Survey of Economics Exam Review
Course Introduction
Survey of Economics provides an overview of fundamental economic principles and concepts, introducing students to both microeconomics and macroeconomics. The course covers topics such as supply and demand, market structures, the role of government in the economy, economic indicators, fiscal and monetary policy, international trade, and current economic issues. Through real-world examples and discussions, students develop a foundational understanding of how economic forces shape individual decisions, business strategies, and national policies, preparing them for further study or informed citizenship.
Recommended Textbook
Economics 4th Edition by Paul Krugman
Available Study Resources on Quizplus
35 Chapters
7902 Verified Questions
7902 Flashcards
Source URL: https://quizplus.com/study-set/3897
Page 2
Chapter 1: First Principles
Available Study Resources on Quizplus for this Chatper
233 Verified Questions
233 Flashcards
Source URL: https://quizplus.com/quiz/77615
Sample Questions
Q1) Which of the following is an example of marginal analysis?
A) ordering a pizza rather than eating leftover meatloaf
B) deciding whether to eat one more slice of pizza
C) using a coupon to save $2 on a pizza
D) writing a check to pay for the pizza rather than using a credit card
Answer: B
Q2) Marginal analysis:
A) refers to decisions about whether or not to engage in a particular activity.
B) is primarily used when making an either-or choice.
C) is used primarily when deciding how much of an activity should be done.
D) does not help when making a "how much" choice.
Answer: C
Q3) Which of the following is the BEST example of making a choice at the margin?
A) buying a new car
B) quitting your job
C) drinking another cup of coffee
D) attending college
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
3
Chapter 2: Economic Models- Trade-Offs and Trade
Available Study Resources on Quizplus for this Chatper
313 Verified Questions
313 Flashcards
Source URL: https://quizplus.com/quiz/77613
Sample Questions
Q1) If the production possibility frontier is a straight line:
A) opportunity costs are constant.
B) the firm faces increasing costs.
C) the firm faces decreasing costs.
D) there is no trade-off between the two goods represented.
Answer: A
Q2) In the circular-flow diagram households receive money for _____ in the _____ market.
A) producing and selling goods and services; product
B) selling resources; product
C) selling resources; factor
D) selling goods and services; factor
Answer: C
Q3) In the factor market, firms buy goods and services.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Supply and Demand
Available Study Resources on Quizplus for this Chatper
290 Verified Questions
290 Flashcards
Source URL: https://quizplus.com/quiz/77612
Sample Questions
Q1) A negative relationship between the quantity demanded and price is called the law of:
A) demand.
B) marginality.
C) efficiency.
D) supply.
Q2) High-fructose corn syrup, which is derived from corn, is an important ingredient in the production of many soft drinks. If the price of corn increases, one would expect:
A) the supply curve for soft drinks to shift left.
B) the quantity supplied of soft drinks to increase.
C) the demand for soft drinks to increase.
D) the supply curve for soft drinks to shift right.
Q3) An increase in the price and an ambiguous change in quantity is most likely caused by:
A) a shift to the left in demand and no shift in supply.
B) a shift to the left in supply and no shift in demand.
C) a shift to the right in supply and a shift to the left in demand.
D) a shift to the left in supply and a shift to the right in demand.
Q4) Why do many clothing stores have big after-Christmas sales on their merchandise?
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Consumer and Producer Surplus
Available Study Resources on Quizplus for this Chatper
224 Verified Questions
224 Flashcards
Source URL: https://quizplus.com/quiz/77611
Sample Questions
Q1) Which situation would most likely cause a DECREASE in consumer surplus in the toy market?
A) The cost of shipping increases because of higher oil prices.
B) Consumer income increases.
C) There is an unexpected baby boom.
D) A new assembly line design increases worker productivity.
Q2) (Table: Producer Surplus) Look at the table Producer Surplus. If the price of a ticket to see The Nutty Nutcracker is $75 and there is no other market for tickets, the total producer surplus for the five students is:
A) $190.
B) $139.
C) $75.
D) $40.
Q3) Externalities affect the welfare of others not involved in the production or consumption of a good or service in ways that markets don't take into account.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
6
Chapter 5: Price Controls and Quotas- Meddling With Markets
Available Study Resources on Quizplus for this Chatper
201 Verified Questions
201 Flashcards
Source URL: https://quizplus.com/quiz/77610
Sample
Questions
Q1) A quota is the minimum amount of some good that can be bought and sold. A)True
B)False
Q2) A price ceiling on a good often results in:
A) black market or underground transactions of the good.
