Question : 11) A recessionary output gap implies that A) the demand : 1384406

Economics

11) A recessionary output gap implies that

A) the demand for all factor services will be relatively low.

B) the intersection of AD and AS occurs where real GDP exceeds potential output.

C) the economy’s resources are being used at more than their normal capacity.

D) there is upward pressure on wages.

E) there is excess demand for most factors of production.

12) An inflationary output gap would generate which of the following conditions in the economy?

A) Firms are making low profits.

B) Workers have a relatively large amount of bargaining power with employers.

C) There is an unusually small demand for labour.

D) There is downward pressure on wages.

E) There is much idle capacity.

13) An inflationary output gap is characterized by

A) falling prices.

B) constant prices.

C) real output that varies one-for-one with aggregate demand.

D) real GDP exceeding potential output.

E) real GDP falling below potential output.

14) A recessionary output gap is characterized by

A) rising prices.

B) constant prices.

C) real output that varies one-for-one with aggregate demand.

D) real GDP exceeding potential output.

E) real GDP falling below potential output.

15) Which of the following will occur as part of the automatic adjustment process in an economy with an inflationary gap?

A) falling prices

B) increasing investment

C) declining government purchases

D) rising wages

E) increasing tax rates

16) Which of the following would occur as part of the automatic adjustment process in an economy with a recessionary gap?

A) rising prices

B) decreasing investment

C) increasing government purchases

D) falling tax rates

E) decreasing wages

17) If the short-run macroeconomic equilibrium occurs with real GDP less than Y*, the economy is

A) at its full-employment level of output.

B) experiencing a recessionary gap.

C) experiencing an inflationary gap.

D) threatened with an acceleration of inflation.

E) operating at full capacity.

18) If the short-run macroeconomic equilibrium occurs with real GDP greater than potential output, the economy is

A) at its full-employment level of output.

B) experiencing a recessionary output gap.

C) experiencing an inflationary output gap.

D) threatened with a demand shock.

E) operating at full capacity.

19) If wages rise faster than increases in labour productivity, then unit labour costs will

A) fall and the AS curve will shift left.

B) fall and the AS curve will shift right.

C) rise and the AS curve will shift left.

D) rise and the AS curve will shift right.

E) not change because only total labour costs change.

20) A common assumption among macroeconomists is that when real GDP exceeds potential output, factor prices adjust and the

A) AS curve shifts to the left fairly rapidly.

B) AS curve shifts to the left only very slowly.

C) AS curve shifts to the right very rapidly.

D) AD curve shifts to the left rapidly.

E) none of the above— the AS curve remains unchanged.

Continue to order Get a quote

July 1, 2023

9.1 The United States in the International Economy

1) Following the tariff imposed on Chinese tires, some businesspeople correctly argued that the U.S. tariff would result in

A) China retaliating by raising tariffs on some U.S. exports.

B) China halting the sale of all products in the United States.

C) U.S. firms never being able to meet the demand for U.S.-produced tires.

D) the government demanding price cuts from U.S. tire manufacturers.

2) Workers in industries protected by tariffs and quotas are likely to support these trade restrictions because

A) they do not want to offend their employers who want them.

B) politicians lobby to convince workers the restrictions will make them better off.

C) they believe the restrictions will protect their jobs.

D) they don't understand that the restrictions will threaten their jobs.

3) The intention of the U.S. tariff on Chinese tires was to

A) protect jobs in the U. S. tire industry.

B) protect infant industries in tire U.S. tire market.

C) insure that Chinese tires meet U.S. quality and safety standards.

D) save the government money by restricting the sale of more expensive Chinese-made tires.

4) In the 1930s, the United States charged an average tariff rate ________. Today, the rate is ________.

A) of 100 percent; 20 percent

B) above 50 percent; less than 1.5 percent

C) of less than 10 percent; over 40 percent

D) of 17 percent; 33 percent

5) A tariff is a tax imposed by a government on

A) exports.

B) services.

C) imports.

D) luxury items.

6) Goods and services bought domestically but produced in other countries are referred to as

A) exports.

B) imports.

C) transfer payments.

D) foreign consumption.

7) Exports are domestically produced goods and services

A) sold to other countries.

B) sold to the government.

C) sold at home.

D) which are used to produce other goods and services.

8) When Roxanne, a U.S. citizen, purchases a designer dress from Barneys of New York that was made in Milan, the purchase is

A) both a U.S. and an Italian import.

B) a U.S. import and an Italian export.

C) a U.S. export and an Italian import.

D) neither an export nor an import for either country.

9) When BMW, a German company, purchases a welding machine that was made in Toronto, the purchase is

A) both a German and a Canadian import.

B) a German import and a Canadian export.

C) a German export and a Canadian import.

D) neither an export nor an import for either country.

10) Which of the following statements about the importance of trade to the U.S. economy is true?

A) Since 1950, both exports and imports have steadily decreased as a fraction of U.S. gross domestic product.

B) Overall, about 80 percent of U.S. manufacturing jobs depend directly or indirectly on exports.

C) The United States is the second largest exporter in the world.

D) The U.S. economy is highly dependent on international trade for growth in its gross domestic product.