Economics Expert Answers & Study Resources

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The gold standard is an example of A) a floating exchange rate system. B) a managed float exchange rate system. C) a flexible exchange rate system. D) a fixed exchange rate system. E) the Bretton Woods System. 2) China's exchange rate.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Growth in the United States from 1800-1900 can be characterized as A) positive and increasing. B) negative. C) positive and decreasing. D) positive and flat. 2) Which of the following explains the ability of the U.S. economy to avoid diminishing.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Gross national product, GNP, of the United States is the market value of all final goods and services A) produced by residents of the United States anywhere in the world. B) consumed within the United States. C) produced.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The Federal Open Market Committee determines the monetary policy of the United States A) with input from Congress and the president. B) with input from the president. C) with input from Congress. D) without input from Congress or the.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The Federal Reserve's two main monetary policy targets are A) price stability and high employment. B) interest rates and high employment. C) price stability and the money supply. D) the money supply and interest rates. 2) The Federal Reserve can.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) After the job losses at the Alcatel-Lucent corporation, laid-off optical engineers had difficultly in finding jobs. These former employees faced difficulties because the market for their very technical skills was declining. These workers were A) frictionally.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Economists refer to the series of induced increases in consumption spending that result from an initial increase in autonomous expenditures as the ________ effect. A) aggregate demand B) consumption C) expenditure D) multiplier 2) The multiplier effect refers to the.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Increasing the amount of consumption spending and reducing the amount of savings ________ investment expenditures, and ________ economic growth in the economy. A) decreases; decreases B) increases; increases C) increases; decreases D) decreases; increases 2) A firm can fund an.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The quantity equation states that the A) money supply divided by the velocity of money equals the price level divided by real output. B) money supply times the velocity of money equals the price level times real.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The currency adopted by most countries in Western Europe is referred to as the A) Eurodollar. B) pound. C) yen. D) euro. 2) Under a floating exchange rate, the exchange rate A) is pegged against the euro. B) is controlled by.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Nominal GDP is GDP in a given year A) valued in the prices of the base year. B) valued in the prices of that year. C) adjusted for inflation. D) adjusted for anticipated inflation. 2) Real GDP is GDP in.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) On the 45-degree line diagram, the 45-degree line shows points where A) real aggregate expenditure equals C + I. B) real aggregate expenditure equals real GDP. C) real income equals real GDP. D) real aggregate output equals the quantity.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following models relies on emphasizing the importance of sticky wages and prices? A) the monetarist model B) the new classical model C) the real business cycle model D) the new Keynesian model 2) Which of the following.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) During which of the following time periods did inflation remain above 5 percent every year? A) 1958 through 1962 B) 1990 through 1999 C) 1973 through 1982 D) 1968 through 1971 2) When individuals use all available information about an.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Alcatel-Lucent faced fierce competition in the global wireless market and its sales and profits declined. In response it ________ the number of persons it employed and this ________ the total number of persons unemployed in.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The level of long run aggregate supply is NOT affected by A) changes in technology. B) changes in the price level. C) changes in the capital stock. D) changes in the number of workers. 2) The level of real GDP.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Under the monetary growth rule proposed by the monetarists, the money supply would grow each year at a constant rate equal to the long-run rate of growth of A) inflation. B) real GDP.  C) employment. D) interest rates. 2).

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Figure 28-1 25) Refer to Figure 28-1. Suppose that the economy is currently at point A on the short-run Phillips curve in the figure above, and the unemployment rate at A is the natural rate. If the.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 41) Illegal activity in markets around the world takes place in what is termed the A) underground economy. B) hidden exchange market. C) government. D) foreign destabilization market. 42) If a country's currency is "pegged" to the dollar, its exchange rate.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) China's economy has grown tremendously from 1979 to the present. The reason the article gives for this growth is A) the introduction of the centrally planned economy in 1978. B) the total lack of governmental intervention in.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The economic growth model predicts that A) lower-income industrial countries will forever be unable to catch up to higher-income industrial countries. B) economic growth in rich countries can only be accomplished at the expense of slow or.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The most liquid measure of money supply is A) M3. B) M2. C) M0. D) L. E) M1. 2) The M1 measure of the money supply equals A) currency plus checking account balances plus traveler's checks. B) currency plus checking account balances. C).

