) Land D) Labor ANSWER B
If the crowding-out effect is complete and the marginal propensity to save is 0.25, then an increase in government spending of $100 billion will generate how much more real GDP? A) $0 B) $400 billion C) $25 billion D) $100 billion ANSWER A
Public debt is held as A) Treasury Bills, Treasury Notes, Treasury Bonds, and U.S. Savings Bonds. B) U.S. Notes. C) Federal Reserve Notes. D) corporate bonds and common stocks of the largest companies. ANSWER A
The public debt can be thought of as A) the total amount the government spends for goods and services. B) the total amount consumers owe on their credit cards. C) accumulated budget deficits and surpluses. D) the total amount in taxes consumers pay to the government. ANSWER C
Refer to the figure above. When the supply curve of flash drives is S1 and the demand curve for flash drives is D, what is the shortage in the market when the price is $5? A) 50 units B) 40 units C) 10 units D) 0 units ANSWER D
