question
If a labor contract between workers and firms is signed that fixes the wage workers will be paid and then the demand for workers decreases, the presence of the sticky price (wage) causes
answer
a longer period of unemployment as wages adjust more slowly.
question
If the Fed sells government securities to a member of the nonbank public, then the resulting effect on the quantity of money is
answer
the same as if the securities were sold to a bank.
question
The demand for loanable funds includes demand for
i. loans.
ii. stocks.
iii. bonds.
i. loans.
ii. stocks.
iii. bonds.
answer
i, ii and iii
question
The expenditure multiplier measures the change in
answer
equilibrium expenditure that results from a change in autonomous expenditure.
question
Because human wants are insatiable and unlimited while available resources are limited, people are said to face the problem of
answer
scarcity.
question
As the central bank, the Federal Reserve System provides banking services to
answer
banks and regulates financial institutions and markets.
question
Moving upward along the aggregate supply curve is equivalent to
answer
moving upward along the short-run Phillips curve.
question
Pizza and tacos are substitutes, and the price of a pizza increases. Which of the following correctly indicates what happens?
answer
The quantity of pizza demanded decreases and the demand for tacos increases.
question
The unit of account is defined as
answer
An agreed-upon measure for stating the prices of goods and services
question
The relationship between the nominal interest rate, the real interest rate, and the inflation rate is that the
answer
nominal interest rate is equal to the real interest rate plus the inflation rate.
question
Labor productivity is calculated as
answer
(real GDP ÷ aggregate hours).
question
As we move along the production possibilities frontier,
answer
the production of one good increases as the production of the other good decreases.
question
The quantity of loanable funds supplied increases if the real interest rate rises, all other things remaining the same, because the
answer
real interest rate is the opportunity cost of consumption.
question
At full employment there still exists some unemployment because
answer
the U.S. economy is constantly creating and destroying jobs.
question
If Country A can produce an extra plane by giving up two boats, and Country B can produce an extra plane by giving up three boats, then
answer
Country A has a comparative advantage over Country B in the production of planes.
question
Other things the same, if the Fed increases the quantity of money, the supply of money curve shifts
answer
rightward and the nominal interest rate decreases.
question
In order to keep the real wage rate constant, the
answer
money wage rate must increase by the same amount as the inflation rate.
question
Changes in which of the following do NOT shift the AS curve?
answer
the price level
question
A minimum wage rate that is set ________ the equilibrium real wage rate creates a ________ of labor.
answer
above; surplus
question
The shape of the productivity curve reflects the
answer
law of diminishing marginal returns
question
An economy experiences a recessionary gap. As the economy adjusts to full employment, the money wage rate
answer
falls, shifting the aggregate supply curve rightward.
question
A decrease in the price of a complement in production leads to
answer
a decrease in the supply of the good in question.
question
In order to obtain the data used to calculate the unemployment rate, the Bureau of Labor Statistics
answer
uses a survey from 60,000 households.
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