Term
1-5 are based on the following information. Employment statistics for Italy are: (in millions)
Number of Italians working full time 20
Number of Italians working part time 25
Number of Italians not working but looking 5
Number of Italians not working or looking 25
1. The size of the laborforce is (in millions)
a. 75
b. 55
c. 50
d. 45
e. 30 |
|
Definition
|
|
Term
1-5 are based on the following information. Employment statistics for Italy are: (in millions)
Number of Italians working full time 20
Number of Italians working part time 25
Number of Italians not working but looking 5
Number of Italians not working or looking 25
2. The size of the labor ‘population’ is (in millions)
a. 75
b. 55
c. 50
d. 45
e. 30 |
|
Definition
|
|
Term
5 are based on the following information. Employment statistics for Italy are: (in millions)
Number of Italians working full time 20
Number of Italians working part time 25
Number of Italians not working but looking 5
Number of Italians not working or looking 25
3. The labor force participation rate is
a. 90%
b. 60%
c. 67%
d. 80%
e. None of the above |
|
Definition
|
|
Term
5 are based on the following information. Employment statistics for Italy are: (in millions)
Number of Italians working full time 20
Number of Italians working part time 25
Number of Italians not working but looking 5
Number of Italians not working or looking 25
4. The unemployment rate is
a. 10%
b. 40%
c. 33%
d. 20%
e. None of the above |
|
Definition
|
|
Term
5 are based on the following information. Employment statistics for Italy are: (in millions)
Number of Italians working full time 20
Number of Italians working part time 25
Number of Italians not working but looking 5
Number of Italians not working or looking 25
If 10 million Italians, originally labeled above as not working or looking, start actively looking for work, the unemployment rate will now be
. 30%
b. 25%
c. 20%
d. 10%
e. none of the above |
|
Definition
|
|
Term
Discouraged workers are considered
a. Unemployed by the Bureau of Labor Statistics
b. Members of the laborforce
c. Members of the labor ‘population’
d. All of the above
e. None of the above |
|
Definition
| c. Members of the labor ‘population’ |
|
|
Term
If the natural rate of unemployment is 5%; what must be true if the actual rate of unemployment is 8%?
a. we have structural unemployment of 3%
b. we have frictional unemployment of 3%
c. we have seasonal unemployment of 3%
d. we have cyclical unemployment of 3%
e. none of the above |
|
Definition
| d. we have cyclical unemployment of 3% |
|
|
Term
The type of unemployment that is caused by minimum wage laws, unions, and some government regulations is
a. cyclical
b. structural
c. seasonal
d. frictional |
|
Definition
|
|
Term
9. The natural rate of unemployment contains the following types of unemployment EXCEPT
a. cyclical
b. structural
c. seasonal
d. frictional |
|
Definition
|
|
Term
10. A public good is a good that
a. Is excludable
b. Is rival
c. Is free
d. Is available regardless of willingness to pay
e. None of the above |
|
Definition
| d. Is available regardless of willingness to pay |
|
|
Term
11. If a good is available only to those who pay for it, the good is
a. Excludable, but not necessarily rival
b. Excludable and rival
c. Rival but not necessarily excludable
d. Non-rival and non-excludable
e. None of the above |
|
Definition
| a. Excludable, but not necessarily rival |
|
|
Term
12. Which of the following examples is(are) public good(s )
a. National defense
b. Movie at the Byrd Theatre in Carytown
c. A Laundromat
d. Only A and B
e. Only A and C |
|
Definition
|
|
Term
13. The free rider problem occurs for
a. Private goods and public goods
b. Private goods but not public goods
c. Public goods but not private goods
d. Neither public nor private goods
e. None of the above |
|
Definition
| c. Public goods but not private goods |
|
|
Term
14. The type of price discrimination that offers two different prices depending on the quantity of units purchased is what type of discrimination?
