Money serves as a standard of value, which is another way of saying that money functions as A) a unit of accounting. B) a medium of exchange. C) an opportunity cost of investment. D) standard of deferred payment. ANSWER A
Date: September 2nd, 2020
What is discretionary fiscal policy and what is its purpose? What will be an ideal response? ANSWER Discretionary fiscal policy is the deliberate changing of government spending and/or taxes. Its purpose is to move the economy toward full employment with price stability more rapidly than it would if left on its own.
Date: September 2nd, 2020
Consider two economies: Barylia and Lithasia. The GDP per capita in Lithasia is $6,000 while the GDP per capita in Barylia is $12,000. Both countries grow exponentially at an annual rate of 10%. How will their GDPs vary over the next year? Is there any limitation of comparing the absolute levels of GDP per capita […]
Date: September 2nd, 2020
Which of the following statements is true of data? A) Anecdotes work as good substitutes for data. B) Data help in verifying causal relationships. C) Data are not important to evaluate theories. D) The less the available data, the better the analysis. ANSWER B
Date: September 2nd, 2020
Cigarettes served as money in some prisoner of war (POW) camps during World War II. Given this, we would expect to observe A) no one ever smoking a cigarette. B) prices of other goods expressed in terms of cigarettes. C) only government-issued cigarettes being accepted as money. D) people usually resorting to barter rather than […]
Date: September 2nd, 2020
What is measured on the vertical axis of the aggregate demand graph? A) unemployment B) nominal income C) the price level D) real GDP per year ANSWER C
Date: September 2nd, 2020
Country A’s GDP per capita in the beginning of 2005 was $22,150. In the beginning of 2006, it increased to $27,600. Calculate country A’s growth rate of GDP per capita between 2005 and 2006. What will be an ideal response? ANSWER In this case, the growth rate of GDP per capita of country A […]
Date: September 2nd, 2020
According to the above table, as the level of real disposable income increases A) the APS increases. B) the APC increases. C) the marginal propensity to save declines. D) the marginal propensity to consume increases. ANSWER A
Date: September 2nd, 2020
Empiricism refers to the process of: A) making choices using values and beliefs. B) measuring variables. C) testing ideas using data. D) collecting and organizing data. ANSWER C
Date: September 2nd, 2020
Which of the following is most likely to reduce the rate of economic growth? A) investment in human capital B) a high domestic saving rate C) subsidies for R&D activities D) slow technological progress ANSWER D
Date: September 2nd, 2020
