Liberty University ECON 214 exam 2 complete solutions correct answers A+ work

There are more than 4 versions

Click the following link

httpswwwcoursemeritcomsolution-details21250Liberty-University-ECON-214-exam-2-complete-solutions-correct-answers-A-work

Question 1 From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

Question 2 How many recessions have there been in the United States since 1982

Question 3 When US aggregate demand and longrun aggregate supply decreased during the Great Recession

Question 4 Refer to the following figure to answer the questions that follow Based on the figure starting at point A if there is an increase in government spending then in the short run we would move to point __________ and in the long run to point __________

Question 5 The longrun aggregate supply curve is

Question 6 From 2006 to 2010 per capita real gross domestic product (GDP) in Poland grew an average of 471 per year At that rate according to the Rule of 70 in roughly how many years will the Polish economy double in size

Question 7 An increase in the general price level will lead to

Question 8 Keynesian economists believe that government intervention in the economy is necessary because

Question 9 Which of the following would cause an upward movement along the aggregate demand curve

Question 10 One of the reasons why the Great Depression was so severe is that

Question 11 Use the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and longrun aggregate supply (LRAS) have decreased with no change in shortrun aggregate supply (SRAS) The graph accurately summarizes what happened during the Great Recession because during that time the price level _________ and real gross domestic product (GDP) _________

Question 12 The economy is in shortrun equilibrium when

Question 13 James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company

Question 14 Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the

following actions would represent an increase in the human capital resource at her hair salon

Question 15 The Great Depression is characterized by a decrease in aggregate demand Of the following factors which would have caused aggregate demand to decrease

Question 16 According to classical economists changes in aggregate demand have little effect on the overall economy and therefore

Question 17 A(n) _____________ in capital goods should ____________ worker productivity

Question 18 During the Great Depression the US aggregate demand curve shifted to the left in part because

Question 19 Suppose an economy has a law that requires all wages to be adjusted quarterly to reflect changes in the general price level This means wages either increase or decrease depending on the percent change in the general price level In this economy

Question 20 If asked about the basic functioning of the economy a Keynesian economist would state that

Question 21 When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run

Question 22 Refer to the following figure to answer the questions that follow Based on the figure which of the following would cause the shortrun aggregate supply curve to shift from SRAS1 to SRAS2

Question 23 From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size

Question 24 Suppose there is a surge in stock market values In the short run we would expect the price level to __________ and the unemployment rate to __________

Question 25 Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________

Question 26 In 2009 per capita real gross domestic product (GDP) in Croatia was $1005968 By 2010 it had increased to $1025771 At what rate did Croatiarsquos economy grow in that time

Question 27 Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Question 28 Which of the following economic statements would a Keynesian economist tend to support

Question 29 Which of the following best summarizes the main causes of the Great Recession

Question 30 The price index used to illustrate the aggregate demand curve is the

Question 31 An increase in ________________ would lead to an increase in longrun

economic growth

Question 32 Use the following graph to answer the questions that follow This graph depicts an economy where aggregate demand has decreased with no change in either shortrun aggregate supply (SRAS) or longrun aggregate supply (LRAS) Which of the following would have caused aggregate demand to decrease in the graph such as occurred during the Great Depression

Question 33 Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________

Question 34 Residents of poor countries tend to have higher rates of infant mortality because

Question 35 From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006

Question 36 During the Great Recession US household wealth declined leading to a decrease in aggregate demand Which pair of factors contributed to this decline in wealth

Question 37 Which of the following would have caused aggregate demand to decrease during the Great Depression

Question 38 Residents of poor countries tend to have fewer automobiles per capita because

Question 39 Which of the following factors is negatively correlated with economic growth

Question 40 When an economy experiences economic growth

Question 1 Suppose a change in health care laws increases the cost of hiring an employee We can expect output in the short run to __________ and output in the long run to __________

Question 2 In 1350 average world income was roughly

Question 3 When firms invest less because people are saving less it is called the

Question 4 From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size

Question 5 From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006

Question 6 Competitive markets contribute significantly to economic growth because

Question 7 If the current shortrun equilibrium level of output is greater than full

employment output we can then expect that in the long run

Question 8 During the Great Recession longrun aggregate supply decreased This was caused by __________

Question 9 When an economy experiences economic growth

Question 10 Suppose housing values fall during a recession In the short run

Question 11 When considering the basic operations of the macroeconomy Keynesian economists argue that

Question 12 Suppose a countryrsquos population is growing due to immigration In the long run output will _________ due to _________

Question 13 During the Great Recession ___________ caused aggregate demand to decrease

Question 14 The Great Recession was similar to other recessions since World War II in that

Question 15 Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

Question 16 When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because

Question 17 A supply shock causes a shift in

Question 18 In 1800 the average income of US citizens was roughly

Question 19 A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________

Question 20 As a result of several factors aggregate demand decreased during the Great Depression One factor would be

Question 21 When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because

Question 22 If the price level rises by 10 then all else being equal the longrun quantity of aggregate supply will

Question 23 Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent

Question 24 Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________

Question 25 In 2009 per capita real gross domestic product (GDP) in Croatia was $1005968 By 2010 it had increased to $1025771 At what rate did Croatiarsquos economy grow in that time

Question 26 During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which

Question 27 Which of the following is an example of an institution that promotes economic growth

Question 28 Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________

Question 29 The Great Recession was similar to other recessions since World War II in that

Question 30 Suppose people are worried about losing their jobs In the short run this will

Question 31 During the Great Depression thousands of US banks failed As a result

Question 32 Refer to the following figure to answer the questions that follow Based on the figure if the economy starts at point A and ends up at point E then in the short run there was

Question 33 Residents of wealthy countries tend to have longer life expectancies because

Question 34 Which of the following best summarizes the main causes of the Great Recession

Question 35 Use the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and longrun aggregate supply (LRAS) have decreased with no change in shortrun aggregate supply (SRAS) During the Great Recession real gross domestic product (GDP) decreased yet the aggregate price level remained largely unchanged as depicted in the graph Unemployment increased to abovenormal levels Which of following best explains why this happened

Question 36 When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because

Question 37 Classical economists believe that savings is crucial for economic growth because

Question 38 Higher rates of economic growth are negatively correlated with

Question 39 Menu costs help to explain

Question 40 Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________

1 Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would bea $520b $5720c $5252d $10520e $61252 In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angolarsquos economy grow in that timea 820

b 2122c 1751d 706e 10123 From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased bya 28b 12c 38d 18e 544 Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakerya moving into a larger spaceb increasing employee trainingc hiring more employeesd buying better quality ingredients‐e hiring an accountant to handle payroll5 ldquoLiving standardsrdquo refer to the well being of the residents of a country Generally speaking ‐higher economic growth leads to higher living standards But higher living standards today can further contribute to economic growth in the future Which of the following aspects of higher living standards would contribute most to future economic growtha access to more and better consumer goodsb improved education for young peoplec greater access to the Internetd more cell phones per persone more automobiles per person6 Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shopa Increasing the number of bikes he holds in inventoryb Utilizing an online ordering system that allows him to sell bikes across the countryc Increasing the number of employeesd Better training for his staffe Increasing his inventory of helmets and accessories that he sells7 In 1950 Brazilrsquos economy was roughly the same size as Nicaraguarsquos Today Brazilrsquos economy is almost five times as large as Nicaraguarsquos Which of the following if true would best explain Brazilrsquos economy grew faster than Nicaraguarsquosa Nicaragua was too reliant on foreign aid whereas Brazil was far more economically independentb Brazil greatly limited international trade whereas Nicaragua opened its borders to imports and exportsc Brazil supported institutions like property rights which tend to foster growth whereas Nicaragua did notd Brazilrsquos economy was largely agricultural whereas Nicaraguarsquos was industriale Nicaragua had excessively high tax rates but Brazil kept its taxes low and competitive8 Which of the following explains why a stable money and price policy fosters economic growtha If prices are expected to rise consumers save too much of their moneyb If prices are expected to rise firms wait until the prices rise before they investc If there is a lot of price instability consumers tend to smooth consumptiond If there is a lot of price instability firms are able to sell less of their product

e If there is a lot of price instability firms invest less9 A restaurantrsquos production function would show the relationship betweena the number of workers hired and the number of meals servedb the number of workers hired and the level of profitc the level of profit and the number of meals servedd the level of profit and the cost of producing the mealse the number of workers hired and the cost of producing the meals10 If this country experiences an epidemic that reduces human capital thena the production function will shift upwardb the production function will shift downwardc there will be an upward movement along the production functiond there will be a downward movement along the production functione there will be no effect on the production function11 The Solow growth theory focuses ona human capital because education is known to increase economic growthb human capital because human capital exhibits diminishing marginal returnsc human capital because one of the biggest differences between poor nations and wealthy nations is the amount of their human capitald physical capital because physical capital exhibits diminishing marginal returnse physical capital because one of the biggest differences between poor nations and wealthy nations is the amount of their physical capital12 Consider the following table which shows the total number of customers served per hour as the number of cash registers is increased The marginal product of the fourth cash register isa 6b 10c 12d 32e 50Use the following production function to answer the next question13 This production function exhibits diminishing returns to capital fora all units of capital after the firstb no units of capitalc all units of capital after the secondd all units of capital after the thirde all units of capital except the sixth14 If an economy is in the steady state thena net investment is zerob depreciation is zeroc investment is zerod the marginal product of capital is zeroe there are no diminishing returns15 The production function for an economy is 1050427 1050427 1050427radic10504271050427 with all symbols defined as in the class Y is output A accounts for technological change K is capital input L is labor input Initially A=2 K=12 L=35 At this initial state the Marginal Product of Capital is approximatelya 0b 167c 4099d 4266e there is not enough Information to answer this question16 Consider the United States growth rates since 1820 They show thata The United States is slowly approaching a steady stateb The United States was in a steady state in the early 19th century but left it long agoc The United States was not in a steady state early on but now it is in a steady state

d The United States was never in a steady state at any point of its historye None of the aboveUse the following graph to answer the next question17 Suppose that the level of capital is 100000 the depreciation rate is 5 and investment is equal to 5000 In this case you would expect thata real gross domestic product (GDP) will increaseb real GDP will decreasec real GDP will remain unchangedd the steady state value of capital will increasee the steady state value of capital will decrease18 When a country adopts a more efficient tax system it is likely toa have no effect on the production functionb shift the production function upwardc shift the production function downwardd have no impact on technological innovatione have no impact on physical capital19 The interest rate effect results from peoplea saving less when the price level risesb consuming more when the price level risesc spending more when the interest rate risesd feeling more wealthy when the price level risese spending more when the price level falls20 When saving declines the quantity of investment will __________ and therefore aggregate demand will __________a increase increaseb decrease decreasec decrease increased increase decreasee remain unchanged decrease21 If people expect higher income in the future then spending today __________ and aggregate demand __________a increases is unaffectedb increases increasesc increases decreasesd decreases decreasese is unaffected is unaffected22 You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________a be unaffected be unaffectedb increase increasec decrease decreased decrease increasee increase decrease23 Which of the following would cause an increase in long run aggregate supply‐a The price level increasesb The price level decreasesc Firms and workers expect the price level to falld Firms and workers expect the price level to risee The stock of capital increases24 All else being equal an increase in _________ would shift the long run aggregate supply curve ‐to the left a the unemployment rate

b the inflation ratec economic growthd government spendinge the rate at which capital depreciatesThe following figure which was discussed in class depicts the percentage of workers whose wages have not changed in the previous year Recall that the shaded areas mark the recessions Use the figure to answer the next question25 This figurehellipa shows that wages are less sticky during recessions than during expansionsb shows that wages are sticky because the percentage of people whose wages doesnt change is generally lowc shows that wages are sticky because the percentage of people whose wages doesnt change first increases then decreases during expansionsd shows that wages are sticky because the percentage of people whose wages doesnt change increases during recessionse doesnt show any thing in particular about wage stickiness26 If inflation turns out to be higher than expected this willa shift long run aggregate supply to the right‐b shift long run aggregate supply to the left‐c shift short run aggregate supply to the left‐d shift short run aggregate supply to the right‐e have no effect on aggregate supplyThe following figure depicts different possible curves for the United States Refer to the figure to answer the next two questions27 Beginning in the equilibrium point i (marked with a circle) where would the economy move to in the short run if the value of the dollar increased‐a Point fb Point gc Point hd Point je Point l28 Beginning in the equilibrium point i (marked with a circle) where would the economy move to in the long run if the rule of law improves‐a Point bb Point hc Point ld Point oe Point p29 Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________a decrease decreaseb decrease increasec decrease remain unchangedd remain unchanged remain unchangede remain unchanged increase30 An increase in long run aggregate supply can be expected to _________ the price level and ‐_________ the natural rate of unemploymenta have no effect on have no effect onb have no effect on increasec decrease decreased decrease have no effect one increase have no effect on31 During the Great Recession there was a financial crisis a stock market crash and a collapse

in housing prices all of whicha contributed to a very long and deep recessionb helped the US economy perform better than the economies of other countriesc kept unemployment from rising above the historical averaged resulted in a very short and mild recessione prevented the United States from experiencing a decline in real gross domestic product (GDP)32 The Great Recession was similar to other recessions since World War II in thata the rate of unemployment increased and then decreased at a later timeb the rate of inflation was extremely highc real gross domestic product (GDP) rapidly increased and then leveled offd the rate of economic growth was unchangede the rate of unemployment decreased and then increased at a later time33 One of the reasons why the Great Depression was so severe is thata stock prices increased during the Great Depressionb the US government increased taxesc the US government allowed the money supply to increased the unemployment rate decreasede expected income increased34 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment35 Keynesian economists believe thata the market tends toward stability and full employmentb the economy needs help in moving back to full employmentc savings is crucial to growthd prices are flexiblee the long run is more important than the short run

Identify the choice that best completes the statement or answers the question____ 1 Which combination of events could have caused the equilibrium interest rate to rise and the equilibrium quantity of loanable funds (both borrowed and lent) to falla A baby boom begins and investor confidence fallsb A baby boom begins and investor confidence risesc People have lower time preferences and governments run larger deficitsd People have lower time preferences and capital is more productivee A baby boom begins and people have higher time preferences____ 2 If foreign entities save more and businesses become more optimistic about the future we would correctly say thata the new equilibrium quantity of loanable funds would decrease but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the originalb the new equilibrium quantity of loanable funds would increase but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the originalc the new equilibrium quantity of loanable funds would be indeterminate but we

would be certain the new equilibrium interest rate would be higher than the originald the new equilibrium quantity of loanable funds would be indeterminate but we would be certain the new equilibrium interest rate would be less than the originale based on this information and because both changes would affect the demand for loanable funds in the opposite way we would be unable to say anything about the relationship of the new equilibrium interest rate and quantity to the original interest rate and quantity____ 3 The demand and supply of loanable funds decrease simultaneously This would causea the equilibrium quantity of loanable funds to decrease and the equilibrium interest rate to increaseb the equilibrium quantity of loanable funds to decrease but the effect on the equilibrium interest rate would be uncertainc the equilibrium quantity of loanable funds to increase but the effect on the equilibrium interest rate would be uncertaind the equilibrium interest rate to increase but the new equilibrium quantity would be uncertaine the equilibrium interest rate to decrease but the new equilibrium quantity would be uncertain____ 4 If interest rates risea firms are willing to borrow more money because their rates of return have increasedb households are willing to borrow more money because their rates of return have increasedc firms are willing to borrow less money because their cost of borrowing has increasedd foreign entities are willing to borrow more money because their rates of return have increasede it must mean that inflation has decreased because nominal rates have increased____ 5 If life expectancy falls due to AIDS and other diseases we would expecta time preference to fall and savings to increaseb time preference to rise and savings to increasec time preference to fall and savings to decreased time preference to rise and savings to decreasee interest rates to fall to zero____ 6 If the demographics of a nation change and the average age of the nation is approaching middle age we would expecta savings to increaseb savings to decreasec borrowing to declined consumption variation to increasee savings as a percentage of income to fall____ 7 One could correctly argue that higher capital productivitya would increase the value of capital and the supply of loanable fundsb would reduce the value of capital and the supply of loanable fundsc would only affect interest rates in the long rund would increase the value of capital and the demand for loanable fundse would reduce the value of capital and the demand for loanable fundsConsider the following scenario when answering the questions that followYour friend Carson is starting a new photography business that specializes in

photographs of Central Park in New York City Because his business is new and risky he is unable to obtain a loan from the local bank On June 21 2013 you agree to pay a price of $4000 for a bond from Carson You will receive $5000 in return on June 21 2014____ 8 The face value of the bond mentioned in the scenario is equal toa $9000b $1000c $4000d $5000e $20000____ 9 The interest rate of the bond mentioned in the scenario is equal toa 80b 20c 25d 10e 5____ 10 If the dollar price of a bond is $7500 and the face value of the bond is $8000 the interest rate is equal toa 7b 667c 625d 14e 5____ 11 Consider a supply and demand model of bonds for company X Which of the following would you expect to happen if the default risk decreases for company Xa The demand curve will shift to the right causing the price of the bond to riseb The demand curve will shift to the left causing the price of the bond to risec The supply curve will shift to the right causing the price of the bond to falld The demand curve will shift the left causing the price of the bond to falle The supply curve will shift to the left causing the price of the bond to rise____ 12 Your friend Jamarcus is an award-winning chef Jamarcus wants to start his own restaurant in Denver but is unable to obtain a loan from his local bank Jamarcus has decided to issue a one-year bond with a face value of $6000 and an interest rate of 10 If you wanted to buy this bond what would be the initial pricea $660000b $550050c $600000d $500000e $545454____ 13 Approximately how much of US federal debt was held by foreignersa 90b 6c 32d 17e 55____ 14 What would you expect to happen to the supply and demand model for Treasury securities if a new law makes it easier for foreign investment in the United Statesa The demand curve shifts to the right causing the price of Treasury securities to increaseb The demand and supply curves shift to the right causing the price of Treasury

securities to increasec The demand and supply curves shift to the left causing the price of Treasury securities to decreased The demand curve shifts to the right causing the price of Treasury securities to decreasee The supply curve shifts to the left causing the price of Treasury securities to increase____ 15 Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continenta Economic growth would not be affected medical aid does not contribute to gross domestic product (GDP)b Economic growth would decrease because there would be more people to feed but no additional resourcesc Economic growth would not be affected because children do not contribute to economic growthd Economic growth would increase because the health and productivity of the future labor supply would increasee Economic growth would increase because more children would survive which represents a technological advance____ 16 When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becausea holding real GDP constant an increase in the population actually lowers average standards of livingb an increase in population will tend to reduce nominal GDPc changes in population tend to have no effect on standards of livingd holding real GDP constant an increase in the population actually raises average standards of livinge an increase in the population will tend to decrease average prices____ 17 Between 2006 and 2010 per capita real gross domestic product (GDP) in India grew at an average rate of 711 per year Which of the following factors would have contributed most to this rapid escalation in growtha advances in technologyb increases in government regulationsc decrease in education standardsd a significant increase in taxese restrictions on immigration____ 18 Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________a infant mortality life expectancyb Internet users automobile ownershipc educational achievement physicians per capitad Internet users infant mortalitye cellular phone use personal computer use____ 19 The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP area the percent change in prices and the rate of investmentb the percent change in prices and the rate of population growthc the rate of investment and the rate of savingsd the rate of population growth and the rate of savings

e the rate of investment and the rate of population growth____ 20 From 2006 to 2010 per capita real gross domestic product (GDP) in Poland grew an average of 471 per year At that rate according to the Rule of 70 in roughly how many years will the Polish economy double in sizea 76 yearsb 149 yearsc 121 yearsd 88 yearse 84 years____ 21 Which of the following factors is positively correlated with economic growtha collectively owned resourcesb high barriers to international tradec restrictions on immigrationd political stability and the rule of lawe high rates of inflationUse the following production function to answer the questions that follow____ 22 How many units of capital should be produced in order to achieve the steady statea 6b 5c 4d 3e There is not enough information to answer this question____ 23 If an economy is in the steady state thena net investment is zerob depreciation is zeroc investment is zerod the marginal product of capital is zeroe there are no diminishing returns____ 24 The relationship between international aid and economic growth for less developed countries isa positive in that more aid means more growthb negative in that less aid means less growthc indeterminate because very few countries have received international aidd positive when financial funds are sent to the less developed countries but negative when developed countries help build capital goods in these countriese nonexistent because some countries have received aid but realized no growth whereas others have grown but have received no aid____ 25 Which of the following describes the correct direction of causalitya economic growth growth-friendly incentives growth-friendly institutionsb growth-friendly incentives economic growth growth-friendly institutionsc growth-friendly institutions growth-friendly incentives economic growthd economic growth growth-friendly institutions growth-friendly incentivese growth-friendly institutions economic growth growth-friendly incentives____ 26 Suppose that the level of capital in the economy is 200 units the depreciation rate is 10 and the level of investment is equal to 10 units In this casea the economy is in a steady stateb investment is less than net investmentc investment is equal to net investmentd investment is greater than net investmente the level of output will increase

____ 27 Country A has been growing at a rate of 7 per year whereas country B has been growing at a rate of 2 per year Assume that both countries have the same production function savings rate and depreciation rateThe Solow growth model would predict thata country A is wealthier than country Bb both countries are in a steady statec country B is closer to its steady state than country Ad country A is closer to its steady state than country Be these two countries will never converge at the same level of wealth____ 28 If all countries are going to converge at the same level of real gross domestic product (GDP) per capita as predicted by the Solow growth model and assuming that allcountries have the same production function savings rate and depreciation rate thena they must all have identical production functionsb they must all have the same number of people in the populationc they must all have the same size of labor forced they must all have the same level of real GDPe they must all end up with a marginal product of zero____ 29 Which of the following would cause a downward movement along the aggregate demand curvea A rise in the price level makes US goods relatively more expensive than foreign goodsb The value of real wealth risesc There is a decline in the expected price leveld A fall in the price level increases savings and lowers interest ratese The value of the dollar decreases____ 30 Which of the following would shift aggregate demand to the lefta A study predicts that the recent drought will increase food prices this winterb There is a rise in the median price of housesc A rise in the price level reduces saving and increases interest ratesd The value of the dollar increasese The European Union emerges from recession____ 31 Supply shocks cause short-run aggregate supply toa remain unchanged in both the short run and the long runb decrease in both the short run and the long runc decrease in the short run and increase in the long rund increase in both the short run and the long rune return to its original position in the long runRefer to the following figure to answer the questions that follow____ 32 Based on the figure if the economy starts at point A and ends up at point E then in the short run there wasa a decrease in aggregate demandb an increase in aggregate demandc a decrease in short-run aggregate supplyd an increase in short-run aggregate supplye an increase in long-run aggregate supply____ 33 Based on the figure starting at point A if there is an increase in government spending then in the short run we would move to point __________ and in the long run to point __________a B Eb B Cc D Ad D C

e B A____ 34 An increase in short-run aggregate supply could be the result ofa an increase in the general price levelb a negative supply shockc an increase in the price of oild an increase in consumption spendinge a reduction in expected future prices____ 35 Suppose that you have the following information about the economy where all figures are in millions of dollarsFull employment output = $2000Consumption = $1200Investment = $400Government spending = $500Net exports = minus$200Because short-run output is __________ full employment output in the long run we would expect the price level to __________a less than riseb less than fallc greater than rised greater than falle equal to remain unchangedUse the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)____ 36 During the Great Recession real gross domestic product (GDP) fell yet the price level was largely unchanged as depicted in the graph Because of this we know thata both aggregate demand and long-run aggregate supply increased during the recessionb aggregate demand and long-run aggregate supply both decreased during the recessionc aggregate demand decreased and long-run aggregate supply increased during the recessiond aggregate demand decreased and short-run aggregate supply increased during the recessione long-run aggregate supply increased and short-run aggregate supply decreased during the recession____ 37 During the Great Depression aggregate demand in the US economy decreased As a result the unemployment rate _________ and real gross domestic product (GDP) _________a increased decreasedb decreased remained unchangedc increased increasedd decreased decreasede remained unchanged increased____ 38 Classical economists believe that prices are completely flexible from which they conclude thata the economy can become stuck at high levels of unemployment for long periods of timeb the economy is self-correcting in response to shocksc the government will need to intervene in the economy frequentlyd the best type of economy is centrally planned and run by the statee the economy will experience wild swings in output and employment

____ 39 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment____ 40 Keynesian economists believe that government intervention in the economy is necessary becausea prices are flexible and allow the economy to quickly return to full employmentb the long run is more important than the short run and economic policy works only in the long runc savings is a crucial part of economic growth and investmentd prices are sticky and prevent the economy from moving toward full employmente supply is more important than demand in determining economic growth and output

The aggregate demand curve slopes downward because

When the price level rises __________ declines from the wealth effect __________ declines from the interest rate effect and __________ decline(s) from the international trade effect

When a change in the price level leads to a change in saving this is known as the

The interest rate effect results from people

You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________ The long-run aggregate supply curve is

A rightward shift of the long-run aggregate supply curve means there has been

Which of the following would cause an increase in long-run aggregate supply

Increases in productivity will

Input prices are _________ in the short run and _________ in the long run

The relationship between sticky input prices and flexible output prices explains

When the general price level rises and firms decide not to change their prices in the short run this can be attributed to

Which of the following would affect both short-run and long-run aggregate supply

Refer to the following figure to answer the questions that follow Based on the figure which points represent long-run equilibrium

Supply shocks cause short-run aggregate supply to

An increase in aggregate demand is harmful because

Suppose the government permanently reduces spending in an effort to reduce the budget deficit In the new long-run equilibrium output will __________ and the price level will __________

Suppose housing values fall during a recession In the short run

Which of the following would cause an increase in the price level in the long run

Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asDuring the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of whichOne similarity between the Great Recession and the Great Depression is that in both episodes

Relevant population 215Employed 138Unemployed 9

According to the table the labor force isThe graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)As a result of aggregate demand and long-run aggregate supply decreasing wecan see that the price level _________ and real gross domestic product (GDP) _________Classical economists believe that government intervention in the economy is unnecessary becauseAssume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in responseHolding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeNina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be consideredWhich of the following statements about structural unemployment is true

Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseWhen the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease becauseThe Austrian School Economists believe all in all of the following except

Keynesian economists believe that government intervention in the economy is necessary becauseKeynesian economists believe that the economy is unstable and tends toward cyclical unemployment becauseWhen 9000 banks failed during the Great Depression it caused aggregate demand to decrease becauseBased on the belief that prices are very flexible classical economists conclude thatFA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic systemKeynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseAccording to classical economists changes in aggregate demand have little effect on the overall economy and thereforeAustrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment

The inputs used to produce goods and services are also known asInflation occursTypically the consumer price index (CPI) is calculated byWhich of the following would be classified as human capitalIf a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 thenYou are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration thenIn 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that timeAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continentDoes the value of cleaning your house count toward the value of GDPIf the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos isFrom 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beWhich of the following conditions might cause the unemployment rate to be less than the natural rate of unemploymentWhich is the largest component of US GDPHigher rates of economic growth are negatively correlated withGDP is an important indicator because it is used as a measure of all of the following exceptReal GDP is GDP adjusted for changes in

Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeResidents of poor countries tend to have fewer automobiles per capita becauseThe textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is thatThe business cycle measuresAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in AfricaFrom 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeConsumption is approximately ________ of GDPWhen actual unemployment is less than its natural rateIf the consumer price index (CPI) was 100 in the period of 1982-1984 thenA computer company builds a new factory This is included in the ________ category of GDPWhich of the following represents the technology used in a classroomIf the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then itWhich of the following lists the three types of unemploymentA(n) _____________ in the amount of resources will tend to _____________ economic growthDuring a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asWhen George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County FloridaCompany X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP isDuring healthy economic periods cyclical unemploymentWhen you include discouraged workers and unemployed workers in calculations of the unemployment rateWhich of the following statements about the composition of the labor force is correctIf mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say thatAverage world income began to rapidly rise during the Industrial Revolution becauseIn 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would beLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryThe website that provides official inflation statistics isA(n) _____________ in capital goods should ____________ worker productivity

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

economic growth

Question 32 Use the following graph to answer the questions that follow This graph depicts an economy where aggregate demand has decreased with no change in either shortrun aggregate supply (SRAS) or longrun aggregate supply (LRAS) Which of the following would have caused aggregate demand to decrease in the graph such as occurred during the Great Depression

Question 33 Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________

Question 34 Residents of poor countries tend to have higher rates of infant mortality because

Question 35 From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006

Question 36 During the Great Recession US household wealth declined leading to a decrease in aggregate demand Which pair of factors contributed to this decline in wealth

Question 37 Which of the following would have caused aggregate demand to decrease during the Great Depression

Question 38 Residents of poor countries tend to have fewer automobiles per capita because

Question 39 Which of the following factors is negatively correlated with economic growth

Question 40 When an economy experiences economic growth

Question 1 Suppose a change in health care laws increases the cost of hiring an employee We can expect output in the short run to __________ and output in the long run to __________

Question 2 In 1350 average world income was roughly

Question 3 When firms invest less because people are saving less it is called the

Question 4 From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size

Question 5 From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006

Question 6 Competitive markets contribute significantly to economic growth because

Question 7 If the current shortrun equilibrium level of output is greater than full

employment output we can then expect that in the long run

Question 8 During the Great Recession longrun aggregate supply decreased This was caused by __________

Question 9 When an economy experiences economic growth

Question 10 Suppose housing values fall during a recession In the short run

Question 11 When considering the basic operations of the macroeconomy Keynesian economists argue that

Question 12 Suppose a countryrsquos population is growing due to immigration In the long run output will _________ due to _________

Question 13 During the Great Recession ___________ caused aggregate demand to decrease

Question 14 The Great Recession was similar to other recessions since World War II in that

Question 15 Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

Question 16 When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because

Question 17 A supply shock causes a shift in

Question 18 In 1800 the average income of US citizens was roughly

Question 19 A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________

Question 20 As a result of several factors aggregate demand decreased during the Great Depression One factor would be

Question 21 When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because

Question 22 If the price level rises by 10 then all else being equal the longrun quantity of aggregate supply will

Question 23 Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent

Question 24 Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________

Question 25 In 2009 per capita real gross domestic product (GDP) in Croatia was $1005968 By 2010 it had increased to $1025771 At what rate did Croatiarsquos economy grow in that time

Question 26 During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which

Question 27 Which of the following is an example of an institution that promotes economic growth

Question 28 Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________

Question 29 The Great Recession was similar to other recessions since World War II in that

Question 30 Suppose people are worried about losing their jobs In the short run this will

Question 31 During the Great Depression thousands of US banks failed As a result

Question 32 Refer to the following figure to answer the questions that follow Based on the figure if the economy starts at point A and ends up at point E then in the short run there was

Question 33 Residents of wealthy countries tend to have longer life expectancies because

Question 34 Which of the following best summarizes the main causes of the Great Recession

Question 35 Use the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and longrun aggregate supply (LRAS) have decreased with no change in shortrun aggregate supply (SRAS) During the Great Recession real gross domestic product (GDP) decreased yet the aggregate price level remained largely unchanged as depicted in the graph Unemployment increased to abovenormal levels Which of following best explains why this happened

Question 36 When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because

Question 37 Classical economists believe that savings is crucial for economic growth because

Question 38 Higher rates of economic growth are negatively correlated with

Question 39 Menu costs help to explain

Question 40 Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________

1 Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would bea $520b $5720c $5252d $10520e $61252 In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angolarsquos economy grow in that timea 820

b 2122c 1751d 706e 10123 From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased bya 28b 12c 38d 18e 544 Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakerya moving into a larger spaceb increasing employee trainingc hiring more employeesd buying better quality ingredients‐e hiring an accountant to handle payroll5 ldquoLiving standardsrdquo refer to the well being of the residents of a country Generally speaking ‐higher economic growth leads to higher living standards But higher living standards today can further contribute to economic growth in the future Which of the following aspects of higher living standards would contribute most to future economic growtha access to more and better consumer goodsb improved education for young peoplec greater access to the Internetd more cell phones per persone more automobiles per person6 Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shopa Increasing the number of bikes he holds in inventoryb Utilizing an online ordering system that allows him to sell bikes across the countryc Increasing the number of employeesd Better training for his staffe Increasing his inventory of helmets and accessories that he sells7 In 1950 Brazilrsquos economy was roughly the same size as Nicaraguarsquos Today Brazilrsquos economy is almost five times as large as Nicaraguarsquos Which of the following if true would best explain Brazilrsquos economy grew faster than Nicaraguarsquosa Nicaragua was too reliant on foreign aid whereas Brazil was far more economically independentb Brazil greatly limited international trade whereas Nicaragua opened its borders to imports and exportsc Brazil supported institutions like property rights which tend to foster growth whereas Nicaragua did notd Brazilrsquos economy was largely agricultural whereas Nicaraguarsquos was industriale Nicaragua had excessively high tax rates but Brazil kept its taxes low and competitive8 Which of the following explains why a stable money and price policy fosters economic growtha If prices are expected to rise consumers save too much of their moneyb If prices are expected to rise firms wait until the prices rise before they investc If there is a lot of price instability consumers tend to smooth consumptiond If there is a lot of price instability firms are able to sell less of their product

e If there is a lot of price instability firms invest less9 A restaurantrsquos production function would show the relationship betweena the number of workers hired and the number of meals servedb the number of workers hired and the level of profitc the level of profit and the number of meals servedd the level of profit and the cost of producing the mealse the number of workers hired and the cost of producing the meals10 If this country experiences an epidemic that reduces human capital thena the production function will shift upwardb the production function will shift downwardc there will be an upward movement along the production functiond there will be a downward movement along the production functione there will be no effect on the production function11 The Solow growth theory focuses ona human capital because education is known to increase economic growthb human capital because human capital exhibits diminishing marginal returnsc human capital because one of the biggest differences between poor nations and wealthy nations is the amount of their human capitald physical capital because physical capital exhibits diminishing marginal returnse physical capital because one of the biggest differences between poor nations and wealthy nations is the amount of their physical capital12 Consider the following table which shows the total number of customers served per hour as the number of cash registers is increased The marginal product of the fourth cash register isa 6b 10c 12d 32e 50Use the following production function to answer the next question13 This production function exhibits diminishing returns to capital fora all units of capital after the firstb no units of capitalc all units of capital after the secondd all units of capital after the thirde all units of capital except the sixth14 If an economy is in the steady state thena net investment is zerob depreciation is zeroc investment is zerod the marginal product of capital is zeroe there are no diminishing returns15 The production function for an economy is 1050427 1050427 1050427radic10504271050427 with all symbols defined as in the class Y is output A accounts for technological change K is capital input L is labor input Initially A=2 K=12 L=35 At this initial state the Marginal Product of Capital is approximatelya 0b 167c 4099d 4266e there is not enough Information to answer this question16 Consider the United States growth rates since 1820 They show thata The United States is slowly approaching a steady stateb The United States was in a steady state in the early 19th century but left it long agoc The United States was not in a steady state early on but now it is in a steady state

d The United States was never in a steady state at any point of its historye None of the aboveUse the following graph to answer the next question17 Suppose that the level of capital is 100000 the depreciation rate is 5 and investment is equal to 5000 In this case you would expect thata real gross domestic product (GDP) will increaseb real GDP will decreasec real GDP will remain unchangedd the steady state value of capital will increasee the steady state value of capital will decrease18 When a country adopts a more efficient tax system it is likely toa have no effect on the production functionb shift the production function upwardc shift the production function downwardd have no impact on technological innovatione have no impact on physical capital19 The interest rate effect results from peoplea saving less when the price level risesb consuming more when the price level risesc spending more when the interest rate risesd feeling more wealthy when the price level risese spending more when the price level falls20 When saving declines the quantity of investment will __________ and therefore aggregate demand will __________a increase increaseb decrease decreasec decrease increased increase decreasee remain unchanged decrease21 If people expect higher income in the future then spending today __________ and aggregate demand __________a increases is unaffectedb increases increasesc increases decreasesd decreases decreasese is unaffected is unaffected22 You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________a be unaffected be unaffectedb increase increasec decrease decreased decrease increasee increase decrease23 Which of the following would cause an increase in long run aggregate supply‐a The price level increasesb The price level decreasesc Firms and workers expect the price level to falld Firms and workers expect the price level to risee The stock of capital increases24 All else being equal an increase in _________ would shift the long run aggregate supply curve ‐to the left a the unemployment rate

b the inflation ratec economic growthd government spendinge the rate at which capital depreciatesThe following figure which was discussed in class depicts the percentage of workers whose wages have not changed in the previous year Recall that the shaded areas mark the recessions Use the figure to answer the next question25 This figurehellipa shows that wages are less sticky during recessions than during expansionsb shows that wages are sticky because the percentage of people whose wages doesnt change is generally lowc shows that wages are sticky because the percentage of people whose wages doesnt change first increases then decreases during expansionsd shows that wages are sticky because the percentage of people whose wages doesnt change increases during recessionse doesnt show any thing in particular about wage stickiness26 If inflation turns out to be higher than expected this willa shift long run aggregate supply to the right‐b shift long run aggregate supply to the left‐c shift short run aggregate supply to the left‐d shift short run aggregate supply to the right‐e have no effect on aggregate supplyThe following figure depicts different possible curves for the United States Refer to the figure to answer the next two questions27 Beginning in the equilibrium point i (marked with a circle) where would the economy move to in the short run if the value of the dollar increased‐a Point fb Point gc Point hd Point je Point l28 Beginning in the equilibrium point i (marked with a circle) where would the economy move to in the long run if the rule of law improves‐a Point bb Point hc Point ld Point oe Point p29 Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________a decrease decreaseb decrease increasec decrease remain unchangedd remain unchanged remain unchangede remain unchanged increase30 An increase in long run aggregate supply can be expected to _________ the price level and ‐_________ the natural rate of unemploymenta have no effect on have no effect onb have no effect on increasec decrease decreased decrease have no effect one increase have no effect on31 During the Great Recession there was a financial crisis a stock market crash and a collapse

in housing prices all of whicha contributed to a very long and deep recessionb helped the US economy perform better than the economies of other countriesc kept unemployment from rising above the historical averaged resulted in a very short and mild recessione prevented the United States from experiencing a decline in real gross domestic product (GDP)32 The Great Recession was similar to other recessions since World War II in thata the rate of unemployment increased and then decreased at a later timeb the rate of inflation was extremely highc real gross domestic product (GDP) rapidly increased and then leveled offd the rate of economic growth was unchangede the rate of unemployment decreased and then increased at a later time33 One of the reasons why the Great Depression was so severe is thata stock prices increased during the Great Depressionb the US government increased taxesc the US government allowed the money supply to increased the unemployment rate decreasede expected income increased34 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment35 Keynesian economists believe thata the market tends toward stability and full employmentb the economy needs help in moving back to full employmentc savings is crucial to growthd prices are flexiblee the long run is more important than the short run