a. 1st degree price discrimination
b. 2nd degree price discrimination
c. 3rd degree price discrimination
d. 4th degree price discrimination
e. this is not price discrimination |
|
Definition
| b. 2nd degree price discrimination |
|
|
Term
15. Many universities charge students different tuitions depending on whether a student is considered in-state or out-of-state. This is an example of
a. 1st degree price discrimination
b. 2nd degree price discrimination
c. 3rd degree price discrimination
d. 4th degree price discrimination
e. This is not an example of price discrimination |
|
Definition
| c. 3rd degree price discrimination |
|
|
Term
16. The type of pricing scheme in which consumers are offered the deal of BOGO, ‘buy one unit, get the next unit for 50% off the stated price’ is called
a. 1st degree price discrimination
b. 2nd degree price discrimination
c. 3rd degree price discrimination
d. 4th degree price discrimination
e. This is not price discrimination |
|
Definition
| b. 2nd degree price discrimination |
|
|
Term
17. The type of price discrimination that is possible when ‘willingness to pay and ability to pay’ are known, allowing sellers to ‘walk down the demand curve’, is known as
a. 1st degree price discrimination
b. 2nd degree price discrimination
c. 3rd degree price discrimination
d. 4th degree price discrimination
e. This is not price discrimination |
|
Definition
| a. 1st degree price discrimination |
|
|
Term
18. Consumer surplus can be thought of as the following (a,b,c) except
a. The amount of value a consumer receives beyond what he pays
b. The area above the supply curve, below the price line, from 0 to given quantity
c. Total value minus total expenditure
d. All of the above are correct
e. All of the above are incorrect |
|
Definition
| b. The area above the supply curve, below the price line, from 0 to given quantity |
|
|
Term
19. Minimum wage legislation
a. Is considered a binding price-floor
b. Shifts surplus from businesses to laborers
c. Increases producer surplus, although this surplus goes to fewer producers
d. All of the above
e. Only A and C |
|
Definition
|
|
Term
20. Dead-weight loss is
a. Also called welfare loss
b. The gains from trade that are lost to society as a result of market intervention
c. Caused by price-floors, price-ceilings, monopolies, and taxes
d. All of the above
e. Only B and C |
|
Definition
|
|
Term
21. Producer surplus can be thought of as all of the following (a,b,c) except
a. The area above the supply curve, below the market price line from 0 to equilibrium quantity
b. Profit
c. Total revenues minus total costs
d. All of the above are correct
e. None of the above are correct |
|
Definition
| d. All of the above are correct |
|
|
Term
22. Minimum wage legislation (an example of a binding price-floor) causes all of the following (a,b,c) except
a. Increase in consumer surplus
b. Increase in producer surplus
c. Dead weight loss
d. All of the above are correct
e. None of the above are correct |
|
Definition
| a. Increase in consumer surplus |
|
|
Term
23. Rent control (an example of a binding price-ceiling) causes all of the following (a,b,c) except
a. Increase in consumer surplus
b. Increase in producer surplus
c. Dead weight loss
d. All of the above are correct
e. None of the above are correct |
|
Definition
| b. Increase in producer surplus |
|
|
Term
24. Price controls (binding floors and ceilings) cause all of the following (a,b,c) except
a. Alternative allocating schemes aside from price
b. Inefficient outcomes in the markets in question
c. Reductions in the gains from trade in the markets in question
d. All of the above are correct
e. None of the above are correct |
|
Definition
| d. All of the above are correct |
|
|
Term
25. The type of unemployment that is caused by a mismatching of skills and through entry/reentry into the laborforce is
a. Frictional
b. Seasonal
c. Structural
d. Cyclical |
|
Definition
|
|
Term
d. Cyclical
Use the data columns below to answer questions 1-5. Assume that year 2000 is the base year.