B) a surplus of the product.
C) more communication between buyers and sellers about the appropriate price. D) a more efficient allocation of the good to buyers.
Q3) A price ceiling is likely to result in a persistent _____, a transfer of surplus from _____, and _____ deadweight loss.
A) surplus; producers to consumers; some B) shortage; producers to consumers; some C) shortage; consumers to producers; no D) surplus; consumers to producers; some
Q4) If the demand curve for clams is downward-sloping, a quota that is set below the equilibrium quantity will decrease the price that consumers pay for clams.
A)True
B)False
Q5) How does a price ceiling cause deadweight loss in the market?
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Elasticity
Available Study Resources on Quizplus for this Chatper
98 Verified Questions
98 Flashcards
Source URL: https://quizplus.com/quiz/77609
Sample Questions
Q1) The price elasticity of demand is measured by _____ the percentage change in _____ the percentage change in _____.
A) dividing; price by; quantity demanded
B) dividing; quantity demanded by; price
C) subtracting; price from; quantity demanded
D) adding; price to; quantity demanded
Q2) (Figure: The Demand for e-Books) Look at the figure The Demand for e-Books. What is the price elasticity of demand (by the midpoint method) when the price decreases from $6 to $4?
A) 0.55
B) 0.5
C) 1
D) 0.67
Q3) When the price goes down, the quantity demanded goes up. The price elasticity of demand measures:
A) how much the price goes down.
B) how much the equilibrium price goes up.
C) the responsiveness of the price change to an income change.
D) the responsiveness of the quantity change to the price change.
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: Taxes
Available Study Resources on Quizplus for this Chatper
298 Verified Questions
298 Flashcards
Source URL: https://quizplus.com/quiz/77608
Sample Questions
Q1) Which of the following taxes reflects the ability-to-pay principle?
A) the federal income tax
B) the payroll tax
C) a sales tax on food
D) Social Security tax
Q2) Sales taxes are considered to be:
A) proportional.
B) progressive.
C) degressive.
D) regressive.
Q3) The demand for food is very inelastic compared to the supply of food, so if a tax is imposed on the consumers of food, the tax incidence:
A) is typically on consumers more than producers.
B) is typically on producers more than consumers.
C) is typically split equally between consumers and producers.
D) cannot be determined without more information.
Q4) If demand is perfectly inelastic, the deadweight loss caused by a tax will be zero.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 9: The Rational Consumer
Available Study Resources on Quizplus for this Chatper
44 Verified Questions
44 Flashcards
Source URL: https://quizplus.com/quiz/77603
Sample Questions
Q1) Joe's budget line reflects the _____ available to Joe if he spends _____ of his income.
A) consumption bundles; all B) consumption bundles; part C) utility; all D) utility; part
Q2) (Figure and Table: The Budget Line) Look at the figure and table The Budget Line. _____ in the price of potatoes would rotate the budget line along the _____ axis _____ the origin.
A) An increase; horizontal; away from B) A decrease; horizontal; toward C) An increase; vertical; away from D) A decrease; vertical; away from
Q3) Whatever the relevant time, Molly's spending will be _____ by her _____.
A) unlimited; marginal utility
B) limited; marginal utility
C) limited; budget
D) unlimited; budget
To view all questions and flashcards with answers, click on the resource link above.
10
Chapter 8: International Trade
Available Study Resources on Quizplus for this Chatper
268 Verified Questions
268 Flashcards
Source URL: https://quizplus.com/quiz/77607
Sample Questions
Q1) (Figure: The Production Possibility Frontiers for Jackson and Tahoe) Look at the figure The Production Possibility Frontiers for Jackson and Tahoe. Tahoe has an absolute advantage in producing:
A) wheat only.
B) cattle only.
C) both wheat and cattle.
D) neither wheat nor cattle.
Q2) When an economy moves from autarky to free international trade, for industries in the export sector, consumer surplus _____, producer surplus _____, and the economy as a whole _____.
A) rises; rises; gains
B) rises; falls; gains
C) falls; rises; gains
D) falls; rises; loses
Q3) Which of the following oversees international trade agreements?