Identify the choice that best completes the statement or answers the question____ 1 Which combination of events could have caused the equilibrium interest rate to rise and the equilibrium quantity of loanable funds (both borrowed and lent) to falla A baby boom begins and investor confidence fallsb A baby boom begins and investor confidence risesc People have lower time preferences and governments run larger deficitsd People have lower time preferences and capital is more productivee A baby boom begins and people have higher time preferences____ 2 If foreign entities save more and businesses become more optimistic about the future we would correctly say thata the new equilibrium quantity of loanable funds would decrease but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the originalb the new equilibrium quantity of loanable funds would increase but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the originalc the new equilibrium quantity of loanable funds would be indeterminate but we

would be certain the new equilibrium interest rate would be higher than the originald the new equilibrium quantity of loanable funds would be indeterminate but we would be certain the new equilibrium interest rate would be less than the originale based on this information and because both changes would affect the demand for loanable funds in the opposite way we would be unable to say anything about the relationship of the new equilibrium interest rate and quantity to the original interest rate and quantity____ 3 The demand and supply of loanable funds decrease simultaneously This would causea the equilibrium quantity of loanable funds to decrease and the equilibrium interest rate to increaseb the equilibrium quantity of loanable funds to decrease but the effect on the equilibrium interest rate would be uncertainc the equilibrium quantity of loanable funds to increase but the effect on the equilibrium interest rate would be uncertaind the equilibrium interest rate to increase but the new equilibrium quantity would be uncertaine the equilibrium interest rate to decrease but the new equilibrium quantity would be uncertain____ 4 If interest rates risea firms are willing to borrow more money because their rates of return have increasedb households are willing to borrow more money because their rates of return have increasedc firms are willing to borrow less money because their cost of borrowing has increasedd foreign entities are willing to borrow more money because their rates of return have increasede it must mean that inflation has decreased because nominal rates have increased____ 5 If life expectancy falls due to AIDS and other diseases we would expecta time preference to fall and savings to increaseb time preference to rise and savings to increasec time preference to fall and savings to decreased time preference to rise and savings to decreasee interest rates to fall to zero____ 6 If the demographics of a nation change and the average age of the nation is approaching middle age we would expecta savings to increaseb savings to decreasec borrowing to declined consumption variation to increasee savings as a percentage of income to fall____ 7 One could correctly argue that higher capital productivitya would increase the value of capital and the supply of loanable fundsb would reduce the value of capital and the supply of loanable fundsc would only affect interest rates in the long rund would increase the value of capital and the demand for loanable fundse would reduce the value of capital and the demand for loanable fundsConsider the following scenario when answering the questions that followYour friend Carson is starting a new photography business that specializes in

photographs of Central Park in New York City Because his business is new and risky he is unable to obtain a loan from the local bank On June 21 2013 you agree to pay a price of $4000 for a bond from Carson You will receive $5000 in return on June 21 2014____ 8 The face value of the bond mentioned in the scenario is equal toa $9000b $1000c $4000d $5000e $20000____ 9 The interest rate of the bond mentioned in the scenario is equal toa 80b 20c 25d 10e 5____ 10 If the dollar price of a bond is $7500 and the face value of the bond is $8000 the interest rate is equal toa 7b 667c 625d 14e 5____ 11 Consider a supply and demand model of bonds for company X Which of the following would you expect to happen if the default risk decreases for company Xa The demand curve will shift to the right causing the price of the bond to riseb The demand curve will shift to the left causing the price of the bond to risec The supply curve will shift to the right causing the price of the bond to falld The demand curve will shift the left causing the price of the bond to falle The supply curve will shift to the left causing the price of the bond to rise____ 12 Your friend Jamarcus is an award-winning chef Jamarcus wants to start his own restaurant in Denver but is unable to obtain a loan from his local bank Jamarcus has decided to issue a one-year bond with a face value of $6000 and an interest rate of 10 If you wanted to buy this bond what would be the initial pricea $660000b $550050c $600000d $500000e $545454____ 13 Approximately how much of US federal debt was held by foreignersa 90b 6c 32d 17e 55____ 14 What would you expect to happen to the supply and demand model for Treasury securities if a new law makes it easier for foreign investment in the United Statesa The demand curve shifts to the right causing the price of Treasury securities to increaseb The demand and supply curves shift to the right causing the price of Treasury

securities to increasec The demand and supply curves shift to the left causing the price of Treasury securities to decreased The demand curve shifts to the right causing the price of Treasury securities to decreasee The supply curve shifts to the left causing the price of Treasury securities to increase____ 15 Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continenta Economic growth would not be affected medical aid does not contribute to gross domestic product (GDP)b Economic growth would decrease because there would be more people to feed but no additional resourcesc Economic growth would not be affected because children do not contribute to economic growthd Economic growth would increase because the health and productivity of the future labor supply would increasee Economic growth would increase because more children would survive which represents a technological advance____ 16 When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becausea holding real GDP constant an increase in the population actually lowers average standards of livingb an increase in population will tend to reduce nominal GDPc changes in population tend to have no effect on standards of livingd holding real GDP constant an increase in the population actually raises average standards of livinge an increase in the population will tend to decrease average prices____ 17 Between 2006 and 2010 per capita real gross domestic product (GDP) in India grew at an average rate of 711 per year Which of the following factors would have contributed most to this rapid escalation in growtha advances in technologyb increases in government regulationsc decrease in education standardsd a significant increase in taxese restrictions on immigration____ 18 Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________a infant mortality life expectancyb Internet users automobile ownershipc educational achievement physicians per capitad Internet users infant mortalitye cellular phone use personal computer use____ 19 The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP area the percent change in prices and the rate of investmentb the percent change in prices and the rate of population growthc the rate of investment and the rate of savingsd the rate of population growth and the rate of savings

e the rate of investment and the rate of population growth____ 20 From 2006 to 2010 per capita real gross domestic product (GDP) in Poland grew an average of 471 per year At that rate according to the Rule of 70 in roughly how many years will the Polish economy double in sizea 76 yearsb 149 yearsc 121 yearsd 88 yearse 84 years____ 21 Which of the following factors is positively correlated with economic growtha collectively owned resourcesb high barriers to international tradec restrictions on immigrationd political stability and the rule of lawe high rates of inflationUse the following production function to answer the questions that follow____ 22 How many units of capital should be produced in order to achieve the steady statea 6b 5c 4d 3e There is not enough information to answer this question____ 23 If an economy is in the steady state thena net investment is zerob depreciation is zeroc investment is zerod the marginal product of capital is zeroe there are no diminishing returns____ 24 The relationship between international aid and economic growth for less developed countries isa positive in that more aid means more growthb negative in that less aid means less growthc indeterminate because very few countries have received international aidd positive when financial funds are sent to the less developed countries but negative when developed countries help build capital goods in these countriese nonexistent because some countries have received aid but realized no growth whereas others have grown but have received no aid____ 25 Which of the following describes the correct direction of causalitya economic growth growth-friendly incentives growth-friendly institutionsb growth-friendly incentives economic growth growth-friendly institutionsc growth-friendly institutions growth-friendly incentives economic growthd economic growth growth-friendly institutions growth-friendly incentivese growth-friendly institutions economic growth growth-friendly incentives____ 26 Suppose that the level of capital in the economy is 200 units the depreciation rate is 10 and the level of investment is equal to 10 units In this casea the economy is in a steady stateb investment is less than net investmentc investment is equal to net investmentd investment is greater than net investmente the level of output will increase

____ 27 Country A has been growing at a rate of 7 per year whereas country B has been growing at a rate of 2 per year Assume that both countries have the same production function savings rate and depreciation rateThe Solow growth model would predict thata country A is wealthier than country Bb both countries are in a steady statec country B is closer to its steady state than country Ad country A is closer to its steady state than country Be these two countries will never converge at the same level of wealth____ 28 If all countries are going to converge at the same level of real gross domestic product (GDP) per capita as predicted by the Solow growth model and assuming that allcountries have the same production function savings rate and depreciation rate thena they must all have identical production functionsb they must all have the same number of people in the populationc they must all have the same size of labor forced they must all have the same level of real GDPe they must all end up with a marginal product of zero____ 29 Which of the following would cause a downward movement along the aggregate demand curvea A rise in the price level makes US goods relatively more expensive than foreign goodsb The value of real wealth risesc There is a decline in the expected price leveld A fall in the price level increases savings and lowers interest ratese The value of the dollar decreases____ 30 Which of the following would shift aggregate demand to the lefta A study predicts that the recent drought will increase food prices this winterb There is a rise in the median price of housesc A rise in the price level reduces saving and increases interest ratesd The value of the dollar increasese The European Union emerges from recession____ 31 Supply shocks cause short-run aggregate supply toa remain unchanged in both the short run and the long runb decrease in both the short run and the long runc decrease in the short run and increase in the long rund increase in both the short run and the long rune return to its original position in the long runRefer to the following figure to answer the questions that follow____ 32 Based on the figure if the economy starts at point A and ends up at point E then in the short run there wasa a decrease in aggregate demandb an increase in aggregate demandc a decrease in short-run aggregate supplyd an increase in short-run aggregate supplye an increase in long-run aggregate supply____ 33 Based on the figure starting at point A if there is an increase in government spending then in the short run we would move to point __________ and in the long run to point __________a B Eb B Cc D Ad D C

e B A____ 34 An increase in short-run aggregate supply could be the result ofa an increase in the general price levelb a negative supply shockc an increase in the price of oild an increase in consumption spendinge a reduction in expected future prices____ 35 Suppose that you have the following information about the economy where all figures are in millions of dollarsFull employment output = $2000Consumption = $1200Investment = $400Government spending = $500Net exports = minus$200Because short-run output is __________ full employment output in the long run we would expect the price level to __________a less than riseb less than fallc greater than rised greater than falle equal to remain unchangedUse the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)____ 36 During the Great Recession real gross domestic product (GDP) fell yet the price level was largely unchanged as depicted in the graph Because of this we know thata both aggregate demand and long-run aggregate supply increased during the recessionb aggregate demand and long-run aggregate supply both decreased during the recessionc aggregate demand decreased and long-run aggregate supply increased during the recessiond aggregate demand decreased and short-run aggregate supply increased during the recessione long-run aggregate supply increased and short-run aggregate supply decreased during the recession____ 37 During the Great Depression aggregate demand in the US economy decreased As a result the unemployment rate _________ and real gross domestic product (GDP) _________a increased decreasedb decreased remained unchangedc increased increasedd decreased decreasede remained unchanged increased____ 38 Classical economists believe that prices are completely flexible from which they conclude thata the economy can become stuck at high levels of unemployment for long periods of timeb the economy is self-correcting in response to shocksc the government will need to intervene in the economy frequentlyd the best type of economy is centrally planned and run by the statee the economy will experience wild swings in output and employment

____ 39 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment____ 40 Keynesian economists believe that government intervention in the economy is necessary becausea prices are flexible and allow the economy to quickly return to full employmentb the long run is more important than the short run and economic policy works only in the long runc savings is a crucial part of economic growth and investmentd prices are sticky and prevent the economy from moving toward full employmente supply is more important than demand in determining economic growth and output

The aggregate demand curve slopes downward because

When the price level rises __________ declines from the wealth effect __________ declines from the interest rate effect and __________ decline(s) from the international trade effect

When a change in the price level leads to a change in saving this is known as the

The interest rate effect results from people

You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________ The long-run aggregate supply curve is

A rightward shift of the long-run aggregate supply curve means there has been

Which of the following would cause an increase in long-run aggregate supply

Increases in productivity will

Input prices are _________ in the short run and _________ in the long run

The relationship between sticky input prices and flexible output prices explains

When the general price level rises and firms decide not to change their prices in the short run this can be attributed to

Which of the following would affect both short-run and long-run aggregate supply

Refer to the following figure to answer the questions that follow Based on the figure which points represent long-run equilibrium

Supply shocks cause short-run aggregate supply to

An increase in aggregate demand is harmful because

Suppose the government permanently reduces spending in an effort to reduce the budget deficit In the new long-run equilibrium output will __________ and the price level will __________

Suppose housing values fall during a recession In the short run

Which of the following would cause an increase in the price level in the long run

Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asDuring the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of whichOne similarity between the Great Recession and the Great Depression is that in both episodes

Relevant population 215Employed 138Unemployed 9

According to the table the labor force isThe graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)As a result of aggregate demand and long-run aggregate supply decreasing wecan see that the price level _________ and real gross domestic product (GDP) _________Classical economists believe that government intervention in the economy is unnecessary becauseAssume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in responseHolding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeNina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be consideredWhich of the following statements about structural unemployment is true

Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseWhen the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease becauseThe Austrian School Economists believe all in all of the following except

Keynesian economists believe that government intervention in the economy is necessary becauseKeynesian economists believe that the economy is unstable and tends toward cyclical unemployment becauseWhen 9000 banks failed during the Great Depression it caused aggregate demand to decrease becauseBased on the belief that prices are very flexible classical economists conclude thatFA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic systemKeynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseAccording to classical economists changes in aggregate demand have little effect on the overall economy and thereforeAustrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment

The inputs used to produce goods and services are also known asInflation occursTypically the consumer price index (CPI) is calculated byWhich of the following would be classified as human capitalIf a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 thenYou are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration thenIn 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that timeAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continentDoes the value of cleaning your house count toward the value of GDPIf the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos isFrom 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beWhich of the following conditions might cause the unemployment rate to be less than the natural rate of unemploymentWhich is the largest component of US GDPHigher rates of economic growth are negatively correlated withGDP is an important indicator because it is used as a measure of all of the following exceptReal GDP is GDP adjusted for changes in

Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeResidents of poor countries tend to have fewer automobiles per capita becauseThe textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is thatThe business cycle measuresAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in AfricaFrom 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeConsumption is approximately ________ of GDPWhen actual unemployment is less than its natural rateIf the consumer price index (CPI) was 100 in the period of 1982-1984 thenA computer company builds a new factory This is included in the ________ category of GDPWhich of the following represents the technology used in a classroomIf the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then itWhich of the following lists the three types of unemploymentA(n) _____________ in the amount of resources will tend to _____________ economic growthDuring a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asWhen George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County FloridaCompany X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP isDuring healthy economic periods cyclical unemploymentWhen you include discouraged workers and unemployed workers in calculations of the unemployment rateWhich of the following statements about the composition of the labor force is correctIf mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say thatAverage world income began to rapidly rise during the Industrial Revolution becauseIn 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would beLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryThe website that provides official inflation statistics isA(n) _____________ in capital goods should ____________ worker productivity

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

employment output we can then expect that in the long run

Question 8 During the Great Recession longrun aggregate supply decreased This was caused by __________

Question 9 When an economy experiences economic growth

Question 10 Suppose housing values fall during a recession In the short run

Question 11 When considering the basic operations of the macroeconomy Keynesian economists argue that

Question 12 Suppose a countryrsquos population is growing due to immigration In the long run output will _________ due to _________

Question 13 During the Great Recession ___________ caused aggregate demand to decrease

Question 14 The Great Recession was similar to other recessions since World War II in that

Question 15 Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

Question 16 When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because

Question 17 A supply shock causes a shift in

Question 18 In 1800 the average income of US citizens was roughly

Question 19 A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________

Question 20 As a result of several factors aggregate demand decreased during the Great Depression One factor would be

Question 21 When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because

Question 22 If the price level rises by 10 then all else being equal the longrun quantity of aggregate supply will

Question 23 Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent

Question 24 Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________

Question 25 In 2009 per capita real gross domestic product (GDP) in Croatia was $1005968 By 2010 it had increased to $1025771 At what rate did Croatiarsquos economy grow in that time

Question 26 During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which

Question 27 Which of the following is an example of an institution that promotes economic growth

Question 28 Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________

Question 29 The Great Recession was similar to other recessions since World War II in that

Question 30 Suppose people are worried about losing their jobs In the short run this will

Question 31 During the Great Depression thousands of US banks failed As a result

Question 32 Refer to the following figure to answer the questions that follow Based on the figure if the economy starts at point A and ends up at point E then in the short run there was

Question 33 Residents of wealthy countries tend to have longer life expectancies because

Question 34 Which of the following best summarizes the main causes of the Great Recession

Question 35 Use the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and longrun aggregate supply (LRAS) have decreased with no change in shortrun aggregate supply (SRAS) During the Great Recession real gross domestic product (GDP) decreased yet the aggregate price level remained largely unchanged as depicted in the graph Unemployment increased to abovenormal levels Which of following best explains why this happened

Question 36 When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because

Question 37 Classical economists believe that savings is crucial for economic growth because

Question 38 Higher rates of economic growth are negatively correlated with

Question 39 Menu costs help to explain

Question 40 Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________

1 Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would bea $520b $5720c $5252d $10520e $61252 In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angolarsquos economy grow in that timea 820

b 2122c 1751d 706e 10123 From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased bya 28b 12c 38d 18e 544 Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakerya moving into a larger spaceb increasing employee trainingc hiring more employeesd buying better quality ingredients‐e hiring an accountant to handle payroll5 ldquoLiving standardsrdquo refer to the well being of the residents of a country Generally speaking ‐higher economic growth leads to higher living standards But higher living standards today can further contribute to economic growth in the future Which of the following aspects of higher living standards would contribute most to future economic growtha access to more and better consumer goodsb improved education for young peoplec greater access to the Internetd more cell phones per persone more automobiles per person6 Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shopa Increasing the number of bikes he holds in inventoryb Utilizing an online ordering system that allows him to sell bikes across the countryc Increasing the number of employeesd Better training for his staffe Increasing his inventory of helmets and accessories that he sells7 In 1950 Brazilrsquos economy was roughly the same size as Nicaraguarsquos Today Brazilrsquos economy is almost five times as large as Nicaraguarsquos Which of the following if true would best explain Brazilrsquos economy grew faster than Nicaraguarsquosa Nicaragua was too reliant on foreign aid whereas Brazil was far more economically independentb Brazil greatly limited international trade whereas Nicaragua opened its borders to imports and exportsc Brazil supported institutions like property rights which tend to foster growth whereas Nicaragua did notd Brazilrsquos economy was largely agricultural whereas Nicaraguarsquos was industriale Nicaragua had excessively high tax rates but Brazil kept its taxes low and competitive8 Which of the following explains why a stable money and price policy fosters economic growtha If prices are expected to rise consumers save too much of their moneyb If prices are expected to rise firms wait until the prices rise before they investc If there is a lot of price instability consumers tend to smooth consumptiond If there is a lot of price instability firms are able to sell less of their product

e If there is a lot of price instability firms invest less9 A restaurantrsquos production function would show the relationship betweena the number of workers hired and the number of meals servedb the number of workers hired and the level of profitc the level of profit and the number of meals servedd the level of profit and the cost of producing the mealse the number of workers hired and the cost of producing the meals10 If this country experiences an epidemic that reduces human capital thena the production function will shift upwardb the production function will shift downwardc there will be an upward movement along the production functiond there will be a downward movement along the production functione there will be no effect on the production function11 The Solow growth theory focuses ona human capital because education is known to increase economic growthb human capital because human capital exhibits diminishing marginal returnsc human capital because one of the biggest differences between poor nations and wealthy nations is the amount of their human capitald physical capital because physical capital exhibits diminishing marginal returnse physical capital because one of the biggest differences between poor nations and wealthy nations is the amount of their physical capital12 Consider the following table which shows the total number of customers served per hour as the number of cash registers is increased The marginal product of the fourth cash register isa 6b 10c 12d 32e 50Use the following production function to answer the next question13 This production function exhibits diminishing returns to capital fora all units of capital after the firstb no units of capitalc all units of capital after the secondd all units of capital after the thirde all units of capital except the sixth14 If an economy is in the steady state thena net investment is zerob depreciation is zeroc investment is zerod the marginal product of capital is zeroe there are no diminishing returns15 The production function for an economy is 1050427 1050427 1050427radic10504271050427 with all symbols defined as in the class Y is output A accounts for technological change K is capital input L is labor input Initially A=2 K=12 L=35 At this initial state the Marginal Product of Capital is approximatelya 0b 167c 4099d 4266e there is not enough Information to answer this question16 Consider the United States growth rates since 1820 They show thata The United States is slowly approaching a steady stateb The United States was in a steady state in the early 19th century but left it long agoc The United States was not in a steady state early on but now it is in a steady state

d The United States was never in a steady state at any point of its historye None of the aboveUse the following graph to answer the next question17 Suppose that the level of capital is 100000 the depreciation rate is 5 and investment is equal to 5000 In this case you would expect thata real gross domestic product (GDP) will increaseb real GDP will decreasec real GDP will remain unchangedd the steady state value of capital will increasee the steady state value of capital will decrease18 When a country adopts a more efficient tax system it is likely toa have no effect on the production functionb shift the production function upwardc shift the production function downwardd have no impact on technological innovatione have no impact on physical capital19 The interest rate effect results from peoplea saving less when the price level risesb consuming more when the price level risesc spending more when the interest rate risesd feeling more wealthy when the price level risese spending more when the price level falls20 When saving declines the quantity of investment will __________ and therefore aggregate demand will __________a increase increaseb decrease decreasec decrease increased increase decreasee remain unchanged decrease21 If people expect higher income in the future then spending today __________ and aggregate demand __________a increases is unaffectedb increases increasesc increases decreasesd decreases decreasese is unaffected is unaffected22 You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________a be unaffected be unaffectedb increase increasec decrease decreased decrease increasee increase decrease23 Which of the following would cause an increase in long run aggregate supply‐a The price level increasesb The price level decreasesc Firms and workers expect the price level to falld Firms and workers expect the price level to risee The stock of capital increases24 All else being equal an increase in _________ would shift the long run aggregate supply curve ‐to the left a the unemployment rate

b the inflation ratec economic growthd government spendinge the rate at which capital depreciatesThe following figure which was discussed in class depicts the percentage of workers whose wages have not changed in the previous year Recall that the shaded areas mark the recessions Use the figure to answer the next question25 This figurehellipa shows that wages are less sticky during recessions than during expansionsb shows that wages are sticky because the percentage of people whose wages doesnt change is generally lowc shows that wages are sticky because the percentage of people whose wages doesnt change first increases then decreases during expansionsd shows that wages are sticky because the percentage of people whose wages doesnt change increases during recessionse doesnt show any thing in particular about wage stickiness26 If inflation turns out to be higher than expected this willa shift long run aggregate supply to the right‐b shift long run aggregate supply to the left‐c shift short run aggregate supply to the left‐d shift short run aggregate supply to the right‐e have no effect on aggregate supplyThe following figure depicts different possible curves for the United States Refer to the figure to answer the next two questions27 Beginning in the equilibrium point i (marked with a circle) where would the economy move to in the short run if the value of the dollar increased‐a Point fb Point gc Point hd Point je Point l28 Beginning in the equilibrium point i (marked with a circle) where would the economy move to in the long run if the rule of law improves‐a Point bb Point hc Point ld Point oe Point p29 Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________a decrease decreaseb decrease increasec decrease remain unchangedd remain unchanged remain unchangede remain unchanged increase30 An increase in long run aggregate supply can be expected to _________ the price level and ‐_________ the natural rate of unemploymenta have no effect on have no effect onb have no effect on increasec decrease decreased decrease have no effect one increase have no effect on31 During the Great Recession there was a financial crisis a stock market crash and a collapse

in housing prices all of whicha contributed to a very long and deep recessionb helped the US economy perform better than the economies of other countriesc kept unemployment from rising above the historical averaged resulted in a very short and mild recessione prevented the United States from experiencing a decline in real gross domestic product (GDP)32 The Great Recession was similar to other recessions since World War II in thata the rate of unemployment increased and then decreased at a later timeb the rate of inflation was extremely highc real gross domestic product (GDP) rapidly increased and then leveled offd the rate of economic growth was unchangede the rate of unemployment decreased and then increased at a later time33 One of the reasons why the Great Depression was so severe is thata stock prices increased during the Great Depressionb the US government increased taxesc the US government allowed the money supply to increased the unemployment rate decreasede expected income increased34 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment35 Keynesian economists believe thata the market tends toward stability and full employmentb the economy needs help in moving back to full employmentc savings is crucial to growthd prices are flexiblee the long run is more important than the short run

Identify the choice that best completes the statement or answers the question____ 1 Which combination of events could have caused the equilibrium interest rate to rise and the equilibrium quantity of loanable funds (both borrowed and lent) to falla A baby boom begins and investor confidence fallsb A baby boom begins and investor confidence risesc People have lower time preferences and governments run larger deficitsd People have lower time preferences and capital is more productivee A baby boom begins and people have higher time preferences____ 2 If foreign entities save more and businesses become more optimistic about the future we would correctly say thata the new equilibrium quantity of loanable funds would decrease but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the originalb the new equilibrium quantity of loanable funds would increase but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the originalc the new equilibrium quantity of loanable funds would be indeterminate but we

would be certain the new equilibrium interest rate would be higher than the originald the new equilibrium quantity of loanable funds would be indeterminate but we would be certain the new equilibrium interest rate would be less than the originale based on this information and because both changes would affect the demand for loanable funds in the opposite way we would be unable to say anything about the relationship of the new equilibrium interest rate and quantity to the original interest rate and quantity____ 3 The demand and supply of loanable funds decrease simultaneously This would causea the equilibrium quantity of loanable funds to decrease and the equilibrium interest rate to increaseb the equilibrium quantity of loanable funds to decrease but the effect on the equilibrium interest rate would be uncertainc the equilibrium quantity of loanable funds to increase but the effect on the equilibrium interest rate would be uncertaind the equilibrium interest rate to increase but the new equilibrium quantity would be uncertaine the equilibrium interest rate to decrease but the new equilibrium quantity would be uncertain____ 4 If interest rates risea firms are willing to borrow more money because their rates of return have increasedb households are willing to borrow more money because their rates of return have increasedc firms are willing to borrow less money because their cost of borrowing has increasedd foreign entities are willing to borrow more money because their rates of return have increasede it must mean that inflation has decreased because nominal rates have increased____ 5 If life expectancy falls due to AIDS and other diseases we would expecta time preference to fall and savings to increaseb time preference to rise and savings to increasec time preference to fall and savings to decreased time preference to rise and savings to decreasee interest rates to fall to zero____ 6 If the demographics of a nation change and the average age of the nation is approaching middle age we would expecta savings to increaseb savings to decreasec borrowing to declined consumption variation to increasee savings as a percentage of income to fall____ 7 One could correctly argue that higher capital productivitya would increase the value of capital and the supply of loanable fundsb would reduce the value of capital and the supply of loanable fundsc would only affect interest rates in the long rund would increase the value of capital and the demand for loanable fundse would reduce the value of capital and the demand for loanable fundsConsider the following scenario when answering the questions that followYour friend Carson is starting a new photography business that specializes in

photographs of Central Park in New York City Because his business is new and risky he is unable to obtain a loan from the local bank On June 21 2013 you agree to pay a price of $4000 for a bond from Carson You will receive $5000 in return on June 21 2014____ 8 The face value of the bond mentioned in the scenario is equal toa $9000b $1000c $4000d $5000e $20000____ 9 The interest rate of the bond mentioned in the scenario is equal toa 80b 20c 25d 10e 5____ 10 If the dollar price of a bond is $7500 and the face value of the bond is $8000 the interest rate is equal toa 7b 667c 625d 14e 5____ 11 Consider a supply and demand model of bonds for company X Which of the following would you expect to happen if the default risk decreases for company Xa The demand curve will shift to the right causing the price of the bond to riseb The demand curve will shift to the left causing the price of the bond to risec The supply curve will shift to the right causing the price of the bond to falld The demand curve will shift the left causing the price of the bond to falle The supply curve will shift to the left causing the price of the bond to rise____ 12 Your friend Jamarcus is an award-winning chef Jamarcus wants to start his own restaurant in Denver but is unable to obtain a loan from his local bank Jamarcus has decided to issue a one-year bond with a face value of $6000 and an interest rate of 10 If you wanted to buy this bond what would be the initial pricea $660000b $550050c $600000d $500000e $545454____ 13 Approximately how much of US federal debt was held by foreignersa 90b 6c 32d 17e 55____ 14 What would you expect to happen to the supply and demand model for Treasury securities if a new law makes it easier for foreign investment in the United Statesa The demand curve shifts to the right causing the price of Treasury securities to increaseb The demand and supply curves shift to the right causing the price of Treasury

securities to increasec The demand and supply curves shift to the left causing the price of Treasury securities to decreased The demand curve shifts to the right causing the price of Treasury securities to decreasee The supply curve shifts to the left causing the price of Treasury securities to increase____ 15 Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continenta Economic growth would not be affected medical aid does not contribute to gross domestic product (GDP)b Economic growth would decrease because there would be more people to feed but no additional resourcesc Economic growth would not be affected because children do not contribute to economic growthd Economic growth would increase because the health and productivity of the future labor supply would increasee Economic growth would increase because more children would survive which represents a technological advance____ 16 When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becausea holding real GDP constant an increase in the population actually lowers average standards of livingb an increase in population will tend to reduce nominal GDPc changes in population tend to have no effect on standards of livingd holding real GDP constant an increase in the population actually raises average standards of livinge an increase in the population will tend to decrease average prices____ 17 Between 2006 and 2010 per capita real gross domestic product (GDP) in India grew at an average rate of 711 per year Which of the following factors would have contributed most to this rapid escalation in growtha advances in technologyb increases in government regulationsc decrease in education standardsd a significant increase in taxese restrictions on immigration____ 18 Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________a infant mortality life expectancyb Internet users automobile ownershipc educational achievement physicians per capitad Internet users infant mortalitye cellular phone use personal computer use____ 19 The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP area the percent change in prices and the rate of investmentb the percent change in prices and the rate of population growthc the rate of investment and the rate of savingsd the rate of population growth and the rate of savings

e the rate of investment and the rate of population growth____ 20 From 2006 to 2010 per capita real gross domestic product (GDP) in Poland grew an average of 471 per year At that rate according to the Rule of 70 in roughly how many years will the Polish economy double in sizea 76 yearsb 149 yearsc 121 yearsd 88 yearse 84 years____ 21 Which of the following factors is positively correlated with economic growtha collectively owned resourcesb high barriers to international tradec restrictions on immigrationd political stability and the rule of lawe high rates of inflationUse the following production function to answer the questions that follow____ 22 How many units of capital should be produced in order to achieve the steady statea 6b 5c 4d 3e There is not enough information to answer this question____ 23 If an economy is in the steady state thena net investment is zerob depreciation is zeroc investment is zerod the marginal product of capital is zeroe there are no diminishing returns____ 24 The relationship between international aid and economic growth for less developed countries isa positive in that more aid means more growthb negative in that less aid means less growthc indeterminate because very few countries have received international aidd positive when financial funds are sent to the less developed countries but negative when developed countries help build capital goods in these countriese nonexistent because some countries have received aid but realized no growth whereas others have grown but have received no aid____ 25 Which of the following describes the correct direction of causalitya economic growth growth-friendly incentives growth-friendly institutionsb growth-friendly incentives economic growth growth-friendly institutionsc growth-friendly institutions growth-friendly incentives economic growthd economic growth growth-friendly institutions growth-friendly incentivese growth-friendly institutions economic growth growth-friendly incentives____ 26 Suppose that the level of capital in the economy is 200 units the depreciation rate is 10 and the level of investment is equal to 10 units In this casea the economy is in a steady stateb investment is less than net investmentc investment is equal to net investmentd investment is greater than net investmente the level of output will increase

____ 27 Country A has been growing at a rate of 7 per year whereas country B has been growing at a rate of 2 per year Assume that both countries have the same production function savings rate and depreciation rateThe Solow growth model would predict thata country A is wealthier than country Bb both countries are in a steady statec country B is closer to its steady state than country Ad country A is closer to its steady state than country Be these two countries will never converge at the same level of wealth____ 28 If all countries are going to converge at the same level of real gross domestic product (GDP) per capita as predicted by the Solow growth model and assuming that allcountries have the same production function savings rate and depreciation rate thena they must all have identical production functionsb they must all have the same number of people in the populationc they must all have the same size of labor forced they must all have the same level of real GDPe they must all end up with a marginal product of zero____ 29 Which of the following would cause a downward movement along the aggregate demand curvea A rise in the price level makes US goods relatively more expensive than foreign goodsb The value of real wealth risesc There is a decline in the expected price leveld A fall in the price level increases savings and lowers interest ratese The value of the dollar decreases____ 30 Which of the following would shift aggregate demand to the lefta A study predicts that the recent drought will increase food prices this winterb There is a rise in the median price of housesc A rise in the price level reduces saving and increases interest ratesd The value of the dollar increasese The European Union emerges from recession____ 31 Supply shocks cause short-run aggregate supply toa remain unchanged in both the short run and the long runb decrease in both the short run and the long runc decrease in the short run and increase in the long rund increase in both the short run and the long rune return to its original position in the long runRefer to the following figure to answer the questions that follow____ 32 Based on the figure if the economy starts at point A and ends up at point E then in the short run there wasa a decrease in aggregate demandb an increase in aggregate demandc a decrease in short-run aggregate supplyd an increase in short-run aggregate supplye an increase in long-run aggregate supply____ 33 Based on the figure starting at point A if there is an increase in government spending then in the short run we would move to point __________ and in the long run to point __________a B Eb B Cc D Ad D C

e B A____ 34 An increase in short-run aggregate supply could be the result ofa an increase in the general price levelb a negative supply shockc an increase in the price of oild an increase in consumption spendinge a reduction in expected future prices____ 35 Suppose that you have the following information about the economy where all figures are in millions of dollarsFull employment output = $2000Consumption = $1200Investment = $400Government spending = $500Net exports = minus$200Because short-run output is __________ full employment output in the long run we would expect the price level to __________a less than riseb less than fallc greater than rised greater than falle equal to remain unchangedUse the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)____ 36 During the Great Recession real gross domestic product (GDP) fell yet the price level was largely unchanged as depicted in the graph Because of this we know thata both aggregate demand and long-run aggregate supply increased during the recessionb aggregate demand and long-run aggregate supply both decreased during the recessionc aggregate demand decreased and long-run aggregate supply increased during the recessiond aggregate demand decreased and short-run aggregate supply increased during the recessione long-run aggregate supply increased and short-run aggregate supply decreased during the recession____ 37 During the Great Depression aggregate demand in the US economy decreased As a result the unemployment rate _________ and real gross domestic product (GDP) _________a increased decreasedb decreased remained unchangedc increased increasedd decreased decreasede remained unchanged increased____ 38 Classical economists believe that prices are completely flexible from which they conclude thata the economy can become stuck at high levels of unemployment for long periods of timeb the economy is self-correcting in response to shocksc the government will need to intervene in the economy frequentlyd the best type of economy is centrally planned and run by the statee the economy will experience wild swings in output and employment

