Shared Flashcard Set

Details

Chap 10, 11, 12, 13, 14 Mult Choice
Test Review
47
Economics
Undergraduate 1
07/23/2013

Additional Economics Flashcards

 


 

Cards

Term
When a profit-maximizing firm makes a decision to employ a worker, that decision is based on:

a. the individual contribution that the worker makes to the profit of the firm
b. the average productivity of the firm's labor force
c. the familial relationship between the employer and the employee
d. the total output produced by the firm
Definition
a.
Term
Improvments in the productivity of labor will tend to:
a. increase the supply of labor
b. increase wages
c. decrease the supply of labor
d. decrease wages
e. do both a and b
Definition
b.
Term
unionization provides ___ in given occupations, and as a result, wage rates in these occupations have a tendency to ___
a. barriers to entry; decrease
b. barriers to entry; increase
c. ease of entry; decrease
d. ease of entry; increase
Definition
b.
Term
why are creditors harmed by unexpected inflation?
a. creditors receive lower nominal rates of interest when prices rise.
b. creditors are paid back with more valuable dollars
c. creditors receive higher nominal rates of interest when prices rise
d. creditors are paid back money with less spending power than when it was originally loaned out
Definition
d.
Term
economists usually use the term "recession" to refer to:
a. any slowdown in the growth of real gdp
b. zero real gdp growth
c. two or more consecutive quarters of declining gdp
d. a significant reduction in output and employment lasting more than a few months
Definition
c.
Term
to achieve a high standard of living, a nation should:
a. increase welfare payments to the poor
b. use less capital and more labor in the production process
c. promote economic growth
d. increase the tax deduction for child dependents
Definition
c.
Term
which of the government policies below is not likely to encourage per capita economic growth?
a. high taxes on companies that spend a lot on capital formation
b. the use of tax revenues for investment and capital formation
c. special subsidies for capital-intensive forms of production
d. promotion of education and training programs for workers
Definition
a.
Term
gdp that has been adjusted for changes in the price level is called:
a. nominal gdp
b. real gdp
c. personal income
d. net gdp
e. net national income
Definition
b.
Term
which of the following will cause consumption, and as a result, aggregate demand to decrease?
a. a tax cut
b. a fall in consumer confidence
c. increased population
d. an optimistic forecast of future income growth
Definition
b.
Term
investment will increase if business taxes ____, real interest rates ____, or if business confidence____.
a. increase, increases, increases
b. decrease, decreases, decreases
c. increase, increases, decreases
d. decrease, decrease, increases
Definition
d.
Term
if the stock market continues a steady climb upwards, this ____ consumer confidence and wealth leading to ___ consumption and ____ aggregate demand.
a. increases, decreased, increased
b. decreases, decreased decreased
c. increases, increased, increased
d. increases, increased, decreased
Definition
c.
Term
the sras is ____; the leas is ____.
a. upward sloping; upward sloping
b. upward sloping; vertical
c. vertical; upward sloping
d. vertical; vertical
Definition
b.
Term
which of the following is synonymous with "stagflation">
a. demand-pull inflation
b. cost-push inflation
c. both of the above
d. none of the above
Definition
b.
Term
demand-pull inflation is caused by:
a. an increase in aggregate demand
b. a decrease in aggregate demand
c. an increase in short-run aggregate supply
d. a decrease in short run aggregate supply
Definition
a.
Term
which of the following would be an example or result of expansionary fiscal policy in action?
a. an increase in taxation
b. a decrease in government purchases
c. a budget deficit
d. a decrease in transfer payments
e. a budget surplus
Definition
c.
Term
how does a change in taxes primarily affect aggregate demand?
a. a tax change alters exports and net exports
b. a tax change alters investment by an equal and opposite amount
c. a tax change alters disposable income and consumption spending
d. a tax change alters government purchases by an equal amount
e. a tax change alters saving by an equal amount
Definition
c.
Term
you are a member of congress when the economy is in a recession. If your goal is to achieve a fully employed labor force, which of the following fiscal policy scenarios should you follow?
a. eliminate a federal budget deficit or add to a federal budget surplus
b. raise government purchases, reduce taxes, and./or increase transfer payments
c. decrease government purchases, increase taxes, and/or cut transfer payments
d. raise government purchases, raise taxes by more than the increase in government purchases, and decrease transfer payments
Definition
b.
Term
if the government wanted to offset the effect of a fall in consumer confidence on aggregate demand, it might
a. decrease government purchases
b. decrease taxes
c. decrease transfer payments
d. do either a or c
Definition
b.
Term
supply-side economics stress that:
a. aggregate demand is the major determinant of real output
b. higher tax rates discourage people from working and investing as much as they would at lower tax rates