A) NAFTA
B) the World Trade Organization
C) the European Union
D) the Federal Reserve Bank
Q4) Explain the difference between comparative advantage and absolute advantage.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Decision Making by Individuals and Firms
Available Study Resources on Quizplus for this Chatper
116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/77606
Sample Questions
Q1) Economic profits are calculated by:
A) taking the difference between total revenue and the sum of explicit and implicit costs.
B) taking the difference between total revenue and explicit costs only.
C) taking the difference between the total revenue and implicit costs only.
D) summing total revenue, explicit costs, and implicit costs.
Q2) Which of the following is a "how much" decision?
A) Mary is trying to decide whether to go to work or go to college after she graduates from high school next month.
B) Andrea is trying to decide whether to go to graduate school in economics or go to law school.
C) Tim is trying to decide the amount of money to save each month to buy a new car next year.
D) Andy is trying to decide whether to take a prep course for the Law School Admissions Test.
To view all questions and flashcards with answers, click on the resource link above.
12
Chapter 11: Perfect Competition and the Supply Curve
Available Study Resources on Quizplus for this Chatper
355 Verified Questions
355 Flashcards
Source URL: https://quizplus.com/quiz/77602
Sample Questions
Q1) (Figure: Marginal Decision Rule) Look at the figure The Marginal Decision Rule. If P<sub>1</sub> is the market price and if this firm is maximizing profit, it should produce:
A) where MR > MC.
B) at quantity q<sub>2</sub>.
C) at quantity q<sub>1</sub>, where MR > MC.
D) a quantity greater than q<sub>1</sub> but less than q<sub>2</sub>.
Q2) (Figure: The Profit-Maximizing Firm in the Short Run) Look at the figure The Profit-Maximizing Firm. O is the _____ curve.
A) ATC
B) MR
C) MC
D) AVC
Q3) Suppose a perfectly competitive firm can increase its profits by increasing its output. Then it must be true that the firm's _____ exceeds its _____.
A) marginal revenue; marginal cost
B) price; average total cost but is less than marginal cost
C) marginal cost; marginal revenue
D) price; marginal revenue
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Monopoly
Available Study Resources on Quizplus for this Chatper
348 Verified Questions
348 Flashcards
Source URL: https://quizplus.com/quiz/77601
Sample Questions
Q1) If a monopolist can engage in perfect price discrimination:
A) it produces at the socially efficient level.
B) consumer surplus is maximized.
C) producer surplus is minimized.
D) the government may impose fines on the monopolist.
Q2) Suppose that the Yankee Cap Company is a profit-maximizing firm with a monopoly in the production of baseball caps. The firm sells its baseball caps for $25 each. For this information, we can assume that the Yankee Cap Company is producing a level of output at which:
A) marginal revenue equals $25.
B) marginal cost equals marginal revenue.
C) average total cost equals $25.
D) average total cost is greater than $25.
Q3) Lenoia runs a natural monopoly producing electricity for a small mountain village. The barrier preventing other firms from competing with her is:
A) her control of scarce natural resources.
B) economies of scale.
C) her technological superiority.
D) a government-set barrier.
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: Oligopoly
Available Study Resources on Quizplus for this Chatper
97 Verified Questions
97 Flashcards
Source URL: https://quizplus.com/quiz/77600
Sample Questions
Q1) (Figure: Collusion) Look at the figure Collusion. The quantity of output produced by firm 1 when there is collusion in the industry is shown by:
A) F.
B) G.
C) H.
D) K.
Q2) (Table: Demand for Crude Oil) Look at the table Demand for Crude Oil. Assume that the crude oil industry is a duopoly and the marginal cost of producing crude oil is zero. Suppose that the two firms are maximizing industry profit and splitting the profit evenly. If firm 1 decides to cheat and increase production by 10 more barrels, the price of crude oil will be:
A) $0.
B) $70.
C) $80.
D) $160.
To view all questions and flashcards with answers, click on the resource link above.
15
Chapter 14: Monopolistic Competition and Product
Differentiation
Available Study Resources on Quizplus for this Chatper
124 Verified Questions
124 Flashcards
Source URL: https://quizplus.com/quiz/77599
Sample Questions
Q1) In a long-run equilibrium, firms in a monopolistically competitive industry sell at a price:
A) equal to marginal cost.
B) less than marginal cost.
C) greater than marginal cost.
D) less than marginal revenue.