____ 39 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment____ 40 Keynesian economists believe that government intervention in the economy is necessary becausea prices are flexible and allow the economy to quickly return to full employmentb the long run is more important than the short run and economic policy works only in the long runc savings is a crucial part of economic growth and investmentd prices are sticky and prevent the economy from moving toward full employmente supply is more important than demand in determining economic growth and output

The aggregate demand curve slopes downward because

When the price level rises __________ declines from the wealth effect __________ declines from the interest rate effect and __________ decline(s) from the international trade effect

When a change in the price level leads to a change in saving this is known as the

The interest rate effect results from people

You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________ The long-run aggregate supply curve is

A rightward shift of the long-run aggregate supply curve means there has been

Which of the following would cause an increase in long-run aggregate supply

Increases in productivity will

Input prices are _________ in the short run and _________ in the long run

The relationship between sticky input prices and flexible output prices explains

When the general price level rises and firms decide not to change their prices in the short run this can be attributed to

Which of the following would affect both short-run and long-run aggregate supply

Refer to the following figure to answer the questions that follow Based on the figure which points represent long-run equilibrium

Supply shocks cause short-run aggregate supply to

An increase in aggregate demand is harmful because

Suppose the government permanently reduces spending in an effort to reduce the budget deficit In the new long-run equilibrium output will __________ and the price level will __________

Suppose housing values fall during a recession In the short run

Which of the following would cause an increase in the price level in the long run

Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asDuring the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of whichOne similarity between the Great Recession and the Great Depression is that in both episodes

Relevant population 215Employed 138Unemployed 9

According to the table the labor force isThe graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)As a result of aggregate demand and long-run aggregate supply decreasing wecan see that the price level _________ and real gross domestic product (GDP) _________Classical economists believe that government intervention in the economy is unnecessary becauseAssume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in responseHolding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeNina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be consideredWhich of the following statements about structural unemployment is true

Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseWhen the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease becauseThe Austrian School Economists believe all in all of the following except

Keynesian economists believe that government intervention in the economy is necessary becauseKeynesian economists believe that the economy is unstable and tends toward cyclical unemployment becauseWhen 9000 banks failed during the Great Depression it caused aggregate demand to decrease becauseBased on the belief that prices are very flexible classical economists conclude thatFA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic systemKeynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseAccording to classical economists changes in aggregate demand have little effect on the overall economy and thereforeAustrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment

The inputs used to produce goods and services are also known asInflation occursTypically the consumer price index (CPI) is calculated byWhich of the following would be classified as human capitalIf a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 thenYou are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration thenIn 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that timeAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continentDoes the value of cleaning your house count toward the value of GDPIf the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos isFrom 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beWhich of the following conditions might cause the unemployment rate to be less than the natural rate of unemploymentWhich is the largest component of US GDPHigher rates of economic growth are negatively correlated withGDP is an important indicator because it is used as a measure of all of the following exceptReal GDP is GDP adjusted for changes in

Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeResidents of poor countries tend to have fewer automobiles per capita becauseThe textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is thatThe business cycle measuresAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in AfricaFrom 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeConsumption is approximately ________ of GDPWhen actual unemployment is less than its natural rateIf the consumer price index (CPI) was 100 in the period of 1982-1984 thenA computer company builds a new factory This is included in the ________ category of GDPWhich of the following represents the technology used in a classroomIf the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then itWhich of the following lists the three types of unemploymentA(n) _____________ in the amount of resources will tend to _____________ economic growthDuring a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asWhen George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County FloridaCompany X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP isDuring healthy economic periods cyclical unemploymentWhen you include discouraged workers and unemployed workers in calculations of the unemployment rateWhich of the following statements about the composition of the labor force is correctIf mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say thatAverage world income began to rapidly rise during the Industrial Revolution becauseIn 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would beLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryThe website that provides official inflation statistics isA(n) _____________ in capital goods should ____________ worker productivity

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

Question 27 Which of the following is an example of an institution that promotes economic growth

Question 28 Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________

Question 29 The Great Recession was similar to other recessions since World War II in that

Question 30 Suppose people are worried about losing their jobs In the short run this will

Question 31 During the Great Depression thousands of US banks failed As a result

Question 32 Refer to the following figure to answer the questions that follow Based on the figure if the economy starts at point A and ends up at point E then in the short run there was

Question 33 Residents of wealthy countries tend to have longer life expectancies because

Question 34 Which of the following best summarizes the main causes of the Great Recession

Question 35 Use the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and longrun aggregate supply (LRAS) have decreased with no change in shortrun aggregate supply (SRAS) During the Great Recession real gross domestic product (GDP) decreased yet the aggregate price level remained largely unchanged as depicted in the graph Unemployment increased to abovenormal levels Which of following best explains why this happened

Question 36 When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because

Question 37 Classical economists believe that savings is crucial for economic growth because

Question 38 Higher rates of economic growth are negatively correlated with

Question 39 Menu costs help to explain

Question 40 Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________

1 Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would bea $520b $5720c $5252d $10520e $61252 In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angolarsquos economy grow in that timea 820

b 2122c 1751d 706e 10123 From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased bya 28b 12c 38d 18e 544 Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakerya moving into a larger spaceb increasing employee trainingc hiring more employeesd buying better quality ingredients‐e hiring an accountant to handle payroll5 ldquoLiving standardsrdquo refer to the well being of the residents of a country Generally speaking ‐higher economic growth leads to higher living standards But higher living standards today can further contribute to economic growth in the future Which of the following aspects of higher living standards would contribute most to future economic growtha access to more and better consumer goodsb improved education for young peoplec greater access to the Internetd more cell phones per persone more automobiles per person6 Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shopa Increasing the number of bikes he holds in inventoryb Utilizing an online ordering system that allows him to sell bikes across the countryc Increasing the number of employeesd Better training for his staffe Increasing his inventory of helmets and accessories that he sells7 In 1950 Brazilrsquos economy was roughly the same size as Nicaraguarsquos Today Brazilrsquos economy is almost five times as large as Nicaraguarsquos Which of the following if true would best explain Brazilrsquos economy grew faster than Nicaraguarsquosa Nicaragua was too reliant on foreign aid whereas Brazil was far more economically independentb Brazil greatly limited international trade whereas Nicaragua opened its borders to imports and exportsc Brazil supported institutions like property rights which tend to foster growth whereas Nicaragua did notd Brazilrsquos economy was largely agricultural whereas Nicaraguarsquos was industriale Nicaragua had excessively high tax rates but Brazil kept its taxes low and competitive8 Which of the following explains why a stable money and price policy fosters economic growtha If prices are expected to rise consumers save too much of their moneyb If prices are expected to rise firms wait until the prices rise before they investc If there is a lot of price instability consumers tend to smooth consumptiond If there is a lot of price instability firms are able to sell less of their product

e If there is a lot of price instability firms invest less9 A restaurantrsquos production function would show the relationship betweena the number of workers hired and the number of meals servedb the number of workers hired and the level of profitc the level of profit and the number of meals servedd the level of profit and the cost of producing the mealse the number of workers hired and the cost of producing the meals10 If this country experiences an epidemic that reduces human capital thena the production function will shift upwardb the production function will shift downwardc there will be an upward movement along the production functiond there will be a downward movement along the production functione there will be no effect on the production function11 The Solow growth theory focuses ona human capital because education is known to increase economic growthb human capital because human capital exhibits diminishing marginal returnsc human capital because one of the biggest differences between poor nations and wealthy nations is the amount of their human capitald physical capital because physical capital exhibits diminishing marginal returnse physical capital because one of the biggest differences between poor nations and wealthy nations is the amount of their physical capital12 Consider the following table which shows the total number of customers served per hour as the number of cash registers is increased The marginal product of the fourth cash register isa 6b 10c 12d 32e 50Use the following production function to answer the next question13 This production function exhibits diminishing returns to capital fora all units of capital after the firstb no units of capitalc all units of capital after the secondd all units of capital after the thirde all units of capital except the sixth14 If an economy is in the steady state thena net investment is zerob depreciation is zeroc investment is zerod the marginal product of capital is zeroe there are no diminishing returns15 The production function for an economy is 1050427 1050427 1050427radic10504271050427 with all symbols defined as in the class Y is output A accounts for technological change K is capital input L is labor input Initially A=2 K=12 L=35 At this initial state the Marginal Product of Capital is approximatelya 0b 167c 4099d 4266e there is not enough Information to answer this question16 Consider the United States growth rates since 1820 They show thata The United States is slowly approaching a steady stateb The United States was in a steady state in the early 19th century but left it long agoc The United States was not in a steady state early on but now it is in a steady state

d The United States was never in a steady state at any point of its historye None of the aboveUse the following graph to answer the next question17 Suppose that the level of capital is 100000 the depreciation rate is 5 and investment is equal to 5000 In this case you would expect thata real gross domestic product (GDP) will increaseb real GDP will decreasec real GDP will remain unchangedd the steady state value of capital will increasee the steady state value of capital will decrease18 When a country adopts a more efficient tax system it is likely toa have no effect on the production functionb shift the production function upwardc shift the production function downwardd have no impact on technological innovatione have no impact on physical capital19 The interest rate effect results from peoplea saving less when the price level risesb consuming more when the price level risesc spending more when the interest rate risesd feeling more wealthy when the price level risese spending more when the price level falls20 When saving declines the quantity of investment will __________ and therefore aggregate demand will __________a increase increaseb decrease decreasec decrease increased increase decreasee remain unchanged decrease21 If people expect higher income in the future then spending today __________ and aggregate demand __________a increases is unaffectedb increases increasesc increases decreasesd decreases decreasese is unaffected is unaffected22 You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________a be unaffected be unaffectedb increase increasec decrease decreased decrease increasee increase decrease23 Which of the following would cause an increase in long run aggregate supply‐a The price level increasesb The price level decreasesc Firms and workers expect the price level to falld Firms and workers expect the price level to risee The stock of capital increases24 All else being equal an increase in _________ would shift the long run aggregate supply curve ‐to the left a the unemployment rate

b the inflation ratec economic growthd government spendinge the rate at which capital depreciatesThe following figure which was discussed in class depicts the percentage of workers whose wages have not changed in the previous year Recall that the shaded areas mark the recessions Use the figure to answer the next question25 This figurehellipa shows that wages are less sticky during recessions than during expansionsb shows that wages are sticky because the percentage of people whose wages doesnt change is generally lowc shows that wages are sticky because the percentage of people whose wages doesnt change first increases then decreases during expansionsd shows that wages are sticky because the percentage of people whose wages doesnt change increases during recessionse doesnt show any thing in particular about wage stickiness26 If inflation turns out to be higher than expected this willa shift long run aggregate supply to the right‐b shift long run aggregate supply to the left‐c shift short run aggregate supply to the left‐d shift short run aggregate supply to the right‐e have no effect on aggregate supplyThe following figure depicts different possible curves for the United States Refer to the figure to answer the next two questions27 Beginning in the equilibrium point i (marked with a circle) where would the economy move to in the short run if the value of the dollar increased‐a Point fb Point gc Point hd Point je Point l28 Beginning in the equilibrium point i (marked with a circle) where would the economy move to in the long run if the rule of law improves‐a Point bb Point hc Point ld Point oe Point p29 Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________a decrease decreaseb decrease increasec decrease remain unchangedd remain unchanged remain unchangede remain unchanged increase30 An increase in long run aggregate supply can be expected to _________ the price level and ‐_________ the natural rate of unemploymenta have no effect on have no effect onb have no effect on increasec decrease decreased decrease have no effect one increase have no effect on31 During the Great Recession there was a financial crisis a stock market crash and a collapse

in housing prices all of whicha contributed to a very long and deep recessionb helped the US economy perform better than the economies of other countriesc kept unemployment from rising above the historical averaged resulted in a very short and mild recessione prevented the United States from experiencing a decline in real gross domestic product (GDP)32 The Great Recession was similar to other recessions since World War II in thata the rate of unemployment increased and then decreased at a later timeb the rate of inflation was extremely highc real gross domestic product (GDP) rapidly increased and then leveled offd the rate of economic growth was unchangede the rate of unemployment decreased and then increased at a later time33 One of the reasons why the Great Depression was so severe is thata stock prices increased during the Great Depressionb the US government increased taxesc the US government allowed the money supply to increased the unemployment rate decreasede expected income increased34 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment35 Keynesian economists believe thata the market tends toward stability and full employmentb the economy needs help in moving back to full employmentc savings is crucial to growthd prices are flexiblee the long run is more important than the short run

Identify the choice that best completes the statement or answers the question____ 1 Which combination of events could have caused the equilibrium interest rate to rise and the equilibrium quantity of loanable funds (both borrowed and lent) to falla A baby boom begins and investor confidence fallsb A baby boom begins and investor confidence risesc People have lower time preferences and governments run larger deficitsd People have lower time preferences and capital is more productivee A baby boom begins and people have higher time preferences____ 2 If foreign entities save more and businesses become more optimistic about the future we would correctly say thata the new equilibrium quantity of loanable funds would decrease but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the originalb the new equilibrium quantity of loanable funds would increase but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the originalc the new equilibrium quantity of loanable funds would be indeterminate but we

would be certain the new equilibrium interest rate would be higher than the originald the new equilibrium quantity of loanable funds would be indeterminate but we would be certain the new equilibrium interest rate would be less than the originale based on this information and because both changes would affect the demand for loanable funds in the opposite way we would be unable to say anything about the relationship of the new equilibrium interest rate and quantity to the original interest rate and quantity____ 3 The demand and supply of loanable funds decrease simultaneously This would causea the equilibrium quantity of loanable funds to decrease and the equilibrium interest rate to increaseb the equilibrium quantity of loanable funds to decrease but the effect on the equilibrium interest rate would be uncertainc the equilibrium quantity of loanable funds to increase but the effect on the equilibrium interest rate would be uncertaind the equilibrium interest rate to increase but the new equilibrium quantity would be uncertaine the equilibrium interest rate to decrease but the new equilibrium quantity would be uncertain____ 4 If interest rates risea firms are willing to borrow more money because their rates of return have increasedb households are willing to borrow more money because their rates of return have increasedc firms are willing to borrow less money because their cost of borrowing has increasedd foreign entities are willing to borrow more money because their rates of return have increasede it must mean that inflation has decreased because nominal rates have increased____ 5 If life expectancy falls due to AIDS and other diseases we would expecta time preference to fall and savings to increaseb time preference to rise and savings to increasec time preference to fall and savings to decreased time preference to rise and savings to decreasee interest rates to fall to zero____ 6 If the demographics of a nation change and the average age of the nation is approaching middle age we would expecta savings to increaseb savings to decreasec borrowing to declined consumption variation to increasee savings as a percentage of income to fall____ 7 One could correctly argue that higher capital productivitya would increase the value of capital and the supply of loanable fundsb would reduce the value of capital and the supply of loanable fundsc would only affect interest rates in the long rund would increase the value of capital and the demand for loanable fundse would reduce the value of capital and the demand for loanable fundsConsider the following scenario when answering the questions that followYour friend Carson is starting a new photography business that specializes in

photographs of Central Park in New York City Because his business is new and risky he is unable to obtain a loan from the local bank On June 21 2013 you agree to pay a price of $4000 for a bond from Carson You will receive $5000 in return on June 21 2014____ 8 The face value of the bond mentioned in the scenario is equal toa $9000b $1000c $4000d $5000e $20000____ 9 The interest rate of the bond mentioned in the scenario is equal toa 80b 20c 25d 10e 5____ 10 If the dollar price of a bond is $7500 and the face value of the bond is $8000 the interest rate is equal toa 7b 667c 625d 14e 5____ 11 Consider a supply and demand model of bonds for company X Which of the following would you expect to happen if the default risk decreases for company Xa The demand curve will shift to the right causing the price of the bond to riseb The demand curve will shift to the left causing the price of the bond to risec The supply curve will shift to the right causing the price of the bond to falld The demand curve will shift the left causing the price of the bond to falle The supply curve will shift to the left causing the price of the bond to rise____ 12 Your friend Jamarcus is an award-winning chef Jamarcus wants to start his own restaurant in Denver but is unable to obtain a loan from his local bank Jamarcus has decided to issue a one-year bond with a face value of $6000 and an interest rate of 10 If you wanted to buy this bond what would be the initial pricea $660000b $550050c $600000d $500000e $545454____ 13 Approximately how much of US federal debt was held by foreignersa 90b 6c 32d 17e 55____ 14 What would you expect to happen to the supply and demand model for Treasury securities if a new law makes it easier for foreign investment in the United Statesa The demand curve shifts to the right causing the price of Treasury securities to increaseb The demand and supply curves shift to the right causing the price of Treasury

securities to increasec The demand and supply curves shift to the left causing the price of Treasury securities to decreased The demand curve shifts to the right causing the price of Treasury securities to decreasee The supply curve shifts to the left causing the price of Treasury securities to increase____ 15 Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continenta Economic growth would not be affected medical aid does not contribute to gross domestic product (GDP)b Economic growth would decrease because there would be more people to feed but no additional resourcesc Economic growth would not be affected because children do not contribute to economic growthd Economic growth would increase because the health and productivity of the future labor supply would increasee Economic growth would increase because more children would survive which represents a technological advance____ 16 When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becausea holding real GDP constant an increase in the population actually lowers average standards of livingb an increase in population will tend to reduce nominal GDPc changes in population tend to have no effect on standards of livingd holding real GDP constant an increase in the population actually raises average standards of livinge an increase in the population will tend to decrease average prices____ 17 Between 2006 and 2010 per capita real gross domestic product (GDP) in India grew at an average rate of 711 per year Which of the following factors would have contributed most to this rapid escalation in growtha advances in technologyb increases in government regulationsc decrease in education standardsd a significant increase in taxese restrictions on immigration____ 18 Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________a infant mortality life expectancyb Internet users automobile ownershipc educational achievement physicians per capitad Internet users infant mortalitye cellular phone use personal computer use____ 19 The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP area the percent change in prices and the rate of investmentb the percent change in prices and the rate of population growthc the rate of investment and the rate of savingsd the rate of population growth and the rate of savings

e the rate of investment and the rate of population growth____ 20 From 2006 to 2010 per capita real gross domestic product (GDP) in Poland grew an average of 471 per year At that rate according to the Rule of 70 in roughly how many years will the Polish economy double in sizea 76 yearsb 149 yearsc 121 yearsd 88 yearse 84 years____ 21 Which of the following factors is positively correlated with economic growtha collectively owned resourcesb high barriers to international tradec restrictions on immigrationd political stability and the rule of lawe high rates of inflationUse the following production function to answer the questions that follow____ 22 How many units of capital should be produced in order to achieve the steady statea 6b 5c 4d 3e There is not enough information to answer this question____ 23 If an economy is in the steady state thena net investment is zerob depreciation is zeroc investment is zerod the marginal product of capital is zeroe there are no diminishing returns____ 24 The relationship between international aid and economic growth for less developed countries isa positive in that more aid means more growthb negative in that less aid means less growthc indeterminate because very few countries have received international aidd positive when financial funds are sent to the less developed countries but negative when developed countries help build capital goods in these countriese nonexistent because some countries have received aid but realized no growth whereas others have grown but have received no aid____ 25 Which of the following describes the correct direction of causalitya economic growth growth-friendly incentives growth-friendly institutionsb growth-friendly incentives economic growth growth-friendly institutionsc growth-friendly institutions growth-friendly incentives economic growthd economic growth growth-friendly institutions growth-friendly incentivese growth-friendly institutions economic growth growth-friendly incentives____ 26 Suppose that the level of capital in the economy is 200 units the depreciation rate is 10 and the level of investment is equal to 10 units In this casea the economy is in a steady stateb investment is less than net investmentc investment is equal to net investmentd investment is greater than net investmente the level of output will increase

____ 27 Country A has been growing at a rate of 7 per year whereas country B has been growing at a rate of 2 per year Assume that both countries have the same production function savings rate and depreciation rateThe Solow growth model would predict thata country A is wealthier than country Bb both countries are in a steady statec country B is closer to its steady state than country Ad country A is closer to its steady state than country Be these two countries will never converge at the same level of wealth____ 28 If all countries are going to converge at the same level of real gross domestic product (GDP) per capita as predicted by the Solow growth model and assuming that allcountries have the same production function savings rate and depreciation rate thena they must all have identical production functionsb they must all have the same number of people in the populationc they must all have the same size of labor forced they must all have the same level of real GDPe they must all end up with a marginal product of zero____ 29 Which of the following would cause a downward movement along the aggregate demand curvea A rise in the price level makes US goods relatively more expensive than foreign goodsb The value of real wealth risesc There is a decline in the expected price leveld A fall in the price level increases savings and lowers interest ratese The value of the dollar decreases____ 30 Which of the following would shift aggregate demand to the lefta A study predicts that the recent drought will increase food prices this winterb There is a rise in the median price of housesc A rise in the price level reduces saving and increases interest ratesd The value of the dollar increasese The European Union emerges from recession____ 31 Supply shocks cause short-run aggregate supply toa remain unchanged in both the short run and the long runb decrease in both the short run and the long runc decrease in the short run and increase in the long rund increase in both the short run and the long rune return to its original position in the long runRefer to the following figure to answer the questions that follow____ 32 Based on the figure if the economy starts at point A and ends up at point E then in the short run there wasa a decrease in aggregate demandb an increase in aggregate demandc a decrease in short-run aggregate supplyd an increase in short-run aggregate supplye an increase in long-run aggregate supply____ 33 Based on the figure starting at point A if there is an increase in government spending then in the short run we would move to point __________ and in the long run to point __________a B Eb B Cc D Ad D C

e B A____ 34 An increase in short-run aggregate supply could be the result ofa an increase in the general price levelb a negative supply shockc an increase in the price of oild an increase in consumption spendinge a reduction in expected future prices____ 35 Suppose that you have the following information about the economy where all figures are in millions of dollarsFull employment output = $2000Consumption = $1200Investment = $400Government spending = $500Net exports = minus$200Because short-run output is __________ full employment output in the long run we would expect the price level to __________a less than riseb less than fallc greater than rised greater than falle equal to remain unchangedUse the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)____ 36 During the Great Recession real gross domestic product (GDP) fell yet the price level was largely unchanged as depicted in the graph Because of this we know thata both aggregate demand and long-run aggregate supply increased during the recessionb aggregate demand and long-run aggregate supply both decreased during the recessionc aggregate demand decreased and long-run aggregate supply increased during the recessiond aggregate demand decreased and short-run aggregate supply increased during the recessione long-run aggregate supply increased and short-run aggregate supply decreased during the recession____ 37 During the Great Depression aggregate demand in the US economy decreased As a result the unemployment rate _________ and real gross domestic product (GDP) _________a increased decreasedb decreased remained unchangedc increased increasedd decreased decreasede remained unchanged increased____ 38 Classical economists believe that prices are completely flexible from which they conclude thata the economy can become stuck at high levels of unemployment for long periods of timeb the economy is self-correcting in response to shocksc the government will need to intervene in the economy frequentlyd the best type of economy is centrally planned and run by the statee the economy will experience wild swings in output and employment

____ 39 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment____ 40 Keynesian economists believe that government intervention in the economy is necessary becausea prices are flexible and allow the economy to quickly return to full employmentb the long run is more important than the short run and economic policy works only in the long runc savings is a crucial part of economic growth and investmentd prices are sticky and prevent the economy from moving toward full employmente supply is more important than demand in determining economic growth and output

The aggregate demand curve slopes downward because

When the price level rises __________ declines from the wealth effect __________ declines from the interest rate effect and __________ decline(s) from the international trade effect

When a change in the price level leads to a change in saving this is known as the

The interest rate effect results from people

You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________ The long-run aggregate supply curve is

A rightward shift of the long-run aggregate supply curve means there has been

Which of the following would cause an increase in long-run aggregate supply

Increases in productivity will

Input prices are _________ in the short run and _________ in the long run

The relationship between sticky input prices and flexible output prices explains

When the general price level rises and firms decide not to change their prices in the short run this can be attributed to

Which of the following would affect both short-run and long-run aggregate supply

Refer to the following figure to answer the questions that follow Based on the figure which points represent long-run equilibrium

Supply shocks cause short-run aggregate supply to

An increase in aggregate demand is harmful because

Suppose the government permanently reduces spending in an effort to reduce the budget deficit In the new long-run equilibrium output will __________ and the price level will __________

Suppose housing values fall during a recession In the short run

Which of the following would cause an increase in the price level in the long run

Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asDuring the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of whichOne similarity between the Great Recession and the Great Depression is that in both episodes

Relevant population 215Employed 138Unemployed 9

According to the table the labor force isThe graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)As a result of aggregate demand and long-run aggregate supply decreasing wecan see that the price level _________ and real gross domestic product (GDP) _________Classical economists believe that government intervention in the economy is unnecessary becauseAssume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in responseHolding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeNina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be consideredWhich of the following statements about structural unemployment is true

Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseWhen the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease becauseThe Austrian School Economists believe all in all of the following except

Keynesian economists believe that government intervention in the economy is necessary becauseKeynesian economists believe that the economy is unstable and tends toward cyclical unemployment becauseWhen 9000 banks failed during the Great Depression it caused aggregate demand to decrease becauseBased on the belief that prices are very flexible classical economists conclude thatFA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic systemKeynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseAccording to classical economists changes in aggregate demand have little effect on the overall economy and thereforeAustrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment

The inputs used to produce goods and services are also known asInflation occursTypically the consumer price index (CPI) is calculated byWhich of the following would be classified as human capitalIf a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 thenYou are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration thenIn 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that timeAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continentDoes the value of cleaning your house count toward the value of GDPIf the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos isFrom 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beWhich of the following conditions might cause the unemployment rate to be less than the natural rate of unemploymentWhich is the largest component of US GDPHigher rates of economic growth are negatively correlated withGDP is an important indicator because it is used as a measure of all of the following exceptReal GDP is GDP adjusted for changes in

Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeResidents of poor countries tend to have fewer automobiles per capita becauseThe textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is thatThe business cycle measuresAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in AfricaFrom 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeConsumption is approximately ________ of GDPWhen actual unemployment is less than its natural rateIf the consumer price index (CPI) was 100 in the period of 1982-1984 thenA computer company builds a new factory This is included in the ________ category of GDPWhich of the following represents the technology used in a classroomIf the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then itWhich of the following lists the three types of unemploymentA(n) _____________ in the amount of resources will tend to _____________ economic growthDuring a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asWhen George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County FloridaCompany X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP isDuring healthy economic periods cyclical unemploymentWhen you include discouraged workers and unemployed workers in calculations of the unemployment rateWhich of the following statements about the composition of the labor force is correctIf mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say thatAverage world income began to rapidly rise during the Industrial Revolution becauseIn 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would beLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryThe website that provides official inflation statistics isA(n) _____________ in capital goods should ____________ worker productivity

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

b 2122c 1751d 706e 10123 From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased bya 28b 12c 38d 18e 544 Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakerya moving into a larger spaceb increasing employee trainingc hiring more employeesd buying better quality ingredients‐e hiring an accountant to handle payroll5 ldquoLiving standardsrdquo refer to the well being of the residents of a country Generally speaking ‐higher economic growth leads to higher living standards But higher living standards today can further contribute to economic growth in the future Which of the following aspects of higher living standards would contribute most to future economic growtha access to more and better consumer goodsb improved education for young peoplec greater access to the Internetd more cell phones per persone more automobiles per person6 Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shopa Increasing the number of bikes he holds in inventoryb Utilizing an online ordering system that allows him to sell bikes across the countryc Increasing the number of employeesd Better training for his staffe Increasing his inventory of helmets and accessories that he sells7 In 1950 Brazilrsquos economy was roughly the same size as Nicaraguarsquos Today Brazilrsquos economy is almost five times as large as Nicaraguarsquos Which of the following if true would best explain Brazilrsquos economy grew faster than Nicaraguarsquosa Nicaragua was too reliant on foreign aid whereas Brazil was far more economically independentb Brazil greatly limited international trade whereas Nicaragua opened its borders to imports and exportsc Brazil supported institutions like property rights which tend to foster growth whereas Nicaragua did notd Brazilrsquos economy was largely agricultural whereas Nicaraguarsquos was industriale Nicaragua had excessively high tax rates but Brazil kept its taxes low and competitive8 Which of the following explains why a stable money and price policy fosters economic growtha If prices are expected to rise consumers save too much of their moneyb If prices are expected to rise firms wait until the prices rise before they investc If there is a lot of price instability consumers tend to smooth consumptiond If there is a lot of price instability firms are able to sell less of their product

e If there is a lot of price instability firms invest less9 A restaurantrsquos production function would show the relationship betweena the number of workers hired and the number of meals servedb the number of workers hired and the level of profitc the level of profit and the number of meals servedd the level of profit and the cost of producing the mealse the number of workers hired and the cost of producing the meals10 If this country experiences an epidemic that reduces human capital thena the production function will shift upwardb the production function will shift downwardc there will be an upward movement along the production functiond there will be a downward movement along the production functione there will be no effect on the production function11 The Solow growth theory focuses ona human capital because education is known to increase economic growthb human capital because human capital exhibits diminishing marginal returnsc human capital because one of the biggest differences between poor nations and wealthy nations is the amount of their human capitald physical capital because physical capital exhibits diminishing marginal returnse physical capital because one of the biggest differences between poor nations and wealthy nations is the amount of their physical capital12 Consider the following table which shows the total number of customers served per hour as the number of cash registers is increased The marginal product of the fourth cash register isa 6b 10c 12d 32e 50Use the following production function to answer the next question13 This production function exhibits diminishing returns to capital fora all units of capital after the firstb no units of capitalc all units of capital after the secondd all units of capital after the thirde all units of capital except the sixth14 If an economy is in the steady state thena net investment is zerob depreciation is zeroc investment is zerod the marginal product of capital is zeroe there are no diminishing returns15 The production function for an economy is 1050427 1050427 1050427radic10504271050427 with all symbols defined as in the class Y is output A accounts for technological change K is capital input L is labor input Initially A=2 K=12 L=35 At this initial state the Marginal Product of Capital is approximatelya 0b 167c 4099d 4266e there is not enough Information to answer this question16 Consider the United States growth rates since 1820 They show thata The United States is slowly approaching a steady stateb The United States was in a steady state in the early 19th century but left it long agoc The United States was not in a steady state early on but now it is in a steady state

d The United States was never in a steady state at any point of its historye None of the aboveUse the following graph to answer the next question17 Suppose that the level of capital is 100000 the depreciation rate is 5 and investment is equal to 5000 In this case you would expect thata real gross domestic product (GDP) will increaseb real GDP will decreasec real GDP will remain unchangedd the steady state value of capital will increasee the steady state value of capital will decrease18 When a country adopts a more efficient tax system it is likely toa have no effect on the production functionb shift the production function upwardc shift the production function downwardd have no impact on technological innovatione have no impact on physical capital19 The interest rate effect results from peoplea saving less when the price level risesb consuming more when the price level risesc spending more when the interest rate risesd feeling more wealthy when the price level risese spending more when the price level falls20 When saving declines the quantity of investment will __________ and therefore aggregate demand will __________a increase increaseb decrease decreasec decrease increased increase decreasee remain unchanged decrease21 If people expect higher income in the future then spending today __________ and aggregate demand __________a increases is unaffectedb increases increasesc increases decreasesd decreases decreasese is unaffected is unaffected22 You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________a be unaffected be unaffectedb increase increasec decrease decreased decrease increasee increase decrease23 Which of the following would cause an increase in long run aggregate supply‐a The price level increasesb The price level decreasesc Firms and workers expect the price level to falld Firms and workers expect the price level to risee The stock of capital increases24 All else being equal an increase in _________ would shift the long run aggregate supply curve ‐to the left a the unemployment rate

b the inflation ratec economic growthd government spendinge the rate at which capital depreciatesThe following figure which was discussed in class depicts the percentage of workers whose wages have not changed in the previous year Recall that the shaded areas mark the recessions Use the figure to answer the next question25 This figurehellipa shows that wages are less sticky during recessions than during expansionsb shows that wages are sticky because the percentage of people whose wages doesnt change is generally lowc shows that wages are sticky because the percentage of people whose wages doesnt change first increases then decreases during expansionsd shows that wages are sticky because the percentage of people whose wages doesnt change increases during recessionse doesnt show any thing in particular about wage stickiness26 If inflation turns out to be higher than expected this willa shift long run aggregate supply to the right‐b shift long run aggregate supply to the left‐c shift short run aggregate supply to the left‐d shift short run aggregate supply to the right‐e have no effect on aggregate supplyThe following figure depicts different possible curves for the United States Refer to the figure to answer the next two questions27 Beginning in the equilibrium point i (marked with a circle) where would the economy move to in the short run if the value of the dollar increased‐a Point fb Point gc Point hd Point je Point l28 Beginning in the equilibrium point i (marked with a circle) where would the economy move to in the long run if the rule of law improves‐a Point bb Point hc Point ld Point oe Point p29 Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________a decrease decreaseb decrease increasec decrease remain unchangedd remain unchanged remain unchangede remain unchanged increase30 An increase in long run aggregate supply can be expected to _________ the price level and ‐_________ the natural rate of unemploymenta have no effect on have no effect onb have no effect on increasec decrease decreased decrease have no effect one increase have no effect on31 During the Great Recession there was a financial crisis a stock market crash and a collapse

in housing prices all of whicha contributed to a very long and deep recessionb helped the US economy perform better than the economies of other countriesc kept unemployment from rising above the historical averaged resulted in a very short and mild recessione prevented the United States from experiencing a decline in real gross domestic product (GDP)32 The Great Recession was similar to other recessions since World War II in thata the rate of unemployment increased and then decreased at a later timeb the rate of inflation was extremely highc real gross domestic product (GDP) rapidly increased and then leveled offd the rate of economic growth was unchangede the rate of unemployment decreased and then increased at a later time33 One of the reasons why the Great Depression was so severe is thata stock prices increased during the Great Depressionb the US government increased taxesc the US government allowed the money supply to increased the unemployment rate decreasede expected income increased34 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment35 Keynesian economists believe thata the market tends toward stability and full employmentb the economy needs help in moving back to full employmentc savings is crucial to growthd prices are flexiblee the long run is more important than the short run

