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```									                         Macro 2301 21346 Review 3 Jun 10
Student: ___________________________________________________________________________

1.   "Unemployment increased in the last month to its highest level in the past ten years." This quote would
be an example of:
A. Post hoc, ergo propter hoc fallacy
B. The fallacy of composition
C. A positive economic statement
D. A normative economic statement
2.   The role of an assumption in an economic theory is to:
B. Prove the theory
C. Cover special cases
D. Simplify the theory

3.   The vertical intercept of line (2) on the above graph is:
A. 8
B. 12
C. 16
D. 24
4.   The production possibilities curve bows outward from the origin because:
A. Opportunity costs decrease as the production of a good increases
B. Opportunity costs increase as the production of a good increases
C. More production of one good results in more production of the other good
D. Resources are of uniform quality

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5.   A schedule or curve that shows the various combinations of two products a consumer can purchase with
a specific amount of money income is:
B. A budget line
C. A tangent point
D. An optimal output
6.   Are the goods that businesses offer for "free" to consumers also free to society?
A. Yes, because the individual consumer does not have to pay for them
B. Yes, because the marginal benefit is greater than the marginal cost
C. No, because scarce resources were used to produce the free goods
D. No, because society does not assign a value to free goods
7.   The "economic perspective" focuses largely on:
A. Normative economics
B. The post hoc fallacy
C. Marginal analysis
D. The fallacy of composition
8.   The post hoc, ergo propter hoc fallacy deals with:
A. Irrational behavior
B. The difficulty in holding everything constant
C. The problem of distinguishing cause and effect
D. Determining whether what is true for the whole is also true for the parts
9.   Which shows a positive relationship between x and y?
A. A change in y = 2 and a change in x = 4
B. A change in y = 2 and a change in x = 0
C. A change in y = -1 and a change in x = 4
D. A change in y = 6 and a change in x = -11
10. Economics is a social science concerned with:
A. Increasing the level of productive resources so there is maximum output in society
B. Increasing the level of productive resources so there is a minimum level of income
C. The best use of scarce resources to achieve the maximum satisfaction of economic wants
D. The best use of scarce resources paid for at the minimum level of cost to consumers and businesses
11. Economics is a:
A. Natural science
B. Social science
C. Managerial science
12. When producers maximize their profits from the production of a good or service, they are:
A. Testing a hypothesis
B. Exhibiting rational behavior
C. Assuming that all other things are equal
D. Making a tradeoff between economic efficiency and economic freedom

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13. Refer to the above graph. The selection of which point on the production possibilities curve is most like
to result in the largest increase in economic growth over time?
A. A
B. B
C. C
D. D
14. Which is the main problem with the barter system of exchange? Barter:
A. Encourages self-interest and selfishness
B. Fosters specialization and division of labor
C. Requires a coincidence of wants
D. Undermines the right to bequeath
15. Which is a key feature of the market system?
A. Price floors and price ceilings in all markets
B. Reallocation of all resources from private to public uses
C. The right to own private property and control resource use
D. Central planning by government to provide goods and services
16. In 1999, McDonald's introduced the "Big Xtra" and it turned out to be successful product. In the
marketplace for fast-food products, this success would be an example of:
A. Derived demand
B. Medium of exchange
C. Consumer sovereignty
17. In 1997, McDonald's introduced the "55-cent special." It turned out to be an unsuccessful product. In the
marketplace for fast-food products, this lack of success would be an example of:
A. Normal profit
B. Economic costs
C. Consumer sovereignty
D. Medium of exchange

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18. Consumers express self-interest when they:
A. Reduce business losses
B. Collect economic profits
C. Seek the lowest price for a product
D. Search for jobs with the highest wages
19. The fact that expenditures on products and payments to owners of resources used to produce those
products flow in opposite directions is known as:
B. A barter economy
C. A pure economy
D. The circular flow of income
20. All economic systems must answer certain fundamental economic questions. Which is not one of these
questions?
A. Which actions should government take to reduce inflation?
B. How will the goods and services be produced?
C. What goods and services will be produced?
D. Who is to receive the output?
21. In the simple circular flow model:
A. Households are sellers of resources and demanders of products
B. Households are sellers of products and demanders of resources
C. Businesses are sellers of resources and demanders of products
D. Businesses are sellers of both resources and products
22. Which of the following would be primarily determined in the resource market?
A. The price of compact discs
B. The wage rates for electricians
C. The number of automobiles produced
D. The amount of money in circulation
23. The circular flow model:
A. Assumes that central planning is taking place
B. Illustrates how natural resources are created
C. Illustrates how money is created by the banking system
D. Illustrates the interdependence of businesses and consumers
24. What, according to economist Donald Boudreaux, best explains why the decentralized market system is
not a random, chaotic mess?
A. There is active cooperation among private property owners and government officials to correct the
excesses of a market economy
B. The roundabout methods of production allocate resources from consumers to producers and then
producers to consumers
C. Government planning limits the chaos and government controls direct economic activity to create
stability in the market system
D. People seek to make the best use of resources and in doing so create arrangements that produce the
products people want

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25. Which is characteristic of the market system?
A. Unselfish individuals
B. Centralized decision-making
C. Free enterprise and choice
D. Government ownership of the means of production
26. The market system is said to be characterized by "consumer sovereignty." This is because:
A. A large number of consumer goods are produced
B. The prices of consumer goods are regulated by government
C. Consumer goods are more profitable than investment goods
D. Of the role of consumers in determining what goods are produced
27. If farmers withhold some of their current corn harvest from the market because they anticipate a higher
price of corn in the future, then this would cause a decrease in the:
A. Demand for corn
B. Supply of corn
C. Current price of corn
D. Quantity of corn supplied
28. Other things equal, which may cause an increase in the price of used houses?
A. An increase in property taxes
B. An increase in mortgage interest rates
C. An increase in construction costs for new houses
D. A decrease in the population of first-time homebuyers
29. Which would cause a rightward shift in the supply curve for telephone service?
A. An increase in the price of telephones
B. An improvement in telephone technology
C. An increase in the wage of telephone workers
D. An increase in consumer incomes in the economy
30. There is a surplus in a market for a product when:
A. The decrease in supply is greater than the increase in demand
B. The increase in demand is greater than the decrease in supply
C. Quantity supplied is less than quantity demanded
D. Quantity demanded is less than quantity supplied
31. If product Y is an inferior good, an increase in consumer incomes will:
A. Result in a surplus of product Y
B. Not affect the sales of product Y
C. Shift the demand curve for product Y to the left
D. Shift the demand curve for product Y to the right
32. The institution which coordinates actions of consumers and producers to establish prices for goods and
services is known as:
A. A market
B. A monopoly
C. An economic system
D. Consumer sovereignty

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Assume that the graphs show a competitive market for the product stated in the question.