Q2) Because most communities have a large number of similar but not identical substitutes, the market for chiropractors is best considered to be:
A) an oligopoly.
B) perfect competition.
C) monopolistically competitive.
D) a monopoly.
Q3) Suppose a monopolistically competitive firm is making a profit, but it can increase its profits by increasing output. At the current level of output:
A) marginal revenue is greater than marginal cost.
B) price is less than marginal cost.
C) price is less than average total cost.
D) marginal revenue is less than marginal cost.
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Externalities
Available Study Resources on Quizplus for this Chatper
140 Verified Questions
140 Flashcards
Source URL: https://quizplus.com/quiz/77598
Sample Questions
Q1) Suppose an emissions tax is imposed on all dairy farms in Wisconsin. This tax would:
A) encourage the dairy farmers to lower prices.
B) increase the level of emissions.
C) reduce the supply of milk in Wisconsin.
D) increase the supply of milk in Wisconsin.
Q2) The principal government agency in the United States responsible for enforcing national environmental policies is the:
A) Department of Agriculture.
B) Department of the Interior.
C) Environmental Protection Agency.
D) Department of Justice.
Q3) According to the Coase theorem, the private market can achieve an efficient outcome:
A) as long as the enforcement of property rights costs less than the marginal benefit of emissions.
B) only if the property right to clean air is assigned to the polluter.
C) only if the property right to clean air is assigned to the party harmed by pollution.
D) if bargaining costs are low and property rights are well-defined.
To view all questions and flashcards with answers, click on the resource link above.
17
Chapter 16: Public Goods and Common Resources
Available Study Resources on Quizplus for this Chatper
75 Verified Questions
75 Flashcards
Source URL: https://quizplus.com/quiz/77597
Sample Questions
Q1) When the allocation of resources is such that a different allocation would increase society's welfare, economists say:
A) market failure has occurred.
B) the efficiency condition is met.
C) decision makers have faced the full marginal benefits and marginal costs of their decisions.
D) producers have maximized total cost.
Q2) If a good is subject to the free-rider problem and an inefficiently low level of production when left to the private market, the good must be a(n):
A) private good.
B) public good.
C) common resource.
D) artificially scarce good.
Q3) For a nonrival good like pay-per-view television programs, the private market will lead to:
A) production of too much of the good.
B) consumption of too much of the good.
C) consumption of too little of the good.
D) outsourcing its production.
To view all questions and flashcards with answers, click on the resource link above.
Page 18
Chapter 17: The Economics of the Welfare State
Available Study Resources on Quizplus for this Chatper
91 Verified Questions
91 Flashcards
Source URL: https://quizplus.com/quiz/77596
Sample Questions
Q1) Some nations, including Canada, have adopted a health care system in which the government pays the medical bills. This is known as a(n) _____ system.
A) employment-based
B) private health insurance
C) means-tested
D) single-payer
Q2) A negative income tax is levied on firms even if they have negative income.
A)True
B)False
Q3) In 2012, which of the following demographic groups had the HIGHEST poverty rate?
A) African-Americans
B) Hispanics
C) Whites
D) female-headed families with no husband present
Q4) An advantage of employment-based insurance is that it:
A) increases moral hazard.
B) increases the likelihood of adverse selection.
C) increases government tax revenues.
D) receives favorable tax treatment.
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Factor Markets and the Distribution of Income
Available Study Resources on Quizplus for this Chatper
314 Verified Questions
314 Flashcards
Source URL: https://quizplus.com/quiz/77594
Sample Questions
Q1) The firm's value of marginal product curve slopes downward:
A) only if the firm is a perfect competitor in the product market.
B) because of diminishing returns.
C) only if the firm is a perfect competitor in the labor market.
D) only if the firm is a perfect competitor in both the labor and product markets.
Q2) (Figure: The Demand for Bricklayers) Look at the figure The Demand for Bricklayers. If the price for bricks laid in the wall is $0.10 a brick, the total production of bricks by the first three bricklayers is _____ bricks.
A) 1,500
B) 2,900
C) 4,200
D) 5,400
Q3) (Table: Employment and Output) In the table Employment and Output, if the price of a bushel of wheat is $10, then the value of the marginal product of the third worker is: A) $15.
B) $150.
C) $170.