Identify the choice that best completes the statement or answers the question____ 1 Which combination of events could have caused the equilibrium interest rate to rise and the equilibrium quantity of loanable funds (both borrowed and lent) to falla A baby boom begins and investor confidence fallsb A baby boom begins and investor confidence risesc People have lower time preferences and governments run larger deficitsd People have lower time preferences and capital is more productivee A baby boom begins and people have higher time preferences____ 2 If foreign entities save more and businesses become more optimistic about the future we would correctly say thata the new equilibrium quantity of loanable funds would decrease but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the originalb the new equilibrium quantity of loanable funds would increase but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the originalc the new equilibrium quantity of loanable funds would be indeterminate but we

would be certain the new equilibrium interest rate would be higher than the originald the new equilibrium quantity of loanable funds would be indeterminate but we would be certain the new equilibrium interest rate would be less than the originale based on this information and because both changes would affect the demand for loanable funds in the opposite way we would be unable to say anything about the relationship of the new equilibrium interest rate and quantity to the original interest rate and quantity____ 3 The demand and supply of loanable funds decrease simultaneously This would causea the equilibrium quantity of loanable funds to decrease and the equilibrium interest rate to increaseb the equilibrium quantity of loanable funds to decrease but the effect on the equilibrium interest rate would be uncertainc the equilibrium quantity of loanable funds to increase but the effect on the equilibrium interest rate would be uncertaind the equilibrium interest rate to increase but the new equilibrium quantity would be uncertaine the equilibrium interest rate to decrease but the new equilibrium quantity would be uncertain____ 4 If interest rates risea firms are willing to borrow more money because their rates of return have increasedb households are willing to borrow more money because their rates of return have increasedc firms are willing to borrow less money because their cost of borrowing has increasedd foreign entities are willing to borrow more money because their rates of return have increasede it must mean that inflation has decreased because nominal rates have increased____ 5 If life expectancy falls due to AIDS and other diseases we would expecta time preference to fall and savings to increaseb time preference to rise and savings to increasec time preference to fall and savings to decreased time preference to rise and savings to decreasee interest rates to fall to zero____ 6 If the demographics of a nation change and the average age of the nation is approaching middle age we would expecta savings to increaseb savings to decreasec borrowing to declined consumption variation to increasee savings as a percentage of income to fall____ 7 One could correctly argue that higher capital productivitya would increase the value of capital and the supply of loanable fundsb would reduce the value of capital and the supply of loanable fundsc would only affect interest rates in the long rund would increase the value of capital and the demand for loanable fundse would reduce the value of capital and the demand for loanable fundsConsider the following scenario when answering the questions that followYour friend Carson is starting a new photography business that specializes in

photographs of Central Park in New York City Because his business is new and risky he is unable to obtain a loan from the local bank On June 21 2013 you agree to pay a price of $4000 for a bond from Carson You will receive $5000 in return on June 21 2014____ 8 The face value of the bond mentioned in the scenario is equal toa $9000b $1000c $4000d $5000e $20000____ 9 The interest rate of the bond mentioned in the scenario is equal toa 80b 20c 25d 10e 5____ 10 If the dollar price of a bond is $7500 and the face value of the bond is $8000 the interest rate is equal toa 7b 667c 625d 14e 5____ 11 Consider a supply and demand model of bonds for company X Which of the following would you expect to happen if the default risk decreases for company Xa The demand curve will shift to the right causing the price of the bond to riseb The demand curve will shift to the left causing the price of the bond to risec The supply curve will shift to the right causing the price of the bond to falld The demand curve will shift the left causing the price of the bond to falle The supply curve will shift to the left causing the price of the bond to rise____ 12 Your friend Jamarcus is an award-winning chef Jamarcus wants to start his own restaurant in Denver but is unable to obtain a loan from his local bank Jamarcus has decided to issue a one-year bond with a face value of $6000 and an interest rate of 10 If you wanted to buy this bond what would be the initial pricea $660000b $550050c $600000d $500000e $545454____ 13 Approximately how much of US federal debt was held by foreignersa 90b 6c 32d 17e 55____ 14 What would you expect to happen to the supply and demand model for Treasury securities if a new law makes it easier for foreign investment in the United Statesa The demand curve shifts to the right causing the price of Treasury securities to increaseb The demand and supply curves shift to the right causing the price of Treasury

securities to increasec The demand and supply curves shift to the left causing the price of Treasury securities to decreased The demand curve shifts to the right causing the price of Treasury securities to decreasee The supply curve shifts to the left causing the price of Treasury securities to increase____ 15 Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continenta Economic growth would not be affected medical aid does not contribute to gross domestic product (GDP)b Economic growth would decrease because there would be more people to feed but no additional resourcesc Economic growth would not be affected because children do not contribute to economic growthd Economic growth would increase because the health and productivity of the future labor supply would increasee Economic growth would increase because more children would survive which represents a technological advance____ 16 When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becausea holding real GDP constant an increase in the population actually lowers average standards of livingb an increase in population will tend to reduce nominal GDPc changes in population tend to have no effect on standards of livingd holding real GDP constant an increase in the population actually raises average standards of livinge an increase in the population will tend to decrease average prices____ 17 Between 2006 and 2010 per capita real gross domestic product (GDP) in India grew at an average rate of 711 per year Which of the following factors would have contributed most to this rapid escalation in growtha advances in technologyb increases in government regulationsc decrease in education standardsd a significant increase in taxese restrictions on immigration____ 18 Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________a infant mortality life expectancyb Internet users automobile ownershipc educational achievement physicians per capitad Internet users infant mortalitye cellular phone use personal computer use____ 19 The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP area the percent change in prices and the rate of investmentb the percent change in prices and the rate of population growthc the rate of investment and the rate of savingsd the rate of population growth and the rate of savings

e the rate of investment and the rate of population growth____ 20 From 2006 to 2010 per capita real gross domestic product (GDP) in Poland grew an average of 471 per year At that rate according to the Rule of 70 in roughly how many years will the Polish economy double in sizea 76 yearsb 149 yearsc 121 yearsd 88 yearse 84 years____ 21 Which of the following factors is positively correlated with economic growtha collectively owned resourcesb high barriers to international tradec restrictions on immigrationd political stability and the rule of lawe high rates of inflationUse the following production function to answer the questions that follow____ 22 How many units of capital should be produced in order to achieve the steady statea 6b 5c 4d 3e There is not enough information to answer this question____ 23 If an economy is in the steady state thena net investment is zerob depreciation is zeroc investment is zerod the marginal product of capital is zeroe there are no diminishing returns____ 24 The relationship between international aid and economic growth for less developed countries isa positive in that more aid means more growthb negative in that less aid means less growthc indeterminate because very few countries have received international aidd positive when financial funds are sent to the less developed countries but negative when developed countries help build capital goods in these countriese nonexistent because some countries have received aid but realized no growth whereas others have grown but have received no aid____ 25 Which of the following describes the correct direction of causalitya economic growth growth-friendly incentives growth-friendly institutionsb growth-friendly incentives economic growth growth-friendly institutionsc growth-friendly institutions growth-friendly incentives economic growthd economic growth growth-friendly institutions growth-friendly incentivese growth-friendly institutions economic growth growth-friendly incentives____ 26 Suppose that the level of capital in the economy is 200 units the depreciation rate is 10 and the level of investment is equal to 10 units In this casea the economy is in a steady stateb investment is less than net investmentc investment is equal to net investmentd investment is greater than net investmente the level of output will increase

____ 27 Country A has been growing at a rate of 7 per year whereas country B has been growing at a rate of 2 per year Assume that both countries have the same production function savings rate and depreciation rateThe Solow growth model would predict thata country A is wealthier than country Bb both countries are in a steady statec country B is closer to its steady state than country Ad country A is closer to its steady state than country Be these two countries will never converge at the same level of wealth____ 28 If all countries are going to converge at the same level of real gross domestic product (GDP) per capita as predicted by the Solow growth model and assuming that allcountries have the same production function savings rate and depreciation rate thena they must all have identical production functionsb they must all have the same number of people in the populationc they must all have the same size of labor forced they must all have the same level of real GDPe they must all end up with a marginal product of zero____ 29 Which of the following would cause a downward movement along the aggregate demand curvea A rise in the price level makes US goods relatively more expensive than foreign goodsb The value of real wealth risesc There is a decline in the expected price leveld A fall in the price level increases savings and lowers interest ratese The value of the dollar decreases____ 30 Which of the following would shift aggregate demand to the lefta A study predicts that the recent drought will increase food prices this winterb There is a rise in the median price of housesc A rise in the price level reduces saving and increases interest ratesd The value of the dollar increasese The European Union emerges from recession____ 31 Supply shocks cause short-run aggregate supply toa remain unchanged in both the short run and the long runb decrease in both the short run and the long runc decrease in the short run and increase in the long rund increase in both the short run and the long rune return to its original position in the long runRefer to the following figure to answer the questions that follow____ 32 Based on the figure if the economy starts at point A and ends up at point E then in the short run there wasa a decrease in aggregate demandb an increase in aggregate demandc a decrease in short-run aggregate supplyd an increase in short-run aggregate supplye an increase in long-run aggregate supply____ 33 Based on the figure starting at point A if there is an increase in government spending then in the short run we would move to point __________ and in the long run to point __________a B Eb B Cc D Ad D C

e B A____ 34 An increase in short-run aggregate supply could be the result ofa an increase in the general price levelb a negative supply shockc an increase in the price of oild an increase in consumption spendinge a reduction in expected future prices____ 35 Suppose that you have the following information about the economy where all figures are in millions of dollarsFull employment output = $2000Consumption = $1200Investment = $400Government spending = $500Net exports = minus$200Because short-run output is __________ full employment output in the long run we would expect the price level to __________a less than riseb less than fallc greater than rised greater than falle equal to remain unchangedUse the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)____ 36 During the Great Recession real gross domestic product (GDP) fell yet the price level was largely unchanged as depicted in the graph Because of this we know thata both aggregate demand and long-run aggregate supply increased during the recessionb aggregate demand and long-run aggregate supply both decreased during the recessionc aggregate demand decreased and long-run aggregate supply increased during the recessiond aggregate demand decreased and short-run aggregate supply increased during the recessione long-run aggregate supply increased and short-run aggregate supply decreased during the recession____ 37 During the Great Depression aggregate demand in the US economy decreased As a result the unemployment rate _________ and real gross domestic product (GDP) _________a increased decreasedb decreased remained unchangedc increased increasedd decreased decreasede remained unchanged increased____ 38 Classical economists believe that prices are completely flexible from which they conclude thata the economy can become stuck at high levels of unemployment for long periods of timeb the economy is self-correcting in response to shocksc the government will need to intervene in the economy frequentlyd the best type of economy is centrally planned and run by the statee the economy will experience wild swings in output and employment

____ 39 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment____ 40 Keynesian economists believe that government intervention in the economy is necessary becausea prices are flexible and allow the economy to quickly return to full employmentb the long run is more important than the short run and economic policy works only in the long runc savings is a crucial part of economic growth and investmentd prices are sticky and prevent the economy from moving toward full employmente supply is more important than demand in determining economic growth and output

The aggregate demand curve slopes downward because

When the price level rises __________ declines from the wealth effect __________ declines from the interest rate effect and __________ decline(s) from the international trade effect

When a change in the price level leads to a change in saving this is known as the

The interest rate effect results from people

You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________ The long-run aggregate supply curve is

A rightward shift of the long-run aggregate supply curve means there has been

Which of the following would cause an increase in long-run aggregate supply

Increases in productivity will

Input prices are _________ in the short run and _________ in the long run

The relationship between sticky input prices and flexible output prices explains

When the general price level rises and firms decide not to change their prices in the short run this can be attributed to

Which of the following would affect both short-run and long-run aggregate supply

Refer to the following figure to answer the questions that follow Based on the figure which points represent long-run equilibrium

Supply shocks cause short-run aggregate supply to

An increase in aggregate demand is harmful because

Suppose the government permanently reduces spending in an effort to reduce the budget deficit In the new long-run equilibrium output will __________ and the price level will __________

Suppose housing values fall during a recession In the short run

Which of the following would cause an increase in the price level in the long run

Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asDuring the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of whichOne similarity between the Great Recession and the Great Depression is that in both episodes

Relevant population 215Employed 138Unemployed 9

According to the table the labor force isThe graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)As a result of aggregate demand and long-run aggregate supply decreasing wecan see that the price level _________ and real gross domestic product (GDP) _________Classical economists believe that government intervention in the economy is unnecessary becauseAssume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in responseHolding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeNina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be consideredWhich of the following statements about structural unemployment is true

Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseWhen the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease becauseThe Austrian School Economists believe all in all of the following except

Keynesian economists believe that government intervention in the economy is necessary becauseKeynesian economists believe that the economy is unstable and tends toward cyclical unemployment becauseWhen 9000 banks failed during the Great Depression it caused aggregate demand to decrease becauseBased on the belief that prices are very flexible classical economists conclude thatFA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic systemKeynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseAccording to classical economists changes in aggregate demand have little effect on the overall economy and thereforeAustrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment

The inputs used to produce goods and services are also known asInflation occursTypically the consumer price index (CPI) is calculated byWhich of the following would be classified as human capitalIf a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 thenYou are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration thenIn 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that timeAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continentDoes the value of cleaning your house count toward the value of GDPIf the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos isFrom 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beWhich of the following conditions might cause the unemployment rate to be less than the natural rate of unemploymentWhich is the largest component of US GDPHigher rates of economic growth are negatively correlated withGDP is an important indicator because it is used as a measure of all of the following exceptReal GDP is GDP adjusted for changes in

Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeResidents of poor countries tend to have fewer automobiles per capita becauseThe textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is thatThe business cycle measuresAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in AfricaFrom 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeConsumption is approximately ________ of GDPWhen actual unemployment is less than its natural rateIf the consumer price index (CPI) was 100 in the period of 1982-1984 thenA computer company builds a new factory This is included in the ________ category of GDPWhich of the following represents the technology used in a classroomIf the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then itWhich of the following lists the three types of unemploymentA(n) _____________ in the amount of resources will tend to _____________ economic growthDuring a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asWhen George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County FloridaCompany X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP isDuring healthy economic periods cyclical unemploymentWhen you include discouraged workers and unemployed workers in calculations of the unemployment rateWhich of the following statements about the composition of the labor force is correctIf mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say thatAverage world income began to rapidly rise during the Industrial Revolution becauseIn 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would beLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryThe website that provides official inflation statistics isA(n) _____________ in capital goods should ____________ worker productivity

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

e If there is a lot of price instability firms invest less9 A restaurantrsquos production function would show the relationship betweena the number of workers hired and the number of meals servedb the number of workers hired and the level of profitc the level of profit and the number of meals servedd the level of profit and the cost of producing the mealse the number of workers hired and the cost of producing the meals10 If this country experiences an epidemic that reduces human capital thena the production function will shift upwardb the production function will shift downwardc there will be an upward movement along the production functiond there will be a downward movement along the production functione there will be no effect on the production function11 The Solow growth theory focuses ona human capital because education is known to increase economic growthb human capital because human capital exhibits diminishing marginal returnsc human capital because one of the biggest differences between poor nations and wealthy nations is the amount of their human capitald physical capital because physical capital exhibits diminishing marginal returnse physical capital because one of the biggest differences between poor nations and wealthy nations is the amount of their physical capital12 Consider the following table which shows the total number of customers served per hour as the number of cash registers is increased The marginal product of the fourth cash register isa 6b 10c 12d 32e 50Use the following production function to answer the next question13 This production function exhibits diminishing returns to capital fora all units of capital after the firstb no units of capitalc all units of capital after the secondd all units of capital after the thirde all units of capital except the sixth14 If an economy is in the steady state thena net investment is zerob depreciation is zeroc investment is zerod the marginal product of capital is zeroe there are no diminishing returns15 The production function for an economy is 1050427 1050427 1050427radic10504271050427 with all symbols defined as in the class Y is output A accounts for technological change K is capital input L is labor input Initially A=2 K=12 L=35 At this initial state the Marginal Product of Capital is approximatelya 0b 167c 4099d 4266e there is not enough Information to answer this question16 Consider the United States growth rates since 1820 They show thata The United States is slowly approaching a steady stateb The United States was in a steady state in the early 19th century but left it long agoc The United States was not in a steady state early on but now it is in a steady state

d The United States was never in a steady state at any point of its historye None of the aboveUse the following graph to answer the next question17 Suppose that the level of capital is 100000 the depreciation rate is 5 and investment is equal to 5000 In this case you would expect thata real gross domestic product (GDP) will increaseb real GDP will decreasec real GDP will remain unchangedd the steady state value of capital will increasee the steady state value of capital will decrease18 When a country adopts a more efficient tax system it is likely toa have no effect on the production functionb shift the production function upwardc shift the production function downwardd have no impact on technological innovatione have no impact on physical capital19 The interest rate effect results from peoplea saving less when the price level risesb consuming more when the price level risesc spending more when the interest rate risesd feeling more wealthy when the price level risese spending more when the price level falls20 When saving declines the quantity of investment will __________ and therefore aggregate demand will __________a increase increaseb decrease decreasec decrease increased increase decreasee remain unchanged decrease21 If people expect higher income in the future then spending today __________ and aggregate demand __________a increases is unaffectedb increases increasesc increases decreasesd decreases decreasese is unaffected is unaffected22 You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________a be unaffected be unaffectedb increase increasec decrease decreased decrease increasee increase decrease23 Which of the following would cause an increase in long run aggregate supply‐a The price level increasesb The price level decreasesc Firms and workers expect the price level to falld Firms and workers expect the price level to risee The stock of capital increases24 All else being equal an increase in _________ would shift the long run aggregate supply curve ‐to the left a the unemployment rate

b the inflation ratec economic growthd government spendinge the rate at which capital depreciatesThe following figure which was discussed in class depicts the percentage of workers whose wages have not changed in the previous year Recall that the shaded areas mark the recessions Use the figure to answer the next question25 This figurehellipa shows that wages are less sticky during recessions than during expansionsb shows that wages are sticky because the percentage of people whose wages doesnt change is generally lowc shows that wages are sticky because the percentage of people whose wages doesnt change first increases then decreases during expansionsd shows that wages are sticky because the percentage of people whose wages doesnt change increases during recessionse doesnt show any thing in particular about wage stickiness26 If inflation turns out to be higher than expected this willa shift long run aggregate supply to the right‐b shift long run aggregate supply to the left‐c shift short run aggregate supply to the left‐d shift short run aggregate supply to the right‐e have no effect on aggregate supplyThe following figure depicts different possible curves for the United States Refer to the figure to answer the next two questions27 Beginning in the equilibrium point i (marked with a circle) where would the economy move to in the short run if the value of the dollar increased‐a Point fb Point gc Point hd Point je Point l28 Beginning in the equilibrium point i (marked with a circle) where would the economy move to in the long run if the rule of law improves‐a Point bb Point hc Point ld Point oe Point p29 Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________a decrease decreaseb decrease increasec decrease remain unchangedd remain unchanged remain unchangede remain unchanged increase30 An increase in long run aggregate supply can be expected to _________ the price level and ‐_________ the natural rate of unemploymenta have no effect on have no effect onb have no effect on increasec decrease decreased decrease have no effect one increase have no effect on31 During the Great Recession there was a financial crisis a stock market crash and a collapse

in housing prices all of whicha contributed to a very long and deep recessionb helped the US economy perform better than the economies of other countriesc kept unemployment from rising above the historical averaged resulted in a very short and mild recessione prevented the United States from experiencing a decline in real gross domestic product (GDP)32 The Great Recession was similar to other recessions since World War II in thata the rate of unemployment increased and then decreased at a later timeb the rate of inflation was extremely highc real gross domestic product (GDP) rapidly increased and then leveled offd the rate of economic growth was unchangede the rate of unemployment decreased and then increased at a later time33 One of the reasons why the Great Depression was so severe is thata stock prices increased during the Great Depressionb the US government increased taxesc the US government allowed the money supply to increased the unemployment rate decreasede expected income increased34 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment35 Keynesian economists believe thata the market tends toward stability and full employmentb the economy needs help in moving back to full employmentc savings is crucial to growthd prices are flexiblee the long run is more important than the short run

Identify the choice that best completes the statement or answers the question____ 1 Which combination of events could have caused the equilibrium interest rate to rise and the equilibrium quantity of loanable funds (both borrowed and lent) to falla A baby boom begins and investor confidence fallsb A baby boom begins and investor confidence risesc People have lower time preferences and governments run larger deficitsd People have lower time preferences and capital is more productivee A baby boom begins and people have higher time preferences____ 2 If foreign entities save more and businesses become more optimistic about the future we would correctly say thata the new equilibrium quantity of loanable funds would decrease but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the originalb the new equilibrium quantity of loanable funds would increase but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the originalc the new equilibrium quantity of loanable funds would be indeterminate but we

would be certain the new equilibrium interest rate would be higher than the originald the new equilibrium quantity of loanable funds would be indeterminate but we would be certain the new equilibrium interest rate would be less than the originale based on this information and because both changes would affect the demand for loanable funds in the opposite way we would be unable to say anything about the relationship of the new equilibrium interest rate and quantity to the original interest rate and quantity____ 3 The demand and supply of loanable funds decrease simultaneously This would causea the equilibrium quantity of loanable funds to decrease and the equilibrium interest rate to increaseb the equilibrium quantity of loanable funds to decrease but the effect on the equilibrium interest rate would be uncertainc the equilibrium quantity of loanable funds to increase but the effect on the equilibrium interest rate would be uncertaind the equilibrium interest rate to increase but the new equilibrium quantity would be uncertaine the equilibrium interest rate to decrease but the new equilibrium quantity would be uncertain____ 4 If interest rates risea firms are willing to borrow more money because their rates of return have increasedb households are willing to borrow more money because their rates of return have increasedc firms are willing to borrow less money because their cost of borrowing has increasedd foreign entities are willing to borrow more money because their rates of return have increasede it must mean that inflation has decreased because nominal rates have increased____ 5 If life expectancy falls due to AIDS and other diseases we would expecta time preference to fall and savings to increaseb time preference to rise and savings to increasec time preference to fall and savings to decreased time preference to rise and savings to decreasee interest rates to fall to zero____ 6 If the demographics of a nation change and the average age of the nation is approaching middle age we would expecta savings to increaseb savings to decreasec borrowing to declined consumption variation to increasee savings as a percentage of income to fall____ 7 One could correctly argue that higher capital productivitya would increase the value of capital and the supply of loanable fundsb would reduce the value of capital and the supply of loanable fundsc would only affect interest rates in the long rund would increase the value of capital and the demand for loanable fundse would reduce the value of capital and the demand for loanable fundsConsider the following scenario when answering the questions that followYour friend Carson is starting a new photography business that specializes in

photographs of Central Park in New York City Because his business is new and risky he is unable to obtain a loan from the local bank On June 21 2013 you agree to pay a price of $4000 for a bond from Carson You will receive $5000 in return on June 21 2014____ 8 The face value of the bond mentioned in the scenario is equal toa $9000b $1000c $4000d $5000e $20000____ 9 The interest rate of the bond mentioned in the scenario is equal toa 80b 20c 25d 10e 5____ 10 If the dollar price of a bond is $7500 and the face value of the bond is $8000 the interest rate is equal toa 7b 667c 625d 14e 5____ 11 Consider a supply and demand model of bonds for company X Which of the following would you expect to happen if the default risk decreases for company Xa The demand curve will shift to the right causing the price of the bond to riseb The demand curve will shift to the left causing the price of the bond to risec The supply curve will shift to the right causing the price of the bond to falld The demand curve will shift the left causing the price of the bond to falle The supply curve will shift to the left causing the price of the bond to rise____ 12 Your friend Jamarcus is an award-winning chef Jamarcus wants to start his own restaurant in Denver but is unable to obtain a loan from his local bank Jamarcus has decided to issue a one-year bond with a face value of $6000 and an interest rate of 10 If you wanted to buy this bond what would be the initial pricea $660000b $550050c $600000d $500000e $545454____ 13 Approximately how much of US federal debt was held by foreignersa 90b 6c 32d 17e 55____ 14 What would you expect to happen to the supply and demand model for Treasury securities if a new law makes it easier for foreign investment in the United Statesa The demand curve shifts to the right causing the price of Treasury securities to increaseb The demand and supply curves shift to the right causing the price of Treasury

securities to increasec The demand and supply curves shift to the left causing the price of Treasury securities to decreased The demand curve shifts to the right causing the price of Treasury securities to decreasee The supply curve shifts to the left causing the price of Treasury securities to increase____ 15 Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continenta Economic growth would not be affected medical aid does not contribute to gross domestic product (GDP)b Economic growth would decrease because there would be more people to feed but no additional resourcesc Economic growth would not be affected because children do not contribute to economic growthd Economic growth would increase because the health and productivity of the future labor supply would increasee Economic growth would increase because more children would survive which represents a technological advance____ 16 When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becausea holding real GDP constant an increase in the population actually lowers average standards of livingb an increase in population will tend to reduce nominal GDPc changes in population tend to have no effect on standards of livingd holding real GDP constant an increase in the population actually raises average standards of livinge an increase in the population will tend to decrease average prices____ 17 Between 2006 and 2010 per capita real gross domestic product (GDP) in India grew at an average rate of 711 per year Which of the following factors would have contributed most to this rapid escalation in growtha advances in technologyb increases in government regulationsc decrease in education standardsd a significant increase in taxese restrictions on immigration____ 18 Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________a infant mortality life expectancyb Internet users automobile ownershipc educational achievement physicians per capitad Internet users infant mortalitye cellular phone use personal computer use____ 19 The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP area the percent change in prices and the rate of investmentb the percent change in prices and the rate of population growthc the rate of investment and the rate of savingsd the rate of population growth and the rate of savings

e the rate of investment and the rate of population growth____ 20 From 2006 to 2010 per capita real gross domestic product (GDP) in Poland grew an average of 471 per year At that rate according to the Rule of 70 in roughly how many years will the Polish economy double in sizea 76 yearsb 149 yearsc 121 yearsd 88 yearse 84 years____ 21 Which of the following factors is positively correlated with economic growtha collectively owned resourcesb high barriers to international tradec restrictions on immigrationd political stability and the rule of lawe high rates of inflationUse the following production function to answer the questions that follow____ 22 How many units of capital should be produced in order to achieve the steady statea 6b 5c 4d 3e There is not enough information to answer this question____ 23 If an economy is in the steady state thena net investment is zerob depreciation is zeroc investment is zerod the marginal product of capital is zeroe there are no diminishing returns____ 24 The relationship between international aid and economic growth for less developed countries isa positive in that more aid means more growthb negative in that less aid means less growthc indeterminate because very few countries have received international aidd positive when financial funds are sent to the less developed countries but negative when developed countries help build capital goods in these countriese nonexistent because some countries have received aid but realized no growth whereas others have grown but have received no aid____ 25 Which of the following describes the correct direction of causalitya economic growth growth-friendly incentives growth-friendly institutionsb growth-friendly incentives economic growth growth-friendly institutionsc growth-friendly institutions growth-friendly incentives economic growthd economic growth growth-friendly institutions growth-friendly incentivese growth-friendly institutions economic growth growth-friendly incentives____ 26 Suppose that the level of capital in the economy is 200 units the depreciation rate is 10 and the level of investment is equal to 10 units In this casea the economy is in a steady stateb investment is less than net investmentc investment is equal to net investmentd investment is greater than net investmente the level of output will increase

____ 27 Country A has been growing at a rate of 7 per year whereas country B has been growing at a rate of 2 per year Assume that both countries have the same production function savings rate and depreciation rateThe Solow growth model would predict thata country A is wealthier than country Bb both countries are in a steady statec country B is closer to its steady state than country Ad country A is closer to its steady state than country Be these two countries will never converge at the same level of wealth____ 28 If all countries are going to converge at the same level of real gross domestic product (GDP) per capita as predicted by the Solow growth model and assuming that allcountries have the same production function savings rate and depreciation rate thena they must all have identical production functionsb they must all have the same number of people in the populationc they must all have the same size of labor forced they must all have the same level of real GDPe they must all end up with a marginal product of zero____ 29 Which of the following would cause a downward movement along the aggregate demand curvea A rise in the price level makes US goods relatively more expensive than foreign goodsb The value of real wealth risesc There is a decline in the expected price leveld A fall in the price level increases savings and lowers interest ratese The value of the dollar decreases____ 30 Which of the following would shift aggregate demand to the lefta A study predicts that the recent drought will increase food prices this winterb There is a rise in the median price of housesc A rise in the price level reduces saving and increases interest ratesd The value of the dollar increasese The European Union emerges from recession____ 31 Supply shocks cause short-run aggregate supply toa remain unchanged in both the short run and the long runb decrease in both the short run and the long runc decrease in the short run and increase in the long rund increase in both the short run and the long rune return to its original position in the long runRefer to the following figure to answer the questions that follow____ 32 Based on the figure if the economy starts at point A and ends up at point E then in the short run there wasa a decrease in aggregate demandb an increase in aggregate demandc a decrease in short-run aggregate supplyd an increase in short-run aggregate supplye an increase in long-run aggregate supply____ 33 Based on the figure starting at point A if there is an increase in government spending then in the short run we would move to point __________ and in the long run to point __________a B Eb B Cc D Ad D C

e B A____ 34 An increase in short-run aggregate supply could be the result ofa an increase in the general price levelb a negative supply shockc an increase in the price of oild an increase in consumption spendinge a reduction in expected future prices____ 35 Suppose that you have the following information about the economy where all figures are in millions of dollarsFull employment output = $2000Consumption = $1200Investment = $400Government spending = $500Net exports = minus$200Because short-run output is __________ full employment output in the long run we would expect the price level to __________a less than riseb less than fallc greater than rised greater than falle equal to remain unchangedUse the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)____ 36 During the Great Recession real gross domestic product (GDP) fell yet the price level was largely unchanged as depicted in the graph Because of this we know thata both aggregate demand and long-run aggregate supply increased during the recessionb aggregate demand and long-run aggregate supply both decreased during the recessionc aggregate demand decreased and long-run aggregate supply increased during the recessiond aggregate demand decreased and short-run aggregate supply increased during the recessione long-run aggregate supply increased and short-run aggregate supply decreased during the recession____ 37 During the Great Depression aggregate demand in the US economy decreased As a result the unemployment rate _________ and real gross domestic product (GDP) _________a increased decreasedb decreased remained unchangedc increased increasedd decreased decreasede remained unchanged increased____ 38 Classical economists believe that prices are completely flexible from which they conclude thata the economy can become stuck at high levels of unemployment for long periods of timeb the economy is self-correcting in response to shocksc the government will need to intervene in the economy frequentlyd the best type of economy is centrally planned and run by the statee the economy will experience wild swings in output and employment

____ 39 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment____ 40 Keynesian economists believe that government intervention in the economy is necessary becausea prices are flexible and allow the economy to quickly return to full employmentb the long run is more important than the short run and economic policy works only in the long runc savings is a crucial part of economic growth and investmentd prices are sticky and prevent the economy from moving toward full employmente supply is more important than demand in determining economic growth and output

The aggregate demand curve slopes downward because

When the price level rises __________ declines from the wealth effect __________ declines from the interest rate effect and __________ decline(s) from the international trade effect

When a change in the price level leads to a change in saving this is known as the

The interest rate effect results from people

You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________ The long-run aggregate supply curve is

A rightward shift of the long-run aggregate supply curve means there has been

Which of the following would cause an increase in long-run aggregate supply

Increases in productivity will

Input prices are _________ in the short run and _________ in the long run

The relationship between sticky input prices and flexible output prices explains

When the general price level rises and firms decide not to change their prices in the short run this can be attributed to

Which of the following would affect both short-run and long-run aggregate supply

Refer to the following figure to answer the questions that follow Based on the figure which points represent long-run equilibrium

Supply shocks cause short-run aggregate supply to

An increase in aggregate demand is harmful because

Suppose the government permanently reduces spending in an effort to reduce the budget deficit In the new long-run equilibrium output will __________ and the price level will __________

Suppose housing values fall during a recession In the short run

Which of the following would cause an increase in the price level in the long run

Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asDuring the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of whichOne similarity between the Great Recession and the Great Depression is that in both episodes

Relevant population 215Employed 138Unemployed 9

According to the table the labor force isThe graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)As a result of aggregate demand and long-run aggregate supply decreasing wecan see that the price level _________ and real gross domestic product (GDP) _________Classical economists believe that government intervention in the economy is unnecessary becauseAssume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in responseHolding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeNina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be consideredWhich of the following statements about structural unemployment is true

Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseWhen the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease becauseThe Austrian School Economists believe all in all of the following except

Keynesian economists believe that government intervention in the economy is necessary becauseKeynesian economists believe that the economy is unstable and tends toward cyclical unemployment becauseWhen 9000 banks failed during the Great Depression it caused aggregate demand to decrease becauseBased on the belief that prices are very flexible classical economists conclude thatFA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic systemKeynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseAccording to classical economists changes in aggregate demand have little effect on the overall economy and thereforeAustrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment

The inputs used to produce goods and services are also known asInflation occursTypically the consumer price index (CPI) is calculated byWhich of the following would be classified as human capitalIf a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 thenYou are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration thenIn 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that timeAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continentDoes the value of cleaning your house count toward the value of GDPIf the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos isFrom 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beWhich of the following conditions might cause the unemployment rate to be less than the natural rate of unemploymentWhich is the largest component of US GDPHigher rates of economic growth are negatively correlated withGDP is an important indicator because it is used as a measure of all of the following exceptReal GDP is GDP adjusted for changes in

Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeResidents of poor countries tend to have fewer automobiles per capita becauseThe textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is thatThe business cycle measuresAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in AfricaFrom 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeConsumption is approximately ________ of GDPWhen actual unemployment is less than its natural rateIf the consumer price index (CPI) was 100 in the period of 1982-1984 thenA computer company builds a new factory This is included in the ________ category of GDPWhich of the following represents the technology used in a classroomIf the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then itWhich of the following lists the three types of unemploymentA(n) _____________ in the amount of resources will tend to _____________ economic growthDuring a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asWhen George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County FloridaCompany X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP isDuring healthy economic periods cyclical unemploymentWhen you include discouraged workers and unemployed workers in calculations of the unemployment rateWhich of the following statements about the composition of the labor force is correctIf mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say thatAverage world income began to rapidly rise during the Industrial Revolution becauseIn 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would beLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryThe website that provides official inflation statistics isA(n) _____________ in capital goods should ____________ worker productivity

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

d The United States was never in a steady state at any point of its historye None of the aboveUse the following graph to answer the next question17 Suppose that the level of capital is 100000 the depreciation rate is 5 and investment is equal to 5000 In this case you would expect thata real gross domestic product (GDP) will increaseb real GDP will decreasec real GDP will remain unchangedd the steady state value of capital will increasee the steady state value of capital will decrease18 When a country adopts a more efficient tax system it is likely toa have no effect on the production functionb shift the production function upwardc shift the production function downwardd have no impact on technological innovatione have no impact on physical capital19 The interest rate effect results from peoplea saving less when the price level risesb consuming more when the price level risesc spending more when the interest rate risesd feeling more wealthy when the price level risese spending more when the price level falls20 When saving declines the quantity of investment will __________ and therefore aggregate demand will __________a increase increaseb decrease decreasec decrease increased increase decreasee remain unchanged decrease21 If people expect higher income in the future then spending today __________ and aggregate demand __________a increases is unaffectedb increases increasesc increases decreasesd decreases decreasese is unaffected is unaffected22 You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________a be unaffected be unaffectedb increase increasec decrease decreased decrease increasee increase decrease23 Which of the following would cause an increase in long run aggregate supply‐a The price level increasesb The price level decreasesc Firms and workers expect the price level to falld Firms and workers expect the price level to risee The stock of capital increases24 All else being equal an increase in _________ would shift the long run aggregate supply curve ‐to the left a the unemployment rate

b the inflation ratec economic growthd government spendinge the rate at which capital depreciatesThe following figure which was discussed in class depicts the percentage of workers whose wages have not changed in the previous year Recall that the shaded areas mark the recessions Use the figure to answer the next question25 This figurehellipa shows that wages are less sticky during recessions than during expansionsb shows that wages are sticky because the percentage of people whose wages doesnt change is generally lowc shows that wages are sticky because the percentage of people whose wages doesnt change first increases then decreases during expansionsd shows that wages are sticky because the percentage of people whose wages doesnt change increases during recessionse doesnt show any thing in particular about wage stickiness26 If inflation turns out to be higher than expected this willa shift long run aggregate supply to the right‐b shift long run aggregate supply to the left‐c shift short run aggregate supply to the left‐d shift short run aggregate supply to the right‐e have no effect on aggregate supplyThe following figure depicts different possible curves for the United States Refer to the figure to answer the next two questions27 Beginning in the equilibrium point i (marked with a circle) where would the economy move to in the short run if the value of the dollar increased‐a Point fb Point gc Point hd Point je Point l28 Beginning in the equilibrium point i (marked with a circle) where would the economy move to in the long run if the rule of law improves‐a Point bb Point hc Point ld Point oe Point p29 Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________a decrease decreaseb decrease increasec decrease remain unchangedd remain unchanged remain unchangede remain unchanged increase30 An increase in long run aggregate supply can be expected to _________ the price level and ‐_________ the natural rate of unemploymenta have no effect on have no effect onb have no effect on increasec decrease decreased decrease have no effect one increase have no effect on31 During the Great Recession there was a financial crisis a stock market crash and a collapse

in housing prices all of whicha contributed to a very long and deep recessionb helped the US economy perform better than the economies of other countriesc kept unemployment from rising above the historical averaged resulted in a very short and mild recessione prevented the United States from experiencing a decline in real gross domestic product (GDP)32 The Great Recession was similar to other recessions since World War II in thata the rate of unemployment increased and then decreased at a later timeb the rate of inflation was extremely highc real gross domestic product (GDP) rapidly increased and then leveled offd the rate of economic growth was unchangede the rate of unemployment decreased and then increased at a later time33 One of the reasons why the Great Depression was so severe is thata stock prices increased during the Great Depressionb the US government increased taxesc the US government allowed the money supply to increased the unemployment rate decreasede expected income increased34 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment35 Keynesian economists believe thata the market tends toward stability and full employmentb the economy needs help in moving back to full employmentc savings is crucial to growthd prices are flexiblee the long run is more important than the short run

