allocation of resources
Arrow's impossibility theorem
Chapter 18International Trade and Finance
1. In terms of production possibilities curves, the benefits of trade between two nations are that each
nation moves to a higher:
a. standard of living.
c. both a and b.
b. consumption possibilitie
Chapter 19Economies in Transition
1. The economic system that answers the What, How and For Whom questions the way they have always
been answered is a:
a. market economy.
c. soviet economy.
b. command economy
d. traditional economy.
Chapter 20Growth and the Less-Developed Countries
1. When per capita real GDP is increasing, real output is growing:
a. more rapidly than prices.
c. less rapidly than prices.
b. more rapidly than population.
d. less rapidly than population
Chapter 17The Phillips Curve and Expectations Theory
1. The Phillips curve illustrates the relationship between:
a. change in the money supply and change in unemployment.
b. tax rates and tax revenues.
c. the equilibrium level of income an
Chapter 15Money Creation
1. Which of the following compose the reserves of a commercial bank?
a. checkable deposits and time deposits
b. vault cash and deposits of the bank with the Federal Reserve
c. U.S. securities and stock equity
Chapter 11Fiscal Policy
1. A balanced budget is present when:
a. the economy is at full employment.
b. the actual level of aggregate spending equals the planned level of spending.
c. public sector spending equals private sector spending.
Appendix to Chapter 16Policy Disputes Using the Self-Correcting Aggregate Demand
and Supply Model
1. Classical theory advocates _ policy and Keynesian theory advocates _ policy.
a. nonintervention; intervention
c. stabilization; fixed wage
Chapter 14Money and the Federal Reserve System
1. A barter economy is one in which:
a. money serves as a medium of exchange.
b. only precious metals are accepted as money.
c. goods are traded directly for other goods.
d. paper money is bac
Chapter 10Aggregate Demand and Supply
1. The aggregate demand curve indicates the relationship between:
a. the real wage rate and the quality of resources demanded by producers of goods and
b. the interest rate and the amount of
Chapter 9The Keynesian Model in Action
1. Using the Keynesian aggregate expenditures model, which of the following is true?
a. Macro equilibrium may occur at levels of real GDP other than full-employment real GDP.
b. At any macro equilibri
Chapter 8The Keynesian Model
1. Classical economists believed that:
a. price flexibility automatically directs market economies to full employment.
b. budget deficits and surpluses were necessary for the control of economic fluctuations.
Chapter 13Federal Deficits, Surpluses, and the National Debt
1. The federal budget process begins when federal agencies submit their budget requests to the:
a. Treasury Department.
b. Council of Economic Advisors (CEA).
c. Office of Manage
Chapter 12The Public Sector
1. Which of the following countries had the highest level of government expenditures as a share of GDP?
c. United States.
TOP: Government Size and Growth
Chapter 6Business Cycles and Unemployment
1. Economists use the phrase "business cycle" when referring to fluctuations in:
a. real GDP.
c. the consumer price index.
b. the chain price index.
d. the general level of prices.
Chapter 5Gross Domestic Product
1. Gross domestic product is equal to the market value of all final goods and services:
a. exchanged during a period.
b. produced domestically during a period.
c. produced by the citizens of a nation during
Appendix to Chapter 3Consumer Surplus, Producer Surplus, and Market Efficiency
1. Consumer surplus is the:
a. number of consumers who are excluded from a market because of scarcity.
b. amount of a good that consumers will buy at a price be
Appendix to Chapter 1Applying Graphs to Economics
1. A direct relationship exists when:
a. there is no association between two variables.
b. one variable increases and there is no change in the other variable.
c. one variable increases and
Chapter 4 Part 2Markets in Action
1. Assuming supply is held constant, an increase in demand for a product will cause an increase in the
equilibrium price and the amount bought and sold.
TOP: Changes in Market Equilibrium
Chapter 4 Part 1Markets in Action
1. If the demand for a good decreased, what would be the effect on the equilibrium price and quantity?
a. Price would increase, and quantity would decrease.
b. Price would decrease, and quantity would decr
Chapter 3 Part 2Market Demand and Supply
1. According to the law of demand, if the price of a good increases, other things being equal, the quantity
demanded will decrease.
TOP: The Law of Demand
NAT: BUSPROG: Analytic
Chapter 3 Part 1Market Demand and Supply
1. In economics, the demand for a good refers to the amount of the good people:
a. would like to have if the good were free.
b. are willing to buy at various prices.
c. need to achieve a minimum sta
Chapter 2Production Possibilities, Opportunity Cost, and Economic Growth
1. Which of the following correctly lists the three fundamental economic questions?
a. If to produce? Why to produce? When to produce?
b. If to produce? What to produ