If other factors are held constant, an increase in the price level A) causes desired net export spending to rise. B) causes the real value of the money to increase. C) causes desired net export spending to fall. D) induces people to spend their money faster. ANSWER C
Date: September 2nd, 2020
Which of the following statements is true? A) Macroeconomics studies how individuals make choices. B) Microeconomics is the study of an economy as a whole. C) The study of the inflation rate is covered under microeconomics. D) The study of the unemployment rate is covered under macroeconomics. ANSWER D
Date: September 2nd, 2020
Regarding the role of saving in economic growth, studies indicate that A) there is both a positive and a negative relationship between economic growth and saving. B) there is a positive relationship between economic growth and saving. C) there is a negative relationship between economic growth and saving. D) there is no relationship between economic […]
Date: September 2nd, 2020
The interest rate effect that helps explain the slope of the aggregate demand curve arises because A) an increase in the price level lead to decreases in interest rates, which induces more borrowing and hence raises planned real expenditures. B) interest rates and total planned real expenditures are unrelated. C) an increase in the price […]
Date: September 2nd, 2020
Which of the following is an example of a topic studied by microeconomists? A) Price determination by a firm B) Interest rate determination C) Measures to combat inflation D) National income calculations ANSWER A
Date: September 2nd, 2020
Jacob buys less soda when the price of soda rises 10 percent, while the prices of all other goods also rise 10 percent. Jacob is A) behaving in accordance with classical economic theory. B) worrying too much about a coming recession. C) suffering from money illusion. D) paying too much attention to changes in relative […]
Date: September 2nd, 2020
It is likely that a small increase in a country’s saving rate will have A) a large effect on per capita real GDP immediately because the increase in saving leads to a much larger rate of economic growth. B) a small effect on per capita real GDP many years later because the increase in saving […]
Date: September 2nd, 2020
Joe’s increase in wages has been identical to the increase in the price level. Joe thinks that he is better off and has increased his expenditures. Joe’s behavior is consistent with A) the classical model. B) Say’s law. C) money illusion. D) a vertical aggregate supply curve. ANSWER C
Date: September 2nd, 2020
By definition, disposable income is equal to A) consumption minus saving. B) consumption plus saving. C) consumption plus investment. D) investment plus saving. ANSWER B
Date: September 2nd, 2020
When interest rates rise, A) borrowing costs decline, and total planned real expenditures decline. B) borrowing costs increase and total planned real expenditures increase. C) borrowing costs decline, and total planned real expenditures increase. D) borrowing costs increase, and total planned real expenditures decline. ANSWER D
Date: September 2nd, 2020