D) $510.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 19: Uncertainty, Risk, and Private Information
Available Study Resources on Quizplus for this Chatper
197 Verified Questions
197 Flashcards
Source URL: https://quizplus.com/quiz/77593
Sample Questions
Q1) (Table: Income and Utility for Tyler) The table Income and Utility for Tyler shows the utility Tyler receives at various income levels, but she does not know what her income will be next year. There is a 40% chance her income will be $20,000, a 40% chance her income will be $30,000, and a 20% chance her income will be $40,000. What level of certain income matches her expected utility, given the uncertainty?
A) $28,000
B) $25,000
C) $26,516
D) $29,000
Q2) Economic growth that is not industry-specific is most likely to:
A) have no effect on most businesses.
B) result in many businesses doing well.
C) result in many businesses not doing well.
D) affect only a few select businesses.
Q3) The insurance industry operates on the principles of:
A) risk trading and diversification.
B) exploitation and capital accumulation.
C) moral hazard and irrationality.
D) adverse selection and diminishing marginal utility.
To view all questions and flashcards with answers, click on the resource link above.
Page 21
Chapter 20: Macroeconomics- the Big Picture
Available Study Resources on Quizplus for this Chatper
168 Verified Questions
168 Flashcards
Source URL: https://quizplus.com/quiz/77592
Sample Questions
Q1) Macroeconomics focuses on:
A) the economy as a whole.
B) individual decisions.
C) wages.
D) the allocation of scarce resources.
Q2) If workers' nominal wages have risen by 50% over a 10 years and prices have increased by 40% in that same period, then we can safely conclude that the amount of goods and services workers can buy has:
A) fallen.
B) increased.
C) not changed.
D) decreased in quality.
Q3) Monetary and fiscal policy are tools to reduce the severity of recessions.
A)True
B)False
Q4) The paradox of thrift highlights:
A) the role of investment in the macroeconomy.
B) how individual decisions to save more may worsen a recession.
C) how an increase in spending occurs during recessions.
D) irrational behavior on the part of households.
To view all questions and flashcards with answers, click on the resource link above. Page 22
Chapter 21: Gdp and the Consumer Price Index
Available Study Resources on Quizplus for this Chatper
204 Verified Questions
204 Flashcards
Source URL: https://quizplus.com/quiz/77591
Sample Questions
Q1) Which one of the following transactions is included in a current year's GDP as investment spending?
A) ABC company purchased 10,000 shares of IBM stock.
B) Ronnie bought a new BMW.
C) Anton purchased his friend's condo.
D) Maggie bought a play-gym set for her day-care business.
Q2) If during 2011 the Republic of Sildavia recorded a value added of $78 billion, wages of $40 billion, profits of $8 billion, and total sales of $90 billion, the value of intermediate goods purchased during 2011 in Sildavia was:
A) $42 billion.
B) $30 billion.
C) $12 billion.
D) $4 billion.
Q3) Real GDP tends to overstate our economic well-being by including:
A) expenditures on crime prevention.
B) payments for cleaning up the environment.
C) repairs to structures destroyed by storms.
D) expenditures on crime prevention, payments for cleaning up the environment, and repairs to structures destroyed by storms.
To view all questions and flashcards with answers, click on the resource link above.
Page 23
Chapter 22: Unemployment and Inflation
Available Study Resources on Quizplus for this Chatper
351 Verified Questions
351 Flashcards
Source URL: https://quizplus.com/quiz/77590
Sample Questions
Q1) When the unemployment rate is very low, most of it tends to be:
A) cyclical.
B) frictional.
C) seasonal.
D) structural.
Q2) If actual unemployment is 6.2% and the natural rate is 4%, cyclical unemployment is:
A) 6.2%.
B) 10.2%.
C) 4%.
D) 2.2%.
Q3) Unanticipated inflation:
A) helps those on fixed incomes.
B) hurts borrowers and helps lenders.
C) helps borrowers and hurts lenders.
D) causes interest rates to decrease.
Q4) The real interest rate is the nominal interest rate less the rate of inflation.
A)True
B)False
Q5) Explain the difference between shoe-leather costs and menu costs of inflation.
To view all questions and flashcards with answers, click on the resource link above. Page 24
Chapter 23: Long-Run Economic Growth
Available Study Resources on Quizplus for this Chatper
313 Verified Questions
313 Flashcards
Source URL: https://quizplus.com/quiz/77589
Sample Questions
Q1) If real GDP grows at an annual rate of 1%, it will double in approximately _____ years.
