Consumption goods A) include spending on machines and buildings so that goods can be produced in the future. B) are goods that are used to make other goods. C) include goods such as DVDs that firms hold in inventory. D) are only the goods bought by households for immediate satisfaction. ANSWER D
Date: September 2nd, 2020
Improvements in information technology over the past decade have enhanced labor productivity. What has been a likely result of this change? A) Unemployment has increased. B) Entrepreneurs no longer have an incentive to invest in information technology. C) Capital productivity has declined. D) The rate of economic growth has increased. ANSWER D
Date: September 2nd, 2020
Which of the following statements is FALSE? A) saving = disposable income – consumption B) consumption + saving = disposable income C) consumption = saving – disposable income D) disposable income – saving = consumption ANSWER C
Date: September 2nd, 2020
What is the shape of the long-run aggregate supply curve? Why? What will be an ideal response? ANSWER The long-run aggregate supply curve is vertical because, in the long run, people have full information about all relevant facts and make their decisions based only on relative prices and not on the absolute price level.
Date: September 2nd, 2020
Thinking as an economist would, which is TRUE of investment? A) Investment is putting money into stocks and bonds. B) Investment is a stock concept. C) Investment represents spending on capital goods. D) It is the portion of disposable income that is not used for consumption or saving. ANSWER C
Date: September 2nd, 2020
Which of the following contributes to economic growth? A) increase in environmental protection policies B) increase in labor regulations restricting the hours of overtime allowed C) increase in labor productivity D) increase in consumer spending ANSWER C
Date: September 2nd, 2020
A long-run aggregate supply curve may graphically be represented as a A) vertical line. B) a downward sloping line. C) an upward sloping line. D) horizontal line. ANSWER A
Date: September 2nd, 2020
Which of the following statements is true? A) A worker who shirks work is not an economic agent. B) All economic agents are necessarily individuals. C) A government is an example of an economic agent. D) A street gang is not an economic agent. ANSWER C
Date: September 2nd, 2020
Labor productivity can be increased if A) the government mandates it. B) the standard of living declines. C) people spend less time developing skills before entering the workforce. D) there is an increase in capital goods. ANSWER D
Date: September 2nd, 2020
According to the classical theory, the aggregate supply curve is A) downward sloping. B) upward sloping. C) vertical. D) horizontal. ANSWER C
Date: September 2nd, 2020
