Which of the following is NOT an example of a flow variable? A) inventory investment B) The federal deficit C) capital stock D) planned investment ANSWER C
Date: September 2nd, 2020
Keynes argued that I. Capitalism did not always lead to full employment. II. Nominal prices were more important than relative prices. A) I only B) II only C) Both I and II D) Neither I nor II ANSWER A
Date: September 2nd, 2020
Involuntary unemployment A) will increase as the wage rate falls. B) exists when there is an excess quantity of labor supplied. C) occurs when the wage rate is below the equilibrium wage rate. D) exists when there is a shortage of labor. ANSWER B
Date: September 2nd, 2020
Economic agents who borrow funds are known as: A) receivers. B) debtors. C) investors. D) creditors. ANSWER B
Date: September 2nd, 2020
Assuming all else equal, if the production technology available to a nation improves, its aggregate production function: A) shifts inward. B) becomes vertical. C) shifts upward. D) becomes horizontal. ANSWER C
Date: September 2nd, 2020
A government grant that gives an inventor the exclusive right or privilege to make, use, or sell his or her invention is known as A) a negative externality. B) a patent. C) a protectionism clause. D) a positive externality. ANSWER B
Date: September 2nd, 2020
When government spending exceeds government revenues during a given period of time A) the national debt must be decreasing. B) a budget surplus exists. C) Congress is obliged to raise taxes. D) a budget deficit exists. ANSWER D
Date: September 2nd, 2020
In a closed economy: A) consumption is equal to zero. B) investment is equal to zero. C) government spending is equal to zero. D) net exports is equal to zero. In a closed economy, without the government, the consumption expenditure equals $5,000 and the investment expenditure equals $2,000. ANSWER D
Date: September 2nd, 2020
Which of the following statements is true? A) Knowledge of economics complicates decision making. B) Economics is more of a theoretical subject with limited applications in the real world. C) Testing with data is essential to develop a good theory. D) Cost-benefit analysis can be applied only to limited economic decisions. ANSWER C
Date: September 2nd, 2020
Which of the following statements is true? A) Economics does not provide insights into human behavior. B) Economic reasoning tends to reduce the quality of decision making. C) Economics is concerned with money, not choices. D) Economics can be used to predict people’s actions. ANSWER D
Date: September 2nd, 2020