Goods 2000 price 2000 quantity 2001 price 2001 quantity
Recount testimony 4 100 4 200
American flags 4 300 8 200
“I can’t believe we 4 100 3 200
don’t have a president” shirts
1. If these are all the final goods produced in the economy, nominal GDP in year 2000 is?
a. 1200
b. 1600
c. 2000
d. 2400
e. None of the above |
|
Definition
|
|
Term
Goods 2000 price 2000 quantity 2001 price 2001 quantity
Recount testimony 4 100 4 200
American flags 4 300 8 200
“I can’t believe we 4 100 3 200
don’t have a president” shirts
2. If these are all the final goods produced in the economy, real GDP in the year 2000 is?
a. 1200
b. 1600
c. 2000
d. 2400
e. None of the above |
|
Definition
|
|
Term
Goods 2000 price 2000 quantity 2001 price 2001 quantity
Recount testimony 4 100 4 200
American flags 4 300 8 200
“I can’t believe we 4 100 3 200
don’t have a president” shirts
3. If the year 2000 is the base year, what is the GDP deflator (in decimal form) for the year 2001?
a. 1.25
b. 1.50
c. .80
d. 1.00
e. None of the above |
|
Definition
|
|
Term
Goods 2000 price 2000 quantity 2001 price 2001 quantity
Recount testimony 4 100 4 200
American flags 4 300 8 200
“I can’t believe we 4 100 3 200
don’t have a president” shirts
4. If the year 2000 is the base year, what is the GDP deflator (in decimal form) for the year 2000?
a. 1.25
b. 1.50
c. .80
d. 1.00
e. None of the above |
|
Definition
|
|
Term
Goods 2000 price 2000 quantity 2001 price 2001 quantity
Recount testimony 4 100 4 200
American flags 4 300 8 200
“I can’t believe we 4 100 3 200
don’t have a president” shirts
1. If these are all the final goods produced in the economy, nominal GDP in year 2000 is?
a. 1200
b. 1600
c. 2000
d. 2400
e. None of the above
5. Between year 2000 and 2001, the rate of inflation is
a. –20 %
b. 25 %
c. 50%
d. 0%
e. None of the above |
|
Definition
|
|
Term
.Which of the following is not a requirement to be counted in expenditure calculation of GDP?
a. the good or service must be for use of a final consumer, valued at market price
b. must be produced domestically
c. must be purchased within the accounting period
d. all are required |
|
Definition
|
|
Term
Consider the following information when answering questions 7-13:
Haiti and the Dominican Republic share a common island. They are each capable of producing baseballs and bats. If Haiti spends all year producing baseballs, they can produce 5. If Haiti spends all year producing bats, they can produce 1. If the Dominican Republic spends all year producing baseballs, they can produce 10. If the Dominican Republic spends all year producing bats, they can produce 10. Each nation formerly produced these goods for their domestic consumption (self-sufficiency), so they are capable of producing some of each, such as Haiti producing 0.5 bats and 2.5 balls, or the Dominican Republic producing 5 bats and 5 balls. For this example you may assume all linear combinations of the above stated constraints (number sets interior to the end points) are feasible, the ‘world’ is simply these two nations combined, and that all individuals are interested in the largest consumption bundle possible and make efficient choices in regards to production.
7. Who has the comparative advantage in baseball production?
a. Haiti
b. Dominican Republic
c. Both
d. Neither |
|
Definition
|
|
Term
Consider the following information when answering questions 7-13:
Haiti and the Dominican Republic share a common island. They are each capable of producing baseballs and bats. If Haiti spends all year producing baseballs, they can produce 5. If Haiti spends all year producing bats, they can produce 1. If the Dominican Republic spends all year producing baseballs, they can produce 10. If the Dominican Republic spends all year producing bats, they can produce 10. Each nation formerly produced these goods for their domestic consumption (self-sufficiency), so they are capable of producing some of each, such as Haiti producing 0.5 bats and 2.5 balls, or the Dominican Republic producing 5 bats and 5 balls. For this example you may assume all linear combinations of the above stated constraints (number sets interior to the end points) are feasible, the ‘world’ is simply these two nations combined, and that all individuals are interested in the largest consumption bundle possible and make efficient choices in regards to production.
8. Who has the comparative advantage in bat production?
a. Haiti
b. Dominican Republic
c. Both
d. Neither |
|
Definition
|
|
Term
Consider the following information when answering questions 7-13:
Haiti and the Dominican Republic share a common island. They are each capable of producing baseballs and bats. If Haiti spends all year producing baseballs, they can produce 5. If Haiti spends all year producing bats, they can produce 1. If the Dominican Republic spends all year producing baseballs, they can produce 10. If the Dominican Republic spends all year producing bats, they can produce 10. Each nation formerly produced these goods for their domestic consumption (self-sufficiency), so they are capable of producing some of each, such as Haiti producing 0.5 bats and 2.5 balls, or the Dominican Republic producing 5 bats and 5 balls. For this example you may assume all linear combinations of the above stated constraints (number sets interior to the end points) are feasible, the ‘world’ is simply these two nations combined, and that all individuals are interested in the largest consumption bundle possible and make efficient choices in regards to production.
9. If the world wanted to consume 1 bat and as many balls as possible, efficient production could generate a maximum of how many balls?
a. 5
b. 10
c. 14
d. 15
e. None of the above |
|
Definition
|
|
Term
Consider the following information when answering questions 7-13:
Haiti and the Dominican Republic share a common island. They are each capable of producing baseballs and bats. If Haiti spends all year producing baseballs, they can produce 5. If Haiti spends all year producing bats, they can produce 1. If the Dominican Republic spends all year producing baseballs, they can produce 10. If the Dominican Republic spends all year producing bats, they can produce 10. Each nation formerly produced these goods for their domestic consumption (self-sufficiency), so they are capable of producing some of each, such as Haiti producing 0.5 bats and 2.5 balls, or the Dominican Republic producing 5 bats and 5 balls. For this example you may assume all linear combinations of the above stated constraints (number sets interior to the end points) are feasible, the ‘world’ is simply these two nations combined, and that all individuals are interested in the largest consumption bundle possible and make efficient choices in regards to production.
