In an economy with no government and no international trade, consumption expenditures will be less than the total value of goods and services when A) people save some of their income. B) people barter rather than use money in making exchanges. C) saving is zero. D) investment is zero. ANSWER A
Date: September 2nd, 2020
Higher saving rates mean higher future growth rates because A) the banks have more money to distribute to their shareholders. B) saving contributes to more investment, which yields a larger capital stock. C) the interest earned from savings gives you more wealth. D) saving contributes to less investment, which yields a larger capital stock. […]
Date: September 2nd, 2020
The Keynesian model is based on the idea that A) both consumption and saving are directly related to disposable income. B) saving depends only on the interest rate. C) consumption is unrelated to the level of real Gross Domestic Product (GDP). D) both consumption and saving are unrelated to the level of real Gross Domestic […]
Date: September 2nd, 2020
A free market is a market: A) that has price controls imposed by a ruling authority. B) where almost all exchanges take place involuntarily. C) where determination of equilibrium quantity is free from the forces of demand and supply. D) that operates with little or no government control. ANSWER D
Date: September 2nd, 2020
A price level increase tends to reduce net exports, thereby reducing the amount of real goods and services purchased in the United States. Economists refer to this phenomenon as A) the barrier effect. B) the Gross Domestic Product (GDP) effect. C) the open-economy effect. D) the wealth effect. ANSWER C
Date: September 2nd, 2020
The relationship between a firm’s advertising expenditure and its profit is studied under: A) international economics. B) microeconomics. C) public economics. D) macroeconomics. ANSWER B
Date: September 2nd, 2020
In order for a nation to be able to consume more in the future, it needs to A) produce less today in aggregate and save the difference between consumption and income. B) produce more today in aggregate and save the difference between consumption and production. C) consume more today in aggregate and borrow the difference […]
Date: September 2nd, 2020
If the price level increases, A) the buying power of your checking accounts rises with it. B) the economy tends to grow faster. C) there is no effect on buying power. D) the buying power of your checking account falls. ANSWER D
Date: September 2nd, 2020
The consumption function shows A) a positive relationship between an individual’s stock of wealth and his level of planned consumption. B) a negative relationship between planned consumption and aggregate saving. C) a positive relationship between disposable income and planned consumption. D) a negative relationship between disposable income and planned consumption. ANSWER C
Date: September 2nd, 2020
When television commentators refer to “tax and spend” policy, they are referring to A) monetary policy. B) the Federal Reserve policy. C) automatic stabilizers. D) fiscal policy. ANSWER D
Date: September 2nd, 2020