Identify the choice that best completes the statement or answers the question____ 1 Which combination of events could have caused the equilibrium interest rate to rise and the equilibrium quantity of loanable funds (both borrowed and lent) to falla A baby boom begins and investor confidence fallsb A baby boom begins and investor confidence risesc People have lower time preferences and governments run larger deficitsd People have lower time preferences and capital is more productivee A baby boom begins and people have higher time preferences____ 2 If foreign entities save more and businesses become more optimistic about the future we would correctly say thata the new equilibrium quantity of loanable funds would decrease but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the originalb the new equilibrium quantity of loanable funds would increase but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the originalc the new equilibrium quantity of loanable funds would be indeterminate but we

would be certain the new equilibrium interest rate would be higher than the originald the new equilibrium quantity of loanable funds would be indeterminate but we would be certain the new equilibrium interest rate would be less than the originale based on this information and because both changes would affect the demand for loanable funds in the opposite way we would be unable to say anything about the relationship of the new equilibrium interest rate and quantity to the original interest rate and quantity____ 3 The demand and supply of loanable funds decrease simultaneously This would causea the equilibrium quantity of loanable funds to decrease and the equilibrium interest rate to increaseb the equilibrium quantity of loanable funds to decrease but the effect on the equilibrium interest rate would be uncertainc the equilibrium quantity of loanable funds to increase but the effect on the equilibrium interest rate would be uncertaind the equilibrium interest rate to increase but the new equilibrium quantity would be uncertaine the equilibrium interest rate to decrease but the new equilibrium quantity would be uncertain____ 4 If interest rates risea firms are willing to borrow more money because their rates of return have increasedb households are willing to borrow more money because their rates of return have increasedc firms are willing to borrow less money because their cost of borrowing has increasedd foreign entities are willing to borrow more money because their rates of return have increasede it must mean that inflation has decreased because nominal rates have increased____ 5 If life expectancy falls due to AIDS and other diseases we would expecta time preference to fall and savings to increaseb time preference to rise and savings to increasec time preference to fall and savings to decreased time preference to rise and savings to decreasee interest rates to fall to zero____ 6 If the demographics of a nation change and the average age of the nation is approaching middle age we would expecta savings to increaseb savings to decreasec borrowing to declined consumption variation to increasee savings as a percentage of income to fall____ 7 One could correctly argue that higher capital productivitya would increase the value of capital and the supply of loanable fundsb would reduce the value of capital and the supply of loanable fundsc would only affect interest rates in the long rund would increase the value of capital and the demand for loanable fundse would reduce the value of capital and the demand for loanable fundsConsider the following scenario when answering the questions that followYour friend Carson is starting a new photography business that specializes in

photographs of Central Park in New York City Because his business is new and risky he is unable to obtain a loan from the local bank On June 21 2013 you agree to pay a price of $4000 for a bond from Carson You will receive $5000 in return on June 21 2014____ 8 The face value of the bond mentioned in the scenario is equal toa $9000b $1000c $4000d $5000e $20000____ 9 The interest rate of the bond mentioned in the scenario is equal toa 80b 20c 25d 10e 5____ 10 If the dollar price of a bond is $7500 and the face value of the bond is $8000 the interest rate is equal toa 7b 667c 625d 14e 5____ 11 Consider a supply and demand model of bonds for company X Which of the following would you expect to happen if the default risk decreases for company Xa The demand curve will shift to the right causing the price of the bond to riseb The demand curve will shift to the left causing the price of the bond to risec The supply curve will shift to the right causing the price of the bond to falld The demand curve will shift the left causing the price of the bond to falle The supply curve will shift to the left causing the price of the bond to rise____ 12 Your friend Jamarcus is an award-winning chef Jamarcus wants to start his own restaurant in Denver but is unable to obtain a loan from his local bank Jamarcus has decided to issue a one-year bond with a face value of $6000 and an interest rate of 10 If you wanted to buy this bond what would be the initial pricea $660000b $550050c $600000d $500000e $545454____ 13 Approximately how much of US federal debt was held by foreignersa 90b 6c 32d 17e 55____ 14 What would you expect to happen to the supply and demand model for Treasury securities if a new law makes it easier for foreign investment in the United Statesa The demand curve shifts to the right causing the price of Treasury securities to increaseb The demand and supply curves shift to the right causing the price of Treasury

securities to increasec The demand and supply curves shift to the left causing the price of Treasury securities to decreased The demand curve shifts to the right causing the price of Treasury securities to decreasee The supply curve shifts to the left causing the price of Treasury securities to increase____ 15 Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continenta Economic growth would not be affected medical aid does not contribute to gross domestic product (GDP)b Economic growth would decrease because there would be more people to feed but no additional resourcesc Economic growth would not be affected because children do not contribute to economic growthd Economic growth would increase because the health and productivity of the future labor supply would increasee Economic growth would increase because more children would survive which represents a technological advance____ 16 When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becausea holding real GDP constant an increase in the population actually lowers average standards of livingb an increase in population will tend to reduce nominal GDPc changes in population tend to have no effect on standards of livingd holding real GDP constant an increase in the population actually raises average standards of livinge an increase in the population will tend to decrease average prices____ 17 Between 2006 and 2010 per capita real gross domestic product (GDP) in India grew at an average rate of 711 per year Which of the following factors would have contributed most to this rapid escalation in growtha advances in technologyb increases in government regulationsc decrease in education standardsd a significant increase in taxese restrictions on immigration____ 18 Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________a infant mortality life expectancyb Internet users automobile ownershipc educational achievement physicians per capitad Internet users infant mortalitye cellular phone use personal computer use____ 19 The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP area the percent change in prices and the rate of investmentb the percent change in prices and the rate of population growthc the rate of investment and the rate of savingsd the rate of population growth and the rate of savings

e the rate of investment and the rate of population growth____ 20 From 2006 to 2010 per capita real gross domestic product (GDP) in Poland grew an average of 471 per year At that rate according to the Rule of 70 in roughly how many years will the Polish economy double in sizea 76 yearsb 149 yearsc 121 yearsd 88 yearse 84 years____ 21 Which of the following factors is positively correlated with economic growtha collectively owned resourcesb high barriers to international tradec restrictions on immigrationd political stability and the rule of lawe high rates of inflationUse the following production function to answer the questions that follow____ 22 How many units of capital should be produced in order to achieve the steady statea 6b 5c 4d 3e There is not enough information to answer this question____ 23 If an economy is in the steady state thena net investment is zerob depreciation is zeroc investment is zerod the marginal product of capital is zeroe there are no diminishing returns____ 24 The relationship between international aid and economic growth for less developed countries isa positive in that more aid means more growthb negative in that less aid means less growthc indeterminate because very few countries have received international aidd positive when financial funds are sent to the less developed countries but negative when developed countries help build capital goods in these countriese nonexistent because some countries have received aid but realized no growth whereas others have grown but have received no aid____ 25 Which of the following describes the correct direction of causalitya economic growth growth-friendly incentives growth-friendly institutionsb growth-friendly incentives economic growth growth-friendly institutionsc growth-friendly institutions growth-friendly incentives economic growthd economic growth growth-friendly institutions growth-friendly incentivese growth-friendly institutions economic growth growth-friendly incentives____ 26 Suppose that the level of capital in the economy is 200 units the depreciation rate is 10 and the level of investment is equal to 10 units In this casea the economy is in a steady stateb investment is less than net investmentc investment is equal to net investmentd investment is greater than net investmente the level of output will increase

____ 27 Country A has been growing at a rate of 7 per year whereas country B has been growing at a rate of 2 per year Assume that both countries have the same production function savings rate and depreciation rateThe Solow growth model would predict thata country A is wealthier than country Bb both countries are in a steady statec country B is closer to its steady state than country Ad country A is closer to its steady state than country Be these two countries will never converge at the same level of wealth____ 28 If all countries are going to converge at the same level of real gross domestic product (GDP) per capita as predicted by the Solow growth model and assuming that allcountries have the same production function savings rate and depreciation rate thena they must all have identical production functionsb they must all have the same number of people in the populationc they must all have the same size of labor forced they must all have the same level of real GDPe they must all end up with a marginal product of zero____ 29 Which of the following would cause a downward movement along the aggregate demand curvea A rise in the price level makes US goods relatively more expensive than foreign goodsb The value of real wealth risesc There is a decline in the expected price leveld A fall in the price level increases savings and lowers interest ratese The value of the dollar decreases____ 30 Which of the following would shift aggregate demand to the lefta A study predicts that the recent drought will increase food prices this winterb There is a rise in the median price of housesc A rise in the price level reduces saving and increases interest ratesd The value of the dollar increasese The European Union emerges from recession____ 31 Supply shocks cause short-run aggregate supply toa remain unchanged in both the short run and the long runb decrease in both the short run and the long runc decrease in the short run and increase in the long rund increase in both the short run and the long rune return to its original position in the long runRefer to the following figure to answer the questions that follow____ 32 Based on the figure if the economy starts at point A and ends up at point E then in the short run there wasa a decrease in aggregate demandb an increase in aggregate demandc a decrease in short-run aggregate supplyd an increase in short-run aggregate supplye an increase in long-run aggregate supply____ 33 Based on the figure starting at point A if there is an increase in government spending then in the short run we would move to point __________ and in the long run to point __________a B Eb B Cc D Ad D C

e B A____ 34 An increase in short-run aggregate supply could be the result ofa an increase in the general price levelb a negative supply shockc an increase in the price of oild an increase in consumption spendinge a reduction in expected future prices____ 35 Suppose that you have the following information about the economy where all figures are in millions of dollarsFull employment output = $2000Consumption = $1200Investment = $400Government spending = $500Net exports = minus$200Because short-run output is __________ full employment output in the long run we would expect the price level to __________a less than riseb less than fallc greater than rised greater than falle equal to remain unchangedUse the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)____ 36 During the Great Recession real gross domestic product (GDP) fell yet the price level was largely unchanged as depicted in the graph Because of this we know thata both aggregate demand and long-run aggregate supply increased during the recessionb aggregate demand and long-run aggregate supply both decreased during the recessionc aggregate demand decreased and long-run aggregate supply increased during the recessiond aggregate demand decreased and short-run aggregate supply increased during the recessione long-run aggregate supply increased and short-run aggregate supply decreased during the recession____ 37 During the Great Depression aggregate demand in the US economy decreased As a result the unemployment rate _________ and real gross domestic product (GDP) _________a increased decreasedb decreased remained unchangedc increased increasedd decreased decreasede remained unchanged increased____ 38 Classical economists believe that prices are completely flexible from which they conclude thata the economy can become stuck at high levels of unemployment for long periods of timeb the economy is self-correcting in response to shocksc the government will need to intervene in the economy frequentlyd the best type of economy is centrally planned and run by the statee the economy will experience wild swings in output and employment

____ 39 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment____ 40 Keynesian economists believe that government intervention in the economy is necessary becausea prices are flexible and allow the economy to quickly return to full employmentb the long run is more important than the short run and economic policy works only in the long runc savings is a crucial part of economic growth and investmentd prices are sticky and prevent the economy from moving toward full employmente supply is more important than demand in determining economic growth and output

The aggregate demand curve slopes downward because

When the price level rises __________ declines from the wealth effect __________ declines from the interest rate effect and __________ decline(s) from the international trade effect

When a change in the price level leads to a change in saving this is known as the

The interest rate effect results from people

You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________ The long-run aggregate supply curve is

A rightward shift of the long-run aggregate supply curve means there has been

Which of the following would cause an increase in long-run aggregate supply

Increases in productivity will

Input prices are _________ in the short run and _________ in the long run

The relationship between sticky input prices and flexible output prices explains

When the general price level rises and firms decide not to change their prices in the short run this can be attributed to

Which of the following would affect both short-run and long-run aggregate supply

Refer to the following figure to answer the questions that follow Based on the figure which points represent long-run equilibrium

Supply shocks cause short-run aggregate supply to

An increase in aggregate demand is harmful because

Suppose the government permanently reduces spending in an effort to reduce the budget deficit In the new long-run equilibrium output will __________ and the price level will __________

Suppose housing values fall during a recession In the short run

Which of the following would cause an increase in the price level in the long run

Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asDuring the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of whichOne similarity between the Great Recession and the Great Depression is that in both episodes

Relevant population 215Employed 138Unemployed 9

According to the table the labor force isThe graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)As a result of aggregate demand and long-run aggregate supply decreasing wecan see that the price level _________ and real gross domestic product (GDP) _________Classical economists believe that government intervention in the economy is unnecessary becauseAssume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in responseHolding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeNina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be consideredWhich of the following statements about structural unemployment is true

Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseWhen the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease becauseThe Austrian School Economists believe all in all of the following except

Keynesian economists believe that government intervention in the economy is necessary becauseKeynesian economists believe that the economy is unstable and tends toward cyclical unemployment becauseWhen 9000 banks failed during the Great Depression it caused aggregate demand to decrease becauseBased on the belief that prices are very flexible classical economists conclude thatFA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic systemKeynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseAccording to classical economists changes in aggregate demand have little effect on the overall economy and thereforeAustrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment

The inputs used to produce goods and services are also known asInflation occursTypically the consumer price index (CPI) is calculated byWhich of the following would be classified as human capitalIf a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 thenYou are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration thenIn 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that timeAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continentDoes the value of cleaning your house count toward the value of GDPIf the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos isFrom 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beWhich of the following conditions might cause the unemployment rate to be less than the natural rate of unemploymentWhich is the largest component of US GDPHigher rates of economic growth are negatively correlated withGDP is an important indicator because it is used as a measure of all of the following exceptReal GDP is GDP adjusted for changes in

Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeResidents of poor countries tend to have fewer automobiles per capita becauseThe textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is thatThe business cycle measuresAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in AfricaFrom 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeConsumption is approximately ________ of GDPWhen actual unemployment is less than its natural rateIf the consumer price index (CPI) was 100 in the period of 1982-1984 thenA computer company builds a new factory This is included in the ________ category of GDPWhich of the following represents the technology used in a classroomIf the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then itWhich of the following lists the three types of unemploymentA(n) _____________ in the amount of resources will tend to _____________ economic growthDuring a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asWhen George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County FloridaCompany X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP isDuring healthy economic periods cyclical unemploymentWhen you include discouraged workers and unemployed workers in calculations of the unemployment rateWhich of the following statements about the composition of the labor force is correctIf mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say thatAverage world income began to rapidly rise during the Industrial Revolution becauseIn 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would beLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryThe website that provides official inflation statistics isA(n) _____________ in capital goods should ____________ worker productivity

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

b the inflation ratec economic growthd government spendinge the rate at which capital depreciatesThe following figure which was discussed in class depicts the percentage of workers whose wages have not changed in the previous year Recall that the shaded areas mark the recessions Use the figure to answer the next question25 This figurehellipa shows that wages are less sticky during recessions than during expansionsb shows that wages are sticky because the percentage of people whose wages doesnt change is generally lowc shows that wages are sticky because the percentage of people whose wages doesnt change first increases then decreases during expansionsd shows that wages are sticky because the percentage of people whose wages doesnt change increases during recessionse doesnt show any thing in particular about wage stickiness26 If inflation turns out to be higher than expected this willa shift long run aggregate supply to the right‐b shift long run aggregate supply to the left‐c shift short run aggregate supply to the left‐d shift short run aggregate supply to the right‐e have no effect on aggregate supplyThe following figure depicts different possible curves for the United States Refer to the figure to answer the next two questions27 Beginning in the equilibrium point i (marked with a circle) where would the economy move to in the short run if the value of the dollar increased‐a Point fb Point gc Point hd Point je Point l28 Beginning in the equilibrium point i (marked with a circle) where would the economy move to in the long run if the rule of law improves‐a Point bb Point hc Point ld Point oe Point p29 Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________a decrease decreaseb decrease increasec decrease remain unchangedd remain unchanged remain unchangede remain unchanged increase30 An increase in long run aggregate supply can be expected to _________ the price level and ‐_________ the natural rate of unemploymenta have no effect on have no effect onb have no effect on increasec decrease decreased decrease have no effect one increase have no effect on31 During the Great Recession there was a financial crisis a stock market crash and a collapse

in housing prices all of whicha contributed to a very long and deep recessionb helped the US economy perform better than the economies of other countriesc kept unemployment from rising above the historical averaged resulted in a very short and mild recessione prevented the United States from experiencing a decline in real gross domestic product (GDP)32 The Great Recession was similar to other recessions since World War II in thata the rate of unemployment increased and then decreased at a later timeb the rate of inflation was extremely highc real gross domestic product (GDP) rapidly increased and then leveled offd the rate of economic growth was unchangede the rate of unemployment decreased and then increased at a later time33 One of the reasons why the Great Depression was so severe is thata stock prices increased during the Great Depressionb the US government increased taxesc the US government allowed the money supply to increased the unemployment rate decreasede expected income increased34 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment35 Keynesian economists believe thata the market tends toward stability and full employmentb the economy needs help in moving back to full employmentc savings is crucial to growthd prices are flexiblee the long run is more important than the short run

Identify the choice that best completes the statement or answers the question____ 1 Which combination of events could have caused the equilibrium interest rate to rise and the equilibrium quantity of loanable funds (both borrowed and lent) to falla A baby boom begins and investor confidence fallsb A baby boom begins and investor confidence risesc People have lower time preferences and governments run larger deficitsd People have lower time preferences and capital is more productivee A baby boom begins and people have higher time preferences____ 2 If foreign entities save more and businesses become more optimistic about the future we would correctly say thata the new equilibrium quantity of loanable funds would decrease but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the originalb the new equilibrium quantity of loanable funds would increase but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the originalc the new equilibrium quantity of loanable funds would be indeterminate but we

would be certain the new equilibrium interest rate would be higher than the originald the new equilibrium quantity of loanable funds would be indeterminate but we would be certain the new equilibrium interest rate would be less than the originale based on this information and because both changes would affect the demand for loanable funds in the opposite way we would be unable to say anything about the relationship of the new equilibrium interest rate and quantity to the original interest rate and quantity____ 3 The demand and supply of loanable funds decrease simultaneously This would causea the equilibrium quantity of loanable funds to decrease and the equilibrium interest rate to increaseb the equilibrium quantity of loanable funds to decrease but the effect on the equilibrium interest rate would be uncertainc the equilibrium quantity of loanable funds to increase but the effect on the equilibrium interest rate would be uncertaind the equilibrium interest rate to increase but the new equilibrium quantity would be uncertaine the equilibrium interest rate to decrease but the new equilibrium quantity would be uncertain____ 4 If interest rates risea firms are willing to borrow more money because their rates of return have increasedb households are willing to borrow more money because their rates of return have increasedc firms are willing to borrow less money because their cost of borrowing has increasedd foreign entities are willing to borrow more money because their rates of return have increasede it must mean that inflation has decreased because nominal rates have increased____ 5 If life expectancy falls due to AIDS and other diseases we would expecta time preference to fall and savings to increaseb time preference to rise and savings to increasec time preference to fall and savings to decreased time preference to rise and savings to decreasee interest rates to fall to zero____ 6 If the demographics of a nation change and the average age of the nation is approaching middle age we would expecta savings to increaseb savings to decreasec borrowing to declined consumption variation to increasee savings as a percentage of income to fall____ 7 One could correctly argue that higher capital productivitya would increase the value of capital and the supply of loanable fundsb would reduce the value of capital and the supply of loanable fundsc would only affect interest rates in the long rund would increase the value of capital and the demand for loanable fundse would reduce the value of capital and the demand for loanable fundsConsider the following scenario when answering the questions that followYour friend Carson is starting a new photography business that specializes in

photographs of Central Park in New York City Because his business is new and risky he is unable to obtain a loan from the local bank On June 21 2013 you agree to pay a price of $4000 for a bond from Carson You will receive $5000 in return on June 21 2014____ 8 The face value of the bond mentioned in the scenario is equal toa $9000b $1000c $4000d $5000e $20000____ 9 The interest rate of the bond mentioned in the scenario is equal toa 80b 20c 25d 10e 5____ 10 If the dollar price of a bond is $7500 and the face value of the bond is $8000 the interest rate is equal toa 7b 667c 625d 14e 5____ 11 Consider a supply and demand model of bonds for company X Which of the following would you expect to happen if the default risk decreases for company Xa The demand curve will shift to the right causing the price of the bond to riseb The demand curve will shift to the left causing the price of the bond to risec The supply curve will shift to the right causing the price of the bond to falld The demand curve will shift the left causing the price of the bond to falle The supply curve will shift to the left causing the price of the bond to rise____ 12 Your friend Jamarcus is an award-winning chef Jamarcus wants to start his own restaurant in Denver but is unable to obtain a loan from his local bank Jamarcus has decided to issue a one-year bond with a face value of $6000 and an interest rate of 10 If you wanted to buy this bond what would be the initial pricea $660000b $550050c $600000d $500000e $545454____ 13 Approximately how much of US federal debt was held by foreignersa 90b 6c 32d 17e 55____ 14 What would you expect to happen to the supply and demand model for Treasury securities if a new law makes it easier for foreign investment in the United Statesa The demand curve shifts to the right causing the price of Treasury securities to increaseb The demand and supply curves shift to the right causing the price of Treasury

securities to increasec The demand and supply curves shift to the left causing the price of Treasury securities to decreased The demand curve shifts to the right causing the price of Treasury securities to decreasee The supply curve shifts to the left causing the price of Treasury securities to increase____ 15 Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continenta Economic growth would not be affected medical aid does not contribute to gross domestic product (GDP)b Economic growth would decrease because there would be more people to feed but no additional resourcesc Economic growth would not be affected because children do not contribute to economic growthd Economic growth would increase because the health and productivity of the future labor supply would increasee Economic growth would increase because more children would survive which represents a technological advance____ 16 When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becausea holding real GDP constant an increase in the population actually lowers average standards of livingb an increase in population will tend to reduce nominal GDPc changes in population tend to have no effect on standards of livingd holding real GDP constant an increase in the population actually raises average standards of livinge an increase in the population will tend to decrease average prices____ 17 Between 2006 and 2010 per capita real gross domestic product (GDP) in India grew at an average rate of 711 per year Which of the following factors would have contributed most to this rapid escalation in growtha advances in technologyb increases in government regulationsc decrease in education standardsd a significant increase in taxese restrictions on immigration____ 18 Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________a infant mortality life expectancyb Internet users automobile ownershipc educational achievement physicians per capitad Internet users infant mortalitye cellular phone use personal computer use____ 19 The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP area the percent change in prices and the rate of investmentb the percent change in prices and the rate of population growthc the rate of investment and the rate of savingsd the rate of population growth and the rate of savings

e the rate of investment and the rate of population growth____ 20 From 2006 to 2010 per capita real gross domestic product (GDP) in Poland grew an average of 471 per year At that rate according to the Rule of 70 in roughly how many years will the Polish economy double in sizea 76 yearsb 149 yearsc 121 yearsd 88 yearse 84 years____ 21 Which of the following factors is positively correlated with economic growtha collectively owned resourcesb high barriers to international tradec restrictions on immigrationd political stability and the rule of lawe high rates of inflationUse the following production function to answer the questions that follow____ 22 How many units of capital should be produced in order to achieve the steady statea 6b 5c 4d 3e There is not enough information to answer this question____ 23 If an economy is in the steady state thena net investment is zerob depreciation is zeroc investment is zerod the marginal product of capital is zeroe there are no diminishing returns____ 24 The relationship between international aid and economic growth for less developed countries isa positive in that more aid means more growthb negative in that less aid means less growthc indeterminate because very few countries have received international aidd positive when financial funds are sent to the less developed countries but negative when developed countries help build capital goods in these countriese nonexistent because some countries have received aid but realized no growth whereas others have grown but have received no aid____ 25 Which of the following describes the correct direction of causalitya economic growth growth-friendly incentives growth-friendly institutionsb growth-friendly incentives economic growth growth-friendly institutionsc growth-friendly institutions growth-friendly incentives economic growthd economic growth growth-friendly institutions growth-friendly incentivese growth-friendly institutions economic growth growth-friendly incentives____ 26 Suppose that the level of capital in the economy is 200 units the depreciation rate is 10 and the level of investment is equal to 10 units In this casea the economy is in a steady stateb investment is less than net investmentc investment is equal to net investmentd investment is greater than net investmente the level of output will increase

____ 27 Country A has been growing at a rate of 7 per year whereas country B has been growing at a rate of 2 per year Assume that both countries have the same production function savings rate and depreciation rateThe Solow growth model would predict thata country A is wealthier than country Bb both countries are in a steady statec country B is closer to its steady state than country Ad country A is closer to its steady state than country Be these two countries will never converge at the same level of wealth____ 28 If all countries are going to converge at the same level of real gross domestic product (GDP) per capita as predicted by the Solow growth model and assuming that allcountries have the same production function savings rate and depreciation rate thena they must all have identical production functionsb they must all have the same number of people in the populationc they must all have the same size of labor forced they must all have the same level of real GDPe they must all end up with a marginal product of zero____ 29 Which of the following would cause a downward movement along the aggregate demand curvea A rise in the price level makes US goods relatively more expensive than foreign goodsb The value of real wealth risesc There is a decline in the expected price leveld A fall in the price level increases savings and lowers interest ratese The value of the dollar decreases____ 30 Which of the following would shift aggregate demand to the lefta A study predicts that the recent drought will increase food prices this winterb There is a rise in the median price of housesc A rise in the price level reduces saving and increases interest ratesd The value of the dollar increasese The European Union emerges from recession____ 31 Supply shocks cause short-run aggregate supply toa remain unchanged in both the short run and the long runb decrease in both the short run and the long runc decrease in the short run and increase in the long rund increase in both the short run and the long rune return to its original position in the long runRefer to the following figure to answer the questions that follow____ 32 Based on the figure if the economy starts at point A and ends up at point E then in the short run there wasa a decrease in aggregate demandb an increase in aggregate demandc a decrease in short-run aggregate supplyd an increase in short-run aggregate supplye an increase in long-run aggregate supply____ 33 Based on the figure starting at point A if there is an increase in government spending then in the short run we would move to point __________ and in the long run to point __________a B Eb B Cc D Ad D C

e B A____ 34 An increase in short-run aggregate supply could be the result ofa an increase in the general price levelb a negative supply shockc an increase in the price of oild an increase in consumption spendinge a reduction in expected future prices____ 35 Suppose that you have the following information about the economy where all figures are in millions of dollarsFull employment output = $2000Consumption = $1200Investment = $400Government spending = $500Net exports = minus$200Because short-run output is __________ full employment output in the long run we would expect the price level to __________a less than riseb less than fallc greater than rised greater than falle equal to remain unchangedUse the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)____ 36 During the Great Recession real gross domestic product (GDP) fell yet the price level was largely unchanged as depicted in the graph Because of this we know thata both aggregate demand and long-run aggregate supply increased during the recessionb aggregate demand and long-run aggregate supply both decreased during the recessionc aggregate demand decreased and long-run aggregate supply increased during the recessiond aggregate demand decreased and short-run aggregate supply increased during the recessione long-run aggregate supply increased and short-run aggregate supply decreased during the recession____ 37 During the Great Depression aggregate demand in the US economy decreased As a result the unemployment rate _________ and real gross domestic product (GDP) _________a increased decreasedb decreased remained unchangedc increased increasedd decreased decreasede remained unchanged increased____ 38 Classical economists believe that prices are completely flexible from which they conclude thata the economy can become stuck at high levels of unemployment for long periods of timeb the economy is self-correcting in response to shocksc the government will need to intervene in the economy frequentlyd the best type of economy is centrally planned and run by the statee the economy will experience wild swings in output and employment

____ 39 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment____ 40 Keynesian economists believe that government intervention in the economy is necessary becausea prices are flexible and allow the economy to quickly return to full employmentb the long run is more important than the short run and economic policy works only in the long runc savings is a crucial part of economic growth and investmentd prices are sticky and prevent the economy from moving toward full employmente supply is more important than demand in determining economic growth and output

The aggregate demand curve slopes downward because

When the price level rises __________ declines from the wealth effect __________ declines from the interest rate effect and __________ decline(s) from the international trade effect

When a change in the price level leads to a change in saving this is known as the

The interest rate effect results from people

You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________ The long-run aggregate supply curve is

A rightward shift of the long-run aggregate supply curve means there has been

Which of the following would cause an increase in long-run aggregate supply

Increases in productivity will

Input prices are _________ in the short run and _________ in the long run

The relationship between sticky input prices and flexible output prices explains

When the general price level rises and firms decide not to change their prices in the short run this can be attributed to

Which of the following would affect both short-run and long-run aggregate supply

Refer to the following figure to answer the questions that follow Based on the figure which points represent long-run equilibrium

Supply shocks cause short-run aggregate supply to

An increase in aggregate demand is harmful because

Suppose the government permanently reduces spending in an effort to reduce the budget deficit In the new long-run equilibrium output will __________ and the price level will __________

Suppose housing values fall during a recession In the short run

Which of the following would cause an increase in the price level in the long run

Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asDuring the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of whichOne similarity between the Great Recession and the Great Depression is that in both episodes

Relevant population 215Employed 138Unemployed 9

According to the table the labor force isThe graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)As a result of aggregate demand and long-run aggregate supply decreasing wecan see that the price level _________ and real gross domestic product (GDP) _________Classical economists believe that government intervention in the economy is unnecessary becauseAssume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in responseHolding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeNina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be consideredWhich of the following statements about structural unemployment is true

Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseWhen the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease becauseThe Austrian School Economists believe all in all of the following except

Keynesian economists believe that government intervention in the economy is necessary becauseKeynesian economists believe that the economy is unstable and tends toward cyclical unemployment becauseWhen 9000 banks failed during the Great Depression it caused aggregate demand to decrease becauseBased on the belief that prices are very flexible classical economists conclude thatFA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic systemKeynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseAccording to classical economists changes in aggregate demand have little effect on the overall economy and thereforeAustrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment

The inputs used to produce goods and services are also known asInflation occursTypically the consumer price index (CPI) is calculated byWhich of the following would be classified as human capitalIf a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 thenYou are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration thenIn 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that timeAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continentDoes the value of cleaning your house count toward the value of GDPIf the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos isFrom 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beWhich of the following conditions might cause the unemployment rate to be less than the natural rate of unemploymentWhich is the largest component of US GDPHigher rates of economic growth are negatively correlated withGDP is an important indicator because it is used as a measure of all of the following exceptReal GDP is GDP adjusted for changes in

Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeResidents of poor countries tend to have fewer automobiles per capita becauseThe textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is thatThe business cycle measuresAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in AfricaFrom 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeConsumption is approximately ________ of GDPWhen actual unemployment is less than its natural rateIf the consumer price index (CPI) was 100 in the period of 1982-1984 thenA computer company builds a new factory This is included in the ________ category of GDPWhich of the following represents the technology used in a classroomIf the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then itWhich of the following lists the three types of unemploymentA(n) _____________ in the amount of resources will tend to _____________ economic growthDuring a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asWhen George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County FloridaCompany X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP isDuring healthy economic periods cyclical unemploymentWhen you include discouraged workers and unemployed workers in calculations of the unemployment rateWhich of the following statements about the composition of the labor force is correctIf mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say thatAverage world income began to rapidly rise during the Industrial Revolution becauseIn 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would beLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryThe website that provides official inflation statistics isA(n) _____________ in capital goods should ____________ worker productivity

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

in housing prices all of whicha contributed to a very long and deep recessionb helped the US economy perform better than the economies of other countriesc kept unemployment from rising above the historical averaged resulted in a very short and mild recessione prevented the United States from experiencing a decline in real gross domestic product (GDP)32 The Great Recession was similar to other recessions since World War II in thata the rate of unemployment increased and then decreased at a later timeb the rate of inflation was extremely highc real gross domestic product (GDP) rapidly increased and then leveled offd the rate of economic growth was unchangede the rate of unemployment decreased and then increased at a later time33 One of the reasons why the Great Depression was so severe is thata stock prices increased during the Great Depressionb the US government increased taxesc the US government allowed the money supply to increased the unemployment rate decreasede expected income increased34 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment35 Keynesian economists believe thata the market tends toward stability and full employmentb the economy needs help in moving back to full employmentc savings is crucial to growthd prices are flexiblee the long run is more important than the short run

Identify the choice that best completes the statement or answers the question____ 1 Which combination of events could have caused the equilibrium interest rate to rise and the equilibrium quantity of loanable funds (both borrowed and lent) to falla A baby boom begins and investor confidence fallsb A baby boom begins and investor confidence risesc People have lower time preferences and governments run larger deficitsd People have lower time preferences and capital is more productivee A baby boom begins and people have higher time preferences____ 2 If foreign entities save more and businesses become more optimistic about the future we would correctly say thata the new equilibrium quantity of loanable funds would decrease but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the originalb the new equilibrium quantity of loanable funds would increase but we would be unable to tell if the new equilibrium interest rate would be higher or lower than the originalc the new equilibrium quantity of loanable funds would be indeterminate but we

would be certain the new equilibrium interest rate would be higher than the originald the new equilibrium quantity of loanable funds would be indeterminate but we would be certain the new equilibrium interest rate would be less than the originale based on this information and because both changes would affect the demand for loanable funds in the opposite way we would be unable to say anything about the relationship of the new equilibrium interest rate and quantity to the original interest rate and quantity____ 3 The demand and supply of loanable funds decrease simultaneously This would causea the equilibrium quantity of loanable funds to decrease and the equilibrium interest rate to increaseb the equilibrium quantity of loanable funds to decrease but the effect on the equilibrium interest rate would be uncertainc the equilibrium quantity of loanable funds to increase but the effect on the equilibrium interest rate would be uncertaind the equilibrium interest rate to increase but the new equilibrium quantity would be uncertaine the equilibrium interest rate to decrease but the new equilibrium quantity would be uncertain____ 4 If interest rates risea firms are willing to borrow more money because their rates of return have increasedb households are willing to borrow more money because their rates of return have increasedc firms are willing to borrow less money because their cost of borrowing has increasedd foreign entities are willing to borrow more money because their rates of return have increasede it must mean that inflation has decreased because nominal rates have increased____ 5 If life expectancy falls due to AIDS and other diseases we would expecta time preference to fall and savings to increaseb time preference to rise and savings to increasec time preference to fall and savings to decreased time preference to rise and savings to decreasee interest rates to fall to zero____ 6 If the demographics of a nation change and the average age of the nation is approaching middle age we would expecta savings to increaseb savings to decreasec borrowing to declined consumption variation to increasee savings as a percentage of income to fall____ 7 One could correctly argue that higher capital productivitya would increase the value of capital and the supply of loanable fundsb would reduce the value of capital and the supply of loanable fundsc would only affect interest rates in the long rund would increase the value of capital and the demand for loanable fundse would reduce the value of capital and the demand for loanable fundsConsider the following scenario when answering the questions that followYour friend Carson is starting a new photography business that specializes in

photographs of Central Park in New York City Because his business is new and risky he is unable to obtain a loan from the local bank On June 21 2013 you agree to pay a price of $4000 for a bond from Carson You will receive $5000 in return on June 21 2014____ 8 The face value of the bond mentioned in the scenario is equal toa $9000b $1000c $4000d $5000e $20000____ 9 The interest rate of the bond mentioned in the scenario is equal toa 80b 20c 25d 10e 5____ 10 If the dollar price of a bond is $7500 and the face value of the bond is $8000 the interest rate is equal toa 7b 667c 625d 14e 5____ 11 Consider a supply and demand model of bonds for company X Which of the following would you expect to happen if the default risk decreases for company Xa The demand curve will shift to the right causing the price of the bond to riseb The demand curve will shift to the left causing the price of the bond to risec The supply curve will shift to the right causing the price of the bond to falld The demand curve will shift the left causing the price of the bond to falle The supply curve will shift to the left causing the price of the bond to rise____ 12 Your friend Jamarcus is an award-winning chef Jamarcus wants to start his own restaurant in Denver but is unable to obtain a loan from his local bank Jamarcus has decided to issue a one-year bond with a face value of $6000 and an interest rate of 10 If you wanted to buy this bond what would be the initial pricea $660000b $550050c $600000d $500000e $545454____ 13 Approximately how much of US federal debt was held by foreignersa 90b 6c 32d 17e 55____ 14 What would you expect to happen to the supply and demand model for Treasury securities if a new law makes it easier for foreign investment in the United Statesa The demand curve shifts to the right causing the price of Treasury securities to increaseb The demand and supply curves shift to the right causing the price of Treasury

securities to increasec The demand and supply curves shift to the left causing the price of Treasury securities to decreased The demand curve shifts to the right causing the price of Treasury securities to decreasee The supply curve shifts to the left causing the price of Treasury securities to increase____ 15 Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continenta Economic growth would not be affected medical aid does not contribute to gross domestic product (GDP)b Economic growth would decrease because there would be more people to feed but no additional resourcesc Economic growth would not be affected because children do not contribute to economic growthd Economic growth would increase because the health and productivity of the future labor supply would increasee Economic growth would increase because more children would survive which represents a technological advance____ 16 When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becausea holding real GDP constant an increase in the population actually lowers average standards of livingb an increase in population will tend to reduce nominal GDPc changes in population tend to have no effect on standards of livingd holding real GDP constant an increase in the population actually raises average standards of livinge an increase in the population will tend to decrease average prices____ 17 Between 2006 and 2010 per capita real gross domestic product (GDP) in India grew at an average rate of 711 per year Which of the following factors would have contributed most to this rapid escalation in growtha advances in technologyb increases in government regulationsc decrease in education standardsd a significant increase in taxese restrictions on immigration____ 18 Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________a infant mortality life expectancyb Internet users automobile ownershipc educational achievement physicians per capitad Internet users infant mortalitye cellular phone use personal computer use____ 19 The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP area the percent change in prices and the rate of investmentb the percent change in prices and the rate of population growthc the rate of investment and the rate of savingsd the rate of population growth and the rate of savings

e the rate of investment and the rate of population growth____ 20 From 2006 to 2010 per capita real gross domestic product (GDP) in Poland grew an average of 471 per year At that rate according to the Rule of 70 in roughly how many years will the Polish economy double in sizea 76 yearsb 149 yearsc 121 yearsd 88 yearse 84 years____ 21 Which of the following factors is positively correlated with economic growtha collectively owned resourcesb high barriers to international tradec restrictions on immigrationd political stability and the rule of lawe high rates of inflationUse the following production function to answer the questions that follow____ 22 How many units of capital should be produced in order to achieve the steady statea 6b 5c 4d 3e There is not enough information to answer this question____ 23 If an economy is in the steady state thena net investment is zerob depreciation is zeroc investment is zerod the marginal product of capital is zeroe there are no diminishing returns____ 24 The relationship between international aid and economic growth for less developed countries isa positive in that more aid means more growthb negative in that less aid means less growthc indeterminate because very few countries have received international aidd positive when financial funds are sent to the less developed countries but negative when developed countries help build capital goods in these countriese nonexistent because some countries have received aid but realized no growth whereas others have grown but have received no aid____ 25 Which of the following describes the correct direction of causalitya economic growth growth-friendly incentives growth-friendly institutionsb growth-friendly incentives economic growth growth-friendly institutionsc growth-friendly institutions growth-friendly incentives economic growthd economic growth growth-friendly institutions growth-friendly incentivese growth-friendly institutions economic growth growth-friendly incentives____ 26 Suppose that the level of capital in the economy is 200 units the depreciation rate is 10 and the level of investment is equal to 10 units In this casea the economy is in a steady stateb investment is less than net investmentc investment is equal to net investmentd investment is greater than net investmente the level of output will increase

