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Because human wants are insatiable and unlimited while available resources are limited, people are said to face the problem of
The question of "How are goods and services produced?" most closely addresses which of the following issues?
In order to make a rational choice, people must
Match statement to their type: [Increase in interest rates decreases investments]
Match statement to their type: [The only way to bring the economy out of a recession is to decrease taxes]
What would be an example of a consumption good or service? (Select 2)
The largest share of total production in the United States is
The difference between consumption and capital goods is that
Which of the following correctly lists the categories of factors of production?
Which of the following is NOT directly related to human capital?
Capital is a factor of production. Which TWO of the following are examples of capital?
In the circular flow model,
Production efficiency is represented by ________ a production possibilities frontier.
Consider a production possibility frontier with books and tables. A combination of 1000 books and 500 tables is on the frontier. Which of the following are true? (Select two)
The production possibilities frontier illustrates which of the following economic ideas?
Gasoline prices increase by 50 percent and other things remain the same. As a result, there is
A change in the demand for apples could result from any of the following EXCEPT
If the demand for used cars decreases after the price of a new car falls, used cars and new cars are
Hot dogs and hot dog buns are complements. If the price of a hot dog falls, then
Classify the following goods as inferior or normal: [As income increases, demand for bus rides decreases. Hence, bus rides are]
Classify the following goods as inferior or normal: [As income increases, demand for movie tickets increases. Hence movie tickets are ]
Milk can be used to produce cheese or butter. If the price of a pound of butter rises, what happens to the supply of cheese?
If the automobile workers' union successfully negotiates a wage increase for its members, how does the wage hike affect the supply of automobiles?
Using the data in the table below, if the price of a stapler is $8, then there is ________ of staplers and the quantity of staplers demanded ________ the quantity of staplers supplied.
Suppose the current price of a pound of steak is $6 per pound and the equilibrium price is $9 per pound. What takes place?
If consumers buy a large number of plug-in electric cars, the equilibrium price of electricity will ________ and the equilibrium quantity of electricity will ________.
Suppose that the price of flour used to produce bagels increases. Hence the equilibrium price of a bagel ________ and the equilibrium quantity ________.
Suppose that the price for flour, which is used to produce bagels, increases. In the market for cream cheese,
When personal computers were first produced, the price was very high. As time passed, the price of personal computers fell because
Gross Domestic Product measures the
Which of the following is included in U.S. GDP? i. the rental value of homes owned by U.S. citizens ii. the production of Suburban SUVs by GM in its plant in Mexico iii. tickets sold by U2 for concerts held in the United States
Which of the following is a final good or service?
In measuring GDP, which of the following is included?
Total expenditure equals total income
Which two of the following does GDP measure? (Select 2)
After calculating net domestic product at factor cost, to calculate GDP using the income approach, in part we must add
________ is most likely to contribute to an improvement in our living standard.
The CPI is calculated by the Bureau of Labor Statistics on a frequency of every
The reference base period for the CPI has an index number of
According to the CPI basket, the largest item in the households' budgets is
The CPI market basket
Which of the following is true?
A marginally attached worker i. does not have a job and has not looked for one in the last month. ii. is available and willing to work. iii. must work at least 1 hour per week.
Since 1960, the labor force participation rate in the United States has
Which TWO of the following help explain the increase in the U.S. labor force participation rate for women?
Which type of unemployment is a permanent and healthy phenomenon in a dynamic economy?
The type of unemployment that arises from a decrease in real GDP is called
Full employment occurs when
When the unemployment rate is greater than the natural unemployment rate, real GDP is
When the CPI rises ________, the inflation rate is ________.
Which of the following is a bias in the CPI? (Select 3)
If prices have increased since the base period, then
The economic growth rate is measured as the
Labor productivity is equal to the quantity of
Sustained increases in the standard of living depend on
Advances in technology and growth in human capital ________ because ________.
Money is best defined as
Which of the following is NOT among the primary functions of money?
If you shop for a car online and compare car prices across dealerships, money is functioning as a
Which of the following is money?
If Joe withdraws a $100 bill from his checking account and Jack deposits another $100 bill in his savings account, by how will M1 and M2 change?
A commercial bank's main goal is to
Which of the following is a thrift institution?
