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Proponents of the managed floating exchange rate system argue

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(TCO 9) In the balance of payments statement, a current account surplus will be matched by a (Points : 4) capital and financial accounts deficit.
capital and financial accounts surplus.
trade deficit.
trade surplus.

2. (TCO 9) Comparing everything that the United States owes to other nations, and what they owe to the United States, the United States is currently a(n) (Points : 4)

net creditor.
net debtor.
international banking asset.
international banking liability.

3. (TCO 9) If a Japanese importer could buy $1,000 U.S. for 122,000 yen, the rate of exchange for $1 would be (Points : 4)

8.19 yen.
122 yen.
820 yen.
1,220 yen.

4. (TCO 9) If a European importer can buy $10,000 for 11,100 euros, the exchange rate for the euro is (Points : 4)

1 euro = $0.80.
1 euro = $0.90.
1 euro = $0.95.
1 euro = $1.11.

5. (TCO 9) Proponents of the managed floating exchange rate system argue that it has (Points : 4)

added the volatility needed by the exchange rate market.
been effective because it is a "nonsystem" without fixed rules.
been sufficiently flexible to weather major economic turbulence.
resolved major problems in balance of payments surpluses and deficits

A decrease in government spending will cause a(n) (Points : 4) increase in the quantity of real domestic output demanded.
decrease in the quantity of real domestic output demanded.
decrease in aggregate demand.
increase in aggregate demand.

2. (TCO 5) The upward slope of the short-run aggregate supply curve is based on the assumption that (Points : 4)

wages and other resource prices do not respond to price level changes.
wages and other resource prices do respond to price level changes.
prices of output do not respond to price level changes.
prices of inputs are flexible while prices of outputs are fixed.

3. (TCO 5) If the price of crude oil decreases, then this event would most likely (Points : 4)

decrease aggregate supply in the U.S.
increase aggregate supply in the U.S.
increase aggregate demand in the U.S.
decrease aggregate demand in the U.S.

4. (TCO 5) With cost-push inflation in the short run, there will be (Points : 4)

an increase in real GDP.
a leftward shift in the aggregate demand curve.
a decrease in real GDP.
a decrease in unemployment.

5. (TCO 6) If a family's MPC is .7, it means that the family is (Points : 4)

operating at the break-even point.
spending seven-tenths of any additional income.
necessarily dissaving.
spending 70 percent of its disposable income.

6. (TCO 7) As of January 2010, slightly more than half of the money supply (M1) was in the form of (Points : 4)

currency.
checkable deposits.
gold coins and bars.
savings deposits.

7. (TCO 7) The basic requirement of money is that it be (Points : 4)

backed by precious metals--gold or silver.
authorized as legal tender by the central government.
generally accepted as a medium of exchange.
some form of debt or credit.

8. (TCO 7) How many members can serve on the Board of Governors of the Federal Reserve System? (Points : 4)

Seven
Nine
12
14

9. (TCO 7) Which group is responsible for the policy of changing the money supply? (Points : 4)

Federal Open Market Committee
Office of Management and Budget
Thrift Advisory Council
Federal Advisory Council

10. (TCO 7) Other things being equal, an expansion of commercial bank lending (Points : 4)

changes the composition, but not the size, of the money supply.
is desirable during a period of demand-pull inflation.
reduces the money supply.
increases the money supply.

11. (TCO 7) The difference between Fed behavior during the Bank Panics of 1930-1933 and the Financial Crisis of 2007-2008 is that the Fed (Points : 4)

was very active during the former crisis, while it was basically passive during the latter crisis.
stood idly by during the former crisis, but took dramatic actions during the latter crisis.
was not yet in existence during the 1930s.
was a much bigger institution in the 1930s than it is today.

12. (TCO 7) The purchase and sale of government securities by the Fed is called (Points : 4)

federal funds market.
open market operations.
money market transactions.
term auction facility.

13. (TCO 7) The tools of monetary policy for altering the reserves of commercial banks are the (Points : 4)

tax rate, transfer payments, and level of government spending.
consumer price index, inflation, and unemployment rate.
public debt, budget surplus, budget deficit, and interest rates.
discount rate, reserve ratio, open market operations, and term auction facility.

14. (TCO 8) Which nation has greatly increased its role in international trade in recent years? (Points : 4)

Japan
Iran
Peru
China

15. (TCO 8) In a two-nation world, comparative advantage means that one nation can produce (Points : 4)

a product with fewer inputs than the other nation.
a product at lower average cost than the other nation.
a product at a lower domestic opportunity cost than the other nation.
more of a product than the other nation.

16. (TCO 8) If a nation imposes a tariff on an imported product, then the nation will experience a(n) (Points : 4)

decrease in total supply and an increase in the price of the product.
decrease in demand and a decrease in the price of the product.
decrease in supply of, and an increase in demand for, the product.
increase in supply of, and a decrease in demand for, the product.

17. (TCO 8) If a nation agrees to set an upper limit on the total amount of a product that it exports to another nation, then this situation would be an example of (Points : 4)

an import quota.
a revenue tariff.
a protective tariff.
a voluntary export restriction.

18. (TCO 8) The major beneficiaries of a tariff on a product are the (Points : 4)

domestic producers of the product.
domestic consumers of the product.
workers engaged in trade, like transportation workers.
foreign producers of the product.