A) 11
B) 23
C) 35
D) 70
Q2) (Figure: Technological Progress and Productivity Growth) Look at the figure Technological Progress and Productivity Growth. Which of the following changes in real GDP is most likely to have resulted from an increase in the quality (as well as quantity) of public health measures?
A) A to B
B) B to C
C) B to A
D) C to B
Q3) The biggest global environment issue is:
A) the impact of fossil-fuel consumption on the world's climate.
B) the availability of coal.
C) how to determine who has the property rights to wind power.
D) how to extract oil from Canadian tar sands.
To view all questions and flashcards with answers, click on the resource link above.
25
Chapter 24: Savings, Investment Spending
Available Study Resources on Quizplus for this Chatper
398 Verified Questions
398 Flashcards
Source URL: https://quizplus.com/quiz/77588
Sample Questions
Q1) In a closed economy government spending was $30 billion, consumption was $70 billion, taxes were $20 billion, and GDP was $110 billion this year. Investment spending was $10 billion. As a result:
A) private savings were $10 billion.
B) the government's budget balance was a surplus of $10 billion.
C) there was no net savings.
D) private savings were $20 billion.
Q2) All other things unchanged, an increase in demand for loanable funds would most likely be caused by a(n):
A) important forecast predicting solid economic growth.
B) important forecast predicting a recession.
C) increase in the market interest rate.
D) increase in the cost of new capital goods.
Q3) The United States is a net recipient of foreign savings.
A) This has never happened before.
B) This is bad because we are borrowing money from overseas.
C) This is bad because we are losing control over our own destiny.
D) This has been true throughout much of our history.
Q4) Explain how a commercial bank meets both the short-term and long-term needs of its customers.
To view all questions and flashcards with answers, click on the resource link above. Page 26
Chapter 25: Fiscal Policy
Available Study Resources on Quizplus for this Chatper
376 Verified Questions
376 Flashcards
Source URL: https://quizplus.com/quiz/77587
Sample Questions
Q1) Decreasing funding for space exploration will shift the _____ curve to the _____.
A) short-run aggregate supply; left
B) short-run aggregate supply; right
C) aggregate demand; left
D) aggregate demand; right
Q2) When the unemployment rate decreases, the budget:
A) will always be balanced.
B) surplus gets smaller or the deficit gets larger.
C) surplus gets larger or the deficit gets smaller.
D) is unaffected.
Q3) Transfer payments are payments that:
A) governments make to households although the government did not receive a good or service from the household.
B) governments make to households when the government receives a good or service.
C) erode the purchasing power of the economy.
D) are essentially tax refunds.
Q4) What is meant by the term social insurance? Give an example of a social insurance program.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 26: Money, Banking, and the Federal Reserve System
Available Study Resources on Quizplus for this Chatper
464 Verified Questions
464 Flashcards
Source URL: https://quizplus.com/quiz/77586
Sample Questions
Q1) (Scenario: Assets and Liabilities of the Banking System) Look at the scenario Assets and Liabilities of the Banking System. Suppose that the reserve ratio is 10% and the Fed buys $25,000 worth of U.S. Treasury bills from the banking system. If the banking system does NOT want to hold any excess reserves, _____ will be added to the money supply.
A) about $667,000
B) about $111,000
C) $250,000
D) $1 million
Q2) Between 1864 and 1913, American banking was dominated by:
A) a federally regulated system of national banks.
B) an unregulated system of state banks, each issuing its own currency.
C) the Federal Reserve System in Washington, D.C.
D) European banks that supplied coins and paper money for the U.S. economy.
Q3) The discount window is the branch of the Federal Reserve that monitors banks to be sure that they are meeting reserve and capital requirements.
A)True
B)False
Q4) What caused the savings and loan crisis of the 1980s?
Page 28
To view all questions and flashcards with answers, click on the resource link above.
Chapter 27: Monetary Policy
Available Study Resources on Quizplus for this Chatper
359 Verified Questions
359 Flashcards
Source URL: https://quizplus.com/quiz/77585
Sample Questions
Q1) The demand for money in Japan is much lower than the demand for money in the United States.
A)True B)False
Q2) Contractionary monetary policy entails _____ the money supply, _____ interest rates, and _____ aggregate demand.