33. Select the graph above that best shows the change to demand or supply in a market given the following
situation: In the market for Florida oranges, a major frost damages the orange crop.
A. Graph A
B. Graph B
C. Graph C
D. Graph D
34. One objection to a competitive and legal market for human organs for transplant is that it would:
A. Decrease the cost of organs for transplant
B. Increase the cost of organs for transplant
C. Decrease the supply of organs for transplant
D. Increase the demand for organs for transplant
35. Over a period of time, the price of a good or service increases and the quantity of the good or service
sold decreases. All of the following could account for this situation, except:
A. An increase in the costs of production
B. The removal of a subsidy on the good or service
C. The imposition of a sales tax on the good or service
D. A decrease in the price of an alternative good or service that producers could also produce

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36. An increase in demand, holding supply constant, will tend to cause:
A. Higher prices and a larger quantity sold
B. Higher prices and a smaller quantity sold
C. Lower prices and a smaller quantity sold
D. Lower prices and a larger quantity sold
37. Which is a determinant of supply?
A. Tastes and preferences
B. Technology
C. Consumer income
D. Number of consumers
38. Government-set price floors and price ceilings:
A. Do not affect the rationing function of price in a free market
B. Interfere with the rationing function of price in a free market
C. Result in surpluses of products in markets where they are used
D. Result in shortages of products in markets where they are used
Answer the next question(s) based on the following supply and demand schedules in units per week for a
product.

39. Refer to the above table. If demand increased by 40 units at each price, while supply decreased by 60
units at each price, the equilibrium price would be:
A. \$30
B. \$40
C. \$50
D. \$60
40. The issue of the separation of ownership and control is concerned with the fact that:
A. Politicians pass laws to control corporations, but since corporations cannot vote, they cannot Protest
such control
B. Major decisions in large corporations are generally made by professional managers rather than the
owners of the corporation
C. Most farms are owned by landlords who do not live on the farms
D. Many small proprietorships are actually controlled by large corporations

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41. Refer to the pie diagram above, which represents the business population by form of legal organization
in the United States. What would be represented by the A slice?
A. Sole proprietorships
B. Corporations
C. Partnerships
D. Cooperatives
42. The U.S. Army Corps of Engineers is virtually the sole dam builder in the United States. From an
economic view why is this true?
A. The government has taken over the production of dams and many goods in the past 30 years simply
to direct the national economy
B. This is primarily due to the huge capital costs involved which would be prohibitive to most private
companies
C. This is largely due to the fact that consumers have an incentive to understate the true value of a dam
to them
D. This is because without government intervention, spillover benefits would not cover spillover costs to
build dams
43. Personal saving constitutes about what proportion of total income in the United States?
A. 0 percent
B. 8 percent
C. 16 percent
D. 24 percent
The following data represent a personal income tax schedule. Answer the next question(s) on the basis of
this information.

44. Refer to the above table. If income increases from \$15,000 to \$30,000, the marginal tax rate is:
A. 10.0 percent
B. 13.3 percent
C. 18.3 percent
D. 26.6 percent

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45. It is difficult to collect information on individuals' true preferences for public goods and services, since:
A. They know it is economically efficient to have private companies produce all goods and services
B. Someone must horizontally sum individuals' demand curves for these goods to find the overall
demand schedule
C. When it is time to pay for public goods, they have incentives to understate the benefits they receive
from these goods
D. While people do indicate their true preferences for public goods, there are too many people to
consider and count their preferences accurately
46. One often-discussed option to improve the financial viability of Social Security is to
A. Lower payroll taxes so Social Security is less of a burden to the U.S. government
B. Raise interest rates so the U.S. government can make a higher return on its investments
C. Let individuals use part of their tax contributions to establish private investment accounts
D. Let the Federal Reserve increase the money supply and invest it in the Social Security trust fund
47. Which was the single most important type of spending of local governments?
A. Highways
B. Welfare
C. Education
D. Public safety
48. What basic economic function is government pursuing when it charges a company with price fixing?
A. Maintaining competition
B. Reallocating resources
C. Providing a public good
D. Stabilizing the economy
49. The most effective form of business organization for raising money to finance the expansion of its
facilities and capabilities is a:
A. Partnership
B. Corporation
C. Conglomerate
D. Sole proprietorship
50. Government purchases currently amount to about:
A. 5 percent of the economy's total output
B. 10 percent of the economy's total output
C. 18 percent of the economy's total output
D. 36 percent of the economy's total output
51. The primary way that government deals with monopoly is to:
A. Regulate the monopoly firm
B. Establish a competing government firm
C. Redistribute monopoly incomes through tax laws
D. Compensate those who are affected by monopoly power

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52. Refer to the above circular flow model. If box E represents government, box A businesses, and box C
households, then flows (11) and (12) represent:
A. Goods and services
B. Expenditures
C. Resources
D. Net taxes
53. Since 1975 the ratio of U.S. exports to GDP has almost:
A. Doubled
B. Tripled
D. Quintupled
54. What is one way that the deficit of the United States in goods and services is financed?
A. By U.S. buying real assets of foreigners
B. By selling real assets of the U.S. to foreigners
C. By borrowing from U.S. citizens
D. By lending from U.S. banks
55. An increase in the United States demand for Japanese goods will:
A. Increase the demand for Japanese yen and increase the dollar price of yen
B. Increase the demand for Japanese yen, but decrease the dollar price of yen
C. Decrease the demand for Japanese yen and decrease the dollar price of yen
D. Decrease the demand for Japanese yen, but increase the dollar price of yen
56. The main commodity exports of the United States are primarily:
A. Agricultural products
B. Industrial products
C. Natural resources
D. Services

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57. Which would be an example of a nontariff or non quota barrier?
A. The voluntary restraint agreement that limits imports of autos to the United States from Japan
B. A limit on the import of textile products from China
C. The use of extensive custom checks on product quality
D. A \$5.00 per case tax on imported wine
The following table shows the foreign currency per U.S. dollar near the end of January of each year
listed.

58. Refer to the above table. From 2004 to 2005, what happened to the value of the Japanese yen and the
value of the U.S. dollar?
A. The Japanese yen appreciated and the U.S. dollar depreciated
B. The Japanese yen depreciated and the U.S. dollar depreciated
C. The Japanese yen depreciated and the U.S. dollar appreciated
D. The Japanese yen appreciated and the U.S. dollar appreciated
59. Which was an outcome of the North American Free Trade Agreement (NAFTA)?
A. Decreased American exports to Mexico
B. Decreased American imports from Mexico
C. A higher standard of living in Mexico
D. A lower standard of living in Mexico
60. Research studies show that the cost of an American job saved in several industries protected from
foreign competition:
A. Is much less than the benefits to the American economy
B. Is much greater than the benefits to the American economy
C. Has fallen in recent years
D. Has risen in recent years
61. If the equilibrium exchange rate changes so that the U.S. dollar price for Japanese yen decreases, it
means that:
A. The U.S. dollar has depreciated in value
B. The Japanese yen has appreciated in value
C. U.S. citizens will be able to buy fewer Japanese goods
D. Japanese citizens will be able to buy fewer U.S. goods
62. Which is a principal commodity export of the United States?
A. Petroleum
B. Clothing
C. Chemicals
D. Iron and steel

