Subject: General Questions / General General Questions
Question1. The short-run labor demand curve is ________.a. more elastic than the long-run labor demand curveb. less elastic than the long-run labor demand curvec. might be more or less elastic than the long-run labor demand curved. perfectly elastic (horizontal)2. Which of the following groups has a poverty rate below theaverage for the United States?a. College graduatesb. Two-parent householdsc. Over 65d. All of the above3. Why is the current method of funding the Social Securitysystem considered to be in crisis?a. Medical costs have risen very rapidly, and these increases are predicted to continue.b. The ratio of the working age to the retiree population is falling.c. A sluggish asset market means that future Social Security payments are likely to be lower than expect-ed.d. Both “a” and “b” are correct.4. Gross domestic product calculations count only final goods and services because ________.a. these are the only goods and services that are pur-chased in an economyb. counting all goods and services would lead to double-counting of many activitiesc. it is difficult to measure the prices of intermediate goods producedd. one cannot calculate the quantities of intermediate goods produced5. Suppose that a clothing store has $100,000 worth of blous-es in inventory at the start of the year and $250,000 in inventory at the end of the year. The inventory amount included in GDP would be ________.a. $100,000b. $250,000c. $150,000d. $175,0006. In order to be defined as unemployed, a person must ________.a. not have a jobb. not have a job and must have looked for work at some timec. not have a job and must actively look for workd. have a job but be looking for a different job7. The type of unemployment most closely associated with periods of falling GDP is ________.a. structural unemploymentb. frictional unemploymentc. cyclical unemploymentd. voluntary unemployment8. Actual unemployment can exceed the natural rate of unemployment due to ________.a. structural unemploymentb. none of thesec. frictional unemploymentd. cyclical unemployment9. The biggest problem with a deflation is that ________.a. prices fallb. wages fallc. people cannot repay their debtsd. interest rates rise10. All but which of the following are reasons to study classical economics?a. John Maynard Keynes extolled it for its insights into macroeconomics.b. There are issues in macroeconomics concerning the long run that we should know about.c. Many of today’s debates in economics can best be analyzed with the tools of classical economics.d. Its tools are used by a new school of economic thought, real business cycle theory, to explain why there are economic booms and recessions.11. The stock of capital that a society has at any point in time ________.a. is determined primarily by current investmentb. is determined primarily by past investmentc. is determined equally by current and past investmentd. is not determined by investment levels12. The substitution effect of a wage increase is the ________.a. increase in labor supply associated with an increase in the opportunity cost of not workingb. decrease in labor supply associated with an increase in the opportunity cost of workingc. increase in labor supply associated with the fact that workers can consume the same amount as before but with less work effortd. decrease in labor supply associated with the fact that workers can consume the same amount as before but with less work effort13. Technological progress occurs when the economy gets more output ________.a. without any more capital or laborb. by using more capital per workerc. by using more capital but not more workersd. by using more labor but not more capital14. Of the nations listed below, which one had the highest GDP per capita in 1997?a. Japanb. Francec. Switzerlandd. United States15. Which of the following uses of tax revenues collected by the government leads to increased capital deepening?a. Building roadsb. Increased foreign aidc. Medicare paymentsd. Social Security payments16. Human capital is _______.a. machines that require workers in order to operate most efficientlyb. any method of production developed by humansc. investment in education and skillsd. a term used to refer to the workers in a factory17. In the macroeconomic short run ________.a. prices do not fully adjust to changes in demandb. prices fully adjust to changes in demandc. prices are flexibled. output is fixed18. The mechanism that normally coordinates what goes on in an economy is the ________.a. governmentb. price systemc. stock marketd. Federal Reserve19. Assuming a Keynesian aggregate supply curve, an increase in the price of oil results in ________ in output and________ in prices.a. an increase, an increaseb. an increase, no changec. a decrease, no changed. a decrease, an increase20. In the short run ________.a. producers supply all the output demandedb. the price level determines the amount of goods producers supplyc. the government determines the level of productiond. prices are flexible21. If the consumption function is C = 25 + 0.9y and income increases by $100, then consumer spending will increase by ________.a. $25b. $115c. $90d. $1022. A decrease in the level of imports ________ the demand for goods and service produced in the U.S.a. increases or decreasesb. does not affectc. decreasesd. increases23. The interest rates quoted in the market are ________.a. fake interest ratesb. real interest ratesc. adjusted interest ratesd. nominal interest rates24. Borrowers and lenders make transactions based on the ________.a. real interest rateb. nominal interest ratec. expected real interest rated. expected nominal interest rate25. Which one of the following statements is true?a. The savings and loan crisis of the 1990s was due to the big U.S. budget deficit.b. Deposit insurance guarantees savings up to $1,000,000.c. Savings and loan institutions were very profitable during the 1970s when there was high inflation.d. Deposit insurance was created to prevent bank runs from occurring.