A) increasing; increasing; increasing
B) increasing; decreasing; decreasing C) decreasing; decreasing; decreasing
D) decreasing; increasing; decreasing
Q3) If the Federal Reserve conducts an open market purchase, holding everything else constant, in the long run there will be:
A) an increase in the aggregate price level.
B) an increase in the aggregate output level.
C) a decrease in unemployment.
D) no effects on output, unemployment, or the price level.
Q4) The Fed prints money only when it is conducting monetary policy.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 29
Chapter 28: Inflation, Disinflation, and Deflation
Available Study Resources on Quizplus for this Chatper
240 Verified Questions
240 Flashcards
Source URL: https://quizplus.com/quiz/77584
Sample Questions
Q1) It is impossible for the U.S. government to raise revenue by printing more money because the Federal Reserve, not the Treasury, issues most of the U.S. money supply.
A)True
B)False
Q2) (Figure: Classical Model of the Price Level) Look at the figure Classical Model of the Price Level. If the central bank increases the money supply such that aggregate demand shifts from AD<sub>1</sub> to AD<sub>2</sub>, according to this classical model, the SRAS will:
A) not change, since in the classical model the SRAS and LRAS are both vertical at potential output.
B) decrease from SRAS<sub>1</sub> to SRAS<sub>2</sub>.
C) increase from SRAS<sub>2</sub> to SRAS<sub>1</sub>.
D) increase from SRAS<sub>1</sub> to SRAS<sub>2</sub>.
Q3) Policies that reduce inflation are popular with voters because they lead to higher output and lower unemployment.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 30
Chapter 29: Crises and Consequences
Available Study Resources on Quizplus for this Chatper
214 Verified Questions
214 Flashcards
Source URL: https://quizplus.com/quiz/77583
Sample Questions
Q1) The banking crises in Finland, Sweden, and Japan in the early 1990s were caused by numerous bank runs in each country.
A)True
B)False
Q2) Most funds received by depository banks are:
A) borrowed from the U.S. Treasury.
B) deposits of individuals' savings.
C) initially in the form of foreign currency.
D) loans to the bank from businesses.
Q3) The purpose of the Consumer Financial Protection Bureau is to:
A) guarantee the safety of food and drugs purchased by consumers.
B) educate consumers on how to save for retirement above and beyond their Social Security.
C) police financial industry practices and protect borrowers.
D) help consumers understand how to get the best health insurance.
Q4) The national banking era is the period following the establishment of the Federal Reserve in 1913.
A)True
B)False
Q5) Explain the two main causes of banking crises.
To view all questions and flashcards with answers, click on the resource link above. Page 31
Chapter 30: Macroeconomics- Events and Ideas
Available Study Resources on Quizplus for this Chatper
320 Verified Questions
320 Flashcards
Source URL: https://quizplus.com/quiz/77582
Sample Questions
Q1) Which of the following statements is FALSE? Keynesian economics:
A) emphasizes the effects of shifts in aggregate demand on aggregate output.
B) focuses the attention of economists on situations in which the short-run aggregate supply curve slopes upward.
C) holds "animal spirits" mainly responsible for business cycles.
D) holds that changes in business confidence have no effect on either the aggregate price level or aggregate output.
Q2) Nancy believes that the best way to grow the economy is through tax cuts to increase the incentive to work and invest. Though these tax cuts might initially increase the budget deficit, Nancy is convinced that the economic growth that results will actually increase government tax revenue. Nancy is best described as a:
A) monetarist.
B) classical economist.
C) new Keynesian.
D) supply-sider.
Q3) The Great Moderation consensus is that fiscal policy has no effect on aggregate demand.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 32
Chapter 31: Open-Economy Macroeconomics
Available Study Resources on Quizplus for this Chatper
466 Verified Questions
466 Flashcards
Source URL: https://quizplus.com/quiz/77581
Sample Questions
Q1) If the U.S. dollar changes from $1 = ¥200 to $1 = ¥100, then:
A) the dollar has depreciated relative to the yen.
B) the dollar has been fixed by the United States and Japan.
C) the dollar has appreciated relative to the yen.
D) U.S. goods are now more expensive in Japan.
Q2) Donald owns several hotels in U.S. tourism destinations. Much of Donald's hotel revenue comes from Europeans. Suppose the U.S. dollar depreciates against the euro. Explain how this will affect Donald's hotel business.