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63. An increase in the American demand for Japanese goods will increase the:
A. Demand for yen and decrease the dollar price of yen
B. Demand for yen and increase the dollar price of yen
C. Supply of yen and decrease the dollar price of yen
D. Supply of yen and increase the dollar price of yen
64. International trade and global competition has forced American businesses to:
A. Raise production costs
B. Improve productivity
C. Be less efficient
D. Redistribute income to workers
65. When a nation is specializing in the production of a product for which it is the least-cost producer
compared to other nations, it is:
A. Achieving full employment of resources in the nation
B. Specializing according to its comparative advantage
C. Creating a coincidence of wants for the money economy
D. Maximizing exchange between business and household sectors
66. If consumers become pessimistic, the economy is likely to experience
A. a negative demand shock
B. a positive demand shock
C. a negative supply shock
D. a positive supply shock
67. Which of the following markets is most likely to exhibit extremely flexible prices?
A. The oil market
B. The market for haircuts
C. The market for newspapers
D. The market for coin-operated laundry machines
68. If prices of goods and services are free to quickly adjust, then
A. a negative demand shock would lead to increased unemployment in the short run
B. a positive demand shock would lead to increased unemployment in the short run
C. a negative demand shock would have no short-run effect on unemployment
D. there would be no short-run demand shocks

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69. Refer to the graph above. Suppose a firm is currently producing 500 computers per week and charging a
price of \$1000. What happens to the firm's inventory of computers if there is a negative demand shock
when prices are sticky?
A. The firm's inventories will not change
B. The firm's inventories will increase by 200 computers per week
C. The firm's inventories will decrease by 150 computers per week
D. The firm's inventories will increase by 350 computers per week
70. Which of the following is NOT a factor that increases short-run price stickiness?
A. Consumers tend to prefer stable prices
B. Stable prices make it easier for consumers to plan their spending
C. A firm can lower its price without fear that rival firms will also lower their prices
D. Firms try to avoid price wars
71. Between 1995 and 2007, the amount of output generated by the U.S. economy grew at an average rate
of
A. 1.7% per year
B. 2.7% per year
C. 3.0% per year
D. 3.7% per year
72. Which of the following is most likely to be an indication of inflation?
A. An increase in real GDP
B. An increase in nominal GDP
C. A decrease in real GDP
D. A decrease in nominal GDP
73. What impact will a negative demand shock have on the main measures of economic performance?
A. Real GDP will increase, inflation will increase, and unemployment will decrease
B. Real GDP will decrease, inflation will decrease, and unemployment will increase
C. Real GDP will decrease, inflation will increase, and unemployment will increase
D. Real GDP will increase, inflation will decrease, and unemployment will decrease
74. Decisions about savings and investment are
A. generally made under conditions of complete certainty about the future
B. complicated by the fact that the future is uncertain
C. unaffected by expectations of the future
D. independent of expectations about the future
75. Economists need different models of the economy because
A. the economy behaves differently depending on how much time has passed after a demand shock
B. we need a different model to analyze a positive demand shock than we need to analyze a negative
demand shock
C. the way economic performance is measured of changes over time
D. prices tend to be less flexible over time
76. Which of the following is the best example of financial investment?
A. Ford Motor Co. builds a new manufacturing plant
B. A student pursues an MBA degree
C. A retiree purchases Google stock
D. A young couple purchases a new home

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77. Situations in which firms expect one thing to happen but then something else happens are called
A. recessions
B. shocks
D. fluctuations
78. Because prices are sticky, positive demand shock will lead to
A. no change in unemployment
B. an increase in unemployment
C. a decrease in unemployment
D. an unpredictable change in unemployment
79. A nation buys three products, A, B, and C. Over two years, the prices of these products change as
follows:

Over the period referred to, the nation's nominal income increased by 2 percent. The nation's real income
changed by approximately:
A. 2 percent
B. 3 percent
C. -3 percent
D. -2 percent

80. Refer to the above data. Personal income is equal to:
A. \$8,348 billion
B. \$8,899 billion
C. \$9,053 billion
D. \$10,446 billion

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81. Some of the production of an economy creates pollution. As a result:
A. Nominal GDP is greater than real GDP
B. Real GDP is greater than nominal GDP
C. GDP tends to understate social welfare
D. GDP tends to overstate social welfare
Assume an economy is producing only one product. Year 2 is the base year. Output and price data for a
five-year period are given.

82. Refer to the above data. If year 2 is chosen as the base year, the price index for year 1 is:
A. 70
B. 80
C. 95
D. 125
83. Which is included in the GDP but not in national income?
A. Consumption of fixed capital
B. Corporate dividends
C. Undistributed corporate profits
D. Personal income taxes
84. Refer to the above data. If year 2 is the base year, then for the years shown, the growth of:
A. Real GDP has exceeded the growth of nominal GDP
B. Nominal GDP exactly reflects increases in real output
C. Nominal GDP overstates increases in real output
D. Nominal GDP understates increases in real output
85. A consumer price index attempts to measure changes in:
A. The prices of all goods and services produced by the U.S. economy
B. The price of a select market basket of goods and services
C. The spending patterns of all consumers in the United States
D. The spending patterns of consumers worldwide
86. Which of the following represents an income or allocation flow in the circular flow of domestic output
and national income?
A. Net exports
B. Investment expenditures
C. Government purchases
D. Corporate profits

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87. An example of an intermediate good or service would be:
A. A calculator purchased by a college student for taking exams
B. Gasoline used by an insurance agent visiting clients
C. A house bought by a banking executive with five children
D. A boat bought by a medical doctor for use on vacation
Answer the question(s) based on the following price and output data over a five-year period for an
economy that produces only one good. Assume that year 2 is the base year.

88. Refer to the above data. If year 2 is the base year, then in determining real GDP for year 1:
A. Nominal GDP in year 1 should be deflated
B. Nominal GDP in year 1 and 2 should be deflated
C. The price index number in year 1 is 95
D. The price index number in year 1 will be greater than 100
(The following national income data are in billions of dollars.)

89. Refer to the above data. Net domestic product is:
A. \$1,039 billion
B. \$1,044 billion
C. \$1,054 billion
D. \$1,076 billion

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90. Nominal GDP is less than real GDP in an economy in year 1 and year 2. In year 3, nominal GDP is
equal to real GDP. In year 4, nominal GDP is slightly greater than real GDP. In year 5, nominal GDP is
significantly greater than real GDP. Which year is most likely to be the base year being used to calculate
the price index for this economy?
A. 2
B. 3
C. 4
D. 5
Answer the question(s) based on the following data, using year 1 as the base year. All dollars are in
billions.

91. Refer to the above data. Real GDP in year 2 was approximately:
A. \$3,245 billion
B. \$3,271 billion
C. \$3,295 billion
D. \$3,402 billion
92. "Show me a pastoral society with an untouched environment, an abundance of leisure, and nonsecular
values, and I will show you an underdeveloped, poverty-ridden country." This statement is most likely to
be made by a(n):
A. Advocate of learning by doing
B. Advocate of network effects
C. Proponent of economic growth
D. Critic of economic growth
93. Historically, the total amount of real capital per worker in the United States has:
A. Provided financing for the industrial expansion of business
B. Increased significantly and made labor more productive
C. Been the single most important determinant of economic growth
D. Remained relatively constant, although the quality of capital has improved dramatically
94. The New Economy is often described as one with a faster rate of:
A. Unemployment
B. Inflation
C. Population growth
D. Productivity growth
95. One of the macroeconomic implications of the New Economy is that it can achieve:
A. A higher rate of frictional unemployment
B. A lower natural rate of unemployment
C. A lower rate of simultaneous consumption
D. A higher rate of inflation

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96. A supply factor in economic growth would be:
A. A fall in the efficient use of resources
B. A rise in the rate of resource depletion
C. An increase in the quantity of labor
D. An increase in consumption spending
The table below shows the quantity of labor (measured in hours) and the productivity of labor (measured
in real GDP per hour) in a hypothetical economy in three different years.

