The advantage of using real GDP over nominal GDP is that: A) it can be compared over time. B) it takes into account the distribution of income. C) it takes into account changes in ruling political party. D) it is easier to calculate. ANSWER A
Date: September 2nd, 2020
The following table shows the demand for notebooks of four consumers. Price ($/unit) Consumer 1 Demand (units) Consumer 2 Demand (units) Consumer 3 Demand (units) Consumer 4 Demand (units) $8 8 6 9 10 $6 16 10 15 18 $4 20 13 21 24 $1 22 17 24 27 Define the term “market demand.” If […]
Date: September 2nd, 2020
The changing of government expenditures or taxes to achieve national economic goals is A) inflationary fiscal policy. B) automatic fiscal policy. C) recessionary fiscal policy. D) discretionary fiscal policy. ANSWER D
Date: September 2nd, 2020
Discretionary fiscal policy is so named because it A) is undertaken at the order of the nation’s central bank. B) involves specific changes in taxes and government spending undertaken by Congress and the president. C) occurs automatically as the nation’s level of GDP changes. D) involves secret advice given by the Council of Economic Advisers […]
Date: September 2nd, 2020
Economic growth refers to an increase in: A) tax rates. B) prices. C) GDP per capita. D) population. ANSWER C
Date: September 2nd, 2020
Long-run unemployment in the classical model is considered to be impossible because A) flexible prices and wages keep workers fully employed. B) the government will intervene to aid the unemployed. C) job placement and training programs are rampant in the United States. D) the labor supply is horizontal. ANSWER A
Date: September 2nd, 2020
Which of the following statements is true? A) Cost-benefit analysis does not yield the same result as optimization analysis. B) A rational economic agent is not likely to optimize. C) Cost-benefit analysis can also be used for normative economic analysis. D) The net benefit of an option that costs $50 and provides a benefit of […]
Date: September 2nd, 2020
Where the consumption function intersects the 45-degree line A) consumption will equal only autonomous consumption. B) the average propensity to consume is 0.5. C) savings will be negative. D) saving will be zero. ANSWER D
Date: September 2nd, 2020
How would the following events affect the market demand for laser printers? a) A recession in the economy leading to a fall in income levels b) A five-fold increase in the price of printing paper What will be an ideal response? ANSWER a) A recession in the economy that causes a fall in income […]
Date: September 2nd, 2020
Suppose the economy has a high level of unemployment. This would imply A) that the economy is operating on the SRAS curve and that government spending could be decreased to reduce unemployment. B) that the government should engage in expansionary fiscal policy and increase the tax rate. C) that fiscal policy has been ineffective and […]
Date: September 2nd, 2020