Q3) A revaluation can help reduce a(n): I. inflationary gap
II) deflationary gap
A) I only
B) II only
C) I and II
D) neither I nor II
Q4) An increase in the value of a fixed rate currency is called an appreciation. A)True B)False
Q5) Floating exchange rates lead to more stable conditions for international trade. A)True B)False
Page 33
To view all questions and flashcards with answers, click on the resource link above.
Chapter 32: Graphs in Economics
Available Study Resources on Quizplus for this Chatper
64 Verified Questions
64 Flashcards
Source URL: https://quizplus.com/quiz/77614
Sample Questions
Q1) The owner of the Dismal Philosopher, one of the five bookstores on College Road, asks you to make a graph showing each College Road bookstore's share of all five stores' book purchases. A good way to show this information is with a pie chart.
A)True
B)False
Q2) (Table: Price, Quantity Demanded, and Quantity Supplied) Look at the table Price, Quantity Demanded, and Quantity Supplied. The slope of the line representing the relationship between price on the vertical axis and quantity demanded on the horizontal axis is:
A) equal to 1/2.
B) equal to 1.
C) equal to 2.
D) different at different points on the line.
Q3) Your boss asks you to graph company profits for the past 10 years. The best way to show this information is with:
A) a scatter diagram.
B) a pie chart.
C) a time-series graph.
D) an independent graph.
To view all questions and flashcards with answers, click on the resource link above.
Page 34
Chapter 33: Toward a Fuller Understanding
Available Study Resources on Quizplus for this Chatper
36 Verified Questions
36 Flashcards
Source URL: https://quizplus.com/quiz/77605
Sample Questions
Q1) To finance your education, you borrow $10,000 from your aunt at an annual interest rate of 5%. If your cousin offers to lend you the same amount but suggests a lower interest rate and you take the offer, you will end up repaying your cousin _____ you would have to your aunt.
A) more than.
B) less than
C) the same amount as D) more now but less later than
Q2) (Table: Present Value of Projects A, B, C, and D) Look at the table Present Value of Projects A, B, C, and D. If the annual interest rate is 2%, which project do you choose? A) A
B) B
C) C
D) D
Q3) Your grandmother has promised you $1,000 when you graduate in two years. At a 6% annual interest rate, you can borrow $890 and pay it all back with your grandmother's gift at graduation.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 35
Chapter 34: Consumer Preferences and Consumer Choice
Available Study Resources on Quizplus for this Chatper
62 Verified Questions
62 Flashcards
Source URL: https://quizplus.com/quiz/77604
Sample Questions
Q1) (Figure: The Indifference Curve Map II) Look at the figure The Indifference Curve Map II. Sara enjoys attending Chicago Cubs baseball games and eating baby back rib dinners. The figure shows two of her indifference curves for Cubs tickets and baby back rib dinners. Which of the following combinations gives Sara the highest level of utility?
A) 40 baby back rib dinners and 2 Cubs tickets
B) 20 baby back rib dinners and 4 Cubs tickets
C) 12 baby back rib dinners and 10 Cubs tickets
D) All combinations give the same level of utility.
Q2) Max consumes only yogurt and almonds, and he is on his highest possible indifference curve. Bundle A (4 yogurts and 2 almonds) and bundle B (3 yogurts and 3 almonds) are on this indifference curve. Between points A and B, what is Max's marginal rate of substitution of yogurt for almonds?
A) 1
B) 2
C) 3
D) 1.33
To view all questions and flashcards with answers, click on the resource link above.
Chapter 35: Indifference Curve Analysis of Labor Supply
Available Study Resources on Quizplus for this Chatper
41 Verified Questions
41 Flashcards
Source URL: https://quizplus.com/quiz/77595
Sample Questions
Q1) Javon has 80 hours per week to allocate between labor and leisure. Javon's wage is $8 per hour. Graph hours of leisure per week on the horizontal axis and income per week on the vertical axis. According to the optimal time allocation rule, Javon should allocate his time such that the marginal utility of an additional hour of leisure is:
A) $8.
B) $10.
C) $640.
D) $800.
Q2) If the labor supply curve bends backward, then the backward-bending portion reveals that _____ is a(n) _____ good and the _____ effect is greater than the _____ effect.
A) labor; normal; income; substitution
B) labor; inferior; substitution; income
C) leisure; normal; income; substitution
D) leisure; inferior; substitution; income
Q3) If an individual's wage rate decreases, the substitution effect will cause the individual to work fewer hours.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 37