10. If the world wanted to consume 7 balls and as many bats as possible, efficient production could generate a maximum of how many bats?
a. 4
b. 5
c. 7
d. 8
e. None of the above |
|
Definition
|
|
Term
Consider the following information when answering questions 7-13:
Haiti and the Dominican Republic share a common island. They are each capable of producing baseballs and bats. If Haiti spends all year producing baseballs, they can produce 5. If Haiti spends all year producing bats, they can produce 1. If the Dominican Republic spends all year producing baseballs, they can produce 10. If the Dominican Republic spends all year producing bats, they can produce 10. Each nation formerly produced these goods for their domestic consumption (self-sufficiency), so they are capable of producing some of each, such as Haiti producing 0.5 bats and 2.5 balls, or the Dominican Republic producing 5 bats and 5 balls. For this example you may assume all linear combinations of the above stated constraints (number sets interior to the end points) are feasible, the ‘world’ is simply these two nations combined, and that all individuals are interested in the largest consumption bundle possible and make efficient choices in regards to production.
11. If the world was willing to buy as many units of balls and bats that are produced, but only willing to pay $1 for a ball, $2 for a bat, how many balls and bats will be produced in total?
a. 0 balls, 11 bats
b. 5 balls, 10 bats
c. 10 balls, 1 bat
d. 15 balls, 0 bats
e. None of the above |
|
Definition
|
|
Term
Consider the following information when answering questions 7-13:
Haiti and the Dominican Republic share a common island. They are each capable of producing baseballs and bats. If Haiti spends all year producing baseballs, they can produce 5. If Haiti spends all year producing bats, they can produce 1. If the Dominican Republic spends all year producing baseballs, they can produce 10. If the Dominican Republic spends all year producing bats, they can produce 10. Each nation formerly produced these goods for their domestic consumption (self-sufficiency), so they are capable of producing some of each, such as Haiti producing 0.5 bats and 2.5 balls, or the Dominican Republic producing 5 bats and 5 balls. For this example you may assume all linear combinations of the above stated constraints (number sets interior to the end points) are feasible, the ‘world’ is simply these two nations combined, and that all individuals are interested in the largest consumption bundle possible and make efficient choices in regards to production.
12. Suppose, due to a change in production methods in Haiti, they are now capable of producing 15 balls in a year, or 5 bats in a year, or any linear combination of those endpoints. With this new information, who has the comparative advantage in ball production?
a. Haiti
b. Dominican Republic
c. Both
d. Neither |
|
Definition
|
|
Term
Consider the following information when answering questions 7-13:
Haiti and the Dominican Republic share a common island. They are each capable of producing baseballs and bats. If Haiti spends all year producing baseballs, they can produce 5. If Haiti spends all year producing bats, they can produce 1. If the Dominican Republic spends all year producing baseballs, they can produce 10. If the Dominican Republic spends all year producing bats, they can produce 10. Each nation formerly produced these goods for their domestic consumption (self-sufficiency), so they are capable of producing some of each, such as Haiti producing 0.5 bats and 2.5 balls, or the Dominican Republic producing 5 bats and 5 balls. For this example you may assume all linear combinations of the above stated constraints (number sets interior to the end points) are feasible, the ‘world’ is simply these two nations combined, and that all individuals are interested in the largest consumption bundle possible and make efficient choices in regards to production.
13. With the new information in the question above, who has the comparative advantage in bat production?
a. Haiti
b. Dominican Republic
c. Both
d. Neither |
|
Definition
|
|
Term
14. Producing a bundle of goods that is different from your consumption bundle is
a. Self-sufficiency
b. Autarky
c. Specialization
d. Both a and b
e. None of the above |
|
Definition
|
|
Term
We claim that good bundles interior to the production possibility frontier are
a. Unattainable
b. Attainable
c. Inefficient
d. Both a and c
e. Both b and c |
|
Definition
|
|
Term
You are a claimant in a lawsuit. As part of a settlement, Dump Poison on You, Inc. agrees to pay you in any of the following ways.