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) How does an increase in a country's exchange rate affect its balance of trade? A) An increase in the exchange rate raises imports, reduces exports, and reduces the balance of trade. B) An increase in the exchange.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following best describes supply-side economics? A) Education impacts the incentive to work, save, and invest, and therefore aggregate supply. B) Education impacts labor productivity which impacts aggregate supply. C) Tax rates, particularly marginal tax rates,.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The expansionary monetary and fiscal policies of the 1960s resulted in A) low inflation rates and high rates of unemployment. B) high inflation rates and high rates of unemployment. C) high inflation rates and low rates of.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following explains the causes of the changes in the unemployment rate at the end of a recession? A) Discouraged workers leave the labor force and this makes the unemployment rate rise. B) Discouraged workers.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) How might a budget deficit affect the balance of trade? A) A budget deficit reduces interest rates, which reduces exchange rates and reduces the balance of trade. B) A budget deficit raises interest rates, which raises exchange.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Suppose there is a banking panic. Which of the following would not be a consequence of this banking panic? A) a likely recession. B) Bank total reserves would decrease. C) Bank checking account balances would decrease. D) Required reserves.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The Philippines and Vietnam have roughly the same size population. Suppose the GDP of the Philippines is $1,000 billion and the GDP of Vietnam is $10,000 billion. You should conclude A) it is not possible to.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following is not an assumption made by the dynamic model of aggregate demand and aggregate supply? A) Aggregate demand and potential real GDP decrease continuously. B) Short run aggregate supply shifts to the right.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) If net exports are positive, A) capital inflows must be greater than capital outflows. B) net foreign investment is also positive. C) net foreign investment is negative. D) Both A and B are correct. 2) Suppose that domestic investment in.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Your roommate constantly argues that globalization is bad. Which of the following would not be one of the arguments he would make? A) Foreign direct investment in developing economies allows these economies to gain access to.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Long run macroeconomic equilibrium occurs when A) aggregate demand equals short run aggregate supply. B) output is above potential GDP. C) aggregate demand equals short run aggregate supply and they intersect at a point on the long run.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Between 2001 and 2004, foreign investment in U.S. corporate stocks A) grew at a faster pace than foreign investment in U.S. corporate bonds. B) fell. C) doubled. D) grew at a faster pace than foreign investment in U.S. government.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The ability of the Federal Reserve to use monetary policy to affect economic variables such as real GDP ultimately depends upon its ability to affect A) nominal interest rates. B) real interest rates. C) foreign exchange rates. D).

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The major assets on a bank's balance sheet are its A) reserves, loans, and checking account deposits. B) reserves, checking and savings account deposits. C) reserves, loans, and holdings of securities. D) checking and savings account deposits. E) loans, and.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which is the largest component of aggregate expenditure? A) government expenditures B) consumption expenditures C) planned investment expenditures D) net export expenditures 2) Consumption spending will ________ when disposable income ________. A) increase; increases B) decrease; increases C) increase; decreases D) change unpredictably; decreases 3).

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The Federal Reserve plays a larger role than the president and the Congress in stabilizing the economy because A) the Federal Reserve can more quickly change monetary policy than the president and the Congress can change.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following would you expect to increase the equilibrium interest rate? A) an increase in the budget deficit B) a decrease in the profitability of investment projects firms are considering C) a change from an income.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) An economic growth model explains A) the growth rate of the price level over time. B) changes in real GDP per capita in the long run. C) how changes in the money supply affect real interest rates. D) changes.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The aggregate demand curve illustrates the relationship between ________ and the ________, holding constant all other factors that affect aggregate expenditure. A) the price level; quantity of planned investment expenditure B) the inflation rate; quantity of planned.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) An increase in unemployment insurance payments would, in effect, ________ the amount of time spent searching for a job, which would increase ________ unemployment. A) decrease; frictional B) increase; frictional C) increase; cyclical D) decrease; cyclical 2) Which of the.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 21) If the GDP deflator in the U.S. is 114, and the GDP deflator in Ukraine is 142, which of the following changes would the theory of purchasing power parity predict? (The Ukrainian currency is the.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The real wage equals the nominal wage ________ the CPI, all times 100. A) times B) divided by C) plus D) minus Table 20-7   Year Nominal Average Hourly Earnings (Dollars) CPI (1982-1984 = 100) 1965 $2.65 32 2005 $16.15 196   The table above reports the nominal average hourly earnings in private.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following could increase unemployment and inflation simultaneously? A) contractionary monetary policy B) expansionary monetary policy C) an increase in oil prices D) a decrease in the real wage 2) A reduction in the rate of inflation is.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Figure 23-3 1) Refer to Figure 23-3. Suppose that investment spending increases by $10 million, shifting up the aggregate expenditure line and GDP increases from GDP1 to GDP2. If the MPC is .9, then what is the.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Stabilization policy is used by the federal government to A) stabilize foreign-exchange rates. B) stabilize interest rates. C) offset the effects of the business cycle on the economy. D) offset the effects of inflation. 2) Fiscal policy is determined by.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 61) Although the pegged exchange rate between the yuan and the dollar has undervalued the yuan, China has been reluctant to abandon the peg for fear that abandoning the peg would A) reduce capital inflows. B) increase Chinese.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) An economy that has interactions in trade or finance with other economies is referred to as A) a trade-balanced economy. B) a closed economy. C) a net foreign investment economy. D) an open economy. 2) Current trade between China and.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following statements describes the experiences of the Boeing Corporation since it was established in 1916? A) strong growth interrupted by periods of business cycle recession B) little or no growth in the long run,.