____ 27 Country A has been growing at a rate of 7 per year whereas country B has been growing at a rate of 2 per year Assume that both countries have the same production function savings rate and depreciation rateThe Solow growth model would predict thata country A is wealthier than country Bb both countries are in a steady statec country B is closer to its steady state than country Ad country A is closer to its steady state than country Be these two countries will never converge at the same level of wealth____ 28 If all countries are going to converge at the same level of real gross domestic product (GDP) per capita as predicted by the Solow growth model and assuming that allcountries have the same production function savings rate and depreciation rate thena they must all have identical production functionsb they must all have the same number of people in the populationc they must all have the same size of labor forced they must all have the same level of real GDPe they must all end up with a marginal product of zero____ 29 Which of the following would cause a downward movement along the aggregate demand curvea A rise in the price level makes US goods relatively more expensive than foreign goodsb The value of real wealth risesc There is a decline in the expected price leveld A fall in the price level increases savings and lowers interest ratese The value of the dollar decreases____ 30 Which of the following would shift aggregate demand to the lefta A study predicts that the recent drought will increase food prices this winterb There is a rise in the median price of housesc A rise in the price level reduces saving and increases interest ratesd The value of the dollar increasese The European Union emerges from recession____ 31 Supply shocks cause short-run aggregate supply toa remain unchanged in both the short run and the long runb decrease in both the short run and the long runc decrease in the short run and increase in the long rund increase in both the short run and the long rune return to its original position in the long runRefer to the following figure to answer the questions that follow____ 32 Based on the figure if the economy starts at point A and ends up at point E then in the short run there wasa a decrease in aggregate demandb an increase in aggregate demandc a decrease in short-run aggregate supplyd an increase in short-run aggregate supplye an increase in long-run aggregate supply____ 33 Based on the figure starting at point A if there is an increase in government spending then in the short run we would move to point __________ and in the long run to point __________a B Eb B Cc D Ad D C

e B A____ 34 An increase in short-run aggregate supply could be the result ofa an increase in the general price levelb a negative supply shockc an increase in the price of oild an increase in consumption spendinge a reduction in expected future prices____ 35 Suppose that you have the following information about the economy where all figures are in millions of dollarsFull employment output = $2000Consumption = $1200Investment = $400Government spending = $500Net exports = minus$200Because short-run output is __________ full employment output in the long run we would expect the price level to __________a less than riseb less than fallc greater than rised greater than falle equal to remain unchangedUse the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)____ 36 During the Great Recession real gross domestic product (GDP) fell yet the price level was largely unchanged as depicted in the graph Because of this we know thata both aggregate demand and long-run aggregate supply increased during the recessionb aggregate demand and long-run aggregate supply both decreased during the recessionc aggregate demand decreased and long-run aggregate supply increased during the recessiond aggregate demand decreased and short-run aggregate supply increased during the recessione long-run aggregate supply increased and short-run aggregate supply decreased during the recession____ 37 During the Great Depression aggregate demand in the US economy decreased As a result the unemployment rate _________ and real gross domestic product (GDP) _________a increased decreasedb decreased remained unchangedc increased increasedd decreased decreasede remained unchanged increased____ 38 Classical economists believe that prices are completely flexible from which they conclude thata the economy can become stuck at high levels of unemployment for long periods of timeb the economy is self-correcting in response to shocksc the government will need to intervene in the economy frequentlyd the best type of economy is centrally planned and run by the statee the economy will experience wild swings in output and employment

____ 39 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment____ 40 Keynesian economists believe that government intervention in the economy is necessary becausea prices are flexible and allow the economy to quickly return to full employmentb the long run is more important than the short run and economic policy works only in the long runc savings is a crucial part of economic growth and investmentd prices are sticky and prevent the economy from moving toward full employmente supply is more important than demand in determining economic growth and output

The aggregate demand curve slopes downward because

When the price level rises __________ declines from the wealth effect __________ declines from the interest rate effect and __________ decline(s) from the international trade effect

When a change in the price level leads to a change in saving this is known as the

The interest rate effect results from people

You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________ The long-run aggregate supply curve is

A rightward shift of the long-run aggregate supply curve means there has been

Which of the following would cause an increase in long-run aggregate supply

Increases in productivity will

Input prices are _________ in the short run and _________ in the long run

The relationship between sticky input prices and flexible output prices explains

When the general price level rises and firms decide not to change their prices in the short run this can be attributed to

Which of the following would affect both short-run and long-run aggregate supply

Refer to the following figure to answer the questions that follow Based on the figure which points represent long-run equilibrium

Supply shocks cause short-run aggregate supply to

An increase in aggregate demand is harmful because

Suppose the government permanently reduces spending in an effort to reduce the budget deficit In the new long-run equilibrium output will __________ and the price level will __________

Suppose housing values fall during a recession In the short run

Which of the following would cause an increase in the price level in the long run

Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asDuring the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of whichOne similarity between the Great Recession and the Great Depression is that in both episodes

Relevant population 215Employed 138Unemployed 9

According to the table the labor force isThe graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)As a result of aggregate demand and long-run aggregate supply decreasing wecan see that the price level _________ and real gross domestic product (GDP) _________Classical economists believe that government intervention in the economy is unnecessary becauseAssume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in responseHolding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeNina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be consideredWhich of the following statements about structural unemployment is true

Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseWhen the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease becauseThe Austrian School Economists believe all in all of the following except

Keynesian economists believe that government intervention in the economy is necessary becauseKeynesian economists believe that the economy is unstable and tends toward cyclical unemployment becauseWhen 9000 banks failed during the Great Depression it caused aggregate demand to decrease becauseBased on the belief that prices are very flexible classical economists conclude thatFA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic systemKeynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseAccording to classical economists changes in aggregate demand have little effect on the overall economy and thereforeAustrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment

The inputs used to produce goods and services are also known asInflation occursTypically the consumer price index (CPI) is calculated byWhich of the following would be classified as human capitalIf a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 thenYou are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration thenIn 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that timeAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continentDoes the value of cleaning your house count toward the value of GDPIf the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos isFrom 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beWhich of the following conditions might cause the unemployment rate to be less than the natural rate of unemploymentWhich is the largest component of US GDPHigher rates of economic growth are negatively correlated withGDP is an important indicator because it is used as a measure of all of the following exceptReal GDP is GDP adjusted for changes in

Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeResidents of poor countries tend to have fewer automobiles per capita becauseThe textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is thatThe business cycle measuresAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in AfricaFrom 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeConsumption is approximately ________ of GDPWhen actual unemployment is less than its natural rateIf the consumer price index (CPI) was 100 in the period of 1982-1984 thenA computer company builds a new factory This is included in the ________ category of GDPWhich of the following represents the technology used in a classroomIf the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then itWhich of the following lists the three types of unemploymentA(n) _____________ in the amount of resources will tend to _____________ economic growthDuring a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asWhen George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County FloridaCompany X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP isDuring healthy economic periods cyclical unemploymentWhen you include discouraged workers and unemployed workers in calculations of the unemployment rateWhich of the following statements about the composition of the labor force is correctIf mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say thatAverage world income began to rapidly rise during the Industrial Revolution becauseIn 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would beLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryThe website that provides official inflation statistics isA(n) _____________ in capital goods should ____________ worker productivity

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

would be certain the new equilibrium interest rate would be higher than the originald the new equilibrium quantity of loanable funds would be indeterminate but we would be certain the new equilibrium interest rate would be less than the originale based on this information and because both changes would affect the demand for loanable funds in the opposite way we would be unable to say anything about the relationship of the new equilibrium interest rate and quantity to the original interest rate and quantity____ 3 The demand and supply of loanable funds decrease simultaneously This would causea the equilibrium quantity of loanable funds to decrease and the equilibrium interest rate to increaseb the equilibrium quantity of loanable funds to decrease but the effect on the equilibrium interest rate would be uncertainc the equilibrium quantity of loanable funds to increase but the effect on the equilibrium interest rate would be uncertaind the equilibrium interest rate to increase but the new equilibrium quantity would be uncertaine the equilibrium interest rate to decrease but the new equilibrium quantity would be uncertain____ 4 If interest rates risea firms are willing to borrow more money because their rates of return have increasedb households are willing to borrow more money because their rates of return have increasedc firms are willing to borrow less money because their cost of borrowing has increasedd foreign entities are willing to borrow more money because their rates of return have increasede it must mean that inflation has decreased because nominal rates have increased____ 5 If life expectancy falls due to AIDS and other diseases we would expecta time preference to fall and savings to increaseb time preference to rise and savings to increasec time preference to fall and savings to decreased time preference to rise and savings to decreasee interest rates to fall to zero____ 6 If the demographics of a nation change and the average age of the nation is approaching middle age we would expecta savings to increaseb savings to decreasec borrowing to declined consumption variation to increasee savings as a percentage of income to fall____ 7 One could correctly argue that higher capital productivitya would increase the value of capital and the supply of loanable fundsb would reduce the value of capital and the supply of loanable fundsc would only affect interest rates in the long rund would increase the value of capital and the demand for loanable fundse would reduce the value of capital and the demand for loanable fundsConsider the following scenario when answering the questions that followYour friend Carson is starting a new photography business that specializes in

photographs of Central Park in New York City Because his business is new and risky he is unable to obtain a loan from the local bank On June 21 2013 you agree to pay a price of $4000 for a bond from Carson You will receive $5000 in return on June 21 2014____ 8 The face value of the bond mentioned in the scenario is equal toa $9000b $1000c $4000d $5000e $20000____ 9 The interest rate of the bond mentioned in the scenario is equal toa 80b 20c 25d 10e 5____ 10 If the dollar price of a bond is $7500 and the face value of the bond is $8000 the interest rate is equal toa 7b 667c 625d 14e 5____ 11 Consider a supply and demand model of bonds for company X Which of the following would you expect to happen if the default risk decreases for company Xa The demand curve will shift to the right causing the price of the bond to riseb The demand curve will shift to the left causing the price of the bond to risec The supply curve will shift to the right causing the price of the bond to falld The demand curve will shift the left causing the price of the bond to falle The supply curve will shift to the left causing the price of the bond to rise____ 12 Your friend Jamarcus is an award-winning chef Jamarcus wants to start his own restaurant in Denver but is unable to obtain a loan from his local bank Jamarcus has decided to issue a one-year bond with a face value of $6000 and an interest rate of 10 If you wanted to buy this bond what would be the initial pricea $660000b $550050c $600000d $500000e $545454____ 13 Approximately how much of US federal debt was held by foreignersa 90b 6c 32d 17e 55____ 14 What would you expect to happen to the supply and demand model for Treasury securities if a new law makes it easier for foreign investment in the United Statesa The demand curve shifts to the right causing the price of Treasury securities to increaseb The demand and supply curves shift to the right causing the price of Treasury

securities to increasec The demand and supply curves shift to the left causing the price of Treasury securities to decreased The demand curve shifts to the right causing the price of Treasury securities to decreasee The supply curve shifts to the left causing the price of Treasury securities to increase____ 15 Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continenta Economic growth would not be affected medical aid does not contribute to gross domestic product (GDP)b Economic growth would decrease because there would be more people to feed but no additional resourcesc Economic growth would not be affected because children do not contribute to economic growthd Economic growth would increase because the health and productivity of the future labor supply would increasee Economic growth would increase because more children would survive which represents a technological advance____ 16 When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becausea holding real GDP constant an increase in the population actually lowers average standards of livingb an increase in population will tend to reduce nominal GDPc changes in population tend to have no effect on standards of livingd holding real GDP constant an increase in the population actually raises average standards of livinge an increase in the population will tend to decrease average prices____ 17 Between 2006 and 2010 per capita real gross domestic product (GDP) in India grew at an average rate of 711 per year Which of the following factors would have contributed most to this rapid escalation in growtha advances in technologyb increases in government regulationsc decrease in education standardsd a significant increase in taxese restrictions on immigration____ 18 Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________a infant mortality life expectancyb Internet users automobile ownershipc educational achievement physicians per capitad Internet users infant mortalitye cellular phone use personal computer use____ 19 The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP area the percent change in prices and the rate of investmentb the percent change in prices and the rate of population growthc the rate of investment and the rate of savingsd the rate of population growth and the rate of savings

e the rate of investment and the rate of population growth____ 20 From 2006 to 2010 per capita real gross domestic product (GDP) in Poland grew an average of 471 per year At that rate according to the Rule of 70 in roughly how many years will the Polish economy double in sizea 76 yearsb 149 yearsc 121 yearsd 88 yearse 84 years____ 21 Which of the following factors is positively correlated with economic growtha collectively owned resourcesb high barriers to international tradec restrictions on immigrationd political stability and the rule of lawe high rates of inflationUse the following production function to answer the questions that follow____ 22 How many units of capital should be produced in order to achieve the steady statea 6b 5c 4d 3e There is not enough information to answer this question____ 23 If an economy is in the steady state thena net investment is zerob depreciation is zeroc investment is zerod the marginal product of capital is zeroe there are no diminishing returns____ 24 The relationship between international aid and economic growth for less developed countries isa positive in that more aid means more growthb negative in that less aid means less growthc indeterminate because very few countries have received international aidd positive when financial funds are sent to the less developed countries but negative when developed countries help build capital goods in these countriese nonexistent because some countries have received aid but realized no growth whereas others have grown but have received no aid____ 25 Which of the following describes the correct direction of causalitya economic growth growth-friendly incentives growth-friendly institutionsb growth-friendly incentives economic growth growth-friendly institutionsc growth-friendly institutions growth-friendly incentives economic growthd economic growth growth-friendly institutions growth-friendly incentivese growth-friendly institutions economic growth growth-friendly incentives____ 26 Suppose that the level of capital in the economy is 200 units the depreciation rate is 10 and the level of investment is equal to 10 units In this casea the economy is in a steady stateb investment is less than net investmentc investment is equal to net investmentd investment is greater than net investmente the level of output will increase

____ 27 Country A has been growing at a rate of 7 per year whereas country B has been growing at a rate of 2 per year Assume that both countries have the same production function savings rate and depreciation rateThe Solow growth model would predict thata country A is wealthier than country Bb both countries are in a steady statec country B is closer to its steady state than country Ad country A is closer to its steady state than country Be these two countries will never converge at the same level of wealth____ 28 If all countries are going to converge at the same level of real gross domestic product (GDP) per capita as predicted by the Solow growth model and assuming that allcountries have the same production function savings rate and depreciation rate thena they must all have identical production functionsb they must all have the same number of people in the populationc they must all have the same size of labor forced they must all have the same level of real GDPe they must all end up with a marginal product of zero____ 29 Which of the following would cause a downward movement along the aggregate demand curvea A rise in the price level makes US goods relatively more expensive than foreign goodsb The value of real wealth risesc There is a decline in the expected price leveld A fall in the price level increases savings and lowers interest ratese The value of the dollar decreases____ 30 Which of the following would shift aggregate demand to the lefta A study predicts that the recent drought will increase food prices this winterb There is a rise in the median price of housesc A rise in the price level reduces saving and increases interest ratesd The value of the dollar increasese The European Union emerges from recession____ 31 Supply shocks cause short-run aggregate supply toa remain unchanged in both the short run and the long runb decrease in both the short run and the long runc decrease in the short run and increase in the long rund increase in both the short run and the long rune return to its original position in the long runRefer to the following figure to answer the questions that follow____ 32 Based on the figure if the economy starts at point A and ends up at point E then in the short run there wasa a decrease in aggregate demandb an increase in aggregate demandc a decrease in short-run aggregate supplyd an increase in short-run aggregate supplye an increase in long-run aggregate supply____ 33 Based on the figure starting at point A if there is an increase in government spending then in the short run we would move to point __________ and in the long run to point __________a B Eb B Cc D Ad D C

e B A____ 34 An increase in short-run aggregate supply could be the result ofa an increase in the general price levelb a negative supply shockc an increase in the price of oild an increase in consumption spendinge a reduction in expected future prices____ 35 Suppose that you have the following information about the economy where all figures are in millions of dollarsFull employment output = $2000Consumption = $1200Investment = $400Government spending = $500Net exports = minus$200Because short-run output is __________ full employment output in the long run we would expect the price level to __________a less than riseb less than fallc greater than rised greater than falle equal to remain unchangedUse the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)____ 36 During the Great Recession real gross domestic product (GDP) fell yet the price level was largely unchanged as depicted in the graph Because of this we know thata both aggregate demand and long-run aggregate supply increased during the recessionb aggregate demand and long-run aggregate supply both decreased during the recessionc aggregate demand decreased and long-run aggregate supply increased during the recessiond aggregate demand decreased and short-run aggregate supply increased during the recessione long-run aggregate supply increased and short-run aggregate supply decreased during the recession____ 37 During the Great Depression aggregate demand in the US economy decreased As a result the unemployment rate _________ and real gross domestic product (GDP) _________a increased decreasedb decreased remained unchangedc increased increasedd decreased decreasede remained unchanged increased____ 38 Classical economists believe that prices are completely flexible from which they conclude thata the economy can become stuck at high levels of unemployment for long periods of timeb the economy is self-correcting in response to shocksc the government will need to intervene in the economy frequentlyd the best type of economy is centrally planned and run by the statee the economy will experience wild swings in output and employment

____ 39 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment____ 40 Keynesian economists believe that government intervention in the economy is necessary becausea prices are flexible and allow the economy to quickly return to full employmentb the long run is more important than the short run and economic policy works only in the long runc savings is a crucial part of economic growth and investmentd prices are sticky and prevent the economy from moving toward full employmente supply is more important than demand in determining economic growth and output

The aggregate demand curve slopes downward because

When the price level rises __________ declines from the wealth effect __________ declines from the interest rate effect and __________ decline(s) from the international trade effect

When a change in the price level leads to a change in saving this is known as the

The interest rate effect results from people

You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________ The long-run aggregate supply curve is

A rightward shift of the long-run aggregate supply curve means there has been

Which of the following would cause an increase in long-run aggregate supply

Increases in productivity will

Input prices are _________ in the short run and _________ in the long run

The relationship between sticky input prices and flexible output prices explains

When the general price level rises and firms decide not to change their prices in the short run this can be attributed to

Which of the following would affect both short-run and long-run aggregate supply

Refer to the following figure to answer the questions that follow Based on the figure which points represent long-run equilibrium

Supply shocks cause short-run aggregate supply to

An increase in aggregate demand is harmful because

Suppose the government permanently reduces spending in an effort to reduce the budget deficit In the new long-run equilibrium output will __________ and the price level will __________

Suppose housing values fall during a recession In the short run

Which of the following would cause an increase in the price level in the long run

Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asDuring the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of whichOne similarity between the Great Recession and the Great Depression is that in both episodes

Relevant population 215Employed 138Unemployed 9

According to the table the labor force isThe graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)As a result of aggregate demand and long-run aggregate supply decreasing wecan see that the price level _________ and real gross domestic product (GDP) _________Classical economists believe that government intervention in the economy is unnecessary becauseAssume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in responseHolding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeNina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be consideredWhich of the following statements about structural unemployment is true

Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseWhen the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease becauseThe Austrian School Economists believe all in all of the following except

Keynesian economists believe that government intervention in the economy is necessary becauseKeynesian economists believe that the economy is unstable and tends toward cyclical unemployment becauseWhen 9000 banks failed during the Great Depression it caused aggregate demand to decrease becauseBased on the belief that prices are very flexible classical economists conclude thatFA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic systemKeynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseAccording to classical economists changes in aggregate demand have little effect on the overall economy and thereforeAustrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment

The inputs used to produce goods and services are also known asInflation occursTypically the consumer price index (CPI) is calculated byWhich of the following would be classified as human capitalIf a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 thenYou are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration thenIn 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that timeAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continentDoes the value of cleaning your house count toward the value of GDPIf the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos isFrom 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beWhich of the following conditions might cause the unemployment rate to be less than the natural rate of unemploymentWhich is the largest component of US GDPHigher rates of economic growth are negatively correlated withGDP is an important indicator because it is used as a measure of all of the following exceptReal GDP is GDP adjusted for changes in

Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeResidents of poor countries tend to have fewer automobiles per capita becauseThe textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is thatThe business cycle measuresAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in AfricaFrom 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeConsumption is approximately ________ of GDPWhen actual unemployment is less than its natural rateIf the consumer price index (CPI) was 100 in the period of 1982-1984 thenA computer company builds a new factory This is included in the ________ category of GDPWhich of the following represents the technology used in a classroomIf the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then itWhich of the following lists the three types of unemploymentA(n) _____________ in the amount of resources will tend to _____________ economic growthDuring a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asWhen George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County FloridaCompany X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP isDuring healthy economic periods cyclical unemploymentWhen you include discouraged workers and unemployed workers in calculations of the unemployment rateWhich of the following statements about the composition of the labor force is correctIf mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say thatAverage world income began to rapidly rise during the Industrial Revolution becauseIn 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would beLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryThe website that provides official inflation statistics isA(n) _____________ in capital goods should ____________ worker productivity

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

photographs of Central Park in New York City Because his business is new and risky he is unable to obtain a loan from the local bank On June 21 2013 you agree to pay a price of $4000 for a bond from Carson You will receive $5000 in return on June 21 2014____ 8 The face value of the bond mentioned in the scenario is equal toa $9000b $1000c $4000d $5000e $20000____ 9 The interest rate of the bond mentioned in the scenario is equal toa 80b 20c 25d 10e 5____ 10 If the dollar price of a bond is $7500 and the face value of the bond is $8000 the interest rate is equal toa 7b 667c 625d 14e 5____ 11 Consider a supply and demand model of bonds for company X Which of the following would you expect to happen if the default risk decreases for company Xa The demand curve will shift to the right causing the price of the bond to riseb The demand curve will shift to the left causing the price of the bond to risec The supply curve will shift to the right causing the price of the bond to falld The demand curve will shift the left causing the price of the bond to falle The supply curve will shift to the left causing the price of the bond to rise____ 12 Your friend Jamarcus is an award-winning chef Jamarcus wants to start his own restaurant in Denver but is unable to obtain a loan from his local bank Jamarcus has decided to issue a one-year bond with a face value of $6000 and an interest rate of 10 If you wanted to buy this bond what would be the initial pricea $660000b $550050c $600000d $500000e $545454____ 13 Approximately how much of US federal debt was held by foreignersa 90b 6c 32d 17e 55____ 14 What would you expect to happen to the supply and demand model for Treasury securities if a new law makes it easier for foreign investment in the United Statesa The demand curve shifts to the right causing the price of Treasury securities to increaseb The demand and supply curves shift to the right causing the price of Treasury

securities to increasec The demand and supply curves shift to the left causing the price of Treasury securities to decreased The demand curve shifts to the right causing the price of Treasury securities to decreasee The supply curve shifts to the left causing the price of Treasury securities to increase____ 15 Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continenta Economic growth would not be affected medical aid does not contribute to gross domestic product (GDP)b Economic growth would decrease because there would be more people to feed but no additional resourcesc Economic growth would not be affected because children do not contribute to economic growthd Economic growth would increase because the health and productivity of the future labor supply would increasee Economic growth would increase because more children would survive which represents a technological advance____ 16 When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becausea holding real GDP constant an increase in the population actually lowers average standards of livingb an increase in population will tend to reduce nominal GDPc changes in population tend to have no effect on standards of livingd holding real GDP constant an increase in the population actually raises average standards of livinge an increase in the population will tend to decrease average prices____ 17 Between 2006 and 2010 per capita real gross domestic product (GDP) in India grew at an average rate of 711 per year Which of the following factors would have contributed most to this rapid escalation in growtha advances in technologyb increases in government regulationsc decrease in education standardsd a significant increase in taxese restrictions on immigration____ 18 Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________a infant mortality life expectancyb Internet users automobile ownershipc educational achievement physicians per capitad Internet users infant mortalitye cellular phone use personal computer use____ 19 The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP area the percent change in prices and the rate of investmentb the percent change in prices and the rate of population growthc the rate of investment and the rate of savingsd the rate of population growth and the rate of savings

e the rate of investment and the rate of population growth____ 20 From 2006 to 2010 per capita real gross domestic product (GDP) in Poland grew an average of 471 per year At that rate according to the Rule of 70 in roughly how many years will the Polish economy double in sizea 76 yearsb 149 yearsc 121 yearsd 88 yearse 84 years____ 21 Which of the following factors is positively correlated with economic growtha collectively owned resourcesb high barriers to international tradec restrictions on immigrationd political stability and the rule of lawe high rates of inflationUse the following production function to answer the questions that follow____ 22 How many units of capital should be produced in order to achieve the steady statea 6b 5c 4d 3e There is not enough information to answer this question____ 23 If an economy is in the steady state thena net investment is zerob depreciation is zeroc investment is zerod the marginal product of capital is zeroe there are no diminishing returns____ 24 The relationship between international aid and economic growth for less developed countries isa positive in that more aid means more growthb negative in that less aid means less growthc indeterminate because very few countries have received international aidd positive when financial funds are sent to the less developed countries but negative when developed countries help build capital goods in these countriese nonexistent because some countries have received aid but realized no growth whereas others have grown but have received no aid____ 25 Which of the following describes the correct direction of causalitya economic growth growth-friendly incentives growth-friendly institutionsb growth-friendly incentives economic growth growth-friendly institutionsc growth-friendly institutions growth-friendly incentives economic growthd economic growth growth-friendly institutions growth-friendly incentivese growth-friendly institutions economic growth growth-friendly incentives____ 26 Suppose that the level of capital in the economy is 200 units the depreciation rate is 10 and the level of investment is equal to 10 units In this casea the economy is in a steady stateb investment is less than net investmentc investment is equal to net investmentd investment is greater than net investmente the level of output will increase

____ 27 Country A has been growing at a rate of 7 per year whereas country B has been growing at a rate of 2 per year Assume that both countries have the same production function savings rate and depreciation rateThe Solow growth model would predict thata country A is wealthier than country Bb both countries are in a steady statec country B is closer to its steady state than country Ad country A is closer to its steady state than country Be these two countries will never converge at the same level of wealth____ 28 If all countries are going to converge at the same level of real gross domestic product (GDP) per capita as predicted by the Solow growth model and assuming that allcountries have the same production function savings rate and depreciation rate thena they must all have identical production functionsb they must all have the same number of people in the populationc they must all have the same size of labor forced they must all have the same level of real GDPe they must all end up with a marginal product of zero____ 29 Which of the following would cause a downward movement along the aggregate demand curvea A rise in the price level makes US goods relatively more expensive than foreign goodsb The value of real wealth risesc There is a decline in the expected price leveld A fall in the price level increases savings and lowers interest ratese The value of the dollar decreases____ 30 Which of the following would shift aggregate demand to the lefta A study predicts that the recent drought will increase food prices this winterb There is a rise in the median price of housesc A rise in the price level reduces saving and increases interest ratesd The value of the dollar increasese The European Union emerges from recession____ 31 Supply shocks cause short-run aggregate supply toa remain unchanged in both the short run and the long runb decrease in both the short run and the long runc decrease in the short run and increase in the long rund increase in both the short run and the long rune return to its original position in the long runRefer to the following figure to answer the questions that follow____ 32 Based on the figure if the economy starts at point A and ends up at point E then in the short run there wasa a decrease in aggregate demandb an increase in aggregate demandc a decrease in short-run aggregate supplyd an increase in short-run aggregate supplye an increase in long-run aggregate supply____ 33 Based on the figure starting at point A if there is an increase in government spending then in the short run we would move to point __________ and in the long run to point __________a B Eb B Cc D Ad D C

e B A____ 34 An increase in short-run aggregate supply could be the result ofa an increase in the general price levelb a negative supply shockc an increase in the price of oild an increase in consumption spendinge a reduction in expected future prices____ 35 Suppose that you have the following information about the economy where all figures are in millions of dollarsFull employment output = $2000Consumption = $1200Investment = $400Government spending = $500Net exports = minus$200Because short-run output is __________ full employment output in the long run we would expect the price level to __________a less than riseb less than fallc greater than rised greater than falle equal to remain unchangedUse the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)____ 36 During the Great Recession real gross domestic product (GDP) fell yet the price level was largely unchanged as depicted in the graph Because of this we know thata both aggregate demand and long-run aggregate supply increased during the recessionb aggregate demand and long-run aggregate supply both decreased during the recessionc aggregate demand decreased and long-run aggregate supply increased during the recessiond aggregate demand decreased and short-run aggregate supply increased during the recessione long-run aggregate supply increased and short-run aggregate supply decreased during the recession____ 37 During the Great Depression aggregate demand in the US economy decreased As a result the unemployment rate _________ and real gross domestic product (GDP) _________a increased decreasedb decreased remained unchangedc increased increasedd decreased decreasede remained unchanged increased____ 38 Classical economists believe that prices are completely flexible from which they conclude thata the economy can become stuck at high levels of unemployment for long periods of timeb the economy is self-correcting in response to shocksc the government will need to intervene in the economy frequentlyd the best type of economy is centrally planned and run by the statee the economy will experience wild swings in output and employment

____ 39 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment____ 40 Keynesian economists believe that government intervention in the economy is necessary becausea prices are flexible and allow the economy to quickly return to full employmentb the long run is more important than the short run and economic policy works only in the long runc savings is a crucial part of economic growth and investmentd prices are sticky and prevent the economy from moving toward full employmente supply is more important than demand in determining economic growth and output

The aggregate demand curve slopes downward because

When the price level rises __________ declines from the wealth effect __________ declines from the interest rate effect and __________ decline(s) from the international trade effect

When a change in the price level leads to a change in saving this is known as the

The interest rate effect results from people

You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________ The long-run aggregate supply curve is

A rightward shift of the long-run aggregate supply curve means there has been

Which of the following would cause an increase in long-run aggregate supply

Increases in productivity will

Input prices are _________ in the short run and _________ in the long run

The relationship between sticky input prices and flexible output prices explains

When the general price level rises and firms decide not to change their prices in the short run this can be attributed to

Which of the following would affect both short-run and long-run aggregate supply

Refer to the following figure to answer the questions that follow Based on the figure which points represent long-run equilibrium

Supply shocks cause short-run aggregate supply to

An increase in aggregate demand is harmful because

Suppose the government permanently reduces spending in an effort to reduce the budget deficit In the new long-run equilibrium output will __________ and the price level will __________

Suppose housing values fall during a recession In the short run

Which of the following would cause an increase in the price level in the long run

Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asDuring the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of whichOne similarity between the Great Recession and the Great Depression is that in both episodes

Relevant population 215Employed 138Unemployed 9

According to the table the labor force isThe graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)As a result of aggregate demand and long-run aggregate supply decreasing wecan see that the price level _________ and real gross domestic product (GDP) _________Classical economists believe that government intervention in the economy is unnecessary becauseAssume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in responseHolding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeNina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be consideredWhich of the following statements about structural unemployment is true

Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseWhen the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease becauseThe Austrian School Economists believe all in all of the following except

Keynesian economists believe that government intervention in the economy is necessary becauseKeynesian economists believe that the economy is unstable and tends toward cyclical unemployment becauseWhen 9000 banks failed during the Great Depression it caused aggregate demand to decrease becauseBased on the belief that prices are very flexible classical economists conclude thatFA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic systemKeynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseAccording to classical economists changes in aggregate demand have little effect on the overall economy and thereforeAustrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment

The inputs used to produce goods and services are also known asInflation occursTypically the consumer price index (CPI) is calculated byWhich of the following would be classified as human capitalIf a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 thenYou are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration thenIn 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that timeAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continentDoes the value of cleaning your house count toward the value of GDPIf the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos isFrom 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beWhich of the following conditions might cause the unemployment rate to be less than the natural rate of unemploymentWhich is the largest component of US GDPHigher rates of economic growth are negatively correlated withGDP is an important indicator because it is used as a measure of all of the following exceptReal GDP is GDP adjusted for changes in

Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeResidents of poor countries tend to have fewer automobiles per capita becauseThe textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is thatThe business cycle measuresAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in AfricaFrom 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeConsumption is approximately ________ of GDPWhen actual unemployment is less than its natural rateIf the consumer price index (CPI) was 100 in the period of 1982-1984 thenA computer company builds a new factory This is included in the ________ category of GDPWhich of the following represents the technology used in a classroomIf the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then itWhich of the following lists the three types of unemploymentA(n) _____________ in the amount of resources will tend to _____________ economic growthDuring a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asWhen George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County FloridaCompany X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP isDuring healthy economic periods cyclical unemploymentWhen you include discouraged workers and unemployed workers in calculations of the unemployment rateWhich of the following statements about the composition of the labor force is correctIf mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say thatAverage world income began to rapidly rise during the Industrial Revolution becauseIn 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would beLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryThe website that provides official inflation statistics isA(n) _____________ in capital goods should ____________ worker productivity