c. an increase in government expenditures and tax rates will cause real income to rise
d. expansionary monetary policy will cause real output to expand without accelerating inflation
Definition
b.
Term
when the economy goes into a ___ the amount of taxes collected by the government ___ automatically
a. recession; falls
b. recession; rises
c. boom; falls
d none of the above
Definition
a.
Term
the primary benefit of the automatic stabilizers is:
a. they provide public assistance through legislative decision making
b. they require no new legislative action so there is no legislative lag before these tools respond to fluctuations in the business cycle
c. they require legislative action so there is a lag in response to these tools to fluctuations int the business cycles and there is time to identify the spillover effects
d. none of the above
Definition
b.
Term
the primary benefit of monetary exchange compared to barter exchange is
a. the possibility of tracking trade for tax purposes
b. increased time devoted to finding trade partners
c. increased time devoted to shopping for what we want
d. increased efficiency in arranging transactions
e. none of the above
Definition
d.
Term
paper money in the us is:
a. fiat money
b. more than half of m2
c. partially backed by gold nad silver in fort knox
d. convertible into specie (gold or silver) at the holder's request
e. both a and b
Definition
a.
Term
fractional reserve banking takes its name from the fact that:
a. banks hold only a fraction of their reserves in the bank itself
b. banks keep only a faction of total deposits on reserve
c. banks lend only a fraction of their total reserves to customers
d. banks reserve only a fraction of their activity for lending
e. banks reserve only a fraction of their cash for teller usage
Definition
b.
Term
when is a particular bank in a position to make new loans?
a. when required reserves equal actual reserves
b. when required reserves exceed actual reserves
c. when required reserves are less than actual reserves
d. when required reserves equal excess reserves
Definition
c.
Term
when the required reserve ratio is decreased:
a. the excess reserves of member banks are reduced, but the money multiplier is not affected
b. the excess reserves of member banks are reduced, and the money multiplier is increased
c. the excess reserves of member banks are increased, but the money multiplier is not affected
d. the excess reserves of member banks are increased and the money multiplier is increased
e. the excess reserves of member banks are reduced, and the money multiplier is decreased
Definition
d.
Term
the money supply would tend to fall if:
a. banks decide to keep more excess reserves and people convert more of their demand deposits to currency
b. banks decide to keep more excess reserves and people deposit currency in their demand deposit accounts
c. banks decide to keep fewer excess reserves and people deposit currency int heir demand deposit accounts
d. banks decide to keep fewer excess reserves and people convert more of their demand deposits to currency
Definition
a.
Term
uncertainty may cause banks to hold larger excess reserves. other things being constant, this will:
a. have no effect on the volume of loans or the money supply.
b. tend to reduce both the volume of loans and the money supply
c. tend to increase both the volume of loans and the money supply
d. tend to increase the volume of loans but reduce the money supply
e. tend to decrease the volume of loans but increase the money supply
Definition
b.
Term
doubling the required reserve ratio would, other things being equal:
a. double the money supply
b. halve the money supply
c. increase the money supply, but less than double
d. decrease the money supply, but more than double
Definition
b.
Term
the supply-of-money curve is almost perfectly inelastic because:
a. as interest rates rise, people will want to be supplied with more loans
b. the fed makes more money available in response to higher interest rates
c. banks generally find loans more profitable than keeping their assets are cash in their vaults or reserve deposits at the fed whether interest rates are 4% or 40%
d. the fed lowers the discount rate as interest rates rise
Definition
c.
Term
if money supply and money demand both increased, but money supply increased more than money demand:
a. interset rates would increase and investment would increase
b. interest rates would increase and investment would decrease
c. interest rates would decrease and investment would increase
d. interest rates would decrease and investment would decrease
e. the change interest rates and investment would be indeterminate.
Definition
c.
Term
if policy makers wanted to use both monetary and fiscal policy to help reduce a high rate of inflation, which of the following would be the most appropriate?
a. a larger budget deficit, the purchase of securities in teh open market by the fed, and a higher discount rate
b. a government budget surplus, the sale of securities in teh open market by the fed, and a lower discount rate
c. a larger government budget deficit, the sale of securities in the open market by the fed, and a lower discount rate
d. a government budget surplus, the purchase of securities in the open market by the fed and a lower discount rate
Definition
b.