19. (TCO 8) About how many nations belonged to the World Trade Organization as of 2010? (Points : 4)

35
72
153
210

20. (TCO 9) U.S. businesses are demanders of foreign currencies because they need them to (Points : 4)

produce goods and services exported to foreign countries.
pay for goods and services imported from foreign countries.
receive interest payments from foreign governments.
receive interest payments from foreign businesses.

As a consequence of the problem of scarcity (Points : 4) there is never enough of anything.
individuals have to make choices from among alternatives.
production has to be planned by government.
things which are plentiful have relatively high prices.

2. (TCO1) Which of the following is considered to be an entrepreneur? (Points : 4)

Self-employed person
MBA graduate hired by a firm to be its CEO
Production-line worker
Customer of a firm

3. (TCO1) A point inside the production possibilities curve is (Points : 4)

attainable and the economy is efficient.
attainable, but the economy is inefficient.
unattainable, but the economy is inefficient.
unattainable and the economy is efficient.

4. (TCO1) In a command system (Points : 4)

self-interest guides and commands individuals to pursue actions that lead them toward achieving their goals.
the head of each family decides what to do with the family's resources.
the government makes production and allocation decisions.
market traders command what outputs are produced and how they are allocated.

5. (TCO 2) The demand curve is a representation of the relationship between the quantity of a product demanded and (Points : 4)

supply.
wealth.
price.
income.

6. (TCO 2) A decrease in supply and a decrease in demand will (Points : 4)

increase price and affect the equilibrium quantity in an indeterminate way.
decrease the equilibrium quantity and decrease price.
increase the equilibrium quantity and affect price in an indeterminate way.
decrease the equilibrium quantity and affect price in an indeterminate way.

7. (TCO 2) Chuck Grim has a price elasticity of demand for beer of 1.2. Suppose that the price of beer is increased by 10 percent. What will happen to the total amount Chuck spends on beer? (Points : 4)

It will not change.
It will decrease.
It will increase.
It is impossible to tell.

8. (TCO 2) The elasticity of supply for a product will be 2 if: (Points : 4)

A 1 percent decrease in the price causes a 0.2 percent decrease in quantity supplied
A 2 percent decrease in price causes a 1 percent decrease in quantity supplied
A 1 percent decrease in price causes a 2 percent decrease in quantity supplied
A 2 percent decrease in price causes a 2 percent decrease in quantity supplied

9. (TCO 2) A purely competitive firm's output is such that its marginal cost is $4 and marginal revenue is $5. Hint: remember that MR = P for Pure Competition and the Profit Maximizing rule. Assuming profit maximization, the firm should (Points : 4)

cut its price and raise its output.
raise its price and cut output.
leave price unchanged and raise output.
leave price unchanged and cut output.

10. (TCO 2) Consumers who clip and redeem discount coupons (Points : 4)

exhibit the same price elasticity of demand for a given product than consumers who do not clip and redeem coupons.
exhibit more price elasticity of demand for a given product than consumers who do not clip and redeem coupons.
exhibit less price elasticity of demand for a given product than consumers who do not clip and redeem coupons.
cause total revenue to decrease for firms that issue coupons for their products.

11. (TCO 3) A cartel is (Points : 4)

a form of covert collusion.
legal in the United States.
always successful in raising profits.
a formal agreement among firms to collude.

12. (TCO 3) The main difference between the short run and the long run is that (Points : 4)

firms earn zero profits in the long run.
the long run always refers to a time period of one year or longer.
in the short run, some inputs are fixed.
in the long run, all inputs are fixed.

13. (TCO 4) Which phase of the business cycle would be most closely associated with an economic contraction? (Points : 4)

Peak
Recession
Trough
Recovery

14. (TCO 4) In calculating the unemployment rate, part-time workers are (Points : 4)

counted as unemployed because they are not working full-time.
counted as employed because they are receiving payment for work.
used to determine the size of the labor force, but not the unemployment rate.
treated the same as "discouraged" workers who are not actively seeking employment.

15. (TCO 4) Adding the market value of all intermediate goods and services to those of final goods and services in an economy in a given year would result in (Points : 4)

the calculation of GDP for that year.
the calculation of NDP for that year.
an amount less than GDP for that year.
an amount greater than GDP for that year.

16. (TCO 4) The service a homeowner performs when she mows her yard is not included in GDP because (Points : 4)

this is a nonmarket transaction.
this is a nonproduction activity.
this is a noninvestment transaction.
multiple counting would be involved.

17. (TCO 6) When the federal government uses taxation and spending actions to stimulate the economy it is conducting (Points : 4)

fiscal policy.
incomes policy.
monetary policy.
employment policy.

18. (TCO 6) Refer to the figure. The economy is at equilibrium at Point B. What would expansionary fiscal policy do?

Graph Description

(Points : 4)

Shift aggregate demand from AD2 to AD1
Shift aggregate demand from AD2 to AD3
Move the economy from Point B downward along AD2
Move the economy from Point B upward along AD2

19. (TCO 6) The American Recovery and Reinvestment Act of 2009 is a clear example of (Points : 4)

nondiscretionary expansionary fiscal policy.
nondiscretionary contractionary fiscal policy.
discretionary contractionary fiscal policy.
discretionary expansionary fiscal policy.

20. (TCO 6) The lag between the time the need for fiscal action is recognized and the time action is taken is referred to as the (Points : 4)

crowding-out lag.
recognition lag.
operational lag.
administrative lag.

Submitted: 356 days and 1 hours ago.

Category: Multiple Problems

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