97. Refer to the above table. What explains the increase in real GDP from Year 1 to Year 3? An increase
in:
A. Labor productivity between Year 2 and Year 3
B. The quantity of labor between Year 1 and Year 2
C. Labor productivity between Year 1 and Year 2 and an increase in the quantity of labor between Year
2 and Year 3
D. Labor productivity between Year 2 and Year 3 and an increase in the quantity of labor between Year
1 and Year 2
98. From 1995-2005, labor productivity grew on average by:
A. 1.4 percent
B. 2.1 percent
C. 2.9 percent
D. 4.7 percent
99. Assume that an economy has 2,000 workers, each working 4,000 hours per year. If the average real
output per worker-hour is \$10, then total output or real GDP will be:
A. \$20 million
B. \$40 million
C. \$80 million
D. \$100 million
100.Rising real wages for women in the U.S. workforce since the 1960s have:
A. Reduced access to job opportunities for women
B. Increased the opportunity cost of staying at home
C. Led to a rise in the number of lifetime births per woman
D. Reallocated labor resources from urban to rural areas of the nation
101.One of the main arguments against further growth for industrialized nations focuses on the problem of:
A. Technological knowledge
B. Environmental quality
C. Feedback mechanisms
D. Infrastructure

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102.Real GDP or total output in any year is equal to:
A. Labor inputs divided by resource outputs
B. Labor productivity multiplied by real output
C. Worker-hours multiplied by labor productivity
D. Worker-hours divided by labor productivity

103.Refer to the above diagram. If there is a movement away from the full employment of resources in an
economy with production possibilities curve AB, this can be shown by:
A. A shift of the curve from AB to CD
B. A movement from point 3 to point 1
C. A movement from point 2 to point 4
D. Point 5 in the diagram
104.Which of the following is a main source of increasing returns in recent years?
A. More learning by doing
B. The concentration of development costs
C. The use of less specialized inputs as firms grow
D. More resources devoted to agricultural production
105.A statement that is often used to describe demand-pull inflation is:
A. "A rising tide lifts all boats"
B. "Money is easily earned, but not easily saved"
C. "Too much money chasing too few goods"
D. "There is no such thing as a free lunch"
106.In Year 1, the price level was 120 and the average nominal income was \$30,000. In Year 2, the price
level was 125 and the average nominal level of income was \$32,000. What happened to real income
from Year 1 to Year 2?
A. It fell by \$400
B. It rose by \$400
C. It rose by \$600
D. It rose by \$2,000

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107.Some economists prefer to use the term business fluctuations rather than business cycles to describe the
historical growth record in the United States because:
A. Cycles include a trough phase while fluctuations do not
B. Cycles imply regularity while fluctuations do not
C. Fluctuations include an expansion phase while cycles do not
D. Fluctuations are relatively predictable events
108.In what circumstances would lenders most benefit?
A. When there is an unanticipated decrease in inflation
B. When there is an anticipated increase in inflation
C. When there is an unanticipated increase in inflation
D. When there is an anticipated decrease in inflation
109.In an economy nominal GDP is \$4,000 billion. The actual unemployment rate is 8 percent and the
natural rate of unemployment is 6 percent. According to Okun's law there will be:
A. \$80 billion lost in potential output
B. \$100 billion lost in potential output
C. \$160 billion lost in potential output
D. \$300 billion lost in potential output
110.The higher the rate of unemployment:
A. The larger is the GDP gap
B. The smaller is the GDP gap
C. The higher the level of actual GDP
D. The higher the level of potential GDP
111.If average nominal income was about \$15,000 and the price level index was 118, then average real
income would be about:
A. \$11,146
B. \$12,712
C. \$13,385
D. \$14,249
112.If unemployment is above the natural rate of unemployment, then potential GDP is:
A. Equal to the GDP gap
B. Equal to actual GDP
C. Less than actual GDP
D. Greater than actual GDP
113.What does research indicate about the effect of changes in stock price averages on stability in the
macroeconomy?
A. The consumption effects of stock price changes are a major cause of macroeconomic instability; the
investment effects are not a major cause of instability
B. The investment effects of stock price changes are a major cause of instability, but the consumption
effects are not a major cause of instability
C. Both the consumption and investment effects of stock price changes are a major cause of instability in
the macroeconomy
D. Neither the consumption nor the investment effects of stock price changes are a major cause of
macroeconomic instability

20
114.A high unemployment rate most likely means that there is a:
A. High rate of inflation in the economy
B. Low rate of interest in the economy
C. Large GDP gap in the economy
D. Small GDP gap in the economy
115.Which industry or sector of the economy would least likely be affected by the business cycle?
A. Automobiles
B. Consumer durables
C. Capital goods
D. Services
116.Which is the correct way to calculate the unemployment rate?
A. [(unemployed)/(population)] x 100
B. [(unemployed)/(labor force)] x 100
C. [(labor force)/(population)] x 100
D. [(labor force)/(unemployed)] x 100
117.When a consumption schedule is plotted as a straight line, the slope of that line is:
A. Vertical
B. Horizontal
C. Greater than the slope of the 45º line
D. Less than the slope of the 45º line
118.If a family's MPC is .7, it is:
A. Operating at the break-even point
B. Spending seven-tenths of any increment to its income
C. Necessarily dissaving
D. Spending 70 percent of its income on consumer goods

119.Refer to the above graph. Which of the following would shift the investment demand curve from ID2 to
ID3?
A. A lower real interest rate
B. A higher real interest rate
C. Higher operating costs for capital goods
D. Lower operating costs for capital goods

21
120.Refer to the above graphs, which correspond to each other across different levels of disposable income.
In graph A, if line A2 shifts to A1 because of a tax increase, then in graph B, line:
A. B2 will shift to B3
B. B1 will shift to B2
C. B2 will shift to B1
D. B3 will shift to B2
121.The investment demand curve will shift to the left as the result of:
A. Business pessimism about future economic conditions
B. The availability of excess productive capacity
C. An increase in the interest rate
D. A decrease in business taxes
122.Which statement about the multiplier is correct?
A. If a \$20 billion increase in spending creates \$20 billion of new income in the first round of the
multiplier process and \$15 billion in the second round, the multiplier in the economy is 5
B. If a \$40 billion increase in spending creates \$40 billion of new income in the first round of the
multiplier process and \$20 billion in the second round, the multiplier in the economy is 4
C. If a \$60 billion increase in spending creates \$60 billion of new income in the first round of the
multiplier process and \$50 billion in the second round, the multiplier in the economy is 5
D. If an \$80 billion increase in spending creates \$80 billion of new income in the first round of the
multiplier process and \$60 billion in the second round, the multiplier in the economy is 4
123.The change in real GDP from an initial change in spending is positive when the:
A. The initial change in spending is negative
B. The initial change in spending is positive
C. Multiplier is positive
D. Multiplier is negative
The disposable income (DI) and consumption (C) schedules are for a private, closed economy. All
figures are in billions of dollars.

