Which of the following statements is true? A) A rational consumer makes his decisions depending on what the majority chooses. B) A trade-off refers to the exchange of goods between economic agents through a barter system or mutual exchange. C) A budget constraint is an economic tool that quantifies the trade-off between consumption of two […]
Other things being equal, a reduction in taxes will A) lead to a corresponding reduction in interest rates increasing the crowding out effect. B) influence the short run aggregate supply curve but not the aggregate demand curve. C) cause an increase in aggregate demand due to increases in consumption, investment, or net exports. D) lead […]
For barter to occur there must be A) two people willing to pay with credit. B) a double coincidence of wants for each good to be exchanged. C) one person who pays cash. D) hyperinflation. ANSWER B
Traditionally, economists regarded improvements in technology as A) unrelated to economic growth in any systematic way. B) the most important factor that helped explain economic growth, and basically the only factor that would cause economic growth. C) an important factor in explaining economic growth that was due to economic forces that also could easily be […]
According to the above figure, at an income level of Y1, A) the economy saves an amount equal to BD. B) the economy dissaves an amount equal to BD. C) the average propensity to save is greater than one. D) the marginal propensity to save is falling. ANSWER B
A barter arrangement simply means A) the government has paid for the goods. B) a promise to pay in the future. C) that gold must be offered from one party. D) a direct exchange of goods without the use of money. ANSWER D
Which of the following factors will NOT cause a shift in the demand for a good? A) A change in consumer incomes B) A change in the market price of the good C) A change in the number of consumers D) A change in tastes and preferences ANSWER B
Recently economists have added what factor as a major explanation of economic growth? A) the growth rate of labor B) the growth rate in labor and capital productivity C) technology D) the growth rate of capital ANSWER C
If you have $5000 and the GDP deflator decreases from 100 to 80 A) the $5000 will buy 20 percent more of the goods and services produced by society. B) the value of the $5000 remains constant. C) the $5000 will buy 20 percent less of the goods and services produced by society. D) the […]
Money functions as a(n) A) medium of exchange. B) unit of account. C) store of value. D) all of the above. ANSWER D