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

securities to increasec The demand and supply curves shift to the left causing the price of Treasury securities to decreased The demand curve shifts to the right causing the price of Treasury securities to decreasee The supply curve shifts to the left causing the price of Treasury securities to increase____ 15 Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continenta Economic growth would not be affected medical aid does not contribute to gross domestic product (GDP)b Economic growth would decrease because there would be more people to feed but no additional resourcesc Economic growth would not be affected because children do not contribute to economic growthd Economic growth would increase because the health and productivity of the future labor supply would increasee Economic growth would increase because more children would survive which represents a technological advance____ 16 When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becausea holding real GDP constant an increase in the population actually lowers average standards of livingb an increase in population will tend to reduce nominal GDPc changes in population tend to have no effect on standards of livingd holding real GDP constant an increase in the population actually raises average standards of livinge an increase in the population will tend to decrease average prices____ 17 Between 2006 and 2010 per capita real gross domestic product (GDP) in India grew at an average rate of 711 per year Which of the following factors would have contributed most to this rapid escalation in growtha advances in technologyb increases in government regulationsc decrease in education standardsd a significant increase in taxese restrictions on immigration____ 18 Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________a infant mortality life expectancyb Internet users automobile ownershipc educational achievement physicians per capitad Internet users infant mortalitye cellular phone use personal computer use____ 19 The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP area the percent change in prices and the rate of investmentb the percent change in prices and the rate of population growthc the rate of investment and the rate of savingsd the rate of population growth and the rate of savings

e the rate of investment and the rate of population growth____ 20 From 2006 to 2010 per capita real gross domestic product (GDP) in Poland grew an average of 471 per year At that rate according to the Rule of 70 in roughly how many years will the Polish economy double in sizea 76 yearsb 149 yearsc 121 yearsd 88 yearse 84 years____ 21 Which of the following factors is positively correlated with economic growtha collectively owned resourcesb high barriers to international tradec restrictions on immigrationd political stability and the rule of lawe high rates of inflationUse the following production function to answer the questions that follow____ 22 How many units of capital should be produced in order to achieve the steady statea 6b 5c 4d 3e There is not enough information to answer this question____ 23 If an economy is in the steady state thena net investment is zerob depreciation is zeroc investment is zerod the marginal product of capital is zeroe there are no diminishing returns____ 24 The relationship between international aid and economic growth for less developed countries isa positive in that more aid means more growthb negative in that less aid means less growthc indeterminate because very few countries have received international aidd positive when financial funds are sent to the less developed countries but negative when developed countries help build capital goods in these countriese nonexistent because some countries have received aid but realized no growth whereas others have grown but have received no aid____ 25 Which of the following describes the correct direction of causalitya economic growth growth-friendly incentives growth-friendly institutionsb growth-friendly incentives economic growth growth-friendly institutionsc growth-friendly institutions growth-friendly incentives economic growthd economic growth growth-friendly institutions growth-friendly incentivese growth-friendly institutions economic growth growth-friendly incentives____ 26 Suppose that the level of capital in the economy is 200 units the depreciation rate is 10 and the level of investment is equal to 10 units In this casea the economy is in a steady stateb investment is less than net investmentc investment is equal to net investmentd investment is greater than net investmente the level of output will increase

____ 27 Country A has been growing at a rate of 7 per year whereas country B has been growing at a rate of 2 per year Assume that both countries have the same production function savings rate and depreciation rateThe Solow growth model would predict thata country A is wealthier than country Bb both countries are in a steady statec country B is closer to its steady state than country Ad country A is closer to its steady state than country Be these two countries will never converge at the same level of wealth____ 28 If all countries are going to converge at the same level of real gross domestic product (GDP) per capita as predicted by the Solow growth model and assuming that allcountries have the same production function savings rate and depreciation rate thena they must all have identical production functionsb they must all have the same number of people in the populationc they must all have the same size of labor forced they must all have the same level of real GDPe they must all end up with a marginal product of zero____ 29 Which of the following would cause a downward movement along the aggregate demand curvea A rise in the price level makes US goods relatively more expensive than foreign goodsb The value of real wealth risesc There is a decline in the expected price leveld A fall in the price level increases savings and lowers interest ratese The value of the dollar decreases____ 30 Which of the following would shift aggregate demand to the lefta A study predicts that the recent drought will increase food prices this winterb There is a rise in the median price of housesc A rise in the price level reduces saving and increases interest ratesd The value of the dollar increasese The European Union emerges from recession____ 31 Supply shocks cause short-run aggregate supply toa remain unchanged in both the short run and the long runb decrease in both the short run and the long runc decrease in the short run and increase in the long rund increase in both the short run and the long rune return to its original position in the long runRefer to the following figure to answer the questions that follow____ 32 Based on the figure if the economy starts at point A and ends up at point E then in the short run there wasa a decrease in aggregate demandb an increase in aggregate demandc a decrease in short-run aggregate supplyd an increase in short-run aggregate supplye an increase in long-run aggregate supply____ 33 Based on the figure starting at point A if there is an increase in government spending then in the short run we would move to point __________ and in the long run to point __________a B Eb B Cc D Ad D C

e B A____ 34 An increase in short-run aggregate supply could be the result ofa an increase in the general price levelb a negative supply shockc an increase in the price of oild an increase in consumption spendinge a reduction in expected future prices____ 35 Suppose that you have the following information about the economy where all figures are in millions of dollarsFull employment output = $2000Consumption = $1200Investment = $400Government spending = $500Net exports = minus$200Because short-run output is __________ full employment output in the long run we would expect the price level to __________a less than riseb less than fallc greater than rised greater than falle equal to remain unchangedUse the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)____ 36 During the Great Recession real gross domestic product (GDP) fell yet the price level was largely unchanged as depicted in the graph Because of this we know thata both aggregate demand and long-run aggregate supply increased during the recessionb aggregate demand and long-run aggregate supply both decreased during the recessionc aggregate demand decreased and long-run aggregate supply increased during the recessiond aggregate demand decreased and short-run aggregate supply increased during the recessione long-run aggregate supply increased and short-run aggregate supply decreased during the recession____ 37 During the Great Depression aggregate demand in the US economy decreased As a result the unemployment rate _________ and real gross domestic product (GDP) _________a increased decreasedb decreased remained unchangedc increased increasedd decreased decreasede remained unchanged increased____ 38 Classical economists believe that prices are completely flexible from which they conclude thata the economy can become stuck at high levels of unemployment for long periods of timeb the economy is self-correcting in response to shocksc the government will need to intervene in the economy frequentlyd the best type of economy is centrally planned and run by the statee the economy will experience wild swings in output and employment

____ 39 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment____ 40 Keynesian economists believe that government intervention in the economy is necessary becausea prices are flexible and allow the economy to quickly return to full employmentb the long run is more important than the short run and economic policy works only in the long runc savings is a crucial part of economic growth and investmentd prices are sticky and prevent the economy from moving toward full employmente supply is more important than demand in determining economic growth and output

The aggregate demand curve slopes downward because

When the price level rises __________ declines from the wealth effect __________ declines from the interest rate effect and __________ decline(s) from the international trade effect

When a change in the price level leads to a change in saving this is known as the

The interest rate effect results from people

You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________ The long-run aggregate supply curve is

A rightward shift of the long-run aggregate supply curve means there has been

Which of the following would cause an increase in long-run aggregate supply

Increases in productivity will

Input prices are _________ in the short run and _________ in the long run

The relationship between sticky input prices and flexible output prices explains

When the general price level rises and firms decide not to change their prices in the short run this can be attributed to

Which of the following would affect both short-run and long-run aggregate supply

Refer to the following figure to answer the questions that follow Based on the figure which points represent long-run equilibrium

Supply shocks cause short-run aggregate supply to

An increase in aggregate demand is harmful because

Suppose the government permanently reduces spending in an effort to reduce the budget deficit In the new long-run equilibrium output will __________ and the price level will __________

Suppose housing values fall during a recession In the short run

Which of the following would cause an increase in the price level in the long run

Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asDuring the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of whichOne similarity between the Great Recession and the Great Depression is that in both episodes

Relevant population 215Employed 138Unemployed 9

According to the table the labor force isThe graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)As a result of aggregate demand and long-run aggregate supply decreasing wecan see that the price level _________ and real gross domestic product (GDP) _________Classical economists believe that government intervention in the economy is unnecessary becauseAssume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in responseHolding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeNina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be consideredWhich of the following statements about structural unemployment is true

Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseWhen the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease becauseThe Austrian School Economists believe all in all of the following except

Keynesian economists believe that government intervention in the economy is necessary becauseKeynesian economists believe that the economy is unstable and tends toward cyclical unemployment becauseWhen 9000 banks failed during the Great Depression it caused aggregate demand to decrease becauseBased on the belief that prices are very flexible classical economists conclude thatFA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic systemKeynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseAccording to classical economists changes in aggregate demand have little effect on the overall economy and thereforeAustrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment

The inputs used to produce goods and services are also known asInflation occursTypically the consumer price index (CPI) is calculated byWhich of the following would be classified as human capitalIf a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 thenYou are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration thenIn 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that timeAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continentDoes the value of cleaning your house count toward the value of GDPIf the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos isFrom 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beWhich of the following conditions might cause the unemployment rate to be less than the natural rate of unemploymentWhich is the largest component of US GDPHigher rates of economic growth are negatively correlated withGDP is an important indicator because it is used as a measure of all of the following exceptReal GDP is GDP adjusted for changes in

Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeResidents of poor countries tend to have fewer automobiles per capita becauseThe textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is thatThe business cycle measuresAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in AfricaFrom 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeConsumption is approximately ________ of GDPWhen actual unemployment is less than its natural rateIf the consumer price index (CPI) was 100 in the period of 1982-1984 thenA computer company builds a new factory This is included in the ________ category of GDPWhich of the following represents the technology used in a classroomIf the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then itWhich of the following lists the three types of unemploymentA(n) _____________ in the amount of resources will tend to _____________ economic growthDuring a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asWhen George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County FloridaCompany X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP isDuring healthy economic periods cyclical unemploymentWhen you include discouraged workers and unemployed workers in calculations of the unemployment rateWhich of the following statements about the composition of the labor force is correctIf mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say thatAverage world income began to rapidly rise during the Industrial Revolution becauseIn 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would beLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryThe website that provides official inflation statistics isA(n) _____________ in capital goods should ____________ worker productivity

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

e the rate of investment and the rate of population growth____ 20 From 2006 to 2010 per capita real gross domestic product (GDP) in Poland grew an average of 471 per year At that rate according to the Rule of 70 in roughly how many years will the Polish economy double in sizea 76 yearsb 149 yearsc 121 yearsd 88 yearse 84 years____ 21 Which of the following factors is positively correlated with economic growtha collectively owned resourcesb high barriers to international tradec restrictions on immigrationd political stability and the rule of lawe high rates of inflationUse the following production function to answer the questions that follow____ 22 How many units of capital should be produced in order to achieve the steady statea 6b 5c 4d 3e There is not enough information to answer this question____ 23 If an economy is in the steady state thena net investment is zerob depreciation is zeroc investment is zerod the marginal product of capital is zeroe there are no diminishing returns____ 24 The relationship between international aid and economic growth for less developed countries isa positive in that more aid means more growthb negative in that less aid means less growthc indeterminate because very few countries have received international aidd positive when financial funds are sent to the less developed countries but negative when developed countries help build capital goods in these countriese nonexistent because some countries have received aid but realized no growth whereas others have grown but have received no aid____ 25 Which of the following describes the correct direction of causalitya economic growth growth-friendly incentives growth-friendly institutionsb growth-friendly incentives economic growth growth-friendly institutionsc growth-friendly institutions growth-friendly incentives economic growthd economic growth growth-friendly institutions growth-friendly incentivese growth-friendly institutions economic growth growth-friendly incentives____ 26 Suppose that the level of capital in the economy is 200 units the depreciation rate is 10 and the level of investment is equal to 10 units In this casea the economy is in a steady stateb investment is less than net investmentc investment is equal to net investmentd investment is greater than net investmente the level of output will increase

____ 27 Country A has been growing at a rate of 7 per year whereas country B has been growing at a rate of 2 per year Assume that both countries have the same production function savings rate and depreciation rateThe Solow growth model would predict thata country A is wealthier than country Bb both countries are in a steady statec country B is closer to its steady state than country Ad country A is closer to its steady state than country Be these two countries will never converge at the same level of wealth____ 28 If all countries are going to converge at the same level of real gross domestic product (GDP) per capita as predicted by the Solow growth model and assuming that allcountries have the same production function savings rate and depreciation rate thena they must all have identical production functionsb they must all have the same number of people in the populationc they must all have the same size of labor forced they must all have the same level of real GDPe they must all end up with a marginal product of zero____ 29 Which of the following would cause a downward movement along the aggregate demand curvea A rise in the price level makes US goods relatively more expensive than foreign goodsb The value of real wealth risesc There is a decline in the expected price leveld A fall in the price level increases savings and lowers interest ratese The value of the dollar decreases____ 30 Which of the following would shift aggregate demand to the lefta A study predicts that the recent drought will increase food prices this winterb There is a rise in the median price of housesc A rise in the price level reduces saving and increases interest ratesd The value of the dollar increasese The European Union emerges from recession____ 31 Supply shocks cause short-run aggregate supply toa remain unchanged in both the short run and the long runb decrease in both the short run and the long runc decrease in the short run and increase in the long rund increase in both the short run and the long rune return to its original position in the long runRefer to the following figure to answer the questions that follow____ 32 Based on the figure if the economy starts at point A and ends up at point E then in the short run there wasa a decrease in aggregate demandb an increase in aggregate demandc a decrease in short-run aggregate supplyd an increase in short-run aggregate supplye an increase in long-run aggregate supply____ 33 Based on the figure starting at point A if there is an increase in government spending then in the short run we would move to point __________ and in the long run to point __________a B Eb B Cc D Ad D C

e B A____ 34 An increase in short-run aggregate supply could be the result ofa an increase in the general price levelb a negative supply shockc an increase in the price of oild an increase in consumption spendinge a reduction in expected future prices____ 35 Suppose that you have the following information about the economy where all figures are in millions of dollarsFull employment output = $2000Consumption = $1200Investment = $400Government spending = $500Net exports = minus$200Because short-run output is __________ full employment output in the long run we would expect the price level to __________a less than riseb less than fallc greater than rised greater than falle equal to remain unchangedUse the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)____ 36 During the Great Recession real gross domestic product (GDP) fell yet the price level was largely unchanged as depicted in the graph Because of this we know thata both aggregate demand and long-run aggregate supply increased during the recessionb aggregate demand and long-run aggregate supply both decreased during the recessionc aggregate demand decreased and long-run aggregate supply increased during the recessiond aggregate demand decreased and short-run aggregate supply increased during the recessione long-run aggregate supply increased and short-run aggregate supply decreased during the recession____ 37 During the Great Depression aggregate demand in the US economy decreased As a result the unemployment rate _________ and real gross domestic product (GDP) _________a increased decreasedb decreased remained unchangedc increased increasedd decreased decreasede remained unchanged increased____ 38 Classical economists believe that prices are completely flexible from which they conclude thata the economy can become stuck at high levels of unemployment for long periods of timeb the economy is self-correcting in response to shocksc the government will need to intervene in the economy frequentlyd the best type of economy is centrally planned and run by the statee the economy will experience wild swings in output and employment

____ 39 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment____ 40 Keynesian economists believe that government intervention in the economy is necessary becausea prices are flexible and allow the economy to quickly return to full employmentb the long run is more important than the short run and economic policy works only in the long runc savings is a crucial part of economic growth and investmentd prices are sticky and prevent the economy from moving toward full employmente supply is more important than demand in determining economic growth and output

The aggregate demand curve slopes downward because

When the price level rises __________ declines from the wealth effect __________ declines from the interest rate effect and __________ decline(s) from the international trade effect

When a change in the price level leads to a change in saving this is known as the

The interest rate effect results from people

You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________ The long-run aggregate supply curve is

A rightward shift of the long-run aggregate supply curve means there has been

Which of the following would cause an increase in long-run aggregate supply

Increases in productivity will

Input prices are _________ in the short run and _________ in the long run

The relationship between sticky input prices and flexible output prices explains

When the general price level rises and firms decide not to change their prices in the short run this can be attributed to

Which of the following would affect both short-run and long-run aggregate supply

Refer to the following figure to answer the questions that follow Based on the figure which points represent long-run equilibrium

Supply shocks cause short-run aggregate supply to

An increase in aggregate demand is harmful because

Suppose the government permanently reduces spending in an effort to reduce the budget deficit In the new long-run equilibrium output will __________ and the price level will __________

Suppose housing values fall during a recession In the short run

Which of the following would cause an increase in the price level in the long run

Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asDuring the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of whichOne similarity between the Great Recession and the Great Depression is that in both episodes

Relevant population 215Employed 138Unemployed 9

According to the table the labor force isThe graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)As a result of aggregate demand and long-run aggregate supply decreasing wecan see that the price level _________ and real gross domestic product (GDP) _________Classical economists believe that government intervention in the economy is unnecessary becauseAssume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in responseHolding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeNina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be consideredWhich of the following statements about structural unemployment is true

Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseWhen the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease becauseThe Austrian School Economists believe all in all of the following except

Keynesian economists believe that government intervention in the economy is necessary becauseKeynesian economists believe that the economy is unstable and tends toward cyclical unemployment becauseWhen 9000 banks failed during the Great Depression it caused aggregate demand to decrease becauseBased on the belief that prices are very flexible classical economists conclude thatFA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic systemKeynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseAccording to classical economists changes in aggregate demand have little effect on the overall economy and thereforeAustrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment

The inputs used to produce goods and services are also known asInflation occursTypically the consumer price index (CPI) is calculated byWhich of the following would be classified as human capitalIf a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 thenYou are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration thenIn 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that timeAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continentDoes the value of cleaning your house count toward the value of GDPIf the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos isFrom 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beWhich of the following conditions might cause the unemployment rate to be less than the natural rate of unemploymentWhich is the largest component of US GDPHigher rates of economic growth are negatively correlated withGDP is an important indicator because it is used as a measure of all of the following exceptReal GDP is GDP adjusted for changes in

Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeResidents of poor countries tend to have fewer automobiles per capita becauseThe textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is thatThe business cycle measuresAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in AfricaFrom 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeConsumption is approximately ________ of GDPWhen actual unemployment is less than its natural rateIf the consumer price index (CPI) was 100 in the period of 1982-1984 thenA computer company builds a new factory This is included in the ________ category of GDPWhich of the following represents the technology used in a classroomIf the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then itWhich of the following lists the three types of unemploymentA(n) _____________ in the amount of resources will tend to _____________ economic growthDuring a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asWhen George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County FloridaCompany X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP isDuring healthy economic periods cyclical unemploymentWhen you include discouraged workers and unemployed workers in calculations of the unemployment rateWhich of the following statements about the composition of the labor force is correctIf mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say thatAverage world income began to rapidly rise during the Industrial Revolution becauseIn 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would beLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryThe website that provides official inflation statistics isA(n) _____________ in capital goods should ____________ worker productivity

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

____ 27 Country A has been growing at a rate of 7 per year whereas country B has been growing at a rate of 2 per year Assume that both countries have the same production function savings rate and depreciation rateThe Solow growth model would predict thata country A is wealthier than country Bb both countries are in a steady statec country B is closer to its steady state than country Ad country A is closer to its steady state than country Be these two countries will never converge at the same level of wealth____ 28 If all countries are going to converge at the same level of real gross domestic product (GDP) per capita as predicted by the Solow growth model and assuming that allcountries have the same production function savings rate and depreciation rate thena they must all have identical production functionsb they must all have the same number of people in the populationc they must all have the same size of labor forced they must all have the same level of real GDPe they must all end up with a marginal product of zero____ 29 Which of the following would cause a downward movement along the aggregate demand curvea A rise in the price level makes US goods relatively more expensive than foreign goodsb The value of real wealth risesc There is a decline in the expected price leveld A fall in the price level increases savings and lowers interest ratese The value of the dollar decreases____ 30 Which of the following would shift aggregate demand to the lefta A study predicts that the recent drought will increase food prices this winterb There is a rise in the median price of housesc A rise in the price level reduces saving and increases interest ratesd The value of the dollar increasese The European Union emerges from recession____ 31 Supply shocks cause short-run aggregate supply toa remain unchanged in both the short run and the long runb decrease in both the short run and the long runc decrease in the short run and increase in the long rund increase in both the short run and the long rune return to its original position in the long runRefer to the following figure to answer the questions that follow____ 32 Based on the figure if the economy starts at point A and ends up at point E then in the short run there wasa a decrease in aggregate demandb an increase in aggregate demandc a decrease in short-run aggregate supplyd an increase in short-run aggregate supplye an increase in long-run aggregate supply____ 33 Based on the figure starting at point A if there is an increase in government spending then in the short run we would move to point __________ and in the long run to point __________a B Eb B Cc D Ad D C

e B A____ 34 An increase in short-run aggregate supply could be the result ofa an increase in the general price levelb a negative supply shockc an increase in the price of oild an increase in consumption spendinge a reduction in expected future prices____ 35 Suppose that you have the following information about the economy where all figures are in millions of dollarsFull employment output = $2000Consumption = $1200Investment = $400Government spending = $500Net exports = minus$200Because short-run output is __________ full employment output in the long run we would expect the price level to __________a less than riseb less than fallc greater than rised greater than falle equal to remain unchangedUse the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)____ 36 During the Great Recession real gross domestic product (GDP) fell yet the price level was largely unchanged as depicted in the graph Because of this we know thata both aggregate demand and long-run aggregate supply increased during the recessionb aggregate demand and long-run aggregate supply both decreased during the recessionc aggregate demand decreased and long-run aggregate supply increased during the recessiond aggregate demand decreased and short-run aggregate supply increased during the recessione long-run aggregate supply increased and short-run aggregate supply decreased during the recession____ 37 During the Great Depression aggregate demand in the US economy decreased As a result the unemployment rate _________ and real gross domestic product (GDP) _________a increased decreasedb decreased remained unchangedc increased increasedd decreased decreasede remained unchanged increased____ 38 Classical economists believe that prices are completely flexible from which they conclude thata the economy can become stuck at high levels of unemployment for long periods of timeb the economy is self-correcting in response to shocksc the government will need to intervene in the economy frequentlyd the best type of economy is centrally planned and run by the statee the economy will experience wild swings in output and employment

____ 39 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment____ 40 Keynesian economists believe that government intervention in the economy is necessary becausea prices are flexible and allow the economy to quickly return to full employmentb the long run is more important than the short run and economic policy works only in the long runc savings is a crucial part of economic growth and investmentd prices are sticky and prevent the economy from moving toward full employmente supply is more important than demand in determining economic growth and output

The aggregate demand curve slopes downward because

When the price level rises __________ declines from the wealth effect __________ declines from the interest rate effect and __________ decline(s) from the international trade effect

When a change in the price level leads to a change in saving this is known as the

The interest rate effect results from people

You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________ The long-run aggregate supply curve is

A rightward shift of the long-run aggregate supply curve means there has been

Which of the following would cause an increase in long-run aggregate supply

Increases in productivity will

Input prices are _________ in the short run and _________ in the long run

The relationship between sticky input prices and flexible output prices explains

When the general price level rises and firms decide not to change their prices in the short run this can be attributed to

Which of the following would affect both short-run and long-run aggregate supply

Refer to the following figure to answer the questions that follow Based on the figure which points represent long-run equilibrium

Supply shocks cause short-run aggregate supply to

An increase in aggregate demand is harmful because

Suppose the government permanently reduces spending in an effort to reduce the budget deficit In the new long-run equilibrium output will __________ and the price level will __________

Suppose housing values fall during a recession In the short run

Which of the following would cause an increase in the price level in the long run

Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asDuring the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of whichOne similarity between the Great Recession and the Great Depression is that in both episodes

Relevant population 215Employed 138Unemployed 9

According to the table the labor force isThe graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)As a result of aggregate demand and long-run aggregate supply decreasing wecan see that the price level _________ and real gross domestic product (GDP) _________Classical economists believe that government intervention in the economy is unnecessary becauseAssume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in responseHolding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeNina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be consideredWhich of the following statements about structural unemployment is true

Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseWhen the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease becauseThe Austrian School Economists believe all in all of the following except

Keynesian economists believe that government intervention in the economy is necessary becauseKeynesian economists believe that the economy is unstable and tends toward cyclical unemployment becauseWhen 9000 banks failed during the Great Depression it caused aggregate demand to decrease becauseBased on the belief that prices are very flexible classical economists conclude thatFA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic systemKeynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseAccording to classical economists changes in aggregate demand have little effect on the overall economy and thereforeAustrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment

The inputs used to produce goods and services are also known asInflation occursTypically the consumer price index (CPI) is calculated byWhich of the following would be classified as human capitalIf a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 thenYou are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration thenIn 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that timeAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continentDoes the value of cleaning your house count toward the value of GDPIf the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos isFrom 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beWhich of the following conditions might cause the unemployment rate to be less than the natural rate of unemploymentWhich is the largest component of US GDPHigher rates of economic growth are negatively correlated withGDP is an important indicator because it is used as a measure of all of the following exceptReal GDP is GDP adjusted for changes in

Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeResidents of poor countries tend to have fewer automobiles per capita becauseThe textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is thatThe business cycle measuresAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in AfricaFrom 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeConsumption is approximately ________ of GDPWhen actual unemployment is less than its natural rateIf the consumer price index (CPI) was 100 in the period of 1982-1984 thenA computer company builds a new factory This is included in the ________ category of GDPWhich of the following represents the technology used in a classroomIf the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then itWhich of the following lists the three types of unemploymentA(n) _____________ in the amount of resources will tend to _____________ economic growthDuring a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asWhen George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County FloridaCompany X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP isDuring healthy economic periods cyclical unemploymentWhen you include discouraged workers and unemployed workers in calculations of the unemployment rateWhich of the following statements about the composition of the labor force is correctIf mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say thatAverage world income began to rapidly rise during the Industrial Revolution becauseIn 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would beLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryThe website that provides official inflation statistics isA(n) _____________ in capital goods should ____________ worker productivity

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

e B A____ 34 An increase in short-run aggregate supply could be the result ofa an increase in the general price levelb a negative supply shockc an increase in the price of oild an increase in consumption spendinge a reduction in expected future prices____ 35 Suppose that you have the following information about the economy where all figures are in millions of dollarsFull employment output = $2000Consumption = $1200Investment = $400Government spending = $500Net exports = minus$200Because short-run output is __________ full employment output in the long run we would expect the price level to __________a less than riseb less than fallc greater than rised greater than falle equal to remain unchangedUse the following graph to answer the questions that follow The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)____ 36 During the Great Recession real gross domestic product (GDP) fell yet the price level was largely unchanged as depicted in the graph Because of this we know thata both aggregate demand and long-run aggregate supply increased during the recessionb aggregate demand and long-run aggregate supply both decreased during the recessionc aggregate demand decreased and long-run aggregate supply increased during the recessiond aggregate demand decreased and short-run aggregate supply increased during the recessione long-run aggregate supply increased and short-run aggregate supply decreased during the recession____ 37 During the Great Depression aggregate demand in the US economy decreased As a result the unemployment rate _________ and real gross domestic product (GDP) _________a increased decreasedb decreased remained unchangedc increased increasedd decreased decreasede remained unchanged increased____ 38 Classical economists believe that prices are completely flexible from which they conclude thata the economy can become stuck at high levels of unemployment for long periods of timeb the economy is self-correcting in response to shocksc the government will need to intervene in the economy frequentlyd the best type of economy is centrally planned and run by the statee the economy will experience wild swings in output and employment

____ 39 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment____ 40 Keynesian economists believe that government intervention in the economy is necessary becausea prices are flexible and allow the economy to quickly return to full employmentb the long run is more important than the short run and economic policy works only in the long runc savings is a crucial part of economic growth and investmentd prices are sticky and prevent the economy from moving toward full employmente supply is more important than demand in determining economic growth and output

The aggregate demand curve slopes downward because

When the price level rises __________ declines from the wealth effect __________ declines from the interest rate effect and __________ decline(s) from the international trade effect

When a change in the price level leads to a change in saving this is known as the

The interest rate effect results from people

You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________ The long-run aggregate supply curve is

A rightward shift of the long-run aggregate supply curve means there has been

Which of the following would cause an increase in long-run aggregate supply

Increases in productivity will

Input prices are _________ in the short run and _________ in the long run

The relationship between sticky input prices and flexible output prices explains

When the general price level rises and firms decide not to change their prices in the short run this can be attributed to

Which of the following would affect both short-run and long-run aggregate supply

Refer to the following figure to answer the questions that follow Based on the figure which points represent long-run equilibrium

Supply shocks cause short-run aggregate supply to

An increase in aggregate demand is harmful because

Suppose the government permanently reduces spending in an effort to reduce the budget deficit In the new long-run equilibrium output will __________ and the price level will __________

Suppose housing values fall during a recession In the short run

Which of the following would cause an increase in the price level in the long run

Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asDuring the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of whichOne similarity between the Great Recession and the Great Depression is that in both episodes

Relevant population 215Employed 138Unemployed 9

According to the table the labor force isThe graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)As a result of aggregate demand and long-run aggregate supply decreasing wecan see that the price level _________ and real gross domestic product (GDP) _________Classical economists believe that government intervention in the economy is unnecessary becauseAssume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in responseHolding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeNina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be consideredWhich of the following statements about structural unemployment is true

Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseWhen the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease becauseThe Austrian School Economists believe all in all of the following except

Keynesian economists believe that government intervention in the economy is necessary becauseKeynesian economists believe that the economy is unstable and tends toward cyclical unemployment becauseWhen 9000 banks failed during the Great Depression it caused aggregate demand to decrease becauseBased on the belief that prices are very flexible classical economists conclude thatFA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic systemKeynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseAccording to classical economists changes in aggregate demand have little effect on the overall economy and thereforeAustrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment

The inputs used to produce goods and services are also known asInflation occursTypically the consumer price index (CPI) is calculated byWhich of the following would be classified as human capitalIf a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 thenYou are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration thenIn 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that timeAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continentDoes the value of cleaning your house count toward the value of GDPIf the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos isFrom 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beWhich of the following conditions might cause the unemployment rate to be less than the natural rate of unemploymentWhich is the largest component of US GDPHigher rates of economic growth are negatively correlated withGDP is an important indicator because it is used as a measure of all of the following exceptReal GDP is GDP adjusted for changes in

Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeResidents of poor countries tend to have fewer automobiles per capita becauseThe textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is thatThe business cycle measuresAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in AfricaFrom 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeConsumption is approximately ________ of GDPWhen actual unemployment is less than its natural rateIf the consumer price index (CPI) was 100 in the period of 1982-1984 thenA computer company builds a new factory This is included in the ________ category of GDPWhich of the following represents the technology used in a classroomIf the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then itWhich of the following lists the three types of unemploymentA(n) _____________ in the amount of resources will tend to _____________ economic growthDuring a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asWhen George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County FloridaCompany X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP isDuring healthy economic periods cyclical unemploymentWhen you include discouraged workers and unemployed workers in calculations of the unemployment rateWhich of the following statements about the composition of the labor force is correctIf mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say thatAverage world income began to rapidly rise during the Industrial Revolution becauseIn 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would beLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryThe website that provides official inflation statistics isA(n) _____________ in capital goods should ____________ worker productivity

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

____ 39 Classical economists believe that the economy is stable and tends toward full employment becausea the government plays an active role in managing the economyb savings is a drain on demand and must be limitedc the short run is more important than the long run and economic policy only works in the short rund prices are flexible and allow the economy to quickly return to full employmente prices are sticky and will not prevent the economy from adjusting to full employment____ 40 Keynesian economists believe that government intervention in the economy is necessary becausea prices are flexible and allow the economy to quickly return to full employmentb the long run is more important than the short run and economic policy works only in the long runc savings is a crucial part of economic growth and investmentd prices are sticky and prevent the economy from moving toward full employmente supply is more important than demand in determining economic growth and output

The aggregate demand curve slopes downward because

When the price level rises __________ declines from the wealth effect __________ declines from the interest rate effect and __________ decline(s) from the international trade effect

When a change in the price level leads to a change in saving this is known as the

The interest rate effect results from people

You read a study that predicts that rising oil prices projected for this summer are certain to fuel inflation Having taken an economics class due to this expected change in prices you predict that spending today will _________ and aggregate demand today will _________ The long-run aggregate supply curve is

A rightward shift of the long-run aggregate supply curve means there has been

Which of the following would cause an increase in long-run aggregate supply

Increases in productivity will

Input prices are _________ in the short run and _________ in the long run

The relationship between sticky input prices and flexible output prices explains

When the general price level rises and firms decide not to change their prices in the short run this can be attributed to

Which of the following would affect both short-run and long-run aggregate supply

Refer to the following figure to answer the questions that follow Based on the figure which points represent long-run equilibrium

Supply shocks cause short-run aggregate supply to

An increase in aggregate demand is harmful because

Suppose the government permanently reduces spending in an effort to reduce the budget deficit In the new long-run equilibrium output will __________ and the price level will __________

Suppose housing values fall during a recession In the short run

Which of the following would cause an increase in the price level in the long run

Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asDuring the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of whichOne similarity between the Great Recession and the Great Depression is that in both episodes

Relevant population 215Employed 138Unemployed 9

According to the table the labor force isThe graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)As a result of aggregate demand and long-run aggregate supply decreasing wecan see that the price level _________ and real gross domestic product (GDP) _________Classical economists believe that government intervention in the economy is unnecessary becauseAssume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in responseHolding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeNina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be consideredWhich of the following statements about structural unemployment is true

Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseWhen the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease becauseThe Austrian School Economists believe all in all of the following except

Keynesian economists believe that government intervention in the economy is necessary becauseKeynesian economists believe that the economy is unstable and tends toward cyclical unemployment becauseWhen 9000 banks failed during the Great Depression it caused aggregate demand to decrease becauseBased on the belief that prices are very flexible classical economists conclude thatFA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic systemKeynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseAccording to classical economists changes in aggregate demand have little effect on the overall economy and thereforeAustrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment

The inputs used to produce goods and services are also known asInflation occursTypically the consumer price index (CPI) is calculated byWhich of the following would be classified as human capitalIf a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 thenYou are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration thenIn 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that timeAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continentDoes the value of cleaning your house count toward the value of GDPIf the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos isFrom 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beWhich of the following conditions might cause the unemployment rate to be less than the natural rate of unemploymentWhich is the largest component of US GDPHigher rates of economic growth are negatively correlated withGDP is an important indicator because it is used as a measure of all of the following exceptReal GDP is GDP adjusted for changes in

Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeResidents of poor countries tend to have fewer automobiles per capita becauseThe textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is thatThe business cycle measuresAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in AfricaFrom 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeConsumption is approximately ________ of GDPWhen actual unemployment is less than its natural rateIf the consumer price index (CPI) was 100 in the period of 1982-1984 thenA computer company builds a new factory This is included in the ________ category of GDPWhich of the following represents the technology used in a classroomIf the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then itWhich of the following lists the three types of unemploymentA(n) _____________ in the amount of resources will tend to _____________ economic growthDuring a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asWhen George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County FloridaCompany X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP isDuring healthy economic periods cyclical unemploymentWhen you include discouraged workers and unemployed workers in calculations of the unemployment rateWhich of the following statements about the composition of the labor force is correctIf mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say thatAverage world income began to rapidly rise during the Industrial Revolution becauseIn 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would beLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryThe website that provides official inflation statistics isA(n) _____________ in capital goods should ____________ worker productivity

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

Suppose the government permanently reduces spending in an effort to reduce the budget deficit In the new long-run equilibrium output will __________ and the price level will __________

Suppose housing values fall during a recession In the short run

Which of the following would cause an increase in the price level in the long run

Refer to the following figure to answer the questions that follow Based on the figure if the economy is at point F then in the long run we can expect

During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asDuring the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of whichOne similarity between the Great Recession and the Great Depression is that in both episodes

Relevant population 215Employed 138Unemployed 9

According to the table the labor force isThe graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)As a result of aggregate demand and long-run aggregate supply decreasing wecan see that the price level _________ and real gross domestic product (GDP) _________Classical economists believe that government intervention in the economy is unnecessary becauseAssume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in responseHolding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeNina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be consideredWhich of the following statements about structural unemployment is true

Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseWhen the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease becauseThe Austrian School Economists believe all in all of the following except

Keynesian economists believe that government intervention in the economy is necessary becauseKeynesian economists believe that the economy is unstable and tends toward cyclical unemployment becauseWhen 9000 banks failed during the Great Depression it caused aggregate demand to decrease becauseBased on the belief that prices are very flexible classical economists conclude thatFA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic systemKeynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseAccording to classical economists changes in aggregate demand have little effect on the overall economy and thereforeAustrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment

The inputs used to produce goods and services are also known asInflation occursTypically the consumer price index (CPI) is calculated byWhich of the following would be classified as human capitalIf a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 thenYou are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration thenIn 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that timeAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continentDoes the value of cleaning your house count toward the value of GDPIf the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos isFrom 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beWhich of the following conditions might cause the unemployment rate to be less than the natural rate of unemploymentWhich is the largest component of US GDPHigher rates of economic growth are negatively correlated withGDP is an important indicator because it is used as a measure of all of the following exceptReal GDP is GDP adjusted for changes in

Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeResidents of poor countries tend to have fewer automobiles per capita becauseThe textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is thatThe business cycle measuresAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in AfricaFrom 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeConsumption is approximately ________ of GDPWhen actual unemployment is less than its natural rateIf the consumer price index (CPI) was 100 in the period of 1982-1984 thenA computer company builds a new factory This is included in the ________ category of GDPWhich of the following represents the technology used in a classroomIf the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then itWhich of the following lists the three types of unemploymentA(n) _____________ in the amount of resources will tend to _____________ economic growthDuring a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asWhen George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County FloridaCompany X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP isDuring healthy economic periods cyclical unemploymentWhen you include discouraged workers and unemployed workers in calculations of the unemployment rateWhich of the following statements about the composition of the labor force is correctIf mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say thatAverage world income began to rapidly rise during the Industrial Revolution becauseIn 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would beLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryThe website that provides official inflation statistics isA(n) _____________ in capital goods should ____________ worker productivity

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

Keynesian economists believe that government intervention in the economy is necessary becauseKeynesian economists believe that the economy is unstable and tends toward cyclical unemployment becauseWhen 9000 banks failed during the Great Depression it caused aggregate demand to decrease becauseBased on the belief that prices are very flexible classical economists conclude thatFA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic systemKeynesian economists believe that more focus should be placed on aggregate demand than aggregate supply becauseAccording to classical economists changes in aggregate demand have little effect on the overall economy and thereforeAustrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment

The inputs used to produce goods and services are also known asInflation occursTypically the consumer price index (CPI) is calculated byWhich of the following would be classified as human capitalIf a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 thenYou are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration thenIn 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that timeAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continentDoes the value of cleaning your house count toward the value of GDPIf the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos isFrom 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beWhich of the following conditions might cause the unemployment rate to be less than the natural rate of unemploymentWhich is the largest component of US GDPHigher rates of economic growth are negatively correlated withGDP is an important indicator because it is used as a measure of all of the following exceptReal GDP is GDP adjusted for changes in

Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeResidents of poor countries tend to have fewer automobiles per capita becauseThe textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is thatThe business cycle measuresAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in AfricaFrom 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeConsumption is approximately ________ of GDPWhen actual unemployment is less than its natural rateIf the consumer price index (CPI) was 100 in the period of 1982-1984 thenA computer company builds a new factory This is included in the ________ category of GDPWhich of the following represents the technology used in a classroomIf the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then itWhich of the following lists the three types of unemploymentA(n) _____________ in the amount of resources will tend to _____________ economic growthDuring a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asWhen George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County FloridaCompany X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP isDuring healthy economic periods cyclical unemploymentWhen you include discouraged workers and unemployed workers in calculations of the unemployment rateWhich of the following statements about the composition of the labor force is correctIf mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say thatAverage world income began to rapidly rise during the Industrial Revolution becauseIn 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would beLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryThe website that provides official inflation statistics isA(n) _____________ in capital goods should ____________ worker productivity

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will seeResidents of poor countries tend to have fewer automobiles per capita becauseThe textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is thatThe business cycle measuresAccess to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in AfricaFrom 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeConsumption is approximately ________ of GDPWhen actual unemployment is less than its natural rateIf the consumer price index (CPI) was 100 in the period of 1982-1984 thenA computer company builds a new factory This is included in the ________ category of GDPWhich of the following represents the technology used in a classroomIf the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then itWhich of the following lists the three types of unemploymentA(n) _____________ in the amount of resources will tend to _____________ economic growthDuring a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified asWhen George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County FloridaCompany X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP isDuring healthy economic periods cyclical unemploymentWhen you include discouraged workers and unemployed workers in calculations of the unemployment rateWhich of the following statements about the composition of the labor force is correctIf mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say thatAverage world income began to rapidly rise during the Industrial Revolution becauseIn 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would beLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryThe website that provides official inflation statistics isA(n) _____________ in capital goods should ____________ worker productivity

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

Underemployed workers areYou bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDPAccording to the textbook which of the following countries is not considered a wealthy nationStructural unemployment isWhich of the following is a topic of macroeconomicsAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beHow do you convert a price of a good from an earlier time into todays priceOfficial unemployment is identified as whenWhen it is difficult to hire employees firms take ____________ to hire which increases ____________ unemploymentFrom 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in sizeDonna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would beWhich of the following statements about historical unemployment rate is trueConsumption is approximately ________ of GDPWhich of the following equations represents the labor forceTechnological advancesGDP is not a good measure ofIt has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true thenDeflationCompany X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP isSaudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resourcesA company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true

What function of money is highlighted when I am comparing the price of one product to anotherWhat function of money is highlighted when I pay for my cell phone bill with cashIf the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead toAutomatic stabilizersThe value of moneyAutomatic stabilizers try to solve the problem ofSupply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a resultCrowding-out occurs when

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking systemThe sale of existing US Treasury securities by the Federal ReserveWhen can a bank make loansPolicies that focus on educationIf the government were to print more money which of the following would occurComplete crowding-out is whenExpansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long runIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reservesIf a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in depositsWhich of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply modelWhich of the following is an example of barter where the double coincidence of wants may not always occurGovernment programs that automatically implement countercyclical fiscal policy in response to economic conditions are calledIn the short run some prices are inflexible Most often the prices that are inflexible areDepending on how fiscal policy is implemented it can affectIt is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policyWhen gasoline gallons are priced in terms of number of seashells seashells serve asAn implementation lag happens becauseWhich of the following is an example of crowding-outLowering marginal income tax rates for individualsExpansionary monetary policy ____________ interest rates which can be shown in the ______________________If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in depositsThe two types of monetary policy areThe Federal Reserve System was created inResearch and development (RampD) tax creditsWhich of the following is not a characteristic of fiat moneyImagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loansSuppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________Expansionary fiscal policy occurs whenLower corporate profit tax ratesSuppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________When stock prices declined during the Great Recession it caused aggregate demand to decrease becauseWhich of the following would cause a downward movement along the aggregate demand curve

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increaseDuring the Great Depression aggregate demand decreased This would have been caused byDuring which of the following situations would you advise for expansionary fiscal policyAn increase in aggregate demand is harmful becauseThe assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is calledA decrease in US housing prices would tend to causeShifts in the aggregate demand curve are caused byThe relationship between sticky input prices and flexible output prices explainsThe Great Recession ended inWhich of the following would cause an increase in employment in the short runAn example of expansionary fiscal policy islWhich of the following statements about travelers checks is trueWhy isnt the barter method of exchange more common in the US economyFiscal policy isAn increase in expected future prices causes___________ is an example of an automatic stabilizerDuring a financial crisis hit hard by bank failures the money supplyA rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will causeThe Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great RecessionA major advantage of money over barter is that it isWhen US aggregate demand and long-run aggregate supply decreased during the Great RecessionDuring the Great Recession the US ________ curve shifted to the ________The Great Depression when compared to other economic downturns in US historySuppose a countrys population is growing due to immigration In the long run output will _________ due to _________During the Great Recession ___________ caused aggregate demand to decreaseAn increase in the value of the dollar will __________ exports and __________ importsThe Great Recession was different from other recessions since World War II in thatAggregate supply describes a relationship betweenAs part of the Economic Stimulus Act of 2008 the typical family of four receivedA recognition lag happens becauseShifts in the long-run aggregate supply curve are caused byWhen money is acting as a unit of account itThe Great Recession began inWhat is true about banks in a fractional reserve banking systemOne similarity between the Great Recession and the Great Depression is that in both episodesWhat will economists today likely state should have been done to limit the severity of the Great DepressionCentral banks can use monetary policy toContractionary monetary policy

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take placeAn impact lag happens becauseIt takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effectsInput prices are _________ in the short run and _________ in the long runWhy would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its ownLong-run aggregate supply shifts are caused byWhen the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policySuppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________A stock market crash in __________ is generally viewed as the beginning of the Great DepressionDuring the Great Recession a major financial crisis followed the collapse of housing prices which led toIf prices fall then real wealth __________ and the quantity of aggregate demand __________A supply shock causes a shift in_________ would decrease short-run aggregate supplyWhen financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease becauseWhen the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policyIncreases in productivity willThe long-run aggregate supply curve isAs credit card balances increase what will be the consequence for M1 and M2If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take placeWhen US goods become more expensive relative to foreign goods exports will __________ and imports will __________Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model__________________ is when a central bank acts to increase the money supply in an effort to stimulate the economyAssume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a resultWhen US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease becauseIn the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemploymentWhich of the following explains expansionary monetary policy in the long run

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined byA decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reservesWhen I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheetAccording to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demandIn the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price levelSuppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increaseWhich of the following causes an increase in short-run aggregate supplyThe Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________A supply shock is defined asThe goal of contractionary fiscal policy is to shift the __________ curve to the __________Fiscal policy that seeks to counteract business-cycle fluctuations isIf the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conductPrior to the Great Depression US stock prices decreased dramatically This would tend to causeInjecting new money into the economy eventually causesYou read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________In a fiat money economy M1 includes currency as well asNew computer technologies can be expected toWhich of the following is NOT considered part of M2When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short runProgressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples ofAn active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansionsOne similarity between the Great Depression and the Great Recession is that in both casesUnemployment rises and real gross domestic product (GDP) growth slows during theIf a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supplyThe crowding-out critique is based on the idea that

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

Which of the following fiscal policy initiatives focuses on the supply side of the economyOne of the reasons why the Great Depression was so severe is thatDuring recessionary periodsThree issues that arise in the application of activist fiscal policy areSuppose housing values fall during a recession In the short runDuring the Great Recession the US aggregate demand curve shifted to the left in part becauseSuppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________The Great Recession lasted forDuring the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________Which of the following events could cause inflation in the United Statesmdasha country that uses fiat moneyIn which of the following situations does money serve as a store of valueWhat did the Federal Reserve do in response to the Great RecessionOne difference between the Great Recession and the Great Depression is thatDuring the Great Depression thousands of US banks failed As a resultWhich of the following would cause an upward movement along the aggregate demand curveCountercyclical fiscal policy attempts toThe Great Depression lasted longer and was deeper than the average recession in part becauseContractionary monetary policy occurs whenI have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheetIf the effects of contractionary fiscal policy hit when the economy is already contractingWhen a change in the price level leads to a change in saving this is known as theThe back-to-back recessions that began in 1929 and ended in 1938 are collectively known asThe three time lags that accompany policy decisions areThe Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________When the price level rises and US goods become relatively more expensive than foreign goods there will beA government might want to reduce aggregate demand if it believes thatAn increase in taxes or a decrease in spending during an economic expansion canThe aggregate demand curve is best represented by which of the following equationsWhen aggregate demand is low enough to drive unemployment above the natural rateIf I were to deposit cash into my savings account which of the following changes would take placeWhich of the following would cause an increase in the price level in the long runDuring the Great Depression there was a financial crisis and a stock market crash both of whichWhen aggregate demand is high enough to drive unemployment below the natural rateAn increase in short-run aggregate supply immediately leads toan increase in real wealth and a movement along the aggregate When an economy has a more stable and well-developed financial system it is reasonable to expect

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out

Real per capita gross domestic product (GDP) is defined asHigher rates of economic growth are negatively correlated withPer capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical personResidents of wealthy countries tend to have longer life expectancies becauseResidents of poor countries tend to have higher rates of infant mortality becauseResidents of poor countries tend to have fewer automobiles per capita becauseLong-run per capita world income growth was basically flat until around what yearAverage world income began to increase rapidly duringAverage world income began to rapidly rise during the Industrial Revolution becauseWhich of the following statements best describes the average standard of living for much of human history prior to the Industrial RevolutionIf an economy experiences economic growth does that mean that everyone in that economy will be better offIn 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughlyEconomic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minusThe percent change in real per capita gross domestic product (GDP) equalsThe percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equalsThe two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP areThe two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP areFrom 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased byNominal gross domestic product (GDP) is a poor measure of economic growth becauseChange in per capita real gross domestic product (GDP) is the best measure of economic growth becauseAnnual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew byFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased byIn 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew byIn 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States wasIn 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase toAnnual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would beAnnual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would beFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew byIn 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that timeIn 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that timeIn the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that timeIf you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missingWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level becauseWhen computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth becauseFrom 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time periodIf your income increases at a rate of 2 per year how long will it take to double your incomeJames has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the companyFrom 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in sizeFrom 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in sizeAn increase in ________________ would lead to an increase in long-run economic growthThe inputs used to produce goods and services are also known asWe know that resources are important for economic growth Which of the following statements about resources is trueAn example of physical capital isLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakeryKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salonA(n) _____________ in capital goods should ____________ worker productivityPopulations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them mustWhy would an increase in capital resources lead to an increase in worker productivityLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakeryLauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakerySteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopSteve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shopKrista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salonA firm`s human capital would increase withAn increase in human capital would tend toSteve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth

Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakeryNathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shopIn what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturingAs they relate to economic growth institutions areOne of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan hasToday not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also haveIs having abundant resources an absolute guarantee of economic growth and prosperityWhich of the following is an example of an institution that promotes economic growthWhich of the following factors is negatively correlated with economic growth

• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• During the Great Recession there was a financial crisis a stock market crash and a collapse in housing prices all of which
• One similarity between the Great Recession and the Great Depression is that in both episodes
• According to the table the labor force is
• The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased with no change in short-run aggregate supply (SRAS)
• Classical economists believe that government intervention in the economy is unnecessary because
• Assume that you are a Keynesian economist You are asked what the government should do if the economy enters a recession What would you say in response
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Nina has a part-time job as she finishes her degree in fashion design After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set Nina has a few interviews but it is taking time to find the job that suits her best Nina would be considered
• Which of the following statements about structural unemployment is true
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• When the government raised taxes at the beginning of the Great Depression it caused aggregate demand to decrease because
• The Austrian School Economists believe all in all of the following except
• Keynesian economists believe that government intervention in the economy is necessary because
• Keynesian economists believe that the economy is unstable and tends toward cyclical unemployment because
• When 9000 banks failed during the Great Depression it caused aggregate demand to decrease because
• Based on the belief that prices are very flexible classical economists conclude that
• FA Hayekrsquos book ldquoRoad to Serfdomrdquo describes Russia Pro-Communist rule and its economic system
• Keynesian economists believe that more focus should be placed on aggregate demand than aggregate supply because
• According to classical economists changes in aggregate demand have little effect on the overall economy and therefore
• Austrian School Economists believe that government intervention in the economy is sometimes necessary to reach full employment
• The inputs used to produce goods and services are also known as
• Inflation occurs
• Typically the consumer price index (CPI) is calculated by
• Which of the following would be classified as human capital
• If a Hersheys chocolate bar cost $005 in 1921 when the price index was 18 and the same size and weight Hersheys chocolate bar cost $005 in 1955 when the price index was 27 then
• You are offered two jobs one in Chicago paying $67000 and one in Dallas paying $58000 The price index in Chicago is 1108 and in Dallas it is 915 If real wages are the only consideration then
• In 1998 per capita real gross domestic product (GDP) in Thailand was $444419 By 1999 it had increased to $469522 At what rate did Thailands economy grow in that time
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would an increase in medical aid to African children have on overall economic growth for the continent
• Does the value of cleaning your house count toward the value of GDP
• If the price index in 1922 was 17 and a unit of Nabisco Oreo cookies cost $032 and if the price index today is 220 and a unit of Nabisco Oreo cookies costs $299 then the inflation-adjusted price of Oreos is
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment
• Which is the largest component of US GDP
• Higher rates of economic growth are negatively correlated with
• GDP is an important indicator because it is used as a measure of all of the following except
• Real GDP is GDP adjusted for changes in
• Holding all else constant if people who are currently discouraged workers decide to start looking for jobs again you will see
• Residents of poor countries tend to have fewer automobiles per capita because
• The textbook shows that the inflation-adjusted movie receipts for Star Wars (released 1977) were $1410707000 and the original receipts were $460998000 The implication is that
• The business cycle measures
• Access to lifesaving medicine is very limited in parts of Africa as a result over 10 of children do not reach the age of five What effect would this have on economic growth in Africa
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• Consumption is approximately ________ of GDP
• When actual unemployment is less than its natural rate
• If the consumer price index (CPI) was 100 in the period of 1982-1984 then
• A computer company builds a new factory This is included in the ________ category of GDP
• Which of the following represents the technology used in a classroom
• If the price of a typical market basket of goods increased from about $20 in 1960 to $200 in early 2012 then it
• Which of the following lists the three types of unemployment
• A(n) _____________ in the amount of resources will tend to _____________ economic growth
• During a recession fewer individuals fly across the country for vacations As a result many pilots and flight attendants lose their jobs These individuals would be classified as
• When George buys a new computer for his business it is included in GDP as _______ and when he buys a new computer for use at home it counts as ________
• JTKB is an accounting firm in South Orange County Florida Company policy is that whenever JTKB decides to open up a new accounting position the hiring manager must conduct at least five interviews over a two-week span Because of this process JTKB is increasing ____________ in South Orange County Florida
• Company X sells paper to company Y for $100000 Company Y uses the paper to make textbooks selling them to consumers for $500000 The total contribution to GDP is
• During healthy economic periods cyclical unemployment
• When you include discouraged workers and unemployed workers in calculations of the unemployment rate
• Which of the following statements about the composition of the labor force is correct
• If mustard now costs $075 when todays price index is 225 and if the price index in 1970 was 38 we would most accurately say that
• Average world income began to rapidly rise during the Industrial Revolution because
• In 1940 you could buy a nickel Pepsi for (oddly enough) a nickel If the price index in 1940 was 14 and the 2011 price index was 221 then the inflation-adjusted price of a Pepsi would be
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• The website that provides official inflation statistics is
• A(n) _____________ in capital goods should ____________ worker productivity
• Underemployed workers are
• You bought stock in 2010 for $100 and you sold it in 2012 for $200 You used a broker to sell the stock for you and he charged you $20 This transaction contributed ________ to GDP
• According to the textbook which of the following countries is not considered a wealthy nation
• Structural unemployment is
• Which of the following is a topic of macroeconomics
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• How do you convert a price of a good from an earlier time into todays price
• Official unemployment is identified as when
• When it is difficult to hire employees firms take ____________ to hire which increases ____________ unemployment
• From 2006 to 2010 per capita real gross domestic product (GDP) in Ethiopia grew an average of 799 per year At that rate according to the Rule of 70 in roughly how many years will the Ethiopian economy double in size
• Donna Newton made $030 per hour in 1946 at a small restaurant in Clearfield Pennsylvania If the consumer price index (CPI) was 183 in 1946 and 2024 in 2011 then Donnas inflation-adjusted wage would be
• Which of the following statements about historical unemployment rate is true
• Consumption is approximately ________ of GDP
• Which of the following equations represents the labor force
• Technological advances
• GDP is not a good measure of
• It has been shown that increases in the money supply are directly related to the rate of inflation If the previous statement is true then
• Deflation
• Company X sells sugar to company Y for $50000 Company Y uses the sugar to make chocolate bars selling them to consumers for $150000 The total contribution to GDP is
• Saudi Arabia is an oil-rich country in the Middle East Much of the country is covered by desert meaning that the nations food production is very low Much of its food must be imported from other countries Does this mean that Saudi Arabia has a very small endowment of natural resources
• A company sells 100 boxes of chocolate yet it only produced 90 boxes of chocolate during the year Which of the following is true
• What function of money is highlighted when I am comparing the price of one product to another
• What function of money is highlighted when I pay for my cell phone bill with cash
• If the government starts a new program where it buys every family that lives in Florida a new air conditioner one may argue this could lead to
• Automatic stabilizers
• The value of money
• Automatic stabilizers try to solve the problem of
• Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right As a result
• Crowding-out occurs when
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount in loans that can be made by all the banks in the banking system
• The sale of existing US Treasury securities by the Federal Reserve
• When can a bank make loans
• Policies that focus on education
• If the government were to print more money which of the following would occur
• Complete crowding-out is when
• Expansionary monetary policy can have immediate real short-run effects initially no prices have adjusted But as prices adjust in the long run
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the amount of required reserves
• If a bank has a required reserve ratio of 15 and has required reserves of $225000000 how much does the bank hold in deposits
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• Which of the following is an example of barter where the double coincidence of wants may not always occur
• Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called
• In the short run some prices are inflexible Most often the prices that are inflexible are
• Depending on how fiscal policy is implemented it can affect
• It is difficult to determine when the economy is turning up or down This is because there is ___________ that delays the effects of changes in fiscal policy
• When gasoline gallons are priced in terms of number of seashells seashells serve as
• An implementation lag happens because
• Which of the following is an example of crowding-out
• Lowering marginal income tax rates for individuals
• Expansionary monetary policy ____________ interest rates which can be shown in the ______________________
• If a bank has a required reserve ratio of 10 and has required reserves of $100000000 how much does the bank hold in deposits
• The two types of monetary policy are
• The Federal Reserve System was created in
• Research and development (RampD) tax credits
• Which of the following is not a characteristic of fiat money
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit what is the maximum amount the bank can hold as loans
• Suppose a hurricane destroys 20 of the capital stock in a country In the long run output will _________ and the price level will _________
• Expansionary fiscal policy occurs when
• Lower corporate profit tax rates
• Suppose new drilling techniques increase the world oil supply In the long run output will _________ and the price level will _________
• When stock prices declined during the Great Recession it caused aggregate demand to decrease because
• Which of the following would cause a downward movement along the aggregate demand curve
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks reserves increase
• During the Great Depression aggregate demand decreased This would have been caused by
• During which of the following situations would you advise for expansionary fiscal policy
• An increase in aggregate demand is harmful because
• The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called
• A decrease in US housing prices would tend to cause
• Shifts in the aggregate demand curve are caused by
• The relationship between sticky input prices and flexible output prices explains
• The Great Recession ended in
• Which of the following would cause an increase in employment in the short run
• An example of expansionary fiscal policy is
• lWhich of the following statements about travelers checks is true
• Why isnt the barter method of exchange more common in the US economy
• Fiscal policy is
• An increase in expected future prices causes
• ___________ is an example of an automatic stabilizer
• During a financial crisis hit hard by bank failures the money supply
• A rise in the price level that leads to a change in the interest rate and therefore to a change in the quantity of aggregate demand will cause
• The Federal Reserve actively worked to keep the federal funds rate at nearly _________ for several years following the Great Recession
• A major advantage of money over barter is that it is
• When US aggregate demand and long-run aggregate supply decreased during the Great Recession
• During the Great Recession the US ________ curve shifted to the ________
• The Great Depression when compared to other economic downturns in US history
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• During the Great Recession ___________ caused aggregate demand to decrease
• An increase in the value of the dollar will __________ exports and __________ imports
• The Great Recession was different from other recessions since World War II in that
• Aggregate supply describes a relationship between
• As part of the Economic Stimulus Act of 2008 the typical family of four received
• A recognition lag happens because
• Shifts in the long-run aggregate supply curve are caused by
• When money is acting as a unit of account it
• The Great Recession began in
• What is true about banks in a fractional reserve banking system
• One similarity between the Great Recession and the Great Depression is that in both episodes
• What will economists today likely state should have been done to limit the severity of the Great Depression
• Central banks can use monetary policy to
• Contractionary monetary policy
• If Ann were to convert some of her checkable deposits into a certificate of deposit which of the following changes would take place
• An impact lag happens because
• It takes time for the complete effects of monetary and fiscal policy to materialize This is because there is ___________ between setting fiscal policy and seeing its effects
• Input prices are _________ in the short run and _________ in the long run
• Why would a government want to use expansionary fiscal policy to help stimulate aggregate demand if in the long run we would expect prices to adjust and the economy to return to its long-run equilibrium on its own
• Long-run aggregate supply shifts are caused by
• When the government increases spending or decreases taxes to stimulate the economy toward expansion the government is conducting
• ___________ can eliminate recognition lags and implementation lags and thereby alleviate some concerns of destabilizing fiscal policy
• Suppose advances in computer technology lead to a surge in worker productivity In the long run output will _________ and the price level will _________
• A stock market crash in __________ is generally viewed as the beginning of the Great Depression
• During the Great Recession a major financial crisis followed the collapse of housing prices which led to
• If prices fall then real wealth __________ and the quantity of aggregate demand __________
• A supply shock causes a shift in
• _________ would decrease short-run aggregate supply
• When financial markets went into a crisis during the Great Recession it caused long-run aggregate supply to decrease because
• When the economy falters people often look to the government to help push the economy forward again In fact the government uses many different tools to try to affect the economy Economists classify these tools on the basis of two different types of policy
• Increases in productivity will
• The long-run aggregate supply curve is
• As credit card balances increase what will be the consequence for M1 and M2
• If I were to give cash to my mother for her birthday and she kept the cash under her mattress which of the following changes would take place
• When US goods become more expensive relative to foreign goods exports will __________ and imports will __________
• Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model
• __________________ is when a central bank acts to increase the money supply in an effort to stimulate the economy
• Assume that the government is currently balancing the national budget so that outlays equal tax revenue Then the economy slips into recession and the government decides to increase government spending by $50 billion The government must pay for this by borrowing it must sell $50 billion worth of Treasury bonds As a result
• When US housing prices declined prior to and during the Great Recession it caused aggregate demand to decrease because
• In the long run a technological advance that improves communication can be expected to _________ labor productivity and _________ unemployment
• Which of the following explains expansionary monetary policy in the long run
• Suppose a countrys population is growing due to immigration In the long run output will _________ due to _________
• Printing more paper money doesnt affect the economys long-run productivity or its ability to produce these outcomes are determined by
• A decrease in aggregate demand is harmful in the short run because __________ but beneficial in the long run because __________
• If Bank of Mateer has a required reserve ratio of 40 and there is $100000 in deposits what is the amount of required reserves
• When I decide to deposit $100 in cash into my savings account at the bank how would this be reflected on the banks balance sheet
• According to the interest rate effect an increase in the price level leads to __________ in the interest rate and therefore to __________ in the quantity of aggregate demand
• In the short run expansionary monetary policy ___________ real gross domestic product (GDP) ___________ unemployment and ___________ the price level
• Suppose a prolonged war in a country destroys 30 of the capital stock In the long run the price level will _________ as _________
• Imagine that you deposit $25000 in currency (which you had been storing in your closet) into your checking account at the bank Assume that this institution has a required reserve ratio of 25 As a result of this deposit by how much will the banks required reserves increase
• Which of the following causes an increase in short-run aggregate supply
• The Great Depression actually consisted of two recessions the first of which began in _________ and ended in _________
• A supply shock is defined as
• The goal of contractionary fiscal policy is to shift the __________ curve to the __________
• Fiscal policy that seeks to counteract business-cycle fluctuations is
• If the economy starting at full-employment output begins to enter into an expansion one would expect Congress and the president to conduct
• Prior to the Great Depression US stock prices decreased dramatically This would tend to cause
• Injecting new money into the economy eventually causes
• You read in the paper that there has been a significant increase in the consumer confidence index Having taken an economics class you predict that spending in the economy will __________ and aggregate demand will __________
• In a fiat money economy M1 includes currency as well as
• New computer technologies can be expected to
• Which of the following is NOT considered part of M2
• When inflation pushes up prices in the economy input prices are _________ and revenues _________ in the short run
• Progressive tax rates taxes on corporate profits unemployment compensation and welfare programs are all examples of
• An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions
• One similarity between the Great Depression and the Great Recession is that in both cases
• Unemployment rises and real gross domestic product (GDP) growth slows during the
• If a bank has a required reserve ratio of 25 and there is $10000 in deposits what is the maximum possible change to the money supply
• The crowding-out critique is based on the idea that
• Which of the following fiscal policy initiatives focuses on the supply side of the economy
• One of the reasons why the Great Depression was so severe is that
• During recessionary periods
• Three issues that arise in the application of activist fiscal policy are
• Suppose housing values fall during a recession In the short run
• During the Great Recession the US aggregate demand curve shifted to the left in part because
• Suppose that many countries in Europe sink into recession In the short run output in the United States will __________ and the price level will __________
• The Great Recession lasted for
• During the Great Depression aggregate demand in the US economy decreased As a result the price level _________ and real gross domestic product (GDP) _________
• Which of the following events could cause inflation in the United Statesmdasha country that uses fiat money
• In which of the following situations does money serve as a store of value
• What did the Federal Reserve do in response to the Great Recession
• One difference between the Great Recession and the Great Depression is that
• During the Great Depression thousands of US banks failed As a result
• Which of the following would cause an upward movement along the aggregate demand curve
• Countercyclical fiscal policy attempts to
• The Great Depression lasted longer and was deeper than the average recession in part because
• Contractionary monetary policy occurs when
• I have a checking account at the local bank and my sister has a car loan at the same bank How does each of these appear on the banks balance sheet
• If the effects of contractionary fiscal policy hit when the economy is already contracting
• When a change in the price level leads to a change in saving this is known as the
• The back-to-back recessions that began in 1929 and ended in 1938 are collectively known as
• The three time lags that accompany policy decisions are
• The Great Depression actually consisted of two recessions the second of which began in _________ and ended in _________
• When the price level rises and US goods become relatively more expensive than foreign goods there will be
• A government might want to reduce aggregate demand if it believes that
• An increase in taxes or a decrease in spending during an economic expansion can
• The aggregate demand curve is best represented by which of the following equations
• When aggregate demand is low enough to drive unemployment above the natural rate
• If I were to deposit cash into my savings account which of the following changes would take place
• Which of the following would cause an increase in the price level in the long run
• During the Great Depression there was a financial crisis and a stock market crash both of which
• When aggregate demand is high enough to drive unemployment below the natural rate
• An increase in short-run aggregate supply immediately leads to
• an increase in real wealth and a movement along the aggregate
• When an economy has a more stable and well-developed financial system it is reasonable to expect
• If a bank has a required reserve ratio of 10 excess reserves of $10000000 and deposits of $500000000 how much can the bank lend out
• Real per capita gross domestic product (GDP) is defined as
• Higher rates of economic growth are negatively correlated with
• Per capita real gross domestic product (GDP) is higher in the United States than in Mexico Based on that we could predict the United States to have a higher rate of ___________ and a lower rate of ___________
• An increase in the amount of household wealth in an economy would ___________ the average standard of living and would ___________ the spending power experienced by the typical person
• Residents of wealthy countries tend to have longer life expectancies because
• Residents of poor countries tend to have higher rates of infant mortality because
• Residents of poor countries tend to have fewer automobiles per capita because
• Long-run per capita world income growth was basically flat until around what year
• Average world income began to increase rapidly during
• Average world income began to rapidly rise during the Industrial Revolution because
• Which of the following statements best describes the average standard of living for much of human history prior to the Industrial Revolution
• If an economy experiences economic growth does that mean that everyone in that economy will be better off
• In 2011 Canada`s gross domestic product (GDP) was roughly $1396 trillion Given that Canada`s population was roughly 334 million people per capita GDP in Canada in 2011 was roughly
• Economic growth (per capita) equals the percent change in nominal gross domestic product (GDP) minus
• The percent change in real per capita gross domestic product (GDP) equals
• The percent change in nominal gross domestic product (GDP) minus the percent change in prices and the rate of population growth equals
• The two factors that must be subtracted from the percent change in nominal gross domestic product (GDP) to yield the percent change in per capita real GDP are
• The two factors that must be added to the percent change in per capita real gross domestic product (GDP) to yield the percent change in nominal GDP are
• From 2011 to 2012 US real GDP increased by 22 and the US population grew by 1 Therefore per capita real GDP in the United States increased by
• Nominal gross domestic product (GDP) is a poor measure of economic growth because
• Change in per capita real gross domestic product (GDP) is the best measure of economic growth because
• Annual real per capita gross domestic product (GDP) in the United States was roughly $44000 in 2000 If it grew by 3 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and the population grew by 1 we know that per capita real GDP grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that prices increased by 1 and per capita real GDP grew by 18 we know that the population grew by
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States grew by 38 Given that the population grew by 1 and per capita real GDP grew by 18 we know that prices increased by
• In 2010 real gross domestic product (GDP) in the United States was roughly $146 trillion In 2011 real GDP in the United States was roughly $151 trillion Therefore between 2010 and 2011 real GDP grew by
• In 2010 per capita real gross domestic product (GDP) in the United States was roughly $46000 In 2011 per capita real GDP in the United States was roughly $48400 Therefore between 2010 and 2011 the rate of economic growth in the United States was
• In 2011 per capita real gross domestic product (GDP) in Mexico was roughly $10100 If Mexico experienced economic growth of 48 in 2012 per capita real GDP would increase to
• Annual real per capita gross domestic product (GDP) in China was roughly $5200 in 2000 If it grew by 10 the following year by 2001 the annual real per capita GDP would be
• Annual real per capita gross domestic product (GDP) in India was roughly $2900 in 2000 If it grew by 8 the following year by 2001 the annual real per capita GDP would be
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 Given that prices increased by 1 and the population grew by 1 we know that nominal GDP grew by
• In 2007 per capita real gross domestic product (GDP) in Brazil was $989392 By 2008 it had increased to $1052558 At what rate did Brazil`s economy grow in that time
• In 2005 per capita real gross domestic product (GDP) in Angola was $332810 By 2006 it had increased to $403431 At what rate did Angola`s economy grow in that time
• In the Republic of Yemen per capita real gross domestic product (GDP) in 2004 was $210927 By 2005 it had increased to $220305 At what rate did Yemen`s economy grow in that time
• If you attempted to determine if the standard of living of a country has increased by looking only at changes in its nominal gross domestic product (GDP) what would you be missing
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect changes in the price level because
• When computing economic growth changes in nominal gross domestic product (GDP) must be adjusted to reflect population growth because
• From 2009 to 2010 nominal gross domestic product (GDP) in the United States increased by 38 Does this mean that the US economy actually grew during that time period
• If your income increases at a rate of 2 per year how long will it take to double your income
• James has worked for the same company his entire life His current income is $100000 per year When he was originally hired he made $50000 per year The company has given James a consistent raise of 2 every year How long has James been with the company
• From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 18 At that rate according to the Rule of 70 in roughly how many years will per capita real GDP double
• From 2006 to 2010 per capita real gross domestic product (GDP) in China grew an average of 1062 per year At that rate according to the Rule of 70 in roughly how many years will Chinese per capita real GDP double in size beginning in 2006
• From 2006 to 2010 per capita real gross domestic product (GDP) in India grew an average of 711 per year At that rate according to the Rule of 70 in roughly how many years will the Indian economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Japan grew an average of 046 per year At that rate according to the Rule of 70 in roughly how many years will the Japanese economy double in size
• From 2006 to 2010 per capita real gross domestic product (GDP) in Egypt grew an average of 48 per year At that rate according to the Rule of 70 in roughly how many years will the Egyptian economy double in size
• An increase in ________________ would lead to an increase in long-run economic growth
• The inputs used to produce goods and services are also known as
• We know that resources are important for economic growth Which of the following statements about resources is true
• An example of physical capital is
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her bakery
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the physical capital resource at her hair salon
• A(n) _____________ in capital goods should ____________ worker productivity
• Populations tend to grow over time meaning there are more workers In order to maintain a constant level of worker productivity the total amount of capital available to them must
• Why would an increase in capital resources lead to an increase in worker productivity
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Lauren owns a bakery She wants to increase her daily production of baked goods so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her bakery
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Steve owns a bike shop He wants to increase the number of bikes he sells each month so he knows he needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at his bike shop
• Krista owns a hair salon She wants to increase the number of clients she serves each month so she knows she needs to acquire more resources Which of the following actions would represent an increase in the human capital resource at her hair salon
• A firm`s human capital would increase with
• An increase in human capital would tend to
• Steve owns a bike shop He wants to increase the number of bikes he sells each week and he wants to use a technological advance to do so _______________ would represent a technological advance at his bike shop
• Lauren owns a bakery She wants to increase her daily production of baked goods and she wants to use a technological advance to do so _______________ would represent a technological advance at her bakery
• Nathan owns a coffee shop He wants to increase the weekly number of coffee drinks he sells and he wants to use a technological advance to do so ______________ would represent a technological advance at his coffee shop
• In what way did Henry Ford`s use of the assembly-line method of production represent an advance in technology in automobile manufacturing
• As they relate to economic growth institutions are
• One of the most basic reasons why Taiwan is so much wealthier than Liberia is that Taiwan has
• Today not all regions of the world enjoy the same level of annual real per capita gross domestic product (GDP) The regions that have higher levels of real per capita GDP probably also have
• Is having abundant resources an absolute guarantee of economic growth and prosperity
• Which of the following is an example of an institution that promotes economic growth
• Which of the following factors is negatively correlated with economic growth