22
124.Refer to the above data. If plotted on a graph, the slope of the consumption schedule would be:
A. .6
B. .7
C. .8
D. .9

125.Refer to the above graph. At income level 1, the amount of dissaving is represented by the line
segment:
A. AB
B. AC
D. BC
126.The magnification of small changes in spending into larger changes in output and income is produced
by:
A. The average propensity to consume
B. The average propensity to save
C. The multiplier effect
D. Saving
127.If consumers experience an increase in wealth, then this will shift:
A. Upward both the consumption and saving schedules
B. Downward both the consumption and saving schedules
C. The consumption schedule upward and the saving schedule downward
D. The consumption schedule downward and the saving schedule upward
128.An increase in household wealth that creates a wealth effect shifts the:
A. Consumption schedule and the saving schedule upward
B. Consumption schedule and the saving schedule downward
C. Consumption schedule upward and the saving schedule downward
D. Consumption schedule downward and the saving schedule upward

23
All figures are in billions of dollars.

129.Refer to the above data. The multiplier is:
A. 1 2/3
B. 2
C. 2 1/2
D. 4
130.What is the likely result from a depreciation of a nation's currency when its economy is operating at its
full-employment level of output?
A. Net exports fall and contribute to demand-pull inflation
B. Net exports rise and contribute to demand-pull inflation
C. Net exports fall, but equilibrium GDP rises
D. Net exports rise, but equilibrium GDP falls
The data are for a closed, private (no government) economy. All figures are in billions of dollars.

131.Refer to the above data. The MPC is:
A. .80
B. .75
C. .67
D. .60

24
132.Which economic concept is most directly applicable for explaining the economic downturn in the U.S.
economy in 2001?
A. Leakages
B. Injections
C. An inflationary expenditure gap
D. A recessionary expenditure gap
133.What is one limitation of the aggregate expenditures model?
A. It accounts for the natural rate of unemployment, but not the full-employment unemployment rate
B. It explains cost-push, but not demand-pull inflation
C. It explains demand-pull, but not cost-push inflation
D. It describes the effects of consumption, but not investment spending on the economy
134.Injections into the income-expenditure stream include:
A. Investment and imports
B. Investment and exports
C. Transfers and imports
D. Transfers and exports
135.In 2005, the U.S. economy achieved full employment output because:
A. Net exports were positive
B. Net exports were negative
C. Domestic consumption was greater than investment
D. Foreign lending helped finance high U.S. domestic spending
The table shows a private, open economy. All figures are in billions of dollars.

136.Refer to the above table. If the marginal propensity to consume in this economy is 0.8, a \$10 increase in
its net exports would increase its equilibrium real GDP by:
A. \$25
B. \$50
C. \$100
D. \$200

25
137.The following data show levels of planned variables for an economy. Ig = Investment; Sa = Saving after
taxes; G = Government spending; T = Taxation; X = Exports; M = Imports. What is the equilibrium level
of domestic output?

A. Choice A
B. Choice B
C. Choice C
D. Choice D
138.A personal tax cut of \$50 billion will affect income differently than an increase in government spending
by \$50 billion because:
A. The increase in government spending will produce a political business cycle
B. The increase in government spending is less expansionary than the increase in taxes
C. Households may save part of the additional income from the tax cut
D. Households may consume more than the additional income from the tax cut
All figures are in billions of dollars.

139.Refer to the above data. If gross investment is \$8 billion, net exports are zero, and there is no
government, the equilibrium level of GDP will be:
A. \$260 billion
B. \$270 billion
C. \$280 billion
D. \$290 billion
140.If a government raises its expenditures by \$50 billion and at the same time levies a lump-sum tax of \$50
billion, the net effect on the economy will be to:
A. Increase GDP by less than \$50 billion
B. Increase GDP by more than \$50 billion
C. Increase GDP by \$50 billion
D. Make no change in GDP

26
141.A decrease in the price level in the aggregate expenditures model would:
A. Decrease aggregate expenditures and real GDP
B. Increase aggregate expenditures and real GDP
C. Decrease aggregate expenditures and increase real GDP
D. Increase aggregate expenditures and decrease real GDP
142.Suppose that real domestic output in an economy is 300 units, the quantity of inputs is 50 and the price
of each input is \$9. If productivity increased such that 400 units are now produced with the quantity of
inputs still equal to 50, then per-unit production costs would:
A. Increase and aggregate demand would decrease
B. Decrease and aggregate demand would increase
C. Decrease and aggregate supply would decrease
D. Decrease and aggregate supply would increase
143.Which of the following will cause the aggregate demand curve to shift to the left?
A. A decrease in the price level
B. An increase in the price level
C. An increase in national incomes abroad
D. An appreciation in the value of the U.S. dollar
It shows the aggregate demand-aggregate supply schedule for a hypothetical economy.

144.Refer to the above table. Using the original data from the table, if the quantity of real domestic output
demanded increased by \$3000 and the quantity of real domestic output supplied increased by \$1000 at
each price level, the new equilibrium price level and quantity of real domestic output would be:
A. 350 and \$8000
B. 300 and \$9000
C. 250 and \$8000
D. 200 and \$7000
145.The interest rate effect indicates that a(n):
A. Decrease in the price level will increase the demand for money, increase interest rates, and decrease
consumption and investment spending
B. Decrease in the price level will decrease the demand for money, decrease interest rates, and increase
consumption and investment spending
C. Increase in the price level will increase the demand for money, reduce interest rates, and decrease
consumption and investment spending
D. Increase in the supply of money will increase interest rates and decrease interest-sensitive
consumption and investment spending

27
146.Refer to the above graph. Which factor explains the downward slope?
A. Market power
B. The interest-rate effect
C. Government regulation
D. Domestic resource prices
147.An increase in investment spending can be expected to shift the:
A. Aggregate expenditures curve downward and the aggregate demand curve leftward
B. Aggregate expenditures curve upward and the aggregate demand curve leftward
C. Aggregate expenditures curve downward and the aggregate demand curve rightward
D. Aggregate expenditures curve upward and the aggregate demand curve rightward
148.Which would be considered to be one of the factors that shift the aggregate supply curve? A change in:
A. Consumer spending
B. Net export spending
C. Government regulation
D. Profit expectations on investment projects
149.The upward slope of the short-run aggregate supply curve is based on the assumption that:
A. Nominal wages and other resource costs do not respond to price level changes
B. Nominal wages and other resource costs do respond to price level changes
C. Nominal wages are greater than real wages
D. Nominal wages are less than real wages
150.If the U.S. dollar depreciates in value relative to foreign currencies, then this will:
A. Increase aggregate demand
B. Decrease aggregate demand
C. Cause a movement along the aggregate demand curve
D. Cause a movement along the aggregate supply curve
151.A decrease in business taxes will most likely result in a(n):
A. Decrease in aggregate demand and aggregate supply
B. Increase in aggregate demand and aggregate supply
C. Decrease in aggregate demand and increase in aggregate supply
D. Increase in aggregate demand and decrease in aggregate supply

