question
Which of the following may be an explanation for the shift in aggregate demand from line A to line B?
answer
Interest rates fall and boost investments.
question
An expansion is a period during which the economy’s output declines.
answer
False
question
The ultimate objective of macroeconomics is to :
answer
develop and test theories about how the overall economy works
question
If Canada is using all its resources to their fullest extent, it can produce either 10 million iPads or 5 million HDTVs. If Mexico is using all its resources to their fullest extent, it can produce either 6 million iPads or 6 million HDTVs. Thus:
answer
Canada has a comparative advantage in producing iPads.
question
The difference between human capital and physical capital is that:
answer
human capital is not physical; an example of human capital is education
question
Which of the following is not the proper subject matter for macroeconomics?
answer
the price of corn
question
Which of the following is true regarding Gross Domestic Product?
answer
it can be measured either from total spending or total expenditure.
question
Which of the following would be included in GDP?
answer
payment of the monthly telephone bill by Mr. Laconic
question
Which one of the following would NOT lead to higher prices?
answer
an increase in the supply of food
question
If oil prices decline, the short-run aggregate supply curve shifts _____ and output supplied will _____.
answer
right; increase
question
One of the main purposes of a tariff is to:
answer
raise the price of an import above the world price.
question
_____ is a reduction in the rate of inflation.
answer
Disinflation
question
Which of the following statements regarding Gross Domestic Product is not true?
answer
It is a stock variable.
question
If the cost of a typical market basket in 2019 is 400 and the cost of a typical market basket in 2020 is 390, then during this period the economy is undergoing:
answer
deflation
question
If the pound sterling appreciates against the U.S. dollar, England buys _____ U.S. goods, causing the U.S. aggregate demand curve to shift to the _____.
answer
more; right
question
Increased consumer confidence will shift the aggregate demand curve to the _____ and _____ output demanded.
answer
right; increase
question
The effects of a quota are similar to that of a tariff in that consumers pay _____ prices and imports _____ as a result of the quota.
answer
higher; fall
question
Stagflation is a situation with high unemployment rates, high inflation rates, and little or no growth in the economy.
answer
True
question
A country has an absolute advantage in the production of a good if it can:
answer
produce more of the good than another country.
question
When calculating the GDP (gross domestic product) of the United States, the value of the cars produced by the Toyota plant in Ohio are included.
answer
True
question
A rising aggregate price level _____ an economy's interest rates and therefore _____ output demanded.
answer
increases; reduces
question
Arlina got a 5% raise while the rate of inflation was 6%. Arlina's standard of living:
answer
fell by 1%
question
The country of MiddleTerra has 200 people, 100 of them are working, and the real GDP is $5,000. What is the per capita income in MiddleTerra?
answer
$25 per capita
question
An increase in real GDP generally translates into a higher standard of living for most of a country's residents.
answer
true
question
Use the following data to calculate GDP: consumption = $2,000; gross investment = $600; government purchases = $500; net exports = -$40; transfer payments = $340.
answer
GDP = $3,060
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