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| 1 | |
Which of the following would be considered an example of monetary policy? |
| | A) | A broad government initiative to reduce the country's reliance on agriculture and promote high-technology industries. |
| | B) | A reduction in income tax rates. |
| | C) | Provision of additional cash to the banking system. |
| | D) | An attempt to reduce the government budget deficit by reducing spending. |
| | E) | A decision by a developing country to reduce government control of the economy and to become more market-oriented. |
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| 2 | |
In Econland population increased from 2 million to 4 million, the number of employed workers increased from 1 million to 2 million, but average labor productivity decreased from $25,000 per worker per year to $20,000 per worker per year. Total output in Econland _____ and the average standard of living _____. |
| | A) | decreased; decreased |
| | B) | decreased; increased |
| | C) | increased; remained constant |
| | D) | increased; increased |
| | E) | increased; decreased |
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| 3 | |
A decrease in the federal income tax is an example of ______ policy. |
| | A) | aggregation |
| | B) | fiscal |
| | C) | monetary |
| | D) | structural |
| | E) | productivity |
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| 4 | |
A decision by a government to sell businesses that currently are operated by the government to private investors is an example of ________ policy. |
| | A) | aggregation |
| | B) | fiscal |
| | C) | monetary |
| | D) | structural |
| | E) | productivity |
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| 5 | |
To aggregate 300 tons of steel, 5,000 bushels of wheat, and 1 million barrels of crude oil, economists add together the _____ of the three products |
| | A) | units |
| | B) | dollar value |
| | C) | physical volume |
| | D) | weight |
| | E) | number of tons, bushels, and barrels |
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| 6 | |
In Econland exports equal 25% of total output, while imports equal 20% of total output. Econland has: |
| | A) | a budget surplus. |
| | B) | a budget deficit. |
| | C) | a trade surplus. |
| | D) | a trade deficit. |
| | E) | balanced trade. |
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| 7 | |
Which of the following is an example of a macroeconomic policy? |
| | A) | Policies to limit the importation of sugar. |
| | B) | Policies to set a minimum price for milk. |
| | C) | Policies to limit the amount of pollutants that can be released into the water. |
| | D) | Policies to require students to pass a competency exam before graduation from high school. |
| | E) | Policies to reduce taxes in order to stimulate consumption spending. |
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| 8 | |
Inflation is an issue for macroeconomic policymakers because inflation: |
| | A) | imposes costs on the economy. |
| | B) | allows people on fixed incomes to improve their standard of living. |
| | C) | was low in the 1970s, but relatively high in the 1990s in the U.S. |
| | D) | rates are similar in all countries. |
| | E) | rates have been stable over time in most countries. |
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| 9 | |
The unemployment rate _____ during recessions and _____ in good times. |
| | A) | increases; equals zero |
| | B) | increases; is above zero |
| | C) | increases; is below zero |
| | D) | decreases; equals zero |
| | E) | decreases; is below |
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| 10 | |
Suppose that the supply curve for muffins has a slope of 2. The price elasticity of supply is thus |
| | A) | 0 |
| | B) | 1 |
| | C) | 2 |
| | D) | 0.5 |
| | E) | Not enough information to answer the question |
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