28
152.The passage of new legislation requiring more extensive government regulation of business will most
likely:
A. Increase aggregate demand
B. Increase aggregate supply
C. Decrease aggregate demand
D. Decrease aggregate supply
153.The public debt is the sum of all previous:
A. Budget surpluses minus the current budget deficit of the Federal government
B. Budget deficits minus any budget surpluses of the Federal government
C. Expenditures of the Federal government
D. Budget deficits of the Federal government
154.About what percentage of the public debt is held by U.S. government agencies and the Federal
Reserve?
A. 20 percent
B. 53 percent
C. 61 percent
D. 72 percent
155.With a progressive tax system, as the level of income increases in an economy, the average tax rate
will:
A. Decrease
B. Increase
C. Remain the same
D. Decrease, increase, or remain the same
156.The standardized deficit is the difference between annual government expenditures and tax revenues that
would have occurred if the economy was:
A. In a recession
B. At full employment
C. At the peak of a business cycle
D. At the trough of the business cycle
157.The actual and standardized budgets will be equal when:
A. The rate of inflation is zero
B. The economy is at full employment
C. The balanced-budget multiplier is 1
D. Taxes have no effect on fiscal policy
158.When government tax revenues change automatically and in a countercyclical direction over the course
of the business cycle, this is an example of:
A. Impounding
B. Built-in stability
C. Money creation
D. The standardized budget

29
159.If the Congress passes legislation to raise taxes to control demand-pull inflation, then this would be an
example of a(n):
A. Political business cycle
B. Expansionary fiscal policy
C. Contractionary fiscal policy
D. Nondiscretionary fiscal policy
160.The United States is experiencing recession, so Congress adopts an expansionary fiscal policy. State
governments face a budget shortfall and raise taxes to balance their budgets. The actions of state
governments would:
A. Slightly increase aggregate supply
B. Slightly increase aggregate demand
C. Partially reinforce the fiscal policy
D. Partially offset the fiscal policy
161.One timing problem with fiscal policy to counter a recession is a "recognition lag" that occurs between
the:
A. Start of the recession and the time it takes to recognize that the recession has started
B. End of the recession and the time it takes to recognize that the recession has ended
C. Time fiscal action is taken and the time that the action has its effect on the economy
D. Time the need for the fiscal action is recognized and the time that the action is taken
162.One of the potential problems with the public debt is that it may:
A. Make income distribution more equitable
B. Increase the debt burden of foreign creditors
C. Lead to added taxes that reduce economic incentives
D. Decrease interest rates and increase investment spending
163.If the Congress passes legislation to decrease government spending to control demand-pull inflation,
then this would be an example of a(n):
A. Automatic stabilizers
B. Expansionary fiscal policy
C. Contractionary fiscal policy
D. Nondiscretionary fiscal policy
164.Due to automatic stabilizers, when income rises, government transfer spending:
A. Increases and tax revenues decrease
B. Decreases and tax revenues increase
C. And tax revenues decrease
D. And tax revenues increase
165.The Federal Open Market Committee (FOMC):
A. Provides advice on banking policy to the FED
B. Monitors regulatory banking laws for member banks
C. Sets policy on the sale and purchase of government bonds by the FED
D. Follows the actions and operations of financial markets to keep them open and competitive

30
166.How many members can serve on the Board of Governors of the Federal Reserve System?
A. 7
B. 9
C. 12
D. 14
167.When was the Federal Reserve System established?
A. 1913
B. 1933
C. 1945
D. 1955
168.The principal advantage money has over barter is its function as:
A. A store of value
B. A medium of exchange
C. Unit of account
D. Debt
169.The use of electronic money and smart cards:
A. Accounts for most of the financial transactions in the United States
B. Serves effectively as a measure of value, but not as a medium of exchange
C. Will make it more difficult for the Federal Reserve to control the money supply
D. Will increase consumer choice, but will reduce productivity in the financial services industry
170.To keep high inflation from eroding the value of money, monetary authorities in the United States:
A. Create token money that is less than its intrinsic value
B. Make paper money legal tender for the payment of debt
C. Establish insurance on checkable deposit accounts
D. Control the supply of money in the economy
171.One reason that "near-monies" are important is because:
A. They simplify the definition of money and therefore the formulation of monetary policy
B. They can be easily converted into money or vice versa, and thereby can influence the stability of the
economy
C. They do not reflect the level of consumer spending but they have a critical impact on saving and
investment in the economy
D. Credit cards synchronize one's expenditures and income, thereby reducing the cash and checkable
deposits one must hold
172.Which declined significantly since the 1980s?
A. The control of the FDMC over the money supply
B. The number of electronic transactions for money
C. The share of total financial assets held by banks and thrifts
D. The amount of debt held by banks and the Federal government
173.The Federal Reserve System is divided into:
A. 5 districts
B. 7 districts
C. 12 districts
D. 15 districts

31
174.When money serves as a means for determining the relative worth of goods, services, and resources, it is
functioning as a:
A. Unit of account
B. Store of value
C. Medium of exchange
D. Standard of deferred payment
175.Holding the money deposits of businesses and households and making loans to the public are the basic
functions of:
A. District banks of the Federal Reserve System
B. Commercial banks and thrift institutions
C. The Open Market Committee and the Board of Governors
D. The Federal Deposit Insurance Corporation and the Federal Savings and Loan Insurance Corporation
176.A 15 percent increase in the price level:
A. Increases the value of a dollar by 15 percent
B. Decreases the value of a dollar by 15 percent
C. Decreases the value of a dollar by 13 percent
D. Decreases the value of a dollar by 8 percent
177.A commercial bank has no excess reserves until a depositor places \$5000 in cash in the bank. The bank
then adds the \$5000 to its reserves by sending it to the Federal Reserve Bank. The commercial bank then
lends \$4000 to a borrower. As a consequence of these transactions the size of the money supply has:
A. Not been affected
B. Increased by \$4000
C. Increased by \$5000
D. Decreased by \$5000
178.The reserve ratio is equal to:
A. A commercial bank's checkable-deposit liabilities divided by its required reserves
B. A commercial bank's required reserves divided by its checkable-deposit liabilities
C. A commercial bank's checkable-deposit liabilities multiplied by its excess reserves
D. A commercial bank's excess reserves divided by its required reserves
Answer questions 104-107 on the basis of the following consolidated balance sheet for the commercial
banking system. All figures are in billions. Assume that the required reserve ratio is 10 percent

179.Refer to the above information. If there is a deposit of \$10 billion of new currency into checking
accounts in the banking system, excess reserves will increase by:
A. \$1 billion
B. \$2 billion
C. \$9 billion
D. \$10 billion