Choice 1 50000 now
Choice 2 55,000 in one years time
Choice 3 5000 in one year and each year forever
16. If the interest rate is 10%, you would
a. choose 1
b. choose 2
c. choose 3
d. would be indifferent (they all have same present value) |
|
Definition
| d. would be indifferent (they all have same present value) |
|
|
Term
You are a claimant in a lawsuit. As part of a settlement, Dump Poison on You, Inc. agrees to pay you in any of the following ways.
Choice 1 50000 now
Choice 2 55,000 in one years time
Choice 3 5000 in one year and each year forever
17. If the interest rate is 20%, you would
a. choose 1
b. choose 2
c. choose 3
d. would be indifferent between 1 and 2 (they have same present value) |
|
Definition
|
|
Term
You are a claimant in a lawsuit. As part of a settlement, Dump Poison on You, Inc. agrees to pay you in any of the following ways.
Choice 1 50000 now
Choice 2 55,000 in one years time
Choice 3 5000 in one year and each year forever
18. If the interest rate is 100%, you would
a. choose 1
b. choose 2
c. choose 3
d. would be indifferent (they all have same present value) |
|
Definition
|
|
Term
19. As the interest rate falls
a. the value of long lived goods rises in relation to short lived goods
b. the value of long lived goods falls in relation to short lived goods
c. uncertain to the value of long lived goods in relation to short term goods
d. none of the above |
|
Definition
| a. the value of long lived goods rises in relation to short lived goods |
|
|
Term
20. Suppose that aggregate demand is $5000 and the price level is 2.5. What is real GDP?
a. $12,500
b. $5000
c. $7500
d. $2000 |
|
Definition
|
|
Term
21. If the nominal interest rate is 10%, the expected inflation rate is 2%, and default risk is 1%, then
a. the real interest rate is 13%
b. the real interest rate is 7%
c. the real interest rate is 8%
d. the real interest rate is 9% |
|
Definition
| b. the real interest rate is 7% |
|
|
Term
The real interest rate is
a. the reward for postponing consumption
b. the cost to borrow someone’s consumption
c. the nominal interest rate plus the default risk plus adjustments for . purchasing power
d. all of the above
e. only A and B |
|
Definition
|
|
Term
You are a claimant in a lawsuit. As part of a settlement, Dump Poison on You, Inc. agrees to pay you in any of the following ways. Choose solely based on present valuation.
Choice 1 5000 now
Choice 2 5500 in one years time
Choice 3 500 in one year and each year forever
1. If the interest rate is 10%, you would
e. choose 1
f. choose 2
g. choose 3
h. would be indifferent (they all have same present value) |
|
Definition
| h. would be indifferent (they all have same present value) |
|
|
Term
You are a claimant in a lawsuit. As part of a settlement, Dump Poison on You, Inc. agrees to pay you in any of the following ways. Choose solely based on present valuation.
Choice 1 5000 now
Choice 2 5500 in one years time
Choice 3 500 in one year and each year forever
2. If the interest rate is 20%, you would
e. choose 1
f. choose 2
g. choose 3
h. would be indifferent between 1 and 2 (they have same present value) |
|
Definition
|
|
Term
You are a claimant in a lawsuit. As part of a settlement, Dump Poison on You, Inc. agrees to pay you in any of the following ways. Choose solely based on present valuation.
Choice 1 5000 now
Choice 2 5500 in one years time
Choice 3 500 in one year and each year forever
3. If the interest rate is 100%, you would
e. choose 1
f. choose 2
g. choose 3
h. would be indifferent (they all have same present value) |
|
Definition
|
|
Term
4. As the interest rate falls
e. the value of long lived goods rises in relation to short lived goods
f. the value of long lived goods falls in relation to short lived goods
g. uncertain to the value of long lived goods in relation to short term goods
h. none of the above |
|
Definition
| e. the value of long lived goods rises in relation to short lived goods |
|
|
Term
5. Suppose that aggregate demand is $5000 and the price level is 2.5. What is real GDP?
e. $12,500
f. $5000
g. $7500
h. $2000 |
|
Definition
|
|
Term
6. If the nominal interest rate is 10%, the expected inflation rate is 2%, and default risk is 1%, then
e. the real interest rate is 13%
f. the real interest rate is 7%
g. the real interest rate is 8%
h. the real interest rate is 9% |
|
Definition
| f. the real interest rate is 7% |
|
|
Term
The real interest rate is
a. the reward for postponing consumption
b. the cost to borrow someone’s consumption
c. the nominal interest rate plus the default risk plus adjustments for . purchasing power
