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- 1. Multiple ChoiceWhich of the following is true if the production possibilities curve is a curved line concave to the origin?Resources are perfectly substitutable between the production of the two goods.It is possible to produce more of both products.Both products are equally capable of satisfying consumer wants.As more of one good is produced,more and more of the other good must be given up.
- 2. Multiple ChoiceWhich of the following best describes aggregate supply?A schedule indicating the level of real output that will be produced at each possible price levelA schedule indicating the level of real output that will be purchased at each possible price levelA schedule showing the trade-off between inflation and unemploymentA schedule showing the relationship between inputs and outputs
- 3. Multiple ChoiceThe short-run aggregate supply curve will shift to the right whenenergy prices increasegovernment regulation increasesprices of inputs decreaseproductivity rates decrease
- 4. Multiple Choice
The long-run aggregate supply curve will shift to the right when
foreign exports increase
government spending increases
investment increases
consumption increases
- 5. Multiple ChoiceA rightward shift in the aggregate demand curve with a horizontal aggregate supply curve will cause employment and the price level to change in which of the following ways?Increase Employment; Increase Price LevelIncrease Employment; No Change to Price LevelNo Change to Employment, Increase Price LevelIncrease Employment; Decrease Price Level
- 6. Multiple Choice
The aggregate demand curve will shift to the right as the result of
an increase in corporate business taxes
a decrease in the real interest rate
recessions in foreign nations that trade with the United States, causing a lower demand for U.S. products
an increase in the nominal interest rate
- 7. Multiple ChoiceIn the gross domestic product, the largest dollar amount isconsumer spendingrental paymentsnet exports of goods and servicesgovernment purchases of goods and services
- 8. Multiple ChoiceWhich would be least appropriate for expansionary fiscal policyIncrease taxesDecrease taxesIncrease government spendingCombination of decreasing taxes and increasing spending
- 9. Multiple Choice
This group is responsible for implementing fiscal policy
Supreme Court
Federal Reserve Board
Council of Economic Advisors
U.S. Congress
- 10. Multiple ChoiceThe goal of fiscal policy is to achieve full employment by shifting this curve:Long Run Aggregate SupplyAggregate DemandShort Run Aggregate SupplyPhillips
- 11. Multiple ChoiceWhy will government have to change taxes by a larger magnitude than they would change spending.Some spending leaks out of the economy through international tradeSome portions of tax cuts are saved and not spentGovernment spending is too inefficient a processTax cuts are always superior to government spending
- 12. Multiple Choice
Full employment GDP is...
output where the Natural Rate of Unemployment is achieved
Output without cyclical unemployment
output where there is non-accelerating inflation
All of the above
- 13. Multiple ChoiceTaxing & spending to help the economy grow is referred to asexpansionary policymonetary policycontractionary policybudget deficit
- 14. Multiple Choice
Expansionary fiscal policy would most likely be used during...
recessions
times where economy is operating at full employment
periods of sustained, demand pull inflation
periods of large positive output gaps in GDP
- 15. Multiple ChoiceWhich of the following is MOST likely to promote economic growth?A decrease in business tax credits for investment spendingA decrease in federal student education grantsAn increase in investment in tools and machineryA decrease in the labor force participation rate
- 16. Multiple ChoiceWhich of the following is an example of discretionary fiscal policy?Income tax payments growCongress spends an extra $2 billion to provide jobsFewer workers receive unemployment compensationMore people apply for and receive welfare benefits
- 17. Multiple Choice
The long run aggregate supply curve is vertical because...
Price level increases but GDP doesn't
GDP increases but price level doesn't
GDP decreases but price level doesn't
Price level decreases but GDP doesn't
- 18. Multiple Choice
The long run aggregate supply curve is also known as
structural unemployment
Full-employment
The natural rate of employment
Cyclical unemployment
- 19. Multiple Choice
If the price of imported Canadian lumber increases
AS shifts left (decrease)
AS shifts right (increase)
AD shifts left (decrease)
AD shifts right (increase)
- 20. Multiple Choice
The multiplier effect shows
How spending is magnified in the economy
How much consumers can spend from their paychecks
How much the government can spend from their budget
How often the economy can survive recessions
- 21. Multiple ChoiceIf Congress increases government spending by the same amount it increases taxes aggregate demand willremain the samedecrease, these are both contractionaryincreaseshift down
- 22. Multiple Choice
take the number of unemployed people in the country divided by the number of people in the labor force and multiplying the quotient by 100.
unemployment rate
unemployment growth
employment rate
- 23. Multiple Choice
value of current gross domestic product adjusted for inflation
GDP
real GDP
inflation
- 24. Multiple Choice
Each year, any deficit in the federal government’s budget adds to the country’s
national income
national debt
national surplus
- 25. Multiple ChoiceIf a country has a comparative advantage over another country it is said thatCountry A can produce more than Country BCountry A should not trade with Country BCountry A can produce at a lower opportunity cost than Country BCountry A and Country B have no direct relationship to each other
- 26. Multiple Choice
What is the opportunity cost of moving from point B to C on the curve?30 tons of wheat30 tons of steel5 tons of wheat5 tons of steel - 27. Multiple ChoicePlants and fertilizer are complements. If the price of fertilizer increases, what will happen in the market for plants?supply increasesupply decreasedemand increasedemand decrease
- 28. Multiple ChoiceCorn Flakes are an inferior good. If minimum wage increases, what will happen in the market for Corn Flakes?rightward shift in supplyleftward shift in supplyrightward shift in demandleftward shift in demand
- 29. Multiple ChoiceIf the demand for Wendy's increases when the price of Starbucks decreases, then what type of goods are Wendy's and Starbucks?normalinferiorsubstitutescomplements
- 30. Multiple Choice
When one decision is made, the next best alternative not selected is called
economic resources
opportunity cost
scarcity
comparative disadvantage
production
- 31. Multiple Choice
What can cause a production possibilities curve to move to the right?
thousands of people move out of the country
a drought destroys many crops
new technology
the population is growing increasingly old
- Answer choicesTagsAnswer choicesTags