32
180.Assume a commercial bank has excess reserves of \$5,000 and can make new loans of \$35,000 and just
meet its legal reserve requirements. The required reserve ratio must be about:
A. 7 percent
B. 14 percent
C. 20 percent
D. 26 percent
181.A commercial bank has actual reserves of \$50,000 and checkable deposits of \$200,000, and the required
reserve ratio is 20%. The excess reserves of the bank are:
A. \$10,000
B. \$20,000
C. \$40,000
D. \$50,000
182.When commercial banks and thrift institutions make loans, they:
A. Buy government securities from the Federal Reserve
B. Sell government securities to the Federal Reserve
C. Monetize the credit extended to borrowers
D. Decrease their balance-sheet liabilities
183.Refer to the above information. The monetary multiplier:
A. 4
B. 5
C. 8
D. 10
184.A commercial bank buys a \$50,000 government security from a securities dealer. The bank gives the
dealer an increase in its checkable deposits of \$50,000. The money supply has:
A. Not been affected
B. Decreased by \$50,000
C. Increased by \$50,000
D. Increased by \$50,000 multiplied by the reciprocal of the required reserve ratio
Use the following balance sheet for the First Federal Bank. Assume the required reserve ratio is 20
percent

185.Refer to the above information. Using the original bank balance sheet, assume that the bank makes a
loan of \$30,000 and has a check cleared against it for the amount of the loan. The bank will then have
excess reserves of:
A. \$10,000
B. \$20,000
C. \$30,000
D. \$40,000

33
Answer the next question(s) on the basis of the following figures for a single commercial bank which
you are to arrange on the balance sheet. All figures are in thousands of dollars

186.Refer to the above data. This bank has liabilities and net worth of:
A. \$400 million
B. \$440 million
C. \$550 million
D. \$580 million
Answer the next question(s) based on the following consolidated balance sheet for the commercial
banking system. Assume the required reserve ratio is 12 percent. All figures are in billions of dollars

187.Refer to the above data. The commercial banking system has excess reserves of:
A. \$32 billion
B. \$36 billion
C. \$42 billion
D. \$60 billion
188.The relative importance of various asset items on a commercial bank's balance sheet reflects a bank's
pursuit of which two conflicting goals?
A. Profits and risk
B. Liquidity and profits
C. Assets and liabilities
D. Buying and selling government securities
189.Which is a valid counterargument to use tariffs to protect high wages from cheap foreign labor?
A. The benefits of such a policy will go to consumers, not workers
B. The benefits of such a policy will go to businesses, not workers
C. Wage rates in a nation are largely determined by productivity
D. The economy may become overheated, thus increasing inflation
190.When a nation has a comparative advantage in producing a product, then in comparison with any other
nation it can produce that product:
A. At a lower average total cost
B. At a lower domestic opportunity cost
C. With less capital
D. With less labor

34
191.Refer to the above diagrams. Assume that prior to specialization and trade Italy and Greece preferred
points I and G on their production possibilities curves. As a result of complete specialization according
to comparative advantage, the resulting gains in output will be:
A. 5X and 15Y
B. 10Y
C. 15X and 5Y
D. 25X
192.The basic difference in the economic effects of a tariff compared with a quota is that a:
A. Quota generates revenue for the government
B. Tariff generates revenue for the government
C. Tariff raises product prices, but a quota does not raise product prices
D. Quota raises product prices, but a tariff does not raise product prices
193.In a two-nation world, comparative advantage means that one nation can produce:
A. A product with fewer inputs than the other nation
B. A product at lower average cost than the other nation
C. A product at a lower domestic opportunity cost than the other nation
D. More of a product than the other nation

35
194.Refer to the above graph, where Sd and Dd are the domestic supply and demand for a product. The world
price of the product is \$6. What would be the difference in the total revenue received by foreign
producers after a quota of 20 units is imposed compared with the total revenue received by foreign
producers when a \$4 per unit tariff is paid?
A. \$0 revenue difference
B. \$80 more revenue with a quota than with a tariff
C. \$200 more revenue with a quota than with a tariff
D. \$120 more revenue with a tariff than with a quota
195.Which is a principal commodity export of the United States?
A. Semiconductors
B. Steel
C. Clothing
D. Petroleum
196.A basic assumption for comparing the straight-line production possibilities curves for two nations is that
the production possibilities curves reflect:
A. Decreasing opportunity costs
B. Increasing opportunity costs
C. The same opportunity costs for producing in each nation
D. Different opportunity costs for producing in each nation
Autos and chemicals are in units of one million

197.The data in the above tables show that production in:
A. Germany is subject to increasing domestic opportunity costs and the United States to constant
domestic opportunity costs
B. The United States is subject to increasing domestic opportunity costs and Germany to constant
domestic opportunity costs
C. Both Germany and the United States are subject to constant domestic opportunity costs
D. Both Germany and the United States are subject to increasing domestic opportunity costs

36
198.Refer to the above graph which shows the import demand and export supply curves for two nations that
produce a product. The import demand curves for the two nations are represented by lines:
A. 5 and 6
B. 5 and 7
C. 6 and 8
D. 7 and 8
199.Assume that a tariff is imposed on an imported product. The difference between the domestic price and
the world price is captured by:
A. The government
B. Domestic consumers
C. Domestic producers
D. Foreign exporters
200.A licensing requirement, or unreasonable standard pertaining to the product quality and safety for a
product that is imported into a country, is an example of:
A. Protective tariffs
B. Nontariff barriers
C. Voluntary export restrictions
D. Quotas on imported products

