- All natural resources are nonrenewable.
Your answer:
True
False
- The ceteris paribus assumption is important to use when building economic models.
Your answer:
True
False
- Economic models are abstractions from reality.
Your answer:
True
False
- Factors of production are resources used in the consumption of goods and services.
Your answer:
True
False
- Capital is a good used in the production of goods that households consume.
Your answer:
True
False
- An improvement in technology will shift a supply curve to the right.
Your answer:
True
False
- When no economic growth occurs in an economy, the growth rate trend line is horizontal.
Your answer:
True
False
- The recession of the early 1990s was triggered by a decrease in aggregate supply.
Your answer:
True
False
- An upward-sloping trend line depicts long-run economic growth.
Your answer:
True
False
- Nominal GDP increases when either or both prices and output increase.
Your answer:
True
False
- Changes in business inventories are counted as part of gross private domestic investment.
Your answer:
True
False
- All government spending in 2000 is counted as part of 2000 GDP.
Your answer:
True
False
- The sum of all income payments made to productive resources is national income.
Your answer:
True
False
- Personal income can never be greater than national income.
Your answer:
True
False
- The 45-degree income line is the same as the aggregate expenditure curve.
Your answer:
True
False
- Consumption goods that are produced, but not sold, become investment goods by default.
Your answer:
True
False
- “Real business cycle” theory argues that business cycles do not, in fact, exist.
Your answer:
True
False
- In the last half century, it seems that GDP doubled every generation.
Your answer:
True
False
- M2 is about four times larger than M1.
Your answer:
True
False
- By lowering the legal reserve requirement, the Fed restricts banks’ abilities to make loans.
Your answer:
True
False
- Street lights are an example of a public good provided at the local level.
Your answer:
True
False
- Terms of trade indicate the purchasing power of a nation’s exports.
Your answer:
True
False
- NAFTA or GATT disagreements are settled at the United Nations.
Your answer:
True
False
- Political instability is a deterrent to long-term private investment.
Your answer:
True
False
- Households purchase goods and services in the
Your answer:
Product market
Labor market
Circular market
Capital market
Market resource
- A firm is an organization that produces
Your answer:
Only resources
only goods for sale to households
Only services for sale to households
Goods and services for sale to households and businesses
Only goods for sale to other businesses
- Factors of production do not include
Your answer:
entrepreneurship
capital
money
land
labor
- A good example of land resources is
Your answer:
a steel billboard on an interstate highway
water
wood-based furniture
machinery made from iron ore
buildings located on prime real estate
- The entrepreneur
Your answer:
earns more than labor
serves as a liaison between management and labor
owns all of the factors of production
assumes the risk and uncertainties of enterprise
allocates the risk and uncertainties of enterprise to others
- A change in demand cannot be caused by a change in
Your answer:
the price of the good itself
tastes
population
expectations of future prices
the price of other goods
- The relative income hypothesis, starting with MPC remains constant as national income increases, was proposed by
Your answer:
Modigliani
Duessenberry
Marshall
Friedman
Keynes
- At low levels of employment, the Keynesian aggregate supply curve
Your answer:
is downward sloping
is horizontal
is zero
is vertical
is upward sloping
- The amount of assets that a bank must hold at all times is determined by the
Your answer:
fractional reserve requirement
legal reserve requirement
excess reserve requirement
banks' actual reserves
actual reserve requirement
- The Phillips curve
Your answer:
shows the trade-off between deficits and inflation
becomes vertical at full employment
was a single curve and relatively well-defined for the 1960s
demonstrates how to achieve stable economic growth
relates the interest rate to investment
- A poll tax is
Your answer:
the same as an excise tax and is progressive
the same as a property tax and is regressive
the same as a head tax and is regressive
a tax on voting
the same as a head tax and is proportional
- When a tax is regressive, as a person’s income rises, the tax rate
Your answer:
increases
becomes the head tax rate
becomes the excise tax rate
remains unchanged
decreases
- If one dollar exchanges for 100 Japanese yen, then
Your answer:
$10 will exchange for one yen
the U.S. dollar is appreciated
one yen is worth a penny
a yen is worth $1
a yen is worth $100
- The Jordanian government might consider devaluing its currency (the dinar)
Your answer:
if domestic inflation is high
if Jordan has a large trade surplus
if Jordan has achieved full employment
if the dollar is appreciated
if Jordan has a large trade deficit