A rise in the price level has a direct effect on spending because A) the real value of the money people have decreases and they can buy less with it. B) a higher price gives people more money, and so the more goods and services they can buy. C) the real value of the money […]
Date: September 2nd, 2020
Money illusion is A) when people think they are better off when their income increases even though prices have increased by the same amount. B) when people are motivated by self-interest. C) could not exist if the economy did not have competitive markets. D) a basic condition that all classical economists assume people have. […]
Date: September 2nd, 2020
________ is the study of an economy as a whole. A) Game theory B) Microeconomics C) Behavioral economics D) Macroeconomics ANSWER D
Date: September 2nd, 2020
Investment includes spending on A) capital goods, buildings, and changes in business savings. B) capital goods, buildings, and changes in business inventories. C) capital goods, buildings, and consumer durable goods. D) capital goods, consumer durable goods, and changes in business inventories. ANSWER B
Date: September 2nd, 2020
Which formula is correct? A) S = Yd – C B) Yd + S = C C) Yd + C = S D) Yd × S = C ANSWER A
Date: September 2nd, 2020
When the government deliberately alters its level of spending and/or taxes in order to achieve specific national economic goals, it is exercising A) a laissez-faire policy. B) discretionary fiscal policy. C) monetary policy. D) a Ricardian policy. ANSWER B
Date: September 2nd, 2020
Which of the following is an example of a topic studied by macroeconomists? A) Utility maximization by a consumer B) Decision making by a producer C) Aggregate demand in an economy D) Price determination by a firm ANSWER C
Date: September 2nd, 2020
Your real disposable income is your real income after you have paid A) consumption expenses. B) rent and food expenses. C) net taxes. D) medical expenses. ANSWER C
Date: September 2nd, 2020
Which of the following is an example of fiscal policy? A) a reduction in the money supply. B) a reduction in the federal funds rate. C) a reduction in lump-sum taxes. D) an increase in the physical stock of capital. ANSWER C
Date: September 2nd, 2020
Keynesian theory is based on the hypothesis that A) full employment is automatically attained in any economy. B) saving is influenced primarily by the interest rate. C) saving and consumption are influenced primarily by real current disposable income. D) planned savings equal planned investment only at full employment. ANSWER C
Date: September 2nd, 2020
