Last Word Art Buchwalds Article Squaring the Economic Circle Humurously Describes How

Macroeconomics (McGraw-Hill Series Economics) 19th Edition Quiz 158

If the price of a production increases:
A. The consumer surplus will decrease
B. The consumer surplus will increment
C. Total revenue will increase if demand is price elastic
D. Total revenue volition subtract if demand is cost inelastic

Refer to the above diagrams. In which example would the coefficient of cross elasticity of demand be negative?
A. A
B. B
C. C
D. D

Need shocks:
A. refer to unexpected changes in the desires of households and businesses to purchase goods and services.
B. refer to unexpected changes in the power of firms to produce and sell goods and services.
C. always have a negative impact on the economy.
D. cause fewer short-run fluctuations than supply shocks.

(Last Discussion) Art Buchwald's article "Squaring the Economic Circle" humorously describes how:
A. a person's decision not to buy an automobile somewhen reduces many people'due south incomes, including that of the person making the original decision.
B. a price increment on a unmarried product eventually leads to rapid aggrandizement.
C. an increment in imports eventually leads to a greater increase in exports.
D. a government tax charge per unit increase eventually results in the government collecting less tax acquirement than before the revenue enhancement charge per unit hike.

Refer to the higher up diagram for a individual closed economy. At the $400 level of Gross domestic product:
A. amass expenditures exceed GDP with the result that Gross domestic product will ascent.
B. consumption is $350 and planned investment is zero so that amass expenditures are $350.
C. consumption is $300 and planned investment is $50 then that aggregate expenditures are $350.
D. consumption is $300 and actual investment is $100 so that aggregate expenditures are $400.

Which of the following is a correct argument of the impacts of a lump-sum tax?
A. Disposable income will increase by the corporeality of the tax and consumption at each level of GDP will reject by the corporeality of the tax multiplied by the MPC.
B. Disposable income volition reject by the amount of the tax and consumption at each level of Gdp will pass up by the amount of the tax multiplied by the multiplier.
C. Dispensable income will refuse by the corporeality of the tax and consumption at each level of Gross domestic product volition too decline by the amount of the taxation.
D. Disposable income will decline past the amount of the tax and consumption at each level of GDP volition turn down past the amount of the revenue enhancement multiplied by the MPC.

If the economy is in a recession and prices are relatively stable, then the discretionary fiscal policy or policies that would most likely be recommended to correct this macroeconomic problem would be:
A. Increased government spending or increased tax, or a combination of the two actions
B. Increased government spending or decreased revenue enhancement, or a combination of the 2 deportment
C. Increased government spending or increased taxation, simply not a combination of the two actions
D. Decreased government spending or decreased taxation, or a combination of the two actions

If in the market for money the corporeality of coin supplied exceeds the corporeality of coin households and businesses desire to hold, the interest charge per unit volition:
A. fall, causing households and businesses to concur less coin.
B. rising, causing households and businesses to hold less money.
C. rise, causing households and businesses to hold more than money.
D. fall, causing households and businesses to hold more money.

A Federal funds rate reduction that is caused past budgetary policy volition:
A. increase the prime interest rate.
B. decrease the size of the monetary multiplier.
C. increment the Fed'southward discount rate.
D. decrease the prime number interest charge per unit.

Other things equal, the brusk-run aggregate supply bend shifts positions when:
A. the price level changes.
B. the rate of inflation changes.
C. nominal wages and other input prices change.
D. aggregate demand changes.

If government uses fiscal policy to restrain cost-push button inflation, we can expect:
A. the unemployment rate to rise.
B. the unemployment charge per unit to fall.
C. the aggregate need curve to shift rightward.
D. tax-rate declines and increases in government spending.

(Consider This) According to economist Abba Lerner (1903-1982), fiscal and budgetary policy is analogous to:
A. automobile brakes.
B. a steering bicycle in an automobile.
C. a string that can be pushed or pulled.
D. highway guard rails.

Nation Alpha has a comparative advantage in product X and nation Beta has a comparative advantage in production Y. Merchandise in the 2 products will only do good the 2 nations if:
A. The commutation ratio of 10 for Y is stock-still
B. The terms of trade increase in both nations
C. There is excess chapters in both economies
D. The prices charged for X and Y reflect their domestic opportunity costs

Refer to the in a higher place diagram in which line AB is the United States production possibility curve and AC is its trading possibilities bend. We tin can conclude that the Usa:
A. has called to specialize in the production of cheese.
B. has chosen to specialize in the production of beef.
C. has decided to trade beefiness for cheese.
D. is relatively more efficient than its trading partners in producing both cheese and beefiness.

In international financial transactions, what are the merely two things that individuals and firms tin substitution?
A. currency and real assets.
B. services and manufactured goods.
C. preexisting assets and currently produced appurtenances and services.
D. currency and currently produced goods and services.

In the following question you lot are asked to determine, other things equal, the furnishings of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X, (2) the equilibrium price (P) of 10 and (3) the equilibrium quantity (Q) of X.

Refer to the above. An increase in the prices of resources used to produce 10 will:
A. increment S, increment P, and increase Q.
B. increase D, increase P, and increase Q.
C. subtract Due south, subtract P, and subtract Q.
D. decrease S, increase P, and decrease Q.

