macro hw 3 - hw3 Multiple Choice Identify the letter of the...

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hw3 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. 1. Which is the most correct statement about the invisible hand? a. The invisible hand always ensures both equity and efficiency. b. The invisible hand is more effective at ensuring equity than it is at ensuring efficiency. c. The invisible hand is more effective at ensuring efficiency than it is at ensuring equity. d. Market power is the instrument with which the invisible hand directs economic activity. 2. According to Adam Smith, the success of decentralized market economies is primarily due to a. the basic benevolence of society. b. society's legal system. c. individuals' pursuit of self-interest. d. partnerships that are forged between business and government. 3. The primary determinant of a country's standard of living is a. the country’s ability to prevail over foreign competition. b. the country’s ability to produce goods and services. c. the total supply of money in the economy. d. the average age of the country's labor force. 4. The income of a typical worker in a country is most closely linked to which of the following? a. population b. productivity c. market power d. government policies 5. Large or persistent inflation is almost always caused by a. excessive government spending. b. excessive growth in the quantity of money. c. foreign competition. d. higher-than-normal levels of productivity. 6. Which of the following is the most correct statement about the relationship between inflation and unemployment? a. In the short run, falling inflation is associated with falling unemployment. b. In the short run, falling inflation is associated with rising unemployment. c. In the long run, falling inflation is associated with falling unemployment. d. In the long run, falling inflation is associated with rising unemployment. 7. The mainstream view among economists is that a. society faces a tradeoff between unemployment and inflation, but only in the short run. b. society faces a tradeoff between unemployment and inflation, but only in the long run. c. society faces a tradeoff between unemployment and inflation, both in the short run and in the long run. d. no tradeoff exists between unemployment and inflation, either in the short run or in the long run. 8. The business cycle is the a. relationship between unemployment and inflation. b. irregular fluctuations in economic activity. c. positive relationship between the quantity of money in an economy and inflation. d. predictable changes in economic activity due to changes in government spending and taxes. 9. In the short run Recessions in South Korea and Indonesia will cause a. the U.S. price level and real GDP to rise. b. the U.S. price level and real GDP to fall. c. the U.S. price level to rise and real GDP to fall. d. the U.S. price level to fall and real GDP to rise. 10. Which of the following would cause prices and real GDP to rise in the short run?
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This note was uploaded on 04/02/2008 for the course ECONOMICS 103 taught by Professor Sheflin during the Spring '08 term at Rutgers.

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macro hw 3 - hw3 Multiple Choice Identify the letter of the...

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