The Fed is a central bank and as such
Conducting the nation's monetary policy is the duty of the
The main policy making body of the Federal Reserve System is the
Which of the following is a policy tool of the Fed? (Select 2)
Open market operations are the
If the Fed engages in quantitative easing, it has likely
When the Fed ________ securities in an open market operation, banks' reserves ________, and therefore lending ________.
The quantity of money demanded
The opportunity cost of holding money is that you
The relationship between the nominal interest rate, the real interest rate, and the inflation rate is that the
Inflation is known as a ________ because it ________.
The "shoe-leather costs" of inflation are the costs from
The aggregate supply curve shows the relationship between
The aggregate supply curve slopes ________ because a ________ in the price level brings a ________ in the real wage rate.
Which of the following shifts the aggregate supply curve rightward?
Which of the following does NOT shift the aggregate demand curve?
If firms' expectations about the future become pessimistic so that they think future profits will be lower, then
Match the events to the resulting changes [Change in investment expenditure]
Match the events to the resulting changes [Change in potential GDP]
Match the events to the resulting changes [Change in price level]
A change in any component of aggregate demand creates a larger change in overall aggregate demand. This is the ________ effect, and it means, for example, that a(n) ________ in consumption will cause an even larger ________ in AD.
In the figure below, the economy is at an equilibrium with real GDP of $16 trillion and a price level of 110. At this point there is
Demand-pull inflation starts with
The short-run Phillips curve is a curve that shows the relationship, other things being constant, between ________ and ________.
If the economy is at full employment, then the inflation rate
Suppose an economy experiences a permanent increase in its expected inflation rate. As a result, there is
If the federal government has a budget surplus, then it is definitely the case that
The national debt is the amount
What two parts of the government determine the federal budget? (Select 2)
Fiscal policies that move the economy toward potential GDP without a change in policy are called
If the government reduces expenditure on goods and services by $30 billion, then aggregate demand
To eliminate a recessionary gap, the government can ________ government expenditures on goods and services or ________ taxes.
Which of the following is a monetary policy goal? (Select 2)
Which of the following is a potential monetary policy instrument for the Fed?
When the Fed buys government securities, banks' reserves ________, the quantity of money ________, and the federal funds rate ________.
If the Fed fears inflation, then the Fed
If the AS and the AD curve intersect at a level of real GDP that exceeds potential GDP, then the appropriate monetary policy is one that ________ the federal funds rate and ________ aggregate demand.
The fundamental force that generates international trade is
When a country imports a good, the ________ to consumers is ________ the ________ to producers.
After a tariff is imposed, consumers must pay a price equal to the
What is the dumping argument for protection from international trade?
Which question is a basic question economists need to answer?
Match each core idea of economic thinking to its definition.
Answer options may be used more than once or not at all.
A company has the production possibilities of bicycles and helmets in a month as follows:
Bicycles________ Helmets
900______________ 0
800_____________200
600____________ 400
350____________ 600
100____________ 800
0_______________1000
Which production numbers show an attainable and efficient production for this company?
Which scenario could the manager have set up to create this higher production?
A fast food restaurant produces 85 hamburgers and 100 trays of French fries each hour. The manager has not made any tradeoffs in production but is producing many more hamburgers and French fries than last month. Assume the production possibilities curve has not changed.
Which scenario could the manager have set up to create this higher production?
Note: This new production combination lies on the restaurant's production possibilities curve.
What are two factors of production that affect how goods and services are produced?
What is true regarding human capital?
Which situation increases current demand of a good?
If the demand for used cars decreases after the price of new cars falls, what is true about the used and new cars?
How is the quantity of demand affected when there is an increase in demand, assuming supply is constant?
Which situation increases the supply of gasoline?
Which situations increases the supply of a product?
Choose 2 answers
What can cause an increase in the quantities supplied of ballpoint pens?
A sugar cane farm was affected by a devastating hurricane that decreased the supply of sugar by 50 percent. Because of the reduced supply of sugar, the chocolate cake industry in Country A was only able to produce half the number of last year's cakes.
What effect will this decrease in sugar supply have on the chocolate cake's market equilibrium?
What happens to the consumer surplus as the allocation of resources becomes more efficient and approaches the production possibilities frontier?
You prepare dinner for you and your family. Which statement is true concerning gross domestic product (GDP)?
Your service in preparing the meal is valued at a cook?s wage and added to GDP.
None of what you bought to prepare for dinner is included in GDP.
Only the market value of ingredients that you purchased this year is added to GDP.