Term
if the fed was trying to reduce demand-pull inflation, it might>
a. sell government securities, lower reserve requirements, and lower the discount rate
b. sell government securities, raise reserve requirements and raise the discount rate
c. sell government securities, lower reserve requirements and raise the discount rate
d. buy government securities, lower reserve requirements, and raise the discount rate
Definition
b.
Term
expansionary fiscal policy can lead to a decline in net exports because:
a. it increases interest rates, increasing the exchange value of the dollar and decreasing net exports
b. it increases interest rates, decreasing the exchange value of the dollar, and decreasing net exports
c. it decreases interest rates, increasing the exchange value of the dollar and decreasing net exports
d. it decreases interest rates decreasing the exchange value of the dollar and decreasing net exports
Definition
a.
Term
if expectations are rational, can monetary and fiscal policy makers accurately control the effects their policies have on unemployment?
a. yes provided they announce policies in advance
b. yes, both policies are effective in altering unemployment in the desired ways
c. no, because these effects depend on whether and to what extent people are fooled by those policies
d. no only fiscal policy can alter unemployment
e. no, only monetary policy can alter unemployement
Definition
c.
Term
which of the following statements was probably made by an adherent of rational expectations?
a. it is rational to pursue any full employment policy because more employment is better than less
b. unemployment is clearly a case of market failure
c. programs designed to stimulate employment will only stimulate the price level with no employment gain
d. it is inhumane to have a single person unemployed whatever the inflation cost
Definition
c.
Term
the cost of maintaining unemployment below its natural rate with expansionary government policy is:
a. increasing inflation
b. decreasing inflation
c. always a larger federal deficit
d. always a smaller federal deficit
e. both a and c
Definition
a.
Term
according to real business cycle theory:
a short timer trade off exists between unemployment and inflation but not a permanent trade off
b. economic fluctuations are the result of external negative and positive productivity shocks to the economy
c. workers and consumers incorporate the likely consequences of government policy changes into their expectations by quickly adjusting wages and prices
d. the economy will self correct to the natural rate of unemployment
Definition
b.
Term
what matters most in determining the efficient distribution of production over the world is:
a. absolute advantage
b. efficiency
c. the stock of resources
d. comparative advantage
Definition
d.
Term
a tariff differs from a quota in that a tariff is:
a. levied on imports, whearas a quota is imposed on exports
b. levied on exports whearas a quota is imposed on imports
c. a tax levied on exports whereas a quota is a limit on the number of units of a good that can be exported
d. a tax imposed on imports whearas a quota is an absolute limit to the number of units of a good that can be imported
Definition
d.
Term
on january 7, 2009 the us dollar was worth .70 euros. how many us dollars did it take to buy one euro?
a. .70
b. 1.27
c. 1.43
d. 1.70
e. 7.00
Definition
c.
Term
suppose that the dollar value rises from 100 to 125 yen, as a result:
a. exports to japan will likely increase
b. japanese tourists will likely visit the united states
c. us businesses will be less likely to use japanese shipping lines to transport their products
d. us consumers will more likely buy japanese made automobiles
Definition
d.
Term
a decrease in tastes for european goods in the us would ____ the demand for euros ____ the equilibrium price (exchange rate) for euros
a. increase; increasing
b increase; decreasing
c. decrease;increasing
d. decrease; decreasing
Definition
d.
Term
if more french tourists visit the grand canyon, what is the effect in the exchange market?
a. it will increase the supply of us dollars
b. it will decrease the supply of us dollars
c. it will increase the demand for us dollars
d. it will decrease the demand for us dollars
Definition
c.
Term
if the us purchases oil from kuwait, what is the effect in the exchange market?
a. it will increase the supply of us dollars
b. it will decrease the supply of us dollars
c. it will increase the demand for us dollars
d. it will decrease the demand for us dollars
Definition
a.
Term
an increase in foreign demand for us exports will ____ the demand for us dollars and cause the us dollar to ___ in value
a. increase; appreciate
b. increase; depreciate
c. decrease; appreciate
d. decrease; depreciate
Definition
a.
Term
if real interest rates in the united states rise relative to real interest rates in other countries, other things being equal;
a. the exchange value of the dollar would decline relative to other curriences
b. the exchange value of the dollar would increase relative to other currencies
c. there would likely be no effect on the exchange value of the dollar relative to other currencies
d. there would be an indeterminate effect on the exchange value of the dollar relative to other currencies
Definition
b.
Supporting users have an ad free experience!