Economy A: gross investment equals depreciation
Economy B: depreciation exceeds gross investment
Economic system C: gross investment exceeds depreciation

Suppose that GDP was $200 billion in year 1 and that all other components of expenditures remained the aforementioned in year 2 except that business concern inventories increased by $10 billion. Gdp in year 2 is:
A. $180 billion.
B. $190 billion.
C. $200 billion.
D. $210 billion.

Suppose a family unit's consumption exceeds its disposable income. This ways that its:
A. MPC is greater than i.
B. MPS is negative.
C. APC is greater than 1.
D. APS is positive.

(Consider This) During the Great Recession of 2007-2009:
A. real involvement rates and investment spending both declined.
B. real interest rates and investment spending both increased.
C. real interest rates increased, choking off investment spending.
D. real interest rates decreased, only expected returns from investment remained unchanged.

Answer the question on the basis of the following sequence of events involving fiscal policy:
(1) The blended index of leading indicators turns downwardly for three consecutive months, suggesting the possibility of a recession; (ii) Economists achieve agreement that the economy is moving into a recession; (3) A tax cut is proposed in Congress; (4) The tax cut is passed past Congress and signed by the President; (five) Consumption spending begins to rising, aggregate demand increases, and the economic system begins to recover.

The crowding-out result of expansionary financial policy suggests that:
A. tax increases are paid primarily out of saving and therefore are non an effective financial device.
B. increases in government spending financed through borrowing will increase the interest rate and thereby reduce investment.
C. it is very difficult to accept excessive aggregate spending in the U.Southward. economy.
D. consumer and investment spending always vary inversely.

Refer to the above data. As a result of the auction, how much and at what interest rate will Beta bank borrow?
A. $0; 3.5 percent (rate charged winning bidders)
B. $0; 4.5 percent (rate charged winning bidders)
C. $five billion; 4.0 percent
D. $5 billion; 5.0 percent

Which of the following is a true statement?
A. Straight foreign investment to DVCs is increasingly provided by commercial banks.
B. Direct strange investment to DVCs has dwindled to near nix in recent years.
C. Approximately v percent of the Gdp of IACs goes to foreign aid.
D. Strange aid from the IACs to the DVCs has greatly expanded in the past several years.

Two nations, ECON and OMICS, each produce appurtenances A and B. The tabular array gives points on each nation'south production possibilities curve.

Refer to the above table. The domestic opportunity cost of producing more of product:
A. A is the aforementioned for both nations
B. B is the same for both nations
C. A is lower in OMICS
D. B is lower in OMICS

Which of the following statements about the correct to private buying is false?
A. Information technology enables individuals to obtain, use, and dispose of land and capital resources every bit they see fit
B. It encourages investment and innovation, and thus fosters economical growth
C. It extends to intangibles such every bit pieces of music and figurer programs
D. It weakens the incentive to maintain the property that one already owns

When economists depict "a market," they mean:
A. A place where stocks and bonds are traded
B. A communication network that allows individuals to keep in affect with each other
C. A hypothetical place where the product of appurtenances and services takes place
D. A system that allows buyers and sellers to interact with one another

An increase in the cost of product M volition upshot in a:
A. Shift of the demand curve for G to the left
B. Decrease in the demand for G
C. Larger quantity of G demanded
D. Movement upward and to the left forth the need curve for G

Y'all are the only seller of eggs in town, and the price-elasticity coefficient for eggs is known to be 0.8. If yous want to increment your sales quantity past 10% through a cost-change, what should you do to price?
A. Increase toll by 12.5%
B. Reduce cost by 12.5%
C. Increase price by eight%
D. Reduce price past eight%

If real GDP declines in a given twelvemonth, nominal Gdp:
A. Must likewise be failing
B. Must as well be increasing
C. May either rise or autumn
D. Is likely to remain constant

Click to reveal this answer.

Refer to the above graph. If the production possibilities bend of an economy shifts from AB to CD, information technology is most likely acquired past which of the following factors?
A. A subtract in the price level
B. Allocative efficiency
C. Technological progress
D. Full employment of resources

The table shows a private closed economy. All figures are in billions of dollars.

Saving is $15 billion at the $125 billion equilibrium level of output in a closed, private economy. Bodily investment must exist:
A. Less than saving
B. Greater than saving
C. Equal to $xv billion
D. Equal to $125 billion

The table shows a private closed economy. All figures are in billions of dollars.

The marginal propensity to consume is 0.eight. Equilibrium GDP volition increment by $30 billion if aggregate expenditures rising by:
A. $v billion
B. $6 billion
C. $eight billion
D. $24 billion

Refer to the above data. The direction of financial policy became more expansionary from:
A. 1999 to 2000
B. 2000 to 2001
C. 2002 to 2003
D. 2003 to 2004

Changes in involvement rates, given ceteris paribus, cause a shift in:
A. Neither the investment demand curve nor the aggregate need curve
B. The investment demand bend, but not the amass demand bend
C. The aggregate demand curve, just non the investment demand curve
D. The investment demand bend and the aggregate demand bend

In 2009, U.S. exports of services ______ U.S. imports of services by about _____.
A. exceeded; $17B
B. brutal short of; $17B
C. exceeded; $138 B
D. vicious brusque of; $138B

Refer to the above tabular array for a certain production market place in Econland. If the world cost for this product were $6, then Econland would import:
A. 400 units and domestic producers would supply one,400
B. 800 units and domestic producers would supply one,400
C. 800 units and domestic producers would supply 2,200
D. 400 units and domestic producers would supply two,200

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