37
Macro 2301 21346 Review 3 Jun 10 Key
1. C

2. D

3. B

4. B

5. B

6. C

7. C

8. C

9. A

10. C

11. B

12. B

13. A

14. C

15. C

16. C

17. C

18. C

19. D

20. A

21. A

22. B

23. D

24. D

25. C

26. D

27. B

28. C

29. B

30. D

1
31. C

32. A

33. D

34. B

35. D

36. A

37. B

38. B

39. B

40. B

41. A

42. C

43. A

44. B

45. C

46. C

47. C

48. A

49. B

50. C

51. A

52. D

53. A

54. B

55. A

56. B

57. C

58. A

59. C

60. B

61. D

62. C

63. B

64. B

2
65. B

66. A

67. A

68. C

69. C

70. C

71. B

72. B

73. B

74. B

75. A

76. C

77. B

78. C

79. C

80. B

81. D

82. B

83. A

84. C

85. B

86. D

87. B

88. A

89. C

90. B

91. B

92. C

93. B

94. D

95. B

96. C

97. C

98. C

3
99. C

100. B

101. B

102. C

103. C

104. A

105. C

106. C

107. B

108. A

109. C

110. A

111. B

112. D

113. D

114. C

115. D

116. B

117. D

118. B

119. D

120. C

121. A

122. D

123. B

124. D

125. A

126. C

127. C

128. C

129. C

130. B

131. B

132. D

4
133. C

134. B

135. D

136. B

137. B

138. C

139. B

140. C

141. B

142. D

143. D

144. C

145. B

146. B

147. D

148. C

149. A

150. A

151. B

152. D

153. B

154. B

155. B

156. B

157. B

158. B

159. C

160. D

161. A

162. C

163. C

164. B

165. C

166. A

5
167. A

168. B

169. C

170. D

171. B

172. C

173. C

174. A

175. B

176. C

177. B

178. B

179. C

180. B

181. A

182. C

183. D

184. C

185. A

186. D

187. C

188. B

189. C

190. B

191. A

192. B

193. C

194. B

195. A

196. D

197. C

198. D

199. A

200. B

6
7
Macro 2301 21346 Review 3 Jun 10 Summary
Category       # of Questions
AACSB: Analytic                                166
AACSB: Analytical                               12
AACSB: Analytical Skills                         13
AACSB: Reflective                                 9
Bloom's: Application                            70
Bloom's: Comprehension                           5
Bloom's: Knowledge                              125
Learning Objective: 1-1                           9
Learning Objective: 1-2                           1
Learning Objective: 1-4                           1
Learning Objective: 1-5                           2
Learning Objective: 2-2                           6
Learning Objective: 2-3                           3
Learning Objective: 2-5                           4
Learning Objective: 23-2                          2
Learning Objective: 23-4                          2
Learning Objective: 23-5                          9
Learning Objective: 24-1                          1
Learning Objective: 24-2                          4
Learning Objective: 24-3                          4
Learning Objective: 24-4                          3
Learning Objective: 24-5                          1
Learning Objective: 25-1                          6
Learning Objective: 25-2                          1
Learning Objective: 25-3                          4
Learning Objective: 25-4                          2
Learning Objective: 26-1                          3
Learning Objective: 26-2                          1
Learning Objective: 26-3                          8
Learning Objective: 27-1                          4
Learning Objective: 27-2                          3
Learning Objective: 27-4                          2
Learning Objective: 27-5                          3
Learning Objective: 28-1                          1
Learning Objective: 28-3                          1
Learning Objective: 28-4                          7
Learning Objective: 28-5                          3
Learning Objective: 29-1                          6
Learning Objective: 29-2                          5
Learning Objective: 29-3                          1
Learning Objective: 3-1                           2
Learning Objective: 3-2                           4
Learning Objective: 3-3                           2
Learning Objective: 3-4                           3
Learning Objective: 3-5                           2
Learning Objective: 30-1                          4
Learning Objective: 30-2                          3

1
Learning Objective: 30-3                                           2
Learning Objective: 30-4                                           3
Learning Objective: 31-1                                           5
Learning Objective: 31-3                                           5
Learning Objective: 31-4                                           2
Learning Objective: 32-2                                           7
Learning Objective: 32-3                                           4
Learning Objective: 32-5                                           1
Learning Objective: 37-1                                           1
Learning Objective: 37-2                                           6
Learning Objective: 37-3                                           4
Learning Objective: 37-4                                           1
Learning Objective: 4-1                                            1
Learning Objective: 4-2                                            2
Learning Objective: 4-3                                            1
Learning Objective: 4-4                                            4
Learning Objective: 4-5                                            5
Learning Objective: 5-1                                            5
Learning Objective: 5-2                                            1
Learning Objective: 5-3                                            4
Learning Objective: 5-4                                            2
Learning Objective: 5-5                                            1
Level: Difficult                                                  56
Level: Easy                                                       59
Level: Moderate                                                   85
McConnellTBII - Chapter 01                                        15
McConnellTBII - Chapter 02                                        13
McConnellTBII - Chapter 03                                        15
McConnellTBII - Chapter 04                                        16
McConnellTBII - Chapter 05                                        14
McConnellTBII - Chapter 23                                        14
McConnellTBII - Chapter 24                                        18
McConnellTBII - Chapter 25                                        15
McConnellTBII - Chapter 26                                        12
McConnellTBII - Chapter 27                                        16
McConnellTBII - Chapter 28                                        16
McConnellTBII - Chapter 29                                        14
McConnellTBII - Chapter 30                                        12
McConnellTBII - Chapter 31                                        12
McConnellTBII - Chapter 32                                        16
McConnellTBII - Chapter 37                                        16
Topic: AD in relation to the AE model                              2
Topic: Aggregate demand                                            4
Topic: Aggregate supply (short-run)                                5
Topic: Analysis of tariffs and quotas                              3
Topic: Applications and critiques                                  3
Topic: Arguments for protectionism                                 1
Topic: Built-in stabilizers                                       3
Topic: Categorizing macroeconomic models using price stickiness    1
Topic: Changes in equilibrium price and quantity                   3
Topic: Characteristics of the market system                        6
Topic: Circular flow model                                         4
Topic: Combined topics                                            4
Topic: Comparative advantage                                       5

2
Topic: Consumption function/APC/MPC                                                    3
Topic: Demand and demand curve                                                         1
Topic: Demand-pull and cost-push inflation                                             1
Topic: Determinants of demand                                                          1
Topic: Determinants of supply                                                          4
Topic: Discretionary fiscal policy                                                     2
Topic: Economic functions of government                                                2
Topic: Economics; economic perspective                                                 4
Topic: Economics; economics perspective                                                2
Topic: Equilibrium GDP in private closed economy                                       2
Topic: Equilibrium; changes in equilibrium                                             1
Topic: Equilibrium; rationing function                                                 2
Topic: Federal finance and progressive taxes                                           1
Topic: Five fundamental questions                                                      3
Topic: Foreign exchange market                                                         4
Topic: Functions of Money                                                              2
Topic: GDP accounting: expenditure approach                                            1
Topic: GDP accounting: value added; income approach                                    2
Topic: GDP and social welfare                                                          1
Topic: GDP concept                                                                     1
Topic: GDP gap; Okun's law                                                             4
Topic: Government in circular flow                                                     1
Topic: Government-set prices                                                           2
Topic: Graphs/tables; mixed consumption and saving                                     2
Topic: Growth debate                                                                   2
Topic: Growth record; growth accounting                                                1
Topic: How sticky are prices?                                                          2
Topic: Individual's economizing problem - budget lines                                 1
Topic: Inflation effects                                                               1
Topic: Ingredients and graphical analysis                                              6
Topic: Investment demand                                                               2
Topic: Legal forms of business                                                         3
Topic: Mixed economy                                                                   5
Topic: Multilateral agreements: free trade zones; implications of the global economy   2
Topic: Multiplier effect                                                               3
Topic: Nominal versus real income                                                      2
Topic: Open economy                                                                    2
Topic: Other social accounts                                                           1
Topic: Performance and policy                                                          2
Topic: Personal and functional distribution of income                                  2
Topic: Positive and normative economics                                                1
Topic: Problems, criticisms, complaints                                                2
Topic: Production possibilities model                                                  1
Topic: Public debt                                                                     3
Topic: Public goods                                                                    2
Topic: Purchases, transfers, and government size                                       1
Topic: Real versus nominal GDP; price indexes                                          7
Topic: Recent developments and reform                                                  2
Topic: Shifts in consumption and saving functions                                      2
Topic: Single commercial bank                                                          8
Topic: Specialization and comparative advantage                                        1
Topic: Standardized budget                                                             2
Topic: State and local finance                                                         1
Topic: Supply and demand analysis of exports and imports                               1

3
Topic: Supply of money (definition, value, etc.)           3
Topic: The business cycle                                  3
Topic: The miracle of modern economic growth               2
Topic: The New Economy                                     4
Topic: Theories, principles, and models                    1
Topic: Trade barriers                                      2
Topic: Trade facts                                         1
Topic: Trade: volume, facilitating factors, participants   4
Topic: Types of trade barriers                             1
Topic: U.S. financial system                               5
Topic: Uncertainty, expectations and shocks                6
Topic: Unemployment                                        1
Topic: Unemployment, growth, and the future                3

4

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