11) Because the inflation rate is so high Wanda refuses to carry cash. Even though it is a bother, she now goes to the ATM twice as often to get the cash she needs. Wanda’s actions are an example of the A) shoe-leather costs of inflation. B) tax costs of inflation. C) confusion costs of inflation. D) uncertainty costs of inflation. E) tax distorting […]

  Figure 10-4       8) Refer to Figure 10-4.  What is the marginal rate of substitution between g and h? A) cookie. B) cookie. C) 2 cookies. D) 3 cookies.     9) Refer to Figure 10-4.  What is the marginal rate of substitution between h and j? A) cookie. B) cookie. C) 2 cookies. D) 4 cookies.   10) The absolute value […]

    31) Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for ramen noodles, an inferior good. Which panel describes what happens in this market as a result of an increase in income? A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)   32) Positive technological change in the production of LCD televisions […]

  21) In general, monetary policy has a longer ________ lag than fiscal policy but shorter ________ lag. A) recognition; response B) implementation; recognition C) implementation; response D) response; implementation   22) Fiscal policy and monetary policy have a similar ________ time lag. A) implementation B) structural C) recognition D) response   Refer to the information provided in Figure 15.2 below to answer the questions […]

    11) The table above shows a nation’s production possibilities frontier. If the nation wants to produce 4 robots and 34 pizzas A) it will shift the production possibilities frontier. B) the opportunity cost is 9 pizzas. C) the nation will be producing inefficiently. D) it will be unable to do so because the production point is unattainable. E) the nation will then be […]

  71) Interactive television (ITV) allows viewers to see the ad in its entirety by pressing a remote button; to order products from home-shopping channels; or choose different camera angles, such as in sports events. Comments by James Pennefather, brand manager for Smirnoff, UK, based on comparison of traditional TV ads to ITV features included all of the following except: A) “it allows viewers to […]

    61.              To use activity-based costing, it is necessary to know the a.cost driver for each activity cost pool. b.expected use of cost drivers per activity. c.expected use of cost drivers per product. d.all of the above.     62.              To assign overhead costs to each product, the company a.multiplies the activity-based overhead rates per cost driver by the number of cost drivers expected […]

    18.1   What is Fiscal Policy?   1) Part of the spending on the Caldecott Tunnel project in northern California came from the American Reinvestment and Recovery Act, which is an example of ________ aimed at increasing real GDP and employment. A) discretionary fiscal policy B) an automatic stabilizer C) contractionary fiscal policy D) a transfer payment   2) If Congress passed a one-time […]

  121) Ceteris paribus when graphing a relationship refers to A) letting all the variables change at once. B) changing the origin of the graph. C) holding constant all but two variables. D) rescaling the coordinates. E) swapping the axes so that the x-axis is the vertical axis and the y-axis is the horizontal axis. 122) When two variables in a graph are related to […]

    81) The reason that some economists advise central banks to never validate a negative supply shock is A) because the economy’s adjustment process is ineffective. B) the monetary validation causes downward pressure on wages. C) the monetary validation results in a higher level of unemployment. D) that there are no short-run effects on any real variables, and so it is not worthwhile. E) […]