Highlight the 20 multiple choice answers and type in the short answer, essay or problems responses. Save the document and post the attachment into the assignment screen for grading. Good luck to all. Gary
Multiple Choice – 20 Questions – 6 points each question
Total of 120 points for Multiple Choice
1. If the level of aggregate expenditures is greater than real GDP, then the level of output is expected to:
c) remain the same
d) change in an unpredictable manner
2. U.S. imports create a domestic demand for foreign currencies, and the satisfaction of this demand:
a) decreases the supply of foreign currencies held by U.S. banksXX b) decreases the demand for foreign currencies held by U.S. banks c) increases the demand for foreign currencies held by U.S. banks d) increases the supply of foreign currencies held by U.S. banks
3. If a European importer can buy $10,000 for 11,100 euros, the exchange rate for the euro is:
a) 1 euro = $0.80
b) 1 euro = $0.90
c) 1 euro = $0.95
d) 1 euro = $1.11
4. Economic growth can best be portrayed as a:
a) leftward shift of the production possibilities curve
b) movement from a point inside to a point outside of the production possibilities curve c) movement from a point near the vertical axis to a point near the horizontal axis on the production possibilities curve d) rightward shift of the production possibilities curve
5. The total volume of business sales in our economy is several times as large as the GDP because:
a) the GDP does not take taxes into account
b) the GDP excludes intermediate transactions
c) the GDP grossly understates the value of our annual output d) total sales are in money terms and GDP is always stated in real terms
6. If there is sufficient time for wage contracts to expire and nominal wage adjustments to occur, then the:
a) economy is operating in the short-run
b) economy has entered the long-run
c) unemployment rate will increase
d) inflation rate will decrease
7. 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
8. The amount of consumption in an economy depends:
a) inversely on the level of disposable income
b) directly on the level of disposable income
c) inversely on the level of saving
d) directly on the rate of interest
9. Here are three things you could do if you do not attend your next-door neighbor's barbecue: watch television with some friends (you value this at $8), read a good novel (you value this at $4), or go in to work (you could earn $6 during the barbecue). The opportunity cost of going to your neighbor's barbecue is
a.$6, because this is the only alternative of the three where you actually receive a monetary payment.
b.$4, because this is the lowest valued alternative forfeited.
c.$8, because this is the highest valued alternative forfeited.
d.$18, because this is the total dollar sum of the alternatives forfeited.
10.Both country 1 and country 2 are located on their respective PPF, but country 1 produces twice the output that country 2 produces. It follows that
a.country 1's PPF lies further to the right than country 2's PPF.
b.country 1 has a smaller population than country 2.
c.country 1 has a bigger population than country 2.
d.country 1 practices capitalism and country 2 practices socialism.
e.none of the above
11.If producers' surplus is $40, and consumers' surplus is $30, then what is the minimum selling price?
e.There is not enough...