Midterm Exam

A  AD; left

B  AS; left

C  AS; right

D  AD; right

A  flatter top portion of AD curve

B  longer distance to equilibrium point

C  shorter distance to equilibrium point

D  downward sloping AD curve

A  interest rate effect; encouraging; discouraging

B  employment effect; discouraging; encouraging

C  foreign price effect; discouraging; encouraging

D  wealth effect; encouraging; discouraging

A  the trade deficit will decline sharply.

B  the rise in domestic investment will mean a higher trade deficit.

C  government borrowing will increase sharply.

D  the rise in domestic investment will mean a higher trade surplus.

A  foreign aid supplied; be lower than the quantity of domestic aid demanded

B  foreign financial capital imports; equal to supply of domestic capital available

C  foreign capital imports; less than the supply of domestic capital available

D  financial capital supplied; equal the quantity of capital financial demanded

A  current account balance; telecommunications, computers, finance, law, and advertising.

B  current account balance; goods, services, international income flows, and foreign aid.

C  current trade balance; finance, law, and software product design.

D  current trade balance; foreign aid announced by the government.

A  surplus of $300

B  deficit of $300

C  surplus of $1300

D  deficit of $1300

A  a trade surplus means that there is a net inflow of capital

B  a trade surplus exists if there is a net inflow of capital excluding foreign borrowing and lending

C  a trade surplus means that there is a net outflow of capital

D  a trade surplus exists if there is a net outflow of capital excluding foreign borrowing and lending

A  151.48%

B  18.34%

C  70.61%

D  38.58%

A  inflation protection plans

B  wage protection clauses

C  cost of living adjustments

D  inflation ceiling guarantees

A  recreation

B  transportation and insurance

C  entertainment

D  apparel and accessories

A  ongoing decrease

B  short term rise

C  short term decrease

D  ongoing rise

A  COLA plus 1.9%

B  COLA plus 2.4%

C  COLA plus 1.6%

D  COLA plus 2.2%

A  11%.

B  20.2 %.

C  14.4%.

D  16.8%.

A  cyclical unemployment

B  frictional unemployment

C  cyclical employment

D  seasonal unemployment

A  It would fall.

B  It would increase.

C  It would not change.

D  It would change, but the effect cannot be predicted.

A  labor unions strike for higher wages.

B  business activity in the macroeconomy declines.

C  the agriculture sector completes the cycle of planting, cultivating, and harvesting the nation’s food supply.

D  the business cycle enters an expansionary phase.

A  1%

B  10%

C  5%

D  20%

A  5.3%.

B  5.6%.

C  6.0%.

D  7.1%

A  either B) or C) occurs.

B  many people who claim to be unemployed actually work in the underground economy.

C  people falsely claim that they are actively seeking work in order to receive unemployment benefits.

D  many part-time employees would like to work fulltime, but are unable to get the additional work.

A  the productivity of labor declines

B  it devotes more resources to research and development.

C  more resources are allocated to consumption goods.

D  taxes are imposed on investment in capital.

A  the level of government spending

B  the quality of available resources

C  the quantity of available resources

D  technological change

A  260 million

B  6.2 billion

C  2.6 billion

D  5 billion

A  one-half

B  one-fourth

C  double

D  triple

A  an aggregate production function

B  physical capital

C  a production function

D  human capital

A  increase the tax deduction for child dependents.

B  promote economic growth.

C  increase welfare payments to the poor.

D  use less capital and more labor in the production process.

A  0.5%

B  10%

C  1%

D  20%

A  contraction, recession, expansion, boom

B  expansion, peak, recession, trough

C  expansion, trough, recession, peak

D  trough, expansion, recession, peak

A  the value of goods produced domestically and sold abroad.

B  the value of intermediate goods sold during a period.

C  the value of services rendered during a period.

D  the value of final goods and services produced, but not sold, during a period.

A  the amount spent on new factories and machinery.

B  the amount spent on consumer goods that last more than one year.

C  the amount spent on purchases of art.

D  the amount spent on stocks and bonds.

A  The timing of business fluctuations is regular and therefore easily predictable.

B  A depression is a recession that is mild and relatively brief.

C  During the contractionary phase of the business cycle, the rate of unemployment is generally quite low.

D  The expansions and contractions of real world business cycles last varying lengths of time and often differ in magnitude.

A  a crisp $50 bill received on your birthday

B  the university tuition paid to enroll in a course

C  sales revenue received from a yard sale

D  cash income received by a self-employed landscaper that is not reported to the IRS

A  GDP; NNP

B  NNP; GDP

C  GNP; NNP

D  NNP; GNP

A  price, quantity demanded

B  quantity demanded, price

C  quantity supplied, quantity demanded

D  price, quantity supplied

A  no change; only the supply curve for beef is likely to be affected.

B  a shift of the demand curve for beef to the right.

C  a movement down along the demand curve for beef to the right.

D  a shift of the demand curve for beef to the left.

A  will buy at alternative income levels.

B  need to achieve a minimum standard of living.

C  would like to have if the good were free.

D  will buy at various prices.

A  utility

B  the production possibilities frontier

C  allocative efficiency

D  scarcity

A  technological progress

B  an increase in the number of hours factories are in use

C  a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leisure time

D  an increase in the production of capital goods

A  is a subjective valuation that can be determined only by the individual who chooses the action.

B  can be determined by considering both the benefits that flow from as well as the monetary costs incurred as a result of the action.

C  can be determined by adding up the bills incurred as a result of the action.

D  can be objectively determined only by economists.

A  choosing to spend one more hour studying economics because you think the improvement in your score on the next quiz will be worth the sacrifice of time.

B  acquiring the information relevant to a choice before making that choice

C  measuring all of the costs of a meal against all of the benefits when deciding whether to order a second milkshake

D  deciding to never purchase a coat made with animal skins or furs

A  consumers would be willing to purchase the same quantity of a good at a higher price.

B  at the current market price, consumers are willing to purchase more of a good than suppliers are willing to produce.

C  consumers are too poor to afford the goods and services available.

D  it is impossible to completely fulfill the unlimited human desire for goods and services with the limited resources available.

A  is concerned with the expansion of a small business into a large corporation.

B  analyzes mergers and acquisitions between firms.

C  is narrower in scope than microeconomics.

D  is concerned with the expansion and contraction of the overall economy.

A  financial investment market

B  financial capital market

C  savings market

D  labor market

A  government

B  household

C  business

D  capital market

A  Skill

B  Specialization

C  Economies of scale

D  Division of labor

A  microeconomics looks at the forest (aggregate markets) while macroeconomics looks at the trees (individual markets).

B  macroeconomics is concerned with groups of individuals while microeconomics is concerned with single countries.

C  microeconomics is concerned with the trees (individual markets) while macroeconomics is concerned with the forest (aggregate markets).

D  macroeconomics is concerned with generalization while microeconomics is concerned with specialization.

A  household savings

B  taxes

C  government spending

D  interest rates