d. all of the above
e. only A and B |
|
Definition
|
|
Term
8. If the inflation rate is negative, the price level of the economy is
a. falling
b. rising
c. constant
d. rising rapidly |
|
Definition
|
|
Term
9. If you are holding $100 and the price level rises by 10%, your
a. money is worth more
b. money is worth less
c. purchasing power has risen
d. money may increase or decrease |
|
Definition
|
|
Term
10. Which of the following statements about inflation are true?
a. inflation benefits lenders
b. inflation benefits borrowers
c. only unexpected inflation benefits lenders
d. only unexpected inflation benefits borrowers |
|
Definition
| d. only unexpected inflation benefits borrowers |
|
|
Term
11. A decrease in the supply of money will cause
a. higher prices but unchanged real GDP in the long run
b. higher prices and higher real GDP in the long run
c. lower prices and higher real GDP in the long run
d. lower prices and unchanged real GDP in the long run
e. none of the above |
|
Definition
| d. lower prices and unchanged real GDP in the long run |
|
|
Term
12. An increase in long run aggregate supply alone will cause
a. lower prices and higher real GDP
b. higher prices and lower real GDP
c. lower prices and lower real GDP
d. higher prices and higher real GDP
e. none of the above |
|
Definition
|
|
Term
A decrease in long run aggregate supply, caused by a plague, will cause
a. lower prices and higher real GDP
b. higher prices and lower real GDP
c. lower prices and lower real GDP
d. higher prices and higher real GDP
e. none of the above |
|
Definition
| b. higher prices and lower real GDP |
|
|
Term
14. Our assumption that the long run aggregate supply curve is vertical is equivalent to assuming
a. In the long run, real GDP is independent of the price level
b. In the long run, the price level is independent of real GDP
c. In the long run, the price level is independent of the money supply
d. In the long run, real GDP and the price level always move in the same direction
e. None of the above |
|
Definition
| a. In the long run, real GDP is independent of the price level |
|
|
Term
15. An increase in reserve requirements will cause
a. A decrease in the price level and in real gdp in the short run
b. An increase in the price level and in real gdp in the short run
c. An increase in the price level in the long run
d. Both b and c
e. None of the above |
|
Definition
| a. A decrease in the price level and in real gdp in the short run |
|
|
Term
16. Which of the following cause an increase in aggregate demand by increasing the money supply?
a. An increase in the discount rate
b. An increase in reserve requirements
c. An open market sale of bonds by the Federal Reserve
d. All of the above
e. None of the above |
|
Definition
|
|
Term
17. A decrease in the discount rate will cause
a. An increase in the price level and real gdp in the long run
b. A decrease in the price level and real gdp in the short run
c. A decrease in the price level in the long run
d. Both b and c
e. None of the above |
|
Definition
|
|
Term
18. An open market sale of bonds by the Federal Reserve will cause
a. An increase in the price level in the long run
b. A decrease in the price level in the long run
c. A decrease in the price level and real gdp in the short run
d. Both b and c
e. None of the above |
|
Definition
|
|
Term
19. A decrease in the reserve requirements will cause
a. An increase in the price level in the long run
b. A decrease in the price level in the long run
c. A decrease in the price level and real gdp in the short run
d. Both b and c
e. None of the above |
|
Definition
| a. An increase in the price level in the long run |
|
|
Term
20. Assume the long run aggregate supply curve is shifting to the right. What Federal Reserve policies could be used to keep the price level stable?
a. An increase in the discount rate
b. An increase in reserve requirements
c. An open market purchase of bonds by the Federal Reserve
d. An open market sale of bonds by the Federal Reserve
e. More than one of the above policies could be used to keep the price level stable |
|
Definition
| c. An open market purchase of bonds by the Federal Reserve |
|
|
Term
21. The present Chairman of the Federal Reserve is
a. Ben Bernanke
b. Alan Greenspan
c. Larry Summers
d. Paul Volcher
e. Timothy Geithner |
|
Definition
|
|
Term
Default risk can be thought of as
a. The adjustment necessary to compensate for changes in purchasing power
b. Compensation for the probability of non payment
c. Unique to an individual, firm or project
d. All of the above
e. Only b and c |
|
Definition
|
|
Term
23. The long run aggregate supply curve
a. Is society’s production constraint at any given time
b. Is also called the steady state of production
c. Tells us the amount of output (real gdp) is independent of the price level in the long run |
|
Definition
|
|
Term
The long run aggregate supply curve is constrained by
a. Human capital
b. Physical capital
c. Population
d. All of the above
e. Both a and b |
|
Definition
|
|