The difference between the cost of the ingredients that you purchased this year and the market value of the dinner is added to GDP.
Which item would be excluded from Canada's gross domestic product (GDP) measure?
Classify the descriptions as a feature of real gross domestic product (GDP) or nominal GDP.
Answer options may be used more than once or not at all.
Nominal GDP
Nominal - Expressed in terms of prices in that same year
Real - Allows the quantities of production to be compared across time
Real - Expressed in terms of the prices of a base year
Real - A more accurate measure of how much the standard of living is rising
Which factor is included when analyzing gross domestic product (GDP)?
How frequently does the Bureau of Labor Statistics conduct its survey of the consumer price index (CPI) market basket to determine CPI?
Which events are causes of inflation?
Choose 3 answers
Which condition must exist for full employment to occur?
How will the gross domestic product (GDP) be affected when unemployment is higher than the natural unemployment rate?
Choose 2 answers
A call-center employee has been laid off because of an economic recession.
Which type of unemployment does this illustrate?
What is job rationing?
What is an efficiency wage?
What do sustained increases in the standard of living depend on?
What would be a reason for an increase in labor productivity growth?
Economic growth in Cuba has been slow.
What can best explain the slow growth?
Which statement is true regarding private investment when government has a budget surplus?
Private investment is greater than saving.
Private investment is less than saving.
Private investment is equal to saving.
What are some of the contributing causes of government running budgetary deficits?
Rapid increases in the government spending not offset by increases in tax revenues
Rapid decline in social welfare programs
Rapid decreases in the government spending
What is an example of financial capital?
What is this an example of?
Cisco is considering opening a financial institution that accepts savings deposits from only its employees and makes loans to only its employees. What is the best description of this financial institution?
What is the goal of a commercial bank?
What is the function of money that is being applied when we put a price tag on goods and services?
What is an open market operation?
Who regulates the quantity of money circulating in the economy?
What can the Federal Reserve System immediately adjust in order to influence the interest rate?
What are open market operations?
How does the quantity of money demanded relate to the nominal interest rate?
What are confusion costs?
What is the result of an increase in price level, other things remaining the same?
When households hoard assets or spend too much time trying to estimate future inflation rates.
A given percentage increase in the quantity of money which brings an equal percentage increase in the price level.
The difficulties that arise when prices are changing so quickly that it is hard to compare marginal benefits to marginal costs.
Moving along the aggregate supply curve, what is the result when the price level increases?
Match each change with how it impacts aggregate demand.
Answer options may be used more than once or not at all.
decrease aggregate
Government purchases decrease
Net exports decrease
Investment increases
Assuming that gross domestic product (GDP) stays constant, what happens in terms of the business cycle when aggregate demand increases?
Why do money wage rates rise in a demand-pull inflation?
What is likely to occur when gross domestic product (GDP) equals planned expenditure?
How is an expenditure multiplier determined?
When would a lower inflation rate occur on a short-run Phillips curve?
What are the policy targets of the Phillips curve?
Which parties decide on the federal budget?
When tax revenue equals outlays
If government expenditures on goods and services increased by $20 billion, what would happen to aggregate demand?
Classify the following actions as either increasing or decreasing aggregate supply.
Answer options may be used more than once or not at all.
decrease aggregate supply
Decrease in unemployment
Increase of infrastructure projects
Decrease in investment
Increase in income taxes
Which factor is a key part of achieving maximum employment?
What is the best indication that the Federal Reserve is achieving its goal of price level stability?
What would happen to aggregate expenditures if the Federal Reserve raised the federal funds target rate?
What is one strategy the Federal Open Market Committee (FOMC) uses to fight inflation?
What happens after a nation starts importing a good from overseas?
In what way do consumers lose and gain from a tariff?
Choose 2 answers
If supporters of restrictions on imports argue that protection is needed to preserve a strategic industry, which argument is being used?
4 Stages of a business cycle
The Federal Open Market Committee consists of how many people? How often do they meet?
What is the main purpose of "Operation Twist"?
3 vital functions that money is expected to perform?
Who is a discouraged worker?
Which term characterizes the situation where the current unemployment rate is equal to the natural unemployment rate?
Which costs would be labeled uncertainty costs?
What happens to the business cycle when aggregate demand increases?
Which consumer gain results from a tariff imposed on a good?
Why do money wage rates rise when an economy has demand-pull inflation?
