According to the classical model, prices and wages A) must be set by government. B) move upward easily, but are “sticky” downward. C) are flexible. D) move downward easily, but are “sticky” upward. ANSWER C
Date: September 2nd, 2020
Which one of the following is NOT a component of aggregate demand? A) investment expenditures B) government purchases C) consumption spending D) merchandise inventories ANSWER D
Date: September 2nd, 2020
Which of the following is NOT related to fiscal policy? A) increasing government expenditures B) decreasing marginal tax rates C) passage of new securities laws D) reducing the budget deficit ANSWER C
Date: September 2nd, 2020
New growth theorists believe that A) wealth creation comes from innovation. B) inventions spread very rapidly, thereby curtailing the need for more innovations. C) wealth creation comes from saving. D) wealth creation is due to capital spending and not research and development spending since much research and development spending fails to produce an invention. […]
Date: September 2nd, 2020
If the marginal propensity to save is 0.4 and disposable income increases from $1,000 to $1,500, saving will increase A) $300. B) $200. C) $100. D) $400. ANSWER B
Date: September 2nd, 2020
A supply schedule is a table that reports: A) the expected excess supply in the market at different prices. B) the profits earned by producers at different levels of production. C) the different quantities of a good that producers are willing to sell at different prices. D) the different quantities of a good that producers […]
Date: September 2nd, 2020
What is cost-benefit analysis? What are the steps involved in using cost-benefit analysis to make the optimal choice? What will be an ideal response? ANSWER Cost-benefit analysis is a calculation that adds up the costs and benefits of a particular choice using a common unit of measurement. It involves the conversion of all costs […]
Date: September 2nd, 2020
The idea that “supply creates its own demand” is attributed to which of the following economists? A) Adam Smith B) David Ricardo C) A. C. Pigou D) J. B. Say ANSWER D
Date: September 2nd, 2020
The most important function of money is when money is used as a A) medium of exchange. B) unit of accounting. C) standard of deferred payment. D) store of value. ANSWER A
Date: September 2nd, 2020
Which of the following statements is true of the U.S. economy in the last 200 years? A) The growth rate of GDP has been more than 10% per year. B) The GDP per capita has decreased. C) The GDP per capita has increased. D) There has been no contraction in the economy. ANSWER C
Date